Posts filed under ‘Human Capital Management’

Why evidence-based HR is critical to success and how to get started

I am huge fan of HR Data & Analytics and I have had the privilege of working with it for many years now. However, it is important to remember one thing; HR Analytics is only a mean to and end; one tool and one mean to better HR.

I talked about exactly that at Human Consult Network with Annemarie Malchow-Knudsen. We discussed among others the need for more evidence in HR and how you in small- and medium sized companies can get started.

Place your bet where you have the highest chances of winning

The purpose of evidence-based HR is not to find “the Right Answer” – we are dealing with people after all. The purpose is to use all available evidence (research, internal data, analysis, experience, interviews etc.) to find the solution with the highest probability of adding the most value to your organization and start out from there. If that doesn’t sound strong enough, believe me, it will be a huge improvement from where we are.

Why will the solutions be better? Psychological research shows that even the most reflected people fall into pitfalls such as biases (see some of the most common ones here, here and here)and prejudices when judging what the best thing to do is. We simply often choose less probable outcomes over more probable ones without even knowing it. Ordinary people like you and I do it all the time.

One way to get around it is to apply an evidence-based approach to establishing the most optimal people interventions. And this is where data comes into the picture. By being better at testing your HR-hypotheses with the use of data and valid analytical tools, you will eliminate the number of times where you decide to go for an HR intervention, which sounds appealing does not have the effect you hope for.

Start with the business challenge and then identify the data

I have seen too many good people get stuck in data cleaning, data management and tough IT-implementations without getting any business results to know that there must be a better way. So, if you don’t want to end up in that situation start with the business challenge and focus where you can add value quickly. My experience is that many start the other way around as the only option and that can mean that business results take too long to materialize.

HR Data Value Chain

Start from the top of the figure (for more info about the content of the pyramid see here) shown above by asking for the business issue, which you will help solving. If the primary business focus is on cost-optimization, your people activities should also focus on cost-optimization. You should focus on getting most value for money invested whether you are involved in leadership development, induction programs, talent management, staffing or something else.

Then ask which knowledge you will need to get that insight: do you need more knowledge of learning efficiency, more knowledge of staffing costs versus performance outcomes of different staffing strategies, insight to identify the best-fit candidates when recruiting etc.

Then identify the information you will need to create that knowledge. You can get inspiration externally from scientific research and best practices, and you can strengthen the argument by analyzing your own organization.

Only then, will you know which data you will need to establish to underpin your intervention with convincing evidence. You can now gather exactly the data required to make an ROI-assessment to underpin your argument – and help you chose the approach with the highest probability of success.

Taking this agile approach will enable you to build your data foundation along with creating value-adding insights to inform business decisions. You cannot avoid investing in data and technology, but providing a flow of value adding insights will ease the funding.

 

14/09/2017 at 11:43 3 comments

Storytelling is nothing without a proper theory – here’s why

Storytelling is rightly hailed as a must-have competence in people analytics. In my own competency model, it is one of the six core competencies any analytics team must have. Other models do the same. Compelling arguments are being made about the value of good storytelling. In other words; master it or beat it.

So don’t get me wrong; it is important. But my point in this post is that storytelling requires the presence of a theory to be successful. If you do not have a proper – i.e. a plausible and documented – theory behind your data, storytelling can do more harm than good.

Angela Duckworth observes in her book: Grit – the power of passion and perseverance, that “a theory is an explanation. A theory takes a blizzard of facts and observations and explains, in the most basic terms, what the heck is going on”. I could not have put it better myself. And funnily enough, this is also what storytelling is doing – explaining what the data says.

Let me give you an example why you need a theory to tell a story: ZengerFolkman – an excellent US data-driven leadership development consultancy company – has compared the combined leadership effectiveness scores as measured on 360-degree evaluations for men and women respectively at different leadership levels. The result is, as you can see below, that women score better than men at all levels and that this difference is more significant the more senior the leaders are.

Screen Shot 08-01-16 at 10.33 PM

I recently made the same observation within a financial institution. They had collected performance data for all their leaders and we were comparing performance data – split into different KPI groups – and it was clear that the performance rating was significantly better for the female leaders and also that difference was greater the more senior the leaders were. The data at this company confirmed the international data I had found. I had data and I had other similar data points to back them up.

