PREFACE
In today’s workplace, the pace and nature of change are simply unprecedented. So much of what we know about jobs and work is shifting beneath our feet due to powerful forces like robotics, big data, artificial intelligence, the Internet of Things, the sharing economy, the gig economy, and others. World Economic Forum Founder Klaus Schwab calls this the Fourth Industrial Revolution, with technologies so transformative that they are challenging what it means to be human.1
It is urgent that we human resource professionals step up our game in response, and effectively prepare for the future. With 47 percent of jobs currently performed by humans potentially eliminated as early as 20302 (or 50 percent of work activities disposable right now, according to a more dire prediction3), we must change the way we think and work. Our profession has evolved from administrative experts in Personnel or Industrial Relations to today’s top CHROs – key executives driving measurable business performance. We