We need to outsmart our smart devices

Most commentary about the Internet of Things assumes that we sacrifice privacy and security for huge efficiency gains. But what if the notion underlying that tradeoff – the idea that more connectivity always means greater efficiency – is flawed? What if indiscriminate information sharing has the same drawbacks with devices as it does with people?

Research shows, after all, that privacy is a source of productivity in organizations. And excessive transparency – in a totally open work environment, for example – makes us less productive and squashes creative problem solving. When we know we’re being closely monitored, we tend to stick to protocol, even when it’s inefficient.

Too much transparency between smart devices can have a similar effect. As much as we’d like to think that all the devices in our cars (and the cars around us) are talking to one another just to keep us safe, they’re also talking about us – and transmitting our data for analysis. Of course, when devices track our behavior on the job, we’re keenly aware of being watched and evaluated. It’s as if the boss is right there every second, noting every misstep. So we don’t take chances and innovate – unless we feel assured that our data won’t be used against us.

So, how much “talking” should devices do?

Executives at a large gas utility wrestled with this question when Harvard Business School researcher Shelley Xin Li and I conducted a recent field experiment involving its service mechanics. The company had put in place advanced mobile technology that has become increasingly standard – for instance, laptops in every truck connected to the central dispatch and order system – to track the mechanics as they did their jobs. The goal was to provide developmental feedback and help the mechanics deliver more efficient customer service, but executives weren’t sure how to report the data they gathered.

They considered making it available to everyone, so that each individual would know how she or he ranked in performance compared with anyone else at any given time. Such real-time transparency, they thought, could increase motivation, promote a culture of fairness, provide feedback for self-improvement, and give managers better tools for developing their people.

But the executives could also imagine how unrestricted access to the data might have deleterious effects on culture and performance. It could undermine employees’ willingness to experiment, for instance, and result in missed opportunities for process improvement.

So far, the company seems to have struck the right balance for its employees: sharing team performance with everyone but making individual data available only to the worker in question. Internal focus groups felt that “the culture’s focus on collaboration and productivity” would give way to competition if each person’s data were out there for all to see.

It’s not easy to find the right interface between human beings and smart devices. Increased connectivity and transparency can cause employees to engage in unproductive behaviors to ward off retribution.

What’s more, devices aren’t always right about us. And we waste energy (and put a drag on productivity) trying to fool them into being right. Consider what happens when the office lights automatically turn off because you haven’t moved and the sensor thinks you’re gone. You wave your arms madly in the dark, waiting for the lights to come back on.

Maybe the answer is to make devices even smarter, and version 2.0 will solve everything. But more likely, we’ll have to come up with better and better ways to outsmart them.


(Ethan Bernstein is an assistant professor of business administration in the organizational behavior unit at Harvard Business School.)

© 2014 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate