Posts tagged ‘HR’
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.
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.
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.
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:
- Strong data management skills
- Captivating storyteller
- Understand the business
- Ability to visualize your results
- Strong psychological skills
- 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:
In essence, if you:
- 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.
- 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).
- 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.
- 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
- 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.
- 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.
If you were to build an HR analytics department where would you put it in your organization? The obvious answer may at first be to put it in HR. But at second glance this may not be the right place. Maybe even the wrong place.
I believe there are five good reasons why HR Analytics (or Workforce Analytics or HR Data or whatever it may be called) should indeed not be placed within the HR department.
- It will lose its strategic potential. It is common knowledge that HR Analytics has far greater potential if it is directed towards strategic issues rather than operational and tactical ones. To put HR analytics in HR will create two problems. The first is that I often see HR Analytics focus on improving HR processes only. Nothing wrong with showing the link between engagement and employee turnover rates, it is just not very strategic. Nothing wrong with improving the training programs with analytics – it is just not very strategic. Tactical at best but most often operational. The strategic mindset is often not present. The second reason is that HR is mainly strategic when it is working outside of HR’s own silo and instead fronting the business and the front line. Some even argue that it is not HR’s role to be stategic. Putting HR Analytics deep inside some (often random) HR function makes the decision making process far removed from the business – and hence strategic – side of matters.
- HR does not have the capabilities – and will not be able to attract the right ones. I have argued that to succeed with any kind of analytics you will need to attract a number of different capabilities to take charge of your analytics effort. These capabilities, competencies and skills include i) being excellent at statistics and numbers, ii) strong data management skills, iii)) captivating storytelling skills, iv) visualization skills, v) strong psychological skills to understand terms such as bias and heuristics, and vi) the ability to truly understand the business. Very few in HR master these and fewer yet have a strong team which complement each other enough to be able to build the right team. Likely they will fall short on data management skills, visualization skills, statistics and understanding the business. And worse, those people are not looking at HR job ads. Trust me.
- HR does not have ownership of all the relevant data. Many of the data which HR has ownership of (recruitment data, performance data, engagement data etc.) needs to be combined with data which reside in other parts of the organization such as finance (payroll), IT, legal and most importantly all the customer related data. These may also just be basic things such as master data. Many times HR Analytics people do want to work on strategic matters but need data which they are not allowed access to for internal reasons. In my experience these are often customer and profit data. If HR Analytics resides in a function outside of HR these data may be more available.
- Efficiency gains. Purely from an economic and efficiency point of view, it does not make sense to have several small teams scattered around the organization trying essentially to do the same thing; namely to do analytics. Instead pull the people together, let them build on each other’s experience and competencies, save money and efficiency by having one big analytics department instead of one in HR, marketing, IT, business units and where else they may be.
- Credibility issues. If HR has not been using data well in the past but instead has created and submitted poor business plans made more by gut feel than by use of good data, and if HR has produced endless of meaningless data reports on absenteeism, employees turnover, sick-days and percentage of women in workforce with questionable data quality, and if HR generally argues by what feels right rather than what is right, then the quality of the analytics work will be called into question just simply because it comes from HR. HR does not have the credibility to work and argue with data. It may require someone from finance or business intelligence to produce and conclude the HR analytics for it to be taken serious.
If you take this perspective where should you then place the HR Analytics people? One approach would be to create a central business intelligence unit where all the company’s analytics will take place. Another approach is to create one or more center of excellence so much of the BI capability can be decentralized to the business units. And there are many other ways.
But maybe HR Analytics should not be placed 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?
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.
Today is the 200th birthday of Søren Aabye Kierkegaard – the Danish thinker and philosopher. Kierkegaard is probably best known as the first existentialist philosopher and as a religious writer but he was also a critical writer within psychology, moral and ethics. He wrote of many Freudian concepts long before Freud was even born.
Kierkegaard is of course being celebrated throughout the world today. And rightly so. But I also believe that we within the HR profession should pay a tribute to his work and thinking. Why do I think that?
The easy way to explain this would be to post some fancy quotes which illustrate his thinking and how he can inspire us such as:
- “Our life always expresses the result of our dominant thoughts”
- “Patience is necessary, and one cannot reap immediately where one has sown”
- “One can advise comfortably from a safe port”
- “Personality is only ripe when a man has made the truth his own”
- “Life must be understood backwards; but… it must be lived forward”
- “There is nothing with which every man is so afraid as getting to know how enormously much he is capable of doing and becoming.”
- “Once you label me you negate me.”
- “The most painful state of being is remembering the future, particularly the one you’ll never have.”
The problem with quotes is that they are always taken from a context and I don’t think quotes are that meaningful to understand a person or even what he/she was talking about.
So to explain why HR should pay tribute to Kierkegaard I want to point to his fundamental philosophical thinking and what he was trying to accomplish. Kierkegaard was devoted to the idea of how each of us lives as a “single individual”, giving priority to concrete human reality over abstract thinking, and he highlighted the importance of personal choice and commitment. His concept of “Truth as Subjectivity” and his idea of the limitation of science’s ability to reveal the inner workings of the human spirit is probably fundament cornerstones on which philosophical HR is built on (if there is such as thing as philosophical HR?). I don’t think that modern HR would be the same had Kierkegaard not been alive.
So with that in mind: happy birth Søren Aabye Kierkegaard.
HR represents something of a paradox. On the one hand, management gurus suggest that HR should be central to the strategic thinking in most organisations. Jack Welsh – former CEO of GE – suggests that the HR executive should be hierarchically second only to the CEO, and at least on a level with the CFO. Jim Collins writes that the best companies understand that they must get the right people on the bus, get the right people in the right seats and only then find out where the bus should drive i.e. the people stuff comes before strategy.
And survey after survey show that people and talent related issues are top priorities and concerns among top executives across the western world. Also, more and more evidence show that the companies with the best people processes and ability to attract the best talent consistently outperform the rest across all industries and countries. It is also near impossible to open a management book or a magazine today without reading that “people is the most important asset” for companies today. This all suggests that HR should be the most important department in any organisation.
On the other hand, most people – including most top executives – often perceive HR to be an administrative function whose purpose is to make sure that people are paid on time, that employment contracts are signed and that relations with unions are good. Stuff that does not add much strategic value. When asked, CEO’s and CFO’s reply that they do not believe that their current HR function is delivering or is even able to deliver the value which is expected of them. HR is still not the strategic partner it wants to be.
So on one hand CEO’s say people stuff is important and on the other they don’t regard HR as important. This is a paradox.
This gap between the theoretical added value of HR and the perception that HR is not adding much value is in large part down to HR practices. Perhaps the best way to describe the current state of HR is to say that it is an area where practice lags behind knowledge quite a lot. There is a lot of evidence that shows that HR can add customer and shareholder value, but it is also fair to say that that practice is different.
I am not sure why. From my chair, I see a lot of improvement; improved practices, new mind-set and focus on value creation. That is why I am surprised that the latest surveys have not improved the picture of HR. Perhaps there is a fixed bias against HR, perhaps it is true that HR really does add no value, perhaps this is changing or perhaps HR is adding a ton of value but it is just not possible to prove it (and therefore other people take the credit). I don’t know. I am just a bit sick of hearing all the time how poor HR is. It is not what I am seeing.