So far so good.

The problem is, that although the difference between performance scores is significant the data makes little sense without a theory to explain the observations. Why are women leaders rated better than men? All we know is that the performance ratings/360-degree evaluations put women higher than men. It may be that women are better leaders than men. It could also be that women are reported to be better leaders but in reality are on par with men. Maybe there is a bias in the evaluation of female leaders. Or it could be a third reason.

Another thing to consider is the relationship between the portion of female to male leaders vs. overall performance. Is it linear or does it have another shape as depicted in the figure below? If it is linear and you conclude that females are better than male leaders, then a natural recommendation is that you should replace all male leaders with female. If on the other hand the relationship has some other shape – such as the one in the second figure below – you should identify the optimal point to reach leadership effectiveness.

Screen Shot 08-01-16 at 10.30 PM

My point is that without an answer as to why there is a difference you cannot create a story and a recommendation. To come up with a proper recommendation you must have a proper theory to explain the why. The basic analysis cannot explain it and you cannot go straight to storytelling because you are still left with the basic question of ‘why’. And what you will be left with are leaders sitting around a table wondering what to do. In this case, maybe there is a good theory. I don’t know of it (but would love to hear it if you happen to have one).

So you need a theory behind your data. An explanation if you will. It does not need to be verified by Harvard or any such institution. But you do need an explanation. Let’s say that you find that the talent you source from one university performs significantly better than the talent you source from another. You need to understand why. If you cannot explain why through a theory, your storytelling will lack the power it has the potential to have.

So: please do not do storytelling on people analytics without a proper theory explaining your data. It really makes no sense.

02/08/2016 at 18:42 4 comments

Six must-have competencies in a world-class analytics team

Succeeding with workforce analytics is difficult. It requires a mix of skills not found in one person only, and you should not assume, that you can do it on your own. We are all decent at most things but really only good in a few. You should therefore assemble a team, which has a multiple of superheroes each with a superpower of their own.

I described this in a previous post, where I suggested six competencies a superhero analytics team should have:

  1. Strong data management skills
  2. Captivating storyteller
  3. Understand the business
  4. Ability to visualize your results
  5. Strong psychological skills
  6. Excellent statistics and numbers skills

But what happens if just one of those skills are not present? Can’t we manage anyway? My answer is no. If just one of the skills is missing from the team, six outcomes are possible – each with a disastrous outcome – as shown in the figure below:

Superhero Analytics Team competencies

In essence, if you:

  1. have no good data, you will not be able to perform analytics. It is as the old saying goes: crap in – crap out. If you do not have good data, it is sometimes better not to do analytics.
  2. lack of storytelling abilities, the message will nog. As Tom Davenport describes: “Narrative is the way we simplify and make sense of a complex world” and it is the way messages are most effectively conveyed and the best way to get people to change (which is the ultimate goal of analytics).
  3. have no business acumen will mean that your team will perform excellent analytics on the wrong issues. Workforce Analytics should help decision making on vital must win battles for your organization. Understanding the business is vital to understand what those must win battles are.
  4. are not able to do visualizations you will bore your audience. Data and numbers are boring (and I am a numbers guy), but data and numbers effectively conveyed through visualization
  5. lack psychological skills you will misunderstand your findings, be unable to convert your information to knowledge and be subject to important challenges such as bias, cognitive dissonance, imposter syndrome etc.
  6. have poor numbers and statistics abilities, your analysis will just be plain poor. You can get really far with simple regression-, factor- and t-test analysis skills but at other times, you will need skills in more advanced statistics when the data set become really big or you are looking for more predictive analysis.

Analytics require a lot of skills and abilities – superpowers if you like. The best way to ensure that you have the right ones to deliver on your task is to assemble the best team. An analytics superhero team.

06/06/2016 at 11:16 4 comments

Should HR introduce quota for men?

HR is primarily staffed by women. That is a fact. Whichever way you look at it, when you call HR you will most likely speak to a woman. HR is best described as a 47 year old white woman. Some have called it a “pink-collar ghetto”.

In my last blog, I asked why there are so many women in HR and I have received a number of suggestions. Some I can’t repeat here. Some have gone the “women care more about people than men”-route, others the “HR is the place to be if you are not career-orientated, which many women are not”-type of argument and others again have argued that “that’s the only areas we are allowed into”-argument.

