An Industry in the Dark

Organizational and Professional Development

Most markets now boast a few platform businesses. These platforms don’t get their hands dirty with products or services. Instead, they illuminate the market. But why is there no light in the organizational development world?

Platforms turn on the lights. They make it easier for buyers and sellers to find each other, they optimize transactions, and they learn about the market. The organizational and professional development marketplaces have many large players, but none of them have flipped the switch from a product business to a platform business. Why?

There are four reasons.

1. Active Data vs. Passive Data

The main source for organizational development data is the survey and the interview. On the surface, this is valuable information — straight from the horse’s mouth. Turns out, this data is unreliable.

There are a host of biases that come into play when we are asked to make an active evaluation. The list of human biases is extensive. It turns out we are a mess of contradictions and misinformation. When it comes to understanding what is really happening, our evaluation of the workplace is often dependant on our mood rather than reality.

Passive data, on the other hand, is more accurate. It relies on what people actually do, not what they say they do. Imagine asking someone how much they gossip. Most people would say they don’t. However, sitting down by a water cooler will give you a very different story.

There is passive data to be found, but it is hard to get as explored in reason #2.

2. Heightened Privacy Demands due to “Opting In”

The Human Dynamics Laboratory of MIT used sound clips to measure team performance. They passively collected information on tone, who was speaking to whom, how much people spoke, etc. With just voice analysis, they were able to predict 50% of the variance in team performance.

This is fantastic data, but for an employee, being recorded is creepy. The same goes for looking through emails and Slack messages. It feels invasive.

Oddly other companies already use this data. Facebook and Google comb through your messages, emails, posts. With your data they can know if you are happy or sad, if you are pregnant or married, what you do for work and in your spare time. We accept privacy intrusion from these companies because we never made the decision to opt-in. It just happens. However, when someone asks for the data, we guard it. This is conveniently called the Opt-In bias.

Workspace companies like We-Work are the exception to the rule because their passive data collection is unobtrusive. Information about how employees use a workspace and its furniture is easy to get and isn’t a cause for alarm. Other companies don’t have it so easy.

3. A Sticky Transition from Product to Platform

The organizational and professional development space is driven by consultants. The biggest players in this space are consultancies. These players have many customers and collect vast amounts of data. They also have the capacity for advanced analytics. So why not leverage this data through the platform model?

A platform, by its nature, doesn’t get its hands dirty with providing products and services. This is nice, but it also means turning potential customers away. A platform business model would require collecting data and not only rejecting the lucrative consulting job but also giving it to a competitor. This is a huge leap to make for companies who charge several hundreds of dollars an hour for their time.

4. Competition for Data

In this industry, small amounts of data are useful. In many other industries, data only becomes economically valuable after aggregation. Knowing about an empty seat in one car isn’t useful to anyone. However, if you know about empty seats in a large number of cars, you can charge for that type of knowledge.

In organizational development, there are a plethora of companies providing surveys of their own. Surveys are useful and cost time and attention. For this reason, companies covet organizational and professional development data. It requires time and effort to gather and it is useful before aggregation in the market.

A company looking to horizontally or vertically integrate a data set would not be easily accepted. Other vendors fight for the data. It gives them proprietary knowledge about a company which can be leveraged into a consulting engagement or a product sale.

Talent acquisition companies get stymied here. They use analytics to help companies make hires, but they can’t get performance data. This lack of data integration means they often don’t know if their recommended candidates actually succeed.

So, high demand and low availability mean a dearth of data. But is it possible for someone to fight for information superiority and turn on the lights?

There are some companies well positioned to make the leap. Gallup has unmatched expertise with development data, Glint and Humu do not have the encumbrance of their own consulting product, and Humanyze is working to integrate passive data.

Is it possible? Maybe, but no one has, yet.