Great to see my new book, The Social Organization , out in the UK. Use code AHRTSO20 on the Kogan Page website for a 20% discou...
"A complex, serious book brimming with ideas that challenge HR convention, such as reward structures or the concept of organisational values, with genuine panache."
"An important, realistic and frequently inspirational book that implores HR to do things differently - and isn't afraid to show it how."
"The emergence of talent development as a new, more evolved form of training and development reinforces the scale of transformation that has been under way within this area of talent management. New insights from neuroscience and behavioral economics and new technologies (social, mobile, cloud) are just some of the drivers leading to a new focus on creating an environment in which talent can develop. Looking back at the focus on delivering training 10 or even five years ago and comparing this with roles talent developers might be undertaking in another 10 years (learning app designer, content curator, community manager), it is clear this has been a revolution, not just an iterative improvement.
Other areas of talent management reviewed within this book have been through similar levels of change. For example, recruitment or talent acquisition, which has seen a radical shift in focus from recruitment advertising to sourcing, employer branding, and external talent communities. But what about reward—the topic and activity relating to compensating and engaging people through monetary and other exchanges?
Well, although there is a lot of talk about “the new pay", there is not that much difference between the new and the old as of yet.
"However data or analytically driven, many executives still reply on intuition. And numbers never prove it 100%. That can mean that executives leave a decision a bit or plan make it later. The point is are they happy to make a decision on the basis of the data that they're getting? It's a bit like what we think house prices are going to do. Data underpins it in a way we're not even conscious of. Over the last few years, asset prices have appreciated, driven by interest rates and global GDP. We've got used to it. So I won't make a good decision if I don't get a forecast, or by suppressing my intuition."
"HRDs are seeing the impact of cloud systems like Workday. They're not taking 5 to 10% out of their transaction costs but by a factor of 2 or 3 times as they move towards self service vs forms and people. It's a strategic issue because it costs less and people get better service. Employees find it more convenient.
But as technology disrupts more jobs and people have to refocus. How prepared is HR to help in that journey?"
"I find it extraordinary that people can give up maths at 16 and go to university with just a maths GCSE. But the coding in schools curriculum is great - every policy maker around the world I've mentioned it to has asked 'why aren't we doing that?'"
1. Much more external focus. Many execs are very internally focused. That may have made sense during the last few years, to drive performance and productivity. But now they're still not spending enough time with customers, understanding the disruptions. They need to go round Silcon Valley and meet the disruptors.
2. Ability to make companies agile. It's difficult to get actions exactly right so you need to be able to respond. It's amazing to see how some companies respond - for example long debates about cannibalisation.
3. Attitudes. It's easy to see the four forces as a perfect storm where everything is negative. but some of the changes will be very exciting, for example taking a billion people out of poverty, creating a consuming class of another billion people, creating a cancer drug that be tailored to your genome and so on. We think the winners will be disproportionally the optimists.
I'm going to be posting on the framework again shortly, but I can't let this Outside In thing go unremarked on (again - since I have remarked in it before).
I just don't see why Ulrich has got so hooked on this. OK, customer centricity is all the rage these days, but the talent centricity has never been getting so much attention either. And it's this which needs to be the future of HR for me.
Plus I just don't think Ulrich's analysis works.
He suggests we should do placements, promotion, training, rewards, performance management, leadership, communication and culture development all from an outside in perspective, so selecting the employees our customers would want, involving customers in providing training etc. Fine, as far as it goes - but the best innovations don't come from customers. The opportunity for an organisation is to understand customer needs, and then to interpret them - to build, extend or challenge them. If you simply define your business by what your customers want, you'll never do any better than your smart competitors (because they'll be doing just the same as you). It's the spin you put on your customers' needs which is important, not just the needs themselves.
Ulrich also ties himself up in knots with his analysis of the six paradoxes facing HR:
Each of these, other than Outside / Inside apparently, are about HR copes with both ends of each dimension - strategic AND administrative, business AND people etc. So why outside TO inside? That's just a choice, not a paradox. It should be outside AND inside at least (and actually that's all I'm suggesting - I'm not saying don't focus on your customers' needs, just that what's happening inside is at least equally important.)
