Wednesday, 8 October 2014

#Analytics, Analytics, Analytics - NOT The Future of #HR #hrtechconf #hrtecheurope

I'm looking forward to the tweets from HR Technology (US), and then later HR Tech Europe, as I can't get to either of them this year (in fact I've not been to HR Technology (US) for three years now since I last presented there.)

Both are normally great conferences - helped by the space they operate within as there is so much new and highly impactful within HR tech.

However as I'm not chairing HR Tech Europe this year (three years was quite enough for a while) I have a bit more freedom to say that I think one aspect of these conferences needs firmly squashing down into place.  Yes - it's the Analytics, Analytics, Analytics focus which kicks off HR Technology (US) this year.

I do understand the link.  Technology often generates a lot more and more useful data and insight than we've had access to before.  We should use that potential.  But that doesn't mean it's the future of HR.  Even HR technology isn't THE future, though increasingly it's a large part of it.  But analytics isn't even close to playing the role that HR tech can play.

Basically, it is important, it's even something we should focus on more than most HR functions do, and I try to play a role in moving it forward eg I'm currently planning a two day session with an HR Analytics team for early next week.  But other than filling a conference room, all of this hype around the topic does us (HR, and HR Analytics professionals) no good what so ever.

Here are ten different reasons why I suggest this:

1.   We shouldn't confuse a big thing for an HR technology vendor with a big thing for an HR function

HR analytics is a big thing - a big part of the future - for HR tech vendors.  Cornerstone's acquisition of Evolv is a good deal for them (even at $42.5m) but that doesn't mean it's a big thing for HR.  In fact the way these things go often means losing a lot of the functionality (at least for companies using a competitor HR system) which made the acquired technology so exciting anyway.

2.   We're not IBM or Google

Forget what they say - it's great, but it doesn't apply to the rest of us. We don't have Watson.  And Google, with Project Oxygen etc (sold by Rahat Harfoush as her best example of an Engineered Ecosystem) isn't completely reinventing HR, it's reinventing HR at Google, that's all.  Even there we'll have to see whether trying to treat people in the way they treat engineering problems is a good idea or not.  But in my view caling their HR department People Operations doesn't inspire confidence that they have a clear, strategic approach to HCM.

3.   There's no data about the future and it's often difficult / impossible to extrapolate

Businesses and HR are going through huge changes.  Recruitment, learning, performance management, pretty much everything we do are going through huge transformation - what we did in HR years 10 or even 5 years ago has little relation to what we're going to be doing in 10 or even 5 years time.  So understanding what we've been doing over the last few years often has very little relevance for the next three.  The need is often for big scenarios mapping out the range of possibilities at high level rather than big data plotting out the detail of one potential future which is unlikely to take place.  And yes I know that analytics can help with scenario planning but if that's what we're suggesting then it's scenario planning which is the future, not the analytics!

4.    There's little data about what's important - so don't build your strategy around your data!

Assuming there's no major changes going on (when was the last time that happened?) it's still difficult to generate really useful insight from data.  The more important something is within HR generally the harder it is to measure, and the more likely it will be that you'll need to use qualitative and subjective measures.  The more you can use quantitative and objective metrics, generally the lower the level of value.  It's why it's so dangerous when people suggest things like 'I believe we should be able to calculate the ROI on everything we do and if we can't calculate it, we shouldn't do it'.  And why McKinsey have it backwards when they suggest that if the CEO and head of HR haven’t recently discussed ideas for using data to generate a talent strategy that’s more closely linked to business results, it’s time to start.  This isn't the right place to do this.

5.   Qualitative information about complex issues needs Wisdom Artists

Analytics is often associated with the quants.  It needs to be redefined to be much broader than this.  Often it's the qualitative information which can offer the most intelligence, and is in any case  the only the thing can be measured.  The panel at HR Technology (US) have been suggesting that analytics support storytelling, but if stories are what are important then just collect stories.  HR also operates in an environment of greater complexity than most of the rest of the business - and understanding complexity needs synthesis not analysis.  So we need wisdom artists not data scientists (see the work we've been doing in the UK and Croatia on the Art of HR.

6.   Most current case studies are rubbish, and that tells us something!

I think it's because of these concerns that most (make that nearly all) case studies I read on analytics leave me completely underwhelmed.  I am pursuaded by big data - I think the potential insight which can arise from examining unsuspected correlations, and not worrying about causation, is real and significant.  But again we tend to only have this data about very operational things so although the financial value of big data analytics can be quite high its strategic value is always going to be very low.  The case studies on the more normal predictive analytics are usually embarassing.  Qantas conducting regression analysis to understand it wasn't a great idea to get rid of its best people is one example that sticks in my mind for its inanity.  We often need better strategic thinking, not better analytics, though both together is obviously best.

7.   It's not worth doing it just to have the data

Sometimes it's suggested that it's worth putting up with all this malarkey ie doing analysis to get insight you already know just so that you have the data.  That's complete rubbish or at least very expensive.  And at some point you're still going to have to have a conversation with your stakeholders to explain that not everything needs to be measured to be manageable and that sometimes it's not worthwhile.

8.   We need to challenge current business paradigms, not fit within them

A linked argument for analytics is often that this is the way business works and therefore that's how we need to present our conclusions.  Well, yes, that's true but if that's all we do we've missed the plot.  We need to fit into the existing paradigm to establish credibility but then once we've done that, help change the paradigm.  Where we can measure and analyse we should do so, but we also need to develop comfort in managing without measurement.

9.   Good analytics requires integration across the business

Although other business leaders are interested in getting more insight on HR and do seem to love criticising our lack of analytical capability (forgetting that they've stopped us investing in the HR technologies we need to do analytics effectively), HR often isn't their main priority (yes of course it should be) and concerns about boiling the ocean will often restrict the level of analytical investment which will go into HR.  We'll have to wait our turn.

10.   Where value does exist it's often not for HR itself

This point is a bit pedantic but I still think it's important to recognise that where analytics does provide insight it's often not for us.  The panel at HR Technology (US) talked about the Board and pension planners but to me the key need is to provide information to employees.  Take wearables - you can use Evolv's solutions to understand your call centre agents movements and shift patterns and manage them better.  But in most organisations that's going to result in a break down of trust and lots of dysfunctionality.  Much better to make this information available to employees and help them use it to improve their own wellness and performance etc.  So if analytics is the future, it's the future of workforce liberation, not of HR!

Of course there are ways to generate value from analytics fairly quickly but that involves throwing out all the maturity curves (which are hopelessly self  limiting) and focusing hard on your people management strategy, then working out which metrics and what analytics can provide insight on the execution of this strategy for you.

But that's about strategy not about technology so I don't see much arguing for it going on at HR technology conferences, however great they are.

By the way, I really mean the point about the poor case studies.  If you know a good one - that really did influence a company's HR strategy - please do let me know! (I won't criticise it, but just try to learn from it.)

See also:

  • Consulting - Research - Speaking - Training - Writing
  • Strategy - Talent - Engagement - Change and OD 
  • Contact me to create more value for your business
  • jon [dot] ingham [at] strategic [dash] hcm [dot] com