Before founding PearlHPS, Gene Tange worked in a variety of enterprise roles including mergers and acquisitions, where he estimates he completed over 50 acquisitions at more than $5 billion in deal value. However, they weren't always smash hits.
"One of the things that I saw in doing these deals, is that a lot of them failed," Tange said. "A lot of them, with all good intentions, they still failed."
In fact, management consulting firm McKinsey & Company reported that 45% of technology projects run over budget, 56% don't deliver their expected business value, and 17% go so badly that they could potentially cause the failure of a company. This is why Tange started PearlHPS, a SaaS-based predictive execution analytics provider that helps businesses predict project outcomes up to 12 months out.
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Tange was first propelled to look at deal execution to better understand why some of those acquisitions he worked on were successful and others weren't. He started by hiring some PhD students from his post-grad program at Pepperdine University to examine 40 of the highest-performing companies in the world and find the hidden variables that affect execution.
The team completed 12,000 hours of research before they developed the software. What they found, Tange said, is that 80-90% of business outcomes were driven by the teams behind them, whether functional, cross-functional, or virtual teams.
"If you can get ahead of it by understanding whether a team has a high success probability 12 months out, then you have the time, energy, and insight to make the changes to improve outcomes," Tange said.After the years of multi-regression analysis, Tange said that they found 20 different variables of teams that, when they are tied together, can predict a business outcome up to a year in advance. However, they felt that 20 was too many to consistently measure for, so they narrowed it down to the three variables that had the highest probability of success when they had performed the regression.
Applying this research to make predictions, PearlHPS offers a core tool called PearlPredict. It uses a host of algorithms and data that is "known but unarticulated" to show how a given team will perform on a project such as a product launch or a corporate acquisition.
The first variable that PearlPredict measures is Team Leadership Capability (TLC), which is the percentage of the team that scores high in 15 characteristics that were found in the initial research. The minimum criteria for success a year out is 35% of the team or greater scoring high in TLC. Tange said it's about looking at the complementary nature of the team, not just individuals.
The product also looks at Team Continuity (TC), which is the probability that you can keep highly capability people on the project for the duration of the project. And, that's different for different kinds of teams, Tange said. Whether functional, cross-functional, or virtual teams will affect continuity.
Finally, PearlPredict measures Team Goal Load (TGL), which accounts for the number of goals that each member of the team has on their plate at the time of your project. There's an optimum number of goals that will affect success. For example, if a team member is asked to be a part of another team during a project, it will ultimately affect their ability to perform as a part of your project team.
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In terms of the data use, the software relies on 25% structured and 75% of the aforementioned "known but unarticulated" data.
"The software pulls from both existing data repositories and unique data sources that are a provided by the business that flow through our proprietary analytics and that address key variables that our algorithms and analytics use," according to a company press release.
Once the program has completed the analysis, it is presented visually to the user. The analytics can then be used in a prescriptive behavior to determine if a project is worth pursuing, or to alter a team on a project for the maximum potential outcome.
The 3 big takeaways for TechRepublic readers
- PearlHPS PearlPredict claims that it can predict business outcomes up to a year out, which could help with business forecasting and project planning.
- The PearlHPS software measure three data points on a team to determine what the likely percentage chance of success is on a given project, allowing leaders to change a team to increase their odds.
- The tool relies on structured and "known but unarticulated," which it pulls from repositories and from data sources unique to the company to perform its analysis.
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Conner Forrest has nothing to disclose. He doesn't hold investments in the technology companies he covers.
Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.