Why Business Isn’t Science

Despite what many software peddlers would like you to believe, business isn’t a science. It’s more like medicine. Science-adjacent, at best.

Sure, the fragrance of science hangs in the air with doctors. They have been known to use long words to describe what pills they’re giving you. The white lab coats play to the image in most people’s minds of “scientists at work”.

But the science bit of medicine is entirely secondary to working out what on earth the problem is in the first place.

Only then does the science kick in. Before that, we’re entirely in the realms of humanity.

Nowadays in business it’s fashionable to implement the science first – the new systems, the upgraded software, the revamped procedures manual. And, if possible, not think about the human dimension at all, because that’s the messier, harder-to-control part of the equation.

To some extent I get that. It’s harder work to flip the script and treat business more like medicine than science. And much easier just to pay for some “magic beans”, like a CRM system or an employee portal that promises to take all your troubles away.

But, in the end, if you want transformational change, you have to start with the human element and work back to the science. It doesn’t work the other way round.

Don’t believe me? Consider this…

Your business is already spending lots of time…and probably lots of money…trying to do things like convert more leads into sales, improve customer loyalty, and get your people to buy-in more enthusiastically to your company mission.

Every single one of those noble objectives has little or nothing to do with science. And everything to do with how your business makes them feel.

Leads who don’t trust their salesperson are unlikely to turn into customers any time soon. A new CRM system is not going to fix that problem.

Customers who are always on the lookout for another supplier selling exactly what you sell, but for a few pennies cheaper, are unlikely to stick with you just because you give them a “loyalty card” with some bonus points.

If your employees feel they’re underpaid and underappreciated, a revamped “employee portal” to act as their gateway to a range of things they have no interest in, isn’t going to move the needle for you.

Around the edges, none of those things are a terrible idea in themselves. But equally, none of them are likely to bring the step-change improvement you’re hoping for.

You’re not trying to solve a scientific problem here. First and foremost, you’re trying to solve a human problem.

It’s only after you’ve solved that part of the equation that science might…and I emphasise “might”…help solve the next step in the puzzle.

A tale of two CRMs

Some years ago I worked for a business which had a state-of-the-art CRM system.

To be fair, by every technical dimension going, it was excellent. And the business saw the technology as only part of the solution – their humans were front and centre in all this, with technology as a source of support, not the be-all and end-all.

However it cost about £4million. So you’d hope it was pretty good.

A year or so after leaving that business, I was able to visit another business doing something very similar.

While the business I had worked for topped most of the industry league tables for service, this other business wasn’t all that far behind. So I was interested to see what their “secret sauce” was.

To my surprise, they didn’t have a CRM system at all. What they had was a series of procedures printed out on bits of paper for their call centre operators to follow in the event of a customer query.

Those were arranged on a carousel in front of the call centre agent, a bit like the holders typists used in olden times to type up their boss’s handwritten notes. It was quite a clever way of making this information easily accessible whatever the customer’s problem might be.

The only tech they had in the call centre were terminals for their ancient “IBM green screen” field engineer booking system. If the problem couldn’t be resolved remotely, the call centre agent would enter a ticket in the system for the field engineers to go and take a look.

This business employed good, helpful people and paid them fairly…just like the business I used to work for. But their tech, from the perspective of someone used to working with a £4million CRM system, was sparse to the point of non-existent.

And yet, to within a tiny margin, this business got results almost as good as the one I used to work for, but had spent £4million less to get there.

Almost…? [snorts contemptuously]

Yes, almost.

If you’re the sort of person who just wants to focus on a number in isolation…who only wants to be top of a league table in a single measure, I get it.

But consider a different perspective. A human perspective. A customer’s perspective. (I’m assuming all your customers are humans, for this purpose.)

It’s been a few years since I was involved with this sector so I can’t remember the numbers exactly, but they went something like this:

Us: service level 99.3%. CRM system cost: £4m

Them: service level 99.1%. CRM system cost: whatever running a few pages of A4 through a printer cost. Plus a few of those “typist carousel” thingies.

Now put yourself in a customer’s position.

Which would you rather have – getting your problem solved 0.2% points faster, or shelling out for your share of the amortised cost of a £4million CRM system?

That, I would suggest, is a much more arguable position.

Either way, you get near-perfect service which >99% of customers are happy with.

In most industries that would be the cause of celebration, not a reason to embark on a round of soul-searching or to give yourself a serious dose of “league table envy”.

It’s more complicated than many organisations think

What both organisations had done extremely well was solve the human dimension of the problem.

They had found good, service-orientated people to help customers solve most problems as close to lightening-fast as possible.

Both sets of customers were pretty much as happy as each other.

And I’m sure the second business could have used a pricey CRM system to squeeze out a little more around the margins and get their service level up from 99.1% to 99.3%. Even 99.4% perhaps.

The question is, though, would that be worth £4million?

Because that’s what they would have needed to spend to bump up their service level by 0.2% points.

The answer to that question isn’t coming from science.

It’s science-adjacent, perhaps.

The decision may well involve numbers, RoI calculations, NPVs, LTVs and goodness knows what else.

It’s going to sound and feel a bit scientific, in places.

But the final decision isn’t science. It’s going to be humans making judgements, in the end.

And I’ve got to tell you – even though I work with numbers for a living and I can “do science” in that context – I’m not sure I’d even be spending a lot of time agonising over whether spending £4million in this situation was a good idea.

Even if you could show me an RoI above the threshold (which I doubt, on the numbers above), a positive NPV, and a slight uptick in LTV, I’m still not sure I’d do it.

Factor in a bit of execution risk, alongside the growing pains of any new tech solution. Then, in the real world, you’ve probably got a project with a negative NPV which will lead to a deterioration of LTV in the short-term, even if it builds back up a few fractions of a % in the longer term.

The doctor’s diagnosis

If I was a doctor, my starting point in assessing that former competitor would be that I’m dealing with a fundamentally healthy patient. Over 99% of things are going perfectly well for them.

Is there a chance of a tiny improvement if I get them into surgery or prescribe some tablets?

Yes, there is. A tiny improvement. And only a chance of it – in the real world it might make no difference at all. But, yes. A tiny chance of a tiny improvement.

Set against that outcome, I’d have to consider whether my intervention might make it worse.

The patient might have an adverse reaction to anaesthetic, metaphorically speaking, and pass away on the operating table.

They might experience unexpected side-effects from the pills.

They might become addicted to post-operative painkillers.

Are the chances of any of those things happening particularly high?

No, they’re not. But then again, the ultimate impact of any “improvement” is tiny too. And that’s before we factor the risks in.

After running a test or two to make sure, I’d probably tell this patient that whatever problem they thought they had was benign and wasn’t going to impact their life in the slightest. Any intervention would be likely to cause more problems than it solved.

While science-adjacent, this approach isn’t science.

First and foremost, we’re solving a human problem. Using judgement informed by experience. Weighing up the risks carefully and measuring them against the impact of any potential upside. Not just doing something for the sake of it, based on a superficial analysis.

One of my favourite quotes is from former President Ronald Reagan, who supposedly said to a US government official, “Don’t just do something, stand there,” in a neat reversal of the old saying.

Sometimes science is designed to make you feel you should be “doing something”. You might be at 99.1% in the league table, looking enviously at the people just ahead of you on 99.3%.

The “obvious” scientific decision is to strain every sinew to bank that extra 0.2%. After all, 99.3% is higher than 99.1%, right?

But…more often than you might think…a better answer is just to “stand there”.

This article originally appeared on LinkedIn.