But the best illustration of why HR's approach should be Inside Out comes from the book's case studies. BAE Systems, MOL Group, Singapore Housing Development Board and Novartis - they're all great case studies, but the source of energy for each one was internal - not external at all. Ie the HR teams in these organisations took account of the external environment but what makes them good case studies is the insightful, unique strategy developed by the organisation. None of them would have been helped by input from an average customer.
I can only think the cases were consultancy projects done by some of Ulrich's team at RBL and he hasn't read them properly!
Anyway, apart from all this, I think it's a good book, and will undoubtedly set the tone for HR's development over the next few years. So I'm going to come back to it again soon.
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Technorati Tags: Customer, Dave Ulrich, Outside In, Inside Out, paradox
We’re now on to succession planning with two chapters from Marshall Goldsmith and then Rob Reindl at Edwards Lifesciences.
Marshall first, writing, not surprisingly, about CEO succession. And on this topic it’s a decent chapter, but as a contribution to the book and the topic of integrated talent management it’s pretty week as there’s actually nothing here about the need for integration.
There’s a lot on the benefit of focusing on internal vs external succession which you’ll probably realise I’ll support. But I do disagree with Goldsmith’s argument for this:
“How do you decide when not to develop your successor from inside the company? The answer, though complicated at one level, is quite simple at another. Do a cost-benefit analysis. What will it cost to bring in an outsider? What are the potential benefits? What are the costs to promote each candidate?| What are the benefits? And finally, are there any outsiders who cannot be matched by someone in the company? If the answer is ‘yes’, by all means hire the outsider. If the answer is uncertain or ‘no’, promote from the inside.”
There’s nothing wrong with this as a generic approach but in terms of CEO succession, the choice is all about the individuals you might consider. If you believe you’re likely to have stronger candidates outside, this should always be part of the process. Ideally though it should still start before you have a succession opportunity (or crisis). Ie you need to keep an eye on the market and identify potential candidates from outside at the same time that you do this internally. (Of course, if this early process suggests you’ve got the people you need inside you can relax the external scanning a little but it’s probably still worth continuing at a high level in case your internal talent leave.)
The following chapter from Rob Reindl, HR VP at Edwards Lifesciences is much more interesting and compelling. In particular, there’s a really good little case study of a CFO succession which I think is very progressive but possibly a little too focused for most organisations! (it’s a lot of effort for one person who could leave so hence very risky):
“After a couple of years of successful performance, the controller was identified as a successor to the CFO, to be ready in three to five years. His development needs to prepare to become CFO at that time included experience with treasury, risk management, tax matters, and working with the outside investor community.
During the next five years, Edwards incrementally added staff responsibility for the treasury, risk management, and taxes who reported directly to the controller, who thus began to take on these responsibilities on a developmental basis….
No doubt it took some finessing with some of the functional leaders who were told that they no longer reported to the CDO but were now going to report to the controller, but such tough calls need to be made, especially when you are preparing someone for a role like the CFO job.
In this case, we also needed to pursuade the existing CFO to relinquish these reporting relationships. Fortunately, she had aspired to be a business unit leader and we felt that she needed some operational experience before taking on that role. So we created a President of Global Operations role that included global manufacturing, supply chains, information technologies, and quality control. That experience prepared her to become a business unit leader.”
Isn’t that a great case study, and a lovely example of creating value – structuring the whole organisation around the key people, rather than simply the other way around.
The key then is to know your key roles, and, as Reindl describes, your development jobs – though I do think it will present problems for most organisations perhaps less focused on people than Edwards Lifesciences if the CHRO position is always seen as one of these jobs!
Also see
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But I’m afraid I think Lawler’s article in the Executive Guide to Integrated Talent Management (featuring me, Dave Ulrich, Marshall Goldsmith – plus Peter Cappelli etc) has got everything pretty much completely the wrong way round.
