A gaping hole in “Balanced Scorecards”, human experience and social signals

The idea that our conscious, individual thinking is the key determining factor of our behaviour may come to be seen as foolish a vanity as our earlier idea that we were the centre of the universe. – Alex (Sandy) Pentland

Last week the Institute of Customer Services held a conference on Customer Satisfaction. I led a session how to create sustainable patterns of customer satisfaction, using behavioural economics (specifically the work of Dan Ariely) and systems-thinking as my primary lenses through which to look at this.

One of the other speakers shared how his organisation has moved away from a balanced scorecard approach to performance improvement – e.g. Financial, Business Processes, Learning indicators – to adding a fourth: ‘Human Experience’. He commented on “how we seem to know this ‘stuff’ is important” but often struggle to make the human element in organisations really work, especially when it comes to aligning it with the hard metrics.

‘Human experience’ resonated with the audience. What emerged during the day was a sense that there are currently more questions than answers around ‘managing’ human experience and improving organisations. Maybe that should be no surprise given that science is only now beginning to understand how human social interaction works, particularly at an unconscious level. For example, as Malcolm Gladwell and others have noted, we know people can see patterns incredibly quickly (thin slicing). What has not been fully explained to date is the mechanisms by which we do this, although there have been some advances.

The MIT Human Dynamics Laboratory is one such place, and it’s run by Alex ‘Sandy’ Pentland, author of Honest Signals: How they shape our world? Pentland is a computational scientist and directs the MIT HD Lab, and the book gives a fascinating insight into their work.

To date, how people communicate has largely been broken down into a relationship between:

• Content (meaning)
• Verbal communication (voice, intonation, pitch, inflection etc)
• Non-verbal communication (stance, gesture, emoting)

Pentland suggests there is a ‘back channel’ of social circuitry that operates when people come together, which is largely unconscious, partly automatic and measurable through technology developed at MIT – the ‘sociometer’. Pentland outlines in this talk how understanding social signals can make organisations more efficient and profitable here, and it gives you a taste og what is in the book.

So What?

One of the MIT experiments shows that this is not just optional fluffiness:

• 40% of a creative teams’ productivity was directly explained by the amount of communication they had with others.
• Employees with the most extensive digital networks were 7% more productive than their colleagues.
• Those with the most cohesive face-to-face networks were 30% more productive.

We tend to think of society – and organisations – as being places where we harness intuition and rationality to ensure that risk and reward are balanced. The error in that thinking has been that we start with, and arguably remain rooted in, an individualistic paradigm, and ignore or discount the social. Even where we do come up with constructs to help us e.g. ‘social capital’, they have been difficult to quantify.

In short the way we think decision-making happens in organisations is not just inaccurate, it is flawed, and we need to look beyond conventional models of organisation and learning to get to the reality of human experience, and how to really improve performance.

The challenge for organisations and those who work in and with them, is that we are going to have to re-define what we mean by “effective communication” and what tools we use to develop greater relational resilience, adaptability and group decision-making skills. That means more sensitising people to relationship dynamics, and inquiry into social process and the relational field.

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