A few (women) suggested to me that there might be discriminatory factors at play. Their line of argument goes the same way as when we are talking about the fact that there are more men in top management – women are biased towards women, men towards men. And – goes the argument- because top managers are men hire other top managers, they will hire men. And in HR the reverse is true.

I don’t know what the reason is and frankly I don’t have a strong opinion either way. What I do wonder however is; would HR be better if there was to be a more balanced gender profile in HR?  Women have long argued – and provided likely evidence by way of correlations studies – that a more balanced gender profile at a leadership level (i.e. more women) – will lead to higher profits.

The trend in HR is that there will be more women in HR going forward. So if we want to reverse the trend perhaps we need to introduce more draconian steps such as introducing quota for men in HR? I am making this suggesting with a twinkle in my eye – a bit of summer fun. But play along. In Norway, a law has been introduced which states that 40% of the board members must be women for listed companies. Should we set an equal quota for men? At 40%? And what – if any – would the consequence be for HR delivery?

01/08/2013 at 14:09 6 comments

Why are there so many women in HR?

Women in HR

I know that I am probably heading into dangerous waters by asking this question; but why are there so many women in HR and what – if any – are the consequences?

In US as well as Europe, HR is totally dominated by women. In US the number is close to 70%; 71% of HR managers according to the Forbes List of the Top 10 Best-Paying Jobs for Women in 2011 and 69% of HR professionals based on a study by HRxAnalysts.

Women’s domination of HR has even extended to the CHRO ranks, despite the persistent belief that men still occupy the vast majority of the top jobs. 67% of all VP’s of HR posts are now held by women.

In Europe the picture is pretty much the same. In UK, 72% of the Chartered Institute of Personnel and Development’s (CIPD) members are women. Here in Denmark the picture is the same – just above 70% of people employed in HR are female.

What may surprise some is that the proportion of women in HR has been rising over the last 10-15 years. In UK in 1997 the proportion was 63.8% and then steadily rose to 79,3% in 2007 since when it has been flat. The same is true both  in Denmark where the rise was notable between 2000-2008 as well as in US.

Numbers and statistics can sometimes be deceptive. But not in this case. Personally, when I speak to groups of HR people or meet with HR as a consultant, I will mostly meet with a woman.  John Sumser said in 2011 following a large study, that “HR is a 47 year old white woman” in US. From my own experience I certainly see what the numbers are telling me.

And this picture is unlikely to change. Looking at universities across the Western World, most of the graduates in HR focused classes are primarily female. Here in Copenhagen, the HRM line at the Copenhagen Business School has 18 men and 132 women attending from what I am told. Also looking at the leadership pipeline, it is most likely that HR will continue to be dominated by women. In UK, 86% of entry level people in HR are female.

The only thing I can see that might change this picture is if HR become more data-orientated, more technology-based, more evidence-based, more financial orientated and yes, more of a science. I was at a Workforce Analytics conference in London earlier this year and most of the participants were men. I am making a lot of assumptions here, but perhaps something like WA will change things?

Why are there more women than men in HR? This is where it becomes dangerous (for me). A few suggestions are

  • Some point towards genetics and biology which – goes the argument – lends itself to the female nature of caring and developing people. They argue that HR is simply more suited for women.
  • Others point towards a long term trend in HR away from the hard core industrial relations (macho and male dominated) to the more developmental psychological HRM which is more feminine in its approach.
  • Some say that some functions are male/female – HR being female, IT being male. The argument goes something like this; with more and more females entering the workforce, HR (together with Communications) attracted more female in the male dominated business world from which men had not intention of letting the power slip away.
  • Others argue that HR simply is less discriminatory and therefore easier for women to enter.

Frankly, I don’t know what the reason is. All I can do is to conclude that there are many women in HR – a trend which has been rising for the last ten years. But why? I would like to hear your view on this one.

The final question must however be; does it matter? This is a classic question in any diversity program; will a company make more money if more of its senior leaders where women and similarly will HR be better and deliver better services if there were more men? Again, I don’t know. But I do believe in general, that the best results – in any function, department and at any level – is achieved with a balanced workforce. Is HR in balance?