It all starts off OK:
“The existence of an effective performance management system is often the major differentiator between organisations that produce adequate results and those that excel. Without a focus on performance management at all levels of an organisation, it is hard to see how an organisation can find a talent-based competitive advantage.
It is far from easy to get performance management right in an organisation. The corporate world is littered with companies whose employees never receive an effective performance appraisal. People at all organisational levels go through the motions of formulaic performance appraisals with astonishing insincerity and have little to show for it. There also are numerous examples of situations where individuals thought they were going the right thing and performing well only to find out that they were mistaken when they had their annual appraisals. Finally, in many organisations, performance appraisals simply aren’t done, either because of employee resistance or because managers ‘dry lab’ (fake) them.”
Agreed. And I think these reasons are why an increasing number of organisations are jettisoning their performance management processes and doing something more innovative and resonant instead.
But if you are going to do it, it’s important to know the best practices which will tend to stack the odds as far in your favour as much as you can.
To me, Lawler’s suggestions are more part of the problem than they are part of the solution. Here’s why:
1. Start at the top
Lawler: “In the best of all possible worlds, goals are first set at the top and then cascaded down so that individuals at each level have goals that are tied to the overall strategic direction of the organisation.”
Me: Well, I understand the logic for this – I’ve even led large projects (£1m+) based upon this principle, and shouted about the case studies which result. But increasingly I see organisations which are just to complicated and complex for this to work. You can’t just start with the top level goals and slice and dice till you end up with every individual taking on their own teeny little bit. Things don’t work like that. So as long as everyone is clear about the overall business strategy, and their own role requirements, they and their managers, and increasingly those other people working around them, are the best people to decide on their goals. Plus of course doing this makes the whole process much quicker and more agile, and less tedious all round.
2. HR should support, not own, the system
Lawler: “HR managers should not act as the conscience of the organisation or drive and sell performance management. These should be the responsibilities of the top managers.”
Me: If HR can’t own this, what can it own? (nothing!). It depends on what you want HR to be – if it’s just an administrative side attraction, then fine, just tell it to operate the logistics of the appraisal round. But if you want HR to drive competitive success but ensuring you have the people you need, you’ve got to give HR ownership of some of the key tools.
Some of this comes down to the difference between accountability and responsibility. HR can’t be responsible for managing peoples’ performance – that’s got to rest with the line. But HR can be accountable for good performance management taking place across the organisation. And owning the system which enables managers to own the performance of the people in their teams is a key part of enabling this to happen.
3. Cascade strategy and goals to all levels
Lawler: “The starting point for an effective performance management process should be the business strategy of the organisation. It should guide a goal-setting process that leads to individuals, teams and business units having transparent goals and objective sthat are directly tied to the strategy of the business. For this to be effective, the goal-setting process needs to begin at the top of the organisation and cascade down.”
Me: I would ignore the fact that this is really just a repeat of Lawler’s principle 1 except that my challenge is largely the same as my earlier one too. Not everything can be dictated from the top. If nothing else, it’s not very compelling to be treated like this ie as a small cog in part of the big organisational wheel. It’s often better to let people come up with objectives they’re going to be committed too, even if they’re not directly aligned with those of the top cheese. See my post on performance leadership for more on this.
4. Set measurable goals
Lawler: “Measurable goals need to be set, and individuals should be assessed in relation to them. This applies to both the skills and competencies that individuals need to develop and also, of course, their performance deliverables – the how and the outcomes of their performance.”
Me: Yeah, measurable’s nice, as it helps understand how people are doing and how much to pay them. But this is about performance assessment, not improvement. And improvement comes, once again, from making goals compelling, not merely measureable. See my earlier post on making objectives MUSICal, not just SMART.
5. Set talent development objectives
Oh good grief – get people to set these themselves. Then they may actually own them and do something about meeting them.
6. Rate outcomes and performance, don’t rank people
Lawler: “Some organisations (for example, ExxonMobil) rank-order hundreds, or in some cases thousands, of people from first to last, numbering them from one to whatever the total number of individuals is in the part of the organisation that is being appraised. This effort is like trying to measure the length of an objective to the closest thousandth of an inch using an ordinary straight ruler; the information needed to measure performance so precisely just isn’t available.”
