Companies Can Benefit from Taming Tacit Interactions


If there's one thing that IT loves, it's automating processes, in the aim of boosting efficiency and cutting costs. But what about the processes that aren't easily automated?


McKinsey & Co. coined the term "tacit interactions" to describe these kinds of processes, notes JargonSpy columnist Dan Woods in Forbes. Some notable examples: negotiating a deal, authoring a blog (a task near and dear to my heart) and selling a product. Such interactions typically involve collecting information from a variety of sources and are rarely completed the same way twice.


Tacit interactions account for a large chunk of business processes, writes Woods. He cites McKinsey's findings that some 41 percent of processes were tacit interactions in 2000 but today account for 70 percent of newly created jobs. (Wonder if the growth of Web 2.0-type collaboration, which is often light on structure, accounts for at least some of this increase?) Not only that, but industries with especially large numbers of tacit interactions see a much larger performance gap between star employees and their more average counterparts, highlighting the importance of process improvement.


Many companies are already aware of this, as evidenced by trends such as the convergence of CRM, which tends to be filled with tacit interactions, and business process management (BPM), which I wrote about in September.


Woods highlights three approaches to reaping bigger benefits from tacit interactions:

  • Scrum, a form of Agile software development that has moved beyond development to be used for other business projects. The key, writes Woods, "seems to flow from improving communication and letting the right way to work emerge from the team." A challenge of Scrum, or any Agile methodology for that matter, is its emphasis on flexibility, a concept with which many organizations struggle, as I wrote earlier this year.
  • An approach to wikis developed by Socialtext "which accelerates the formation of teams, the flow of information in a team and the pace of tacit interactions," writes Woods. Wikis can offer obvious value for organizations, as IT Business Edge blogger Rob Enderle illustrates in his post on a product development project at EMC that made good use of wikis and other Web 2.0 collaboration tools and, not coincidentally, didn't adhere to EMC's usual project management processes.
  • A new product from startup ActionBase that "combines a wiki-like document structure with a simple way of modeling and managing tasks through Outlook and Word," writes Woods. IT Business Edge associate editor Lora Bentley spoke with the company's CTO earlier this month and was similarly impressed with its approach. In particular, she noted its ability to aid compliance efforts -- another shortcoming of tacit interactions -- by making such interactions more transparent.

Woods suggests that companies can benefit even if they don't adopt these approaches, simply by finding inspiration in some of their key principles, such as flexibility and transparency.