Business Intelligence should be the best-managed smaller company in Britain. It makes its living by investigating best (and worst) practice on the key issues concerning management - so it knows what should and shouldn't be done.
Founded eight years ago, the company is in fact among the fastest-growing private companies, having reached a turnover of £2.25 million and a staff of 16. It was founded in Wimbledon by two journalists, David Harvey and Ian Meiklejohn, for whom redundancy came in handy.
They had been planning to leave Business Computing magazine, and were debating, says Harvey, 'who should go first.' Their employer solved that problem by letting both go, and redundancy money largely funded the enterprise. The pair planned to combine publishing with conferences. With luck and good judgment they settled on a hot topic - executive information systems - that brought early success.
Blue-chip companies queued up for a conference which is still selling out, with attendances of 450 people paying up to £800 for the two-day event. These systems, which provide key data at the touch of a button, were early fruits of the electronic revolution in business information. So how does Business Intelligence's intelligence rate?
'On a scale of nought to ten, we're about eight.', says Harvey. In some respects, though, the company is in the same boat as ill-shod cobblers' children and physicians unhealed by themselves. For example, Harvey pays staff bonuses linked to company and individual results - performance-related pay.
According to the latest Business Intelligence report, that's found ineffective 'in supporting change' by a quarter of the surveyed companies. A trifling 2.6% thought it 'very effective'. Yet 70% of the companies used this method of reward. Firms frequently do stick to tried, trusted and useless methods - and shun new ones.
In payment, the new star is 'competency-related pay'. Only 12% of surveyed companies reward people for their demonstrated levels of skill and capability, rather than performance. But the approach scored 80 to 100% for effectiveness among over half those surveyed. Cases in the report confirm that it really does work.
Another striking example of persisting with outdated ways is appraisal. Getting customers to appraise performance and subordinates to assess superiors got rated 'front-runners for effectiveness' with strong backing from firms like building society Birmingham Midshires and Holiday Inns Worldwide. But only 27 of 219 companies use 'upward assessment' by subordinates.
In contrast, 162 are stuck with top-down appraisal by managers, even though only a third find that it works. All very deplorable, of course, but also all grist to Havrvey's mill. The change in management styles from hierarchic ways has demanded many new methods. 'Very few people have a sound idea of how to make these things work.'
That gives Harvey, 50, and Meiklejohn, 42, the opportunity to tell them, and in as many ways as possible. In addition to financially weighty reports (Pay, Performance and Careeer Development costs £445), they've engaged in subscription clubs and newsletters in a deliberate policy - to 'proliferate media' - which is now leading into electronic publishing.
The rationale is that each medium requires its different approach and thus offers a further means of exploiting the 'areas of interest' to customers, mostly drawn from the top 1,000 companies. The strategy is eminently sound: cultivate your business garden intensively, and build around that core.
Thus, information systems led to the role of IT in corporate transformation. It wasn't a long step to business re-engineering events and publications. Re-engineering means taking apart business processes with the help of the people involved and putting the processes together again - while usually employing many less of said people.
That makes Harvey's current interest in people management very understandable. The rewards report is a result. It contains some depressing news. For instance, 80% of companies report drops in employee motivation: taking out management layers has cut promotion opportunities. But good managers won't rest there.
At Business Intelligence, says Harvey. 'We're very aware of our defects.' Suiting the deeds to the awareness, they're currently re-examining their own reward system. That's Harvey's main, optimistic thrust and the key to his firm's success - show companies the best way, and the good get better.
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