Me: Yes, but you can’t accurately compare people’s performance at higher levels either. Nobody’s performance, goals or their job is the same, so you’re comparing apples with oranges whatever you try and do. Anyway, it’s not the ‘information’ that’s important here, it’s the conversation. The value of ranking, and why I suggest organisations do it, is the conversations between managers about what they value in different people and why they perceive some as more valuable than others. I’ve never seen the same quality of discussion take place over simply rating people. I4CP can show that it’s apparently less popular, but personally, I’d still do it.
Lawler: “Another seriously flawed rating practice is forced distribution. Some organisations (for example, GE, EDS and Accenture) require their managers to identify a certain proportion of their reports who are failing, often 5 to 10 percent, and a certain proportion who are doing particularly well, often 15 to 20 percent. The forced distribution approach ignores the reality that some work groups have no poor performers and other have no good performers.”
Me: Yes, that’s probably true, though GE never forced this to the extent that the story was spun. Anyway, you get round the problem by rating and ranking people. So they get rated based upon their objectives, and ranked against everyone else. If they’re performed well against their objectives but their colleagues have done even better (ie the bar has been raised) they’ll get a good rating but be ranked rather lower. I can’t see the problem in this.
7. Train managers and employees
I almost have to agree to this one, but there is a way round doing so. Recognise the need for emergence – if you have to train people (on the system, not just having good quality conversations) then the system is too complex. keep the bureaucracy light and just let it happen. Managers and employees will find their own ways to manage and improve their performance.
8. Link rewards to performance, but discuss development separately
Lawler: “Principle 8 is to link rewards to performance, but to discuss development separately. An important feature of an effective performance management system is the degree to which it affects the reward system; in other words, the degree to which it leads to pay increases, bonuses, stock options and promotions. Over the years, articles and books have claimed that performance management processes should separate the appraisal of performance from discussion about salary increases and promotions. This may indeed make some of the discussion easier, but it is not the way to make money and other tangible rewards effective motivators.”
Me: I certainly agree that there’s a problem here – put simply, if money’s involved, people won’t discuss their development needs (weaknesses) because they think it’s going to result in them being paid less. So they pretend they don’t have any needs, only strengths, so no, or at least less, development needs get identified. But I think Lawler is completely wrong to go with the reward vs the development aspect. Firstly because we know reward doesn’t motivate that much. And secondly, because it definitely doesn’t improve performance (by very much).
So use performance management to drive learning and development – both key drivers of improvement in any organsiation. And figure out something else (like this) to provide a basis for reward.
9. Appraise the appraisers
Again, a bit more of a difficult one to object too, but it’d be a shame to give up now…. so of course I need to note that simply appraising managers isn’t really going to be anything like enough. More important is finding people to work as managers who are motivated and competent to manage. And then you won’t have to worry about appraising them.
10. Consider having review discussions online
For a while I thought this would be the hardest principle of the ten to challenge – but then I saw my way through it. Don’t consider – just do it! This isn’t so much for the sake of being more ‘functional’ (“it gives individuals a chance to think a bit before they make their responses”) however, as Lawler suggests – it’s because online provides better clarity, sharing and memory than doing it any other way. Simps.
There you go – sorry Ed!
Also see
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Mine is actually the next chapter after the earlier ones I have already reviewed outlining the general benefits of integrated talent management, and on the integration of learning with recruiting.
My chapter is on the integration of learning and compensation and rewards, and starts of with…
“Ensuring the alignment and integration of L&D and reward as well as other management policies, processes and practices is an important enabler to effective talent management. There is firstly a need for horizontal alignment – ensuring that both L&D and reward, along with other elements of the HR and management architecture, are linked together and support each other.
However, it is even more important for an organization to ensure vertical alignment, which it achieves from having both L&D and reward, and other processes, aligned with the overall business strategy, and its mission, vision, values and so on.