15/07/2013 at 21:08 48 comments

Prediction: The HR specialist will be back

HR Specialist will be back

The HR Partner role (the HR generalist) is very much in vogue.  Everywhere I look (here in Northern Europe) this model is being applied. In fact, over the last five years the title “HR Partner” has probably received a bit of a mini-revival again. It is cool to be a HR Partner theses days.

The introduction of the HR Partner model was right and welcome when it was introduced 20 years ago. HR had built ivory towers in company headquarters and did not know what was going on in the business. Managers and leaders did not feel that HR understood or even cared about what the company was about. They felt that HR was all about creating big processes and programs that did not match the business need. So a change was good. And in stepped Dave Ulrich and with him the HR Partner model. The pendulum began to swing back towards the generalist.

Now I believe things are about to change again. Why? Simply, because they have to. And because new trends are emerging which requires HR specialists to do the job. 20 years ago the structure of HR did not match the need of the business. I think the same is true again.

Many companies have hired HR Partners while downsizing HR specialists. The HR Partner is a generalist who is moved out in the business as close as possible to the unit-manager. The idea is that the partner should be the right hand man/woman to the function leader. The job itself is a mix of administrative and tactical work with a hint of strategic work in some (often rare) cases. The result: HR is now close to the business and is visible to the rest of the organization. But at the same time they must master everything HR related. They are jack of all trades.

This will change.

I don’t think that things will go back to the old. It never does. And nor should it. But specialists are needed. New and important trends are emerging which requires specialists. Just take the area of HR data which includes Big HR Data, Analytics and the fact that HR is being more software driven in general. To master this HR must employ specialists. But not in big centralized headquarter departments. Instead I think companies will create some HR Excellence Centers which will support both HR partners – of which there will be fewer – and corporate HR. They will be very specialized in key HR areas such as Social Media, Workforce Analytics, Talent Management, Leadership Development and Performance Management.

So my prediction for HR for 2020: Outsource more, focus on HR strategy and increase specialization. That will, by the way, make HR more influential and so much better.

13/06/2013 at 09:44 5 comments

Be careful with the sports metaphor – also in HR

Sports metaphors in HR

Leading a company or managing a team in an organization is not like coaching a soccer or a basketball team. It’s not. There are some similarities – such as how to motivate, coach, prepare and celebrate successes – but even in those cases you should be careful. The metaphor of sports can limit you as well.

Don’t get me wrong. I am very inspired by the late John Wooden who I think was one of the best coaches in sports history. He won the NCAA championship ten times in 12 years – seven of which were in a row. His insights into how to motivate a team and how to get the best out of talent are inspirational. Also, when I see Al Pacino give his half time speech in “Any Given Sunday” I get goosebumps. And I have previously argued that these guys’ know a lot about spotting, assessing and motivating talent and that this insight is useful.

But, I am surprised how far many take the analogy. In US, football is the most frequently used sports metaphor to explain how business works, what leadership looks like, and how employees are expected to perform. And this I think is dangerous.

The great benefit of metaphors is that they simplify and that they can create a sense of understanding. Metaphors and analogies often distort our thinking by disproportionately focus. For example, if you use the sports metaphor you are likely to be narrowed in the following ways;

  • All interactions in the marketplace are games to be won (some are, but most are not)
  • The only objective is to win the game – at whatever cost (not at whatever cost)
  • Customers are spectators (you should involve them – use co-creation etc.)
  • You should fire employees who are not ‘in the zone’ (who is in the zone all the time at work?)
  • The rules of the game are fair and fixed (no they are not)
  • There is a referee who will be fair and impartial (nope)

Further, there are also so many differences between an organizational and sports context. The most obvious include the composition of team, context of work and intensity of context. But more importantly, what is a talent and high performer in a sports context is so very different from an organizational context.

So I think you should be careful before you rename your ‘managers’ to ‘coaches’ – as they have done at Eastman Chemical – give out gold, silver and bronze medals to best performing teams or assess your talents from a sports understand of what a talent is. It may work and be appropriate, but many times companies experience the hidden bindings of analogies.

HR must be careful not to fall into the trap of using sports as the primary analogy. It is tempting in talent management and performance management, but it carries risks. Business is like a game, but it is not exactly like a game. Be inspired by sports, but also be very careful not to make it the center of your understanding when designing processes in your organization.

15/03/2013 at 09:50 Leave a comment

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