Hermanni Hyytiälä as Aiwo's CDO

August 26, 2021
Tiia Rahkonen

Hermanni Hyytiälä has started as Aiwo's CDO (Chief Development Officer). Hyytiälä is known as a leading expert in failure demand and modern management and his work for organizational development. He initially started his impressive career as a software architect, after which he has moved to a variety of positions ranging from team leader, technology director and executive board membership before moving into the consulting world, in which role he has been for almost 15 years. In his own words, he describes himself as a "recovering nerd" and "handshaker". The ability and development of service organizations began to interest Hyytiälä through personal experiences.

I noticed through my own personal experiences that there is much room for improvement in public social and health care services. Through that, I became generally interested in service organizations and their development. I also became acquainted with the life work of British Professor John Seddon, who opened the world to me on these topics. He’s kind of  like my apprentice who inspired me to make a career change from a software developer to a consultant, Hyytiälä backgrounds.

Failure demand at the center of the service event 

Hyytiälä is one of the internationally reowned experts on failure demand, of which he has read extensively and spoken actively throughout his career, as well as written in various contexts. When searching for the failure demand in Finnish with a word "häiriökysyntä" from search engines, Hyytiälä's name will come up already from the first page.

Failure demand is demand caused by a failure to do something or do something right for the customer. Customers come back, making further demands, unnecessarily consuming the organization's resources because the service they receive is ineffective (Seddon 2003, Freedom from Command & Control).

So the failure demand is basically a supply-demand problem where supply and demand don't meet in a service transaction. If an organization doesn't recognize and respond what matters to you, your service experience is poorer, and the organization consumes additional resources to resolve your situation. For example, a customer may repeatedly apply for a service against the customer's will because the customer hasn't received a solution to the problem.

According to Hyytiälä, failure demand is invisible phenomenon especially for service organization decision-makers.

Failure demand can be often identified when a customer reluctantly contacts a service organization in order to meet with needs or goals. From the point of view of the organization, on the other hand, the failure demand appears in a way that the same customer repeatedly contacts the company and the organization reluctantly has to serve this customer. This type of reluctant interaction is usually a signal of failure demand, Hyytiälä emphasizes.

Hermanni Hyytiälä opens the concept of failure demand with an excellent "Busy restaurant" example (in Finnish) in Aiwo Studio. Watch the clip (in Finnish) from here: Busy restaurant

The amount of failure demand varies in different industries. In the finance sector the amount of failure demand is between 20 to 60 percent of all customer-generated demand. In the telecom, on the other hand, the amount failure demand is even between 70 to 90 percent. It is not uncommon for public sector failure demand to be well over 50 percent.

Aiwo arises curiosity and changes the way of thinking 

During Hyytiälä's nearly 15-year consulting career Hyytiälä has learned to see things that recur in organizations. He is also familiar with the most common ways that the organizations set out to solve the problems. Consulting is one of those with what, according to Hyytiälä, a certain point can be reached. But something else is needed, if changes in the way of thinking or in systemics want to be achieved. Hyytiälä mentions his apprentice John Seddon who has said that a well-functioning IT system shouldn't be installed in a poorly functioning organization. Based on this thought Hyytiälä does his work, by helping organizations to firstly do the right things and act more sensibly, before installing any IT system or other digital process.

In a consulting world, I have seen how the service organizations are managed according to industrial production-based paradigm, which is the root cause for failure demand. This is then addressed through consulting, service design, leaning or digitization. First the basics should be put in order and only then see if the service design, leaning or digitalization will help. Service design alone cannot tackle the problem of failure demand, emphasizes Hyytiälä.

In his work as a consultant Hyytiälä helps organization to do better new things and not existing things better. He also helps the organizations to "unlearn" from existing norms and habits. He does this by first arousing curiosity in the listener:

Rational argumentation won't help to "unlearn" so to change the person's norms, whether it's work, relationship, friendship or parenthood. If another person things differently about the matter being discussed, it's very hard to change one's way of thinking with rational argumentation. For that normative experimental learning is needed. The organizational psychologist and professor emeritus Chris Argyris created criteria for how the person's norms can be change. There are three things needed: valid data, cognitive dissonance and pragmatic norms that the person consciously adopts. When these three are met, the better things can be done, says Hyytiälä.

Hyytiälä says that Aiwo as a platform offers these: valid data, and cognitive dissonance, which means the mental state that's caused by the two contradictory matters. In other words, Aiwo is able to arouse curiosity and possibly change a person’s perceptions with the help of the valid data that Aiwo provides to its users in an objective and real-time manner by using artificial intelligence.

As an intervention tool  Aiwo is impressive. It helps to see things that people have not seen or been able to look at before. Aiwo brings out the interaction between the organization and the client by telling what type of interaction it is, and how much the interaction contains failure demand, Hyytiälä tells.

aiwo, CDO, hermanni hyytiälä

Aiwo's CDO Hermanni Hyytiälä.

Aiwo's technology creates a shared reality for the organization

Inspired by the emeritus professor Pauli Juuti, Hyytiälä also talks a lot about the hierarchy of power that poses challenges to communicate the reality that prevails in an organization. Juuti sees this as the biggest single problem in organizations.

Hyytiälä thinks that the fundamental dilemma of organizations is difficult to solve only through consultation when the design and management of work is based on hierarchy.

It is possible, but extremely challenging. I feel that  Aiwo's technology creates a snapshot of a common reality, can bridge the gap between top management and employees and, on the other hand, between top management and customers as well. Through this, wiser decisions can be made in both strategic and operational development.

Hyytiälä sees that Aiwo can also be useful tool in consulting work:

I sincerely believe that many consulting firms would also benefit from the service in different projects regarding change, digitalization and customer orientation development. Aiwo provides consulting firms with a real-time overall picture of customers' needs, failure demand, and employee development issues. As a consultant myself I would have often longed for the snapshots that Aiwo creates as a basis for decision making and development plans. I believe and hope that consulting companies understand the value and benefits of Aiwo for them. 

Failure demand emerges from the analysis that Aiwo provides

As Aiwo's CDO, Hyytiälä will be helping in the development of Aiwo platform. In addition to that he will be coaching Aiwo's customer organizations to see from Aiwo the interaction regarding failure demand.  Hyytiälä offers consulting services about failure demand in general and on key concepts related to organizational development, so that the organizations will know what is being discussed and what they are looking for from the overall picture that Aiwo provides.

Hyytiälä sees enormous potential in Aiwo and is excited about how technology can solve issues that would traditionally require consultants. He thinks that Aiwo provides a different approach to eternal problems that exists in organizations.

It is also great to start developing and growing Aiwo together with a great team and find new markets through failure demand, Hyytiälä smiles.