These vertical and horizontal linkages can help build HR, L&D and other processes around what an organization believes about people management and development – for example, what it thinks works in motivating and upskilling people and how these strategies can best be implemented…
For example… some organizations believe strongly in formal systems and structures whereas others prefer informal and social ways of operating. The first form of organization is likely to have set learning curricula for each grade and level supported by a Learning Management System. Organizations subscribing to more informal approaches are likely to put greater emphasis on opportunities for connecting with others in the organization and for self managed learning. An organization’s reward strategy should also be aligned with these approaches to learning. For example, a formal learning system is likely to work best when supported by a formal incentive programme and an informal or social approach to learning may work best when linked to a looser recognition programme allowing and encouraging managers and employees to express their appreciation for exceptional effort, skills and performance.
Karl-Heinz Oehler, VP Global Talent Management at Hertz then provides an example of the sort of problem which occurs when there isn’t this type of intgration in a more structured type of firm:
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“Compensation & Rewards is interrelated with almost every functional HR domain, but its relationships with L&D is special, yet underestimated. It is special because L&D’s role is to enhance employee competence, to bring about behavioural change, and to develop employees’ ability to work more effectively. Yet development programs all too often fall short in producing the desired change – and not because these programs are badly designed or delivered. In fact, many of them receive very high ratings. So what was the problem?
Reviewing development programs at Hertz, especially those aimed at improving business results, highlighted the fact that employees were convinced that what they learned was right for the business. However, the C&R system was contrary to the principles learned and thus drove a different ehaviour. New behaviours can only be encouraged, implemented, and sustained if the employees practicing them are properly compensated and rewarded. This was one of the formidable challenges that Hertz L&D faced.”
Karl-Heinz goes on to describe some great example of how Hertz has tried to ensure better integration from this point.
However, despite what Karl-Heinz states, I don’t think C&R does have much of a special relationships with L&D – certainly not to the same extent as between C&R and Performance Management, and PM and L&D.
I’m going to continue (and this time, complete) reviewing / providing extracts from these other relationships / the other chapters of the book over the next couple of weeks.
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I think I’m going to limit this to one event I attended last Wednesday, organised by Fairplace Cedar, and featuring Jeremy Kourdi, co-author of The Truth About Talent.
For Jeremy there are a number of problems with the traditional focus of talent management, ie of those who are outstanding based upon the way they develop relationships, change things and invent things.
The main issue is that because we tend to think that talent is not abundant and diverse (which Kourdi things it is), we enter into a doom loop in which we antagonise everyone else:
This is a particular problem because more than ever, talent operates systematically and through relationships.
I’m not totally convinced by the doom loop, but I do agree with the broader problems concerned by an overly exclusive / differentiated approach to talent management.
However, as I commented to Jeremy after the event, I don’t think the problem is limited to disengagement. Organisations need people to work together, and if the ‘untalented’ feel differentiated from the ‘talent’, then they’re not going to see themselves as ‘people like us’, and they’re not going to work together so well. So there’s a direct hit on productivity too.
It was interesting therefore that on the same day as the event, HR Magazine published a survey suggesting that felt inequality rises with salary difference:
“For example, only 2% of workers earning over £80,000 felt their boss or company had 'more money than sense', whereas that figure rose dramatically to 23% for those who earn under that amount.”
In his book, Jeremy writes about social capital (thanks for the mention on p102 by the way Jeremy!) and this is the truth about talent for me: talent management in the way that Jeremy describes it makes some sense from a purely human capital oriented perspective, but it makes little sense from a social capital oriented one.
From the social perspective, it’s the performance of the whole organisation which is important, and singling out particular individuals as different is going to be mainly unhelpful to achieving this objective.
Talent managers therefore need to consider the effectiveness of their whole organisations rather than just the talent piece if they’re going to maximise their impact (see for example Ed Lawler on the organisational effectiveness role).
I’ll be continuing to post on challenges and opportunities for heads of talent for the rest of this week. And I’ll also be describing how you (internal practitioners only, sorry) can win a ticket to the Economist’s Talent Management conference this June, where I’ll be chairing one of the panel sessions, and am once again the sole official blogging partner too.
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First of all: “Talent management is not an imprecise art form. Rather, it is a rigorous science based on solid numbers.”
It’s complete nonsense of course, and I don’t understand how Boudreau gets away with it.
He makes the comment in particular relation to a case study of Deutsche Telekom introducing job families to support succession management. Let’s check the details shall we:
I’m not saying it’s not a good example of an analytics based approach, I sort of think it is – better than most of the examples in Calculating Success anyway. But a rigorous science???!!! I think not.
Actually, what makes it an interesting and useful case study is the creativity of the approach (and there’s no evidence that the creativity has been generated through learnings from using analytics either) eg the way that readiness is judged for vertical or horizontal movement.
Secondly: the focus on pivotal talent. This is a complete red herring. It’s all value for money stuff. OK, if nothing is changing it makes sense to invest more in sweepers than it does the Mickey Mouse(s – you’ve heard the joke lots of times by now, right – there’s only ever one Mickey Mouse) because the sweepers are more pivotal – ie a certain investment can produce a bigger shift in performance than it can with the MM(s). But what organisation isn’t changing these days? A much better focus is on the organisational strategy. If this requires change in the role of either the MM(s) or the sweepers, then these are the most important group/s. Importance just doesn’t make sense on its own, it all depends upon what the organisation is trying to do.
Pivotness is bad logic and it leads to bad decisions eg “An organisation might do well to acquire a 90th percentile performer in the R&D scientist role and be satisfied with a 50th percentile performer in the controller role.” It’s the sort of logic that Beatty uses too and it’s just wrong. You don’t necessarily want to pay over the odds in all these positions but that’s only a bother if pay is the only element in your employee offer (in which case you’re definitely not doing transformative HR). You still want the best person you can get in all your different roles. Deliberately seeking out or even just being satisfied with anything less than this is just nuts.
Boudreau’s favourite question, “Where would improving something make the biggest difference to success?” results in then same, value for money results. You can get benefits out of this, and particularly out of making the improvements. But you’ll find greater benefits in asking “What do we need to improve to support our strategy?” (adding value) or even “How could we develop new capabilities which would enable us to set new strategic objectives?”.
Other than these things, the book is actually very similar to Calculating Success, including some of the same case studies (particularly IBM and RBS) which you could take to indicate this isn’t yet that popular an area, or that most organisations have a more nuanced approach to the use of analytics.
There are a couple of bright points – I love the example of Shanda Games and its 100 point, gamified grading system which I first came across in Boudreau’s presentation at HR Technology North America last year, and still rave about.
In the book, Boudreau also writes about Shanda providing each employee with a virtual city. Employees are awarded virtual objects for completing tasks or projects and these can be used to decorate their cities. Each city owner is also able to decide on what their city’s weather for the day is going to be, and Shanda intends to measure the mood of the organisation by scanning how nice the weather is each day – nothing to do with analytics though (although presumably Shanda could do an analysis on the number of virtual clouds?).
And there’s a good chapter on risk management too. I do quite a bit of work in this area myself but I’ve never used anything like Boudreau’s inverse heat map which I think is a really good idea.
So do read the book, but keep that pinch of salt close by as you do.
Also see my criticism of Beyond HR. (I never got around to reviewing Retoooling HR but I didn’t like this much either.)
And: The Five Most Important HR Analytics
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It’s a pretty turgid book, but then it does focus on measurement, which isn’t the most naturally entertaining topic area (I always struggle slightly to make my measurement workshops as stimulating as my other trainings).
But there are also a few other things which really irritate me about the book, for example I think the authors define analytics a bit too widely: “We see workforce analytics as a set of quantitative approaches that answer a simple, yet often overlooked question: what do we need to know about our organisation and workforce to run the company more effectively and (perhaps most importantly) how do we turn this knowledge into action?”
This definition leads the authors to including things like engagement surveys as example of analytics whereas to me, these are clearly measurement approaches rather than analytical ones (the analytics then follows the measurement of engagement). And scenario planning? It’s certainly a way of better understanding strategy, but its not an analytical approach!
