“Like, I’ve been doing this podcast for like, eight years now, but there’s like one language peeve that I’ve never thought to write about, so when a listener asked me about it, I was like, ‘I can’t believe we’ve never covered this before!’ – Grammar Girl, 2014
The caricature of a Valley Girl is comical, but analogies showing how one thing is “like” another are vital tools for social and organizational change, especially when it comes to work and HR.
In my last article, I urged HR to embrace the best and brightest from all disciplines. We can help convey the connections by “retooling” HR using analogies:
- Retool leadership development using options theory and portfolio risk optimization.
- Retool performance management using engineering frameworks to optimize the return on improved performance (ROIP).
- Retool total rewards using product design and market segmentation to optimize the “deal” and balance customization, and standardization.
- Retool HR planning using inventory management frameworks that integrate employee acquisition, development, and separation.
- Retool talent sourcing and deployment using supply chain frameworks.
Analogies are also vital to social change, including adopting human capital reporting standards and disruptively accelerating the HR profession (CHREATE). They help to engage diverse “mental models” of constituents.
Yet, analogies can be tricky. Human capital and financial reporting have similarities, and financial reporting metaphors have been invoked in attempts to make human capital reporting more legitimate. However, this also invited critiques that human capital reporting lacks the institutional and procedural elements of financial reporting.
Must analogies be near perfect to work? Are imperfect analogies distracting or creativity-motivating? How can analogies be used most effectively?
Research in sociology and industry evolution offers fascinating clues.
Fit the Analogy To the Purpose
Some researchers suggest using very specific and simple analogies to describe small incremental changes, and broader analogies (such as to sports, warfare or art) when disrupting or rethinking existing frameworks. For example, research showed that chefs successfully introduced small changes in cuisine, such as using ingredients from new regions, by framing the changes as consistent with existing frameworks, such as the Michelin Guide. In contrast, chefs who successfully introduced more radical changes, such as from haute cuisine to vegetarian cuisine, used the broader idea of the chef as an artist, comparing the chef to a sculptor who formerly worked in wood and turns to work in bronze.
“Stretching and Bending”: How Analogies Revolutionized Online Advertising
A forthcoming article in the journal Organization Science, by Vern Glaser, Peer Fiss and Mark Kennedy shows how the internet display advertising industry transformed using an analogy to financial trading, and how analogy imperfections can inspire innovation.
Internet-based display advertising (advertisements dynamically selected for specific individuals based on context, browsing history, or various other data) is sold by media publishers, search engines, social networks, blogs and specialty interest websites. Historically, agencies purchased advertising space for clients from direct sales forces of media outlets like magazines and newspapers. As Internet advertising grew, Internet publishers had a larger inventory of internet display advertising impressions than they could sell the old-fashioned way. Trillions of impressions formed a so-called “remnant” inventory and overwhelmed the capacity of traditional agency-based sales channels. New business models emerged to help liquidate this unmet demand.
Organizations such as DoubleClick (the leading provider of ad server technology in the industry), Right Media (an ad network), and AdECN (an advertising exchange partnered with an ad network) sought to shift identities from ad networks to ad exchanges. They invoked analogies to financial markets, comparing display ad markets to the New York Stock Exchange (NYSE) or the NASDAQ. The market validated these models, and by the end of 2007 Yahoo purchased Right Media for $680 million, Google acquired DoubleClick for $3.1 billion, and Microsoft purchased AdECN for an estimated $70 million. By 2011, it was estimated that 35 percent of online display ads were sold using a non-guaranteed “biddable” selling model.
The article authors show that the industry effectively “stretched” and “bent” the imperfect analogies.
Stretching involves modifying the analogy to fit the new context (internet display ad marketing). AdECN said, “By way of analogy, AdECN is the New York Stock Exchange, and the members of the exchange are stockbrokers like Merrill Lynch, Fidelity, Charles Schwab, and so on. What’s wrong with the way the industry works today? It is incredibly inefficient. Imagine a world full of stock brokers but without a stock exchange. (AdECN Website 9/2007).”
Bending involves actually changing the industry to fit the analogy. This can be by creating superficial similarities, such as naming the ad exchange ADSDAQ to be similar to NASDAQ. More significant “structural” bending involves changing actual activities. For example, AdECN switched from traditional sales representatives to creating automated exchange platforms for ad trading, and even restricted “seats” on the exchanges, much like the NYSE stock exchange. In fact, a job of ad “trader” emerged, working at computer screens, feeding systems with data and perfecting trading algorithms. Analogies also inspired innovations through “generative” bending, where new activities and products are inspired by the analogy. Ad sellers introduced previously unheard of products such as options, puts, futures contracts, and covered calls, that allowed ad buyers and sellers to hedge risk.
Embracing Analogies in HR
The human capital analogies described at the beginning of this article make the promise of inspiring vital innovations. Such innovations can be rudimentary, such as referring to employees as “human assets,” or to recruitment messages as the “employer brand.” Some analogies have sparked resistance rather than collaboration, as in the case of human capital reporting efforts.
Yet, there is immense potential for analogies to inspire collaboration and innovation. Organization leaders and constituents should learn from researchers about fitting, bending and stretching analogies, to tap that potential.
Take another look at the analogies above. Can you use those analogies more skillfully in your next encounter with an organization leader or constituent?
About the author: John Boudreau
John Boudreau is professor and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations, and Boudreau is the author of two forthcoming books, “Human Resource Excellence” with Edward E. Lawler III and “Reinventing Jobs” with Ravin Jesuthasan.
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