The case study presented by McClanahan and Wilson (2021) examines the reorganization of Allstate’s Data Group. In 1931, Allstate’s Data, Discovery, and Decision Making group (D3) was a small group of data scientists who analyzed insurance risks. However, by 2017, the D3 was comprised of 300 members, and the specialization of the company expanded to numerous other projects related to data science. The employees at Allstate were primarily former academics with “PhDs in computer science, physics, statistics, and engineering” (McClanahan & Wilson, 2021, p. 2). The central idea behind the distribution of employees was that they did not have any specific position. Instead, they were distributed according to their experience and were assigned to the projects vertically depending on requirements.
The realignment of lower-level managers in 2014 was regarded as a failure because the D3 employees were discouraged by the fact that they had no choice. In 2017, the administration expressed the necessity to reorganize the company again but was afraid to repeat the past negative experience. For this reason, the HR algorithm was developed; it “matched participants to a rotation assignment based on their experience and skillset” (McClanahan & Wilson, 2021, p. 4). As a result, the number of dissatisfied employees was relatively low, whereas the performance of the D3 was still high.
Generally, this experience was successful, but it was still too complicated and time-consuming because 90 percent of employees kept their positions. It is suggested that Allstate’s Data Group would be better off if it not only rotated the employees but also altered its vertical system of job distribution. More precisely, it is recommended to establish positions depending on skills so that every person would have a precise set of constant responsibilities instead of assigning employees to the projects vertically.
Reference
McClanahan, K. J., & Wilson, M. M. (2021). Algorithmic management in action: The reorganization of Allstates Data Group. Northwestern Kellogg School of Management, 1-11.