Perhaps a better definition would be the process of asking and answering questions, to gain a better understanding of an organisation (ie being about the question, not the approach used to answer this)? Like these asked within the book:
I also dislike the complete absence of any focus on people strategy in the book. For me, analytics isn’t simply about developing insight into how people support a business, but how they support the people strategy which supports a business – a small but crucial difference. So analytics is about asking questions which provide a better insight into how people strategy leads to better business results.
And I’m largely unimpressed by the book’s case studies. Many of these are really about things completely unconnected with analytics, eg:
However, there are some good examples too, eg I liked the CORP case study which concerns a case where measures showed a negative relationship between performance of the supervisors and the sales of a team, and a positive correlation between sales and team turnover. But ever here, the organisation only used surveys and focus groups to get a better understanding of the causes of these findings – not really something I would call an analytics based approach. The PHARMA case study is better – again involving an interesting situation in which some of the best people were being lost but also involving the use of regression analysis and stochastic modelling to gain a better understanding of the situation. This is the only example of what I would call a true analytics based approach in the whole book, but it is a good case study, so the book may be worth reading just for this (it’s in chapter six).
And then one of the most interesting aspects of the book, to me, is its discussions on people as widgets which concerns the importance, but yet also the perhaps over-hyped perception of importance, of this whole field:
“Other companies have a cultural bias against adopting a disciplined analytics approach to people, believing that people are not inanimate parts.
The authors quote from Boudreau’s Retooling HR:
“Is it because people are not widgets, and out of respect for their free will and humanity it’s unfair or wrong to use the same logic for workforce decisions as we use for decisions about more inanimate objectives like inventories and machines? No.
In fact, it’s arguable more unfair and disrespectful to employees and job applicants to make important decisions about where to invest in their development, performance and careers in less rigorous ways that those applied to more traditional resources.”
I don’t disagree with this, but I also think it misses the point. The reason why we don’t want to treat people as widgets isn’t about humanity and fairness, it’s about practicality. People are different to widgets. We talk to each other creating a complex and messy system in which it’s often difficult to disentangle cause and effect and in which a small change in inputs can have a large impact on outputs. It’s why HR analytics are so useful, but also why we must not overestimate their usefulness. We should never say this investment will result in this, just that it may…
So I dislike examples in which organisations seem to think they’re developed a full understanding of something which is actually impossible to wrap up this way. For example, an Asian airline apparently managed to develop a ‘clear picture’ of where instant messaging and other forms of social networking could have a significant impact on productivity. Well, I’m not so sure they did. There’s nothing wrong in trying to predict where the best use will be, but that’s very different to believing you’ve got the whole thing sewn up. Particularly with social networking, most case studies show that organisations will find a whole slew of emergent benefits that their people make up which they hadn’t thought about before.
And in fact the authors seem to come round to this perspective later in the book (in a chapter perhaps written by a different author?):
“However, we also believe that organisations sometimes take an overtly simplistic view of the complexities and interdependencies inherent in developing an ‘on demand’ workforce. People are not widgets; they cannot be comprehensively described within a ‘bill of materials’ or an ‘ingredient list’. Individuals come with a set of distinctive skills, preferences and requirements that motivate them to achieve well beyond their ‘specifications’ or that hinder achievement of their potential…. Given these differences, organisations should be wary of claims that they can manage the supply and demand for talent with the same precision as other commodities.”
Well quite, and in other areas of analytics too. This is all useful stuff, but let’s keep it in perspective – it’s the development and then implementation of a creating value people strategy that’s the most important – as well as difficult - thing, not the measurement of this, and not the analytics which may play a role in the strategy’s formation.
I like the point where the authors write “The value to the organisation and workforce of the access to these networks cannot be underestimated”. Right, and if that’s the case, let’s not go to the bother of estimating or analysing it. If it can be underestimated, you may need to use some analytical tools, but I’m afraid you probably won’t find them in this book.
Also see: The Five Most Important HR Analytics
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