The past few months have not made the spread or deepening of the topic of workforce analytics (WFA) – or people analytics – any easier, although the alignment of resources is currently very important and of immense importance for future competitiveness. Why is that? Is there too little data? Do we lack sufficient expertise in their analysis? Is the strategic direction of the organization unclear?

When I review the latest publications in this blog, explanations on business models, strategy execution, as well as culture and leadership predominate. In my opinion, all of this is currently not only highly relevant, but is directly related to progress or regression in the area of EFA. In this context, I also refer to the article from January 16, 2020: Role of the 9D-EiPA model. In concrete terms: What do wise innovators do differently when it comes to WFA?

Understanding the Fundamentals

A prerequisite for WFA “to fall on fertile ground” is the self-image of areas such as personnel and corporate / organizational development. For their part, the business areas are pushing three D’s (data, design and digital) and expect a proactive role from the above Areas. Specifically, managers and employees expect the kind of technology support they know as consumers, e.g. from Amazon.
It is now critical for HR and OD to focus on a business impact-based approach that focuses on being more commercial, data and evidence-based, and analytical in order to fill the evidence gap.
The role of both areas is to evaluate, proactively analyze, and develop robust strategies that are clearly aligned with rapidly changing business needs. Income and growth as well as costs play an important role here. The stronger leverage of both are new revenue streams and new ways to improve productivity.

The connection of WFA to business models and to strategy can easily be explained using the 3-horizon model from McKinsey. In the context of strategy implementation, I also like to speak of the three strategy windows:

  • Horizont 1 offers short-term continuous innovations for the existing business model and the core competencies of a company (optimization and automation).
  • Horizon 2 expands the existing business model and the core functions of a company with the help of digitization to new customers, markets or goals (see Ansoff: Expand and grow business model (s)).
  • Horizon 3 creates new functions and business opportunities to seize or respond to disruptive opportunities (transformation and innovation – new business models).

Trying to run a WFA initiative without a plan or structure will not work. Even after studying newer procedural models (e.g. Khan / Millner), I still favor Josh Bersin’s 8-step model, which partners like VISIER also use as a guide.

Establishing an Analytics Culture

Understanding organizational culture can help employees explain many organizational phenomena, as culture can either support or impair organizational effectiveness. It is important to understand that leadership is the fundamental process by which organizational cultures are created, changed, or destroyed.
Culture and leadership are two sides of the same coin, and neither can be truly understood on its own. The only important thing leaders do is create and exemplify culture, and it is important that employees recognize the central role of culture management as one of their strategic initiatives.

A cultural program essentially revolves around seven topics that must be taken into account. Please contact me if you would like to know more about it.

Getting Started

Datasets already available in companies, such as financial data as well as wage and salary data usually provide far more knowledge than is shown in descriptive reports. Unfortunately, due to the lack of analytical approaches that incorporate business challenges, these findings are rarely transparent.

However, data alone does not provide clear answers. A context is needed in order to be able to interpret the data / figures / facts correctly. That is why we always use two questionnaires in our surveys on relevant focus topics: The context is determined in the “influencing factors” questionnaire, the actual data in the “output variables” questionnaire.

Data with context, information and knowledge can give us insights to make decisions, but it is our own skills and wisdom – we often share these in webinars or specialist conferences – that enable us to make more effective decisions!

An organizational design of the HR and OD areas based on the outlined findings is complex and should follow the principles of good organizational design. In the VUCA(R) world in which we find ourselves, it does not work to copy the procedures and models of other organizations in isolation and to paint organizational charts.

Building Your Capability

It is already important, and will become even more important in the future, to develop an output- and impact-oriented mindset that takes into account the financial challenges of the organization; e.g. total costs, premium growth, total return.
Striving for strategy in isolation is not enough; numerous areas have not yet successfully implemented this interlocking in the last 10-15 years!
In my opinion, the discussion about Purpose has been going on for several months. made a fresh effort to accomplish this.

Basically, the following six Cs are in the foreground for me: curiosity, credibility, confidence, courage, cooperation and capability.
These underpin an evidence-based practice that focuses on creating value for the organization. Khan / Millner have developed a solid self-assessment for this.

Patrick Coolen, Auke Ijsselstein and John Boudreau have set out specifically required characteristics of a WFA expert (see capability wheel and six skills for success). It is important that the WFA team – not necessarily in one organizational unit – has these skills.

Conclusion

A wise innovator acts prudently and has a strategy; i.e. he knows where he is going. When it comes to innovations, he does not become hectic, but checks quickly and – if necessary – acts quickly. Innovations have to fit the plans, not the other way round.

In relation to WFA this means the following in my opinion:

  • The focus is on the business problem that needs to be resolved.
  • Culture and leadership are geared towards solving this problem.
  • Well-researched hypotheses are available, which are then validated and verified along a practical process model.
  • An iterative process of collecting and analyzing data and gaining knowledge leads to the identification of a clear recommendation.
  • The skills required for this are available internally and / or externally.
  • Process and recommendation are discussed in detail with the stakeholders.
  • Recommendations that are backed up with strong statistical data and quantified financial impacts have a positive impact on earnings.

Is the strategic direction of the organization clearer to these innovators than to their peer group? Basically yes; they only start a WFA initiative when the direction is clear and do not start “blindly”.

Do these innovators have more data than others? Not necessarily. You usually start the first use cases on the basis of existing data and only collect additional data if it increases the quality of the recommendation to solve the business problem (smart data instead of big data!).

Do these innovators have a higher level of expertise in extracting insights from data? Often not at the start of a WFA initiative; however, due to the strategic alignment and the associated focus, they make faster progress and thus develop a significantly higher level of expertise than their comparison group over the first three years.

There is no such thing as a “one size fits all” approach; but experience gained from practice on success factors that can be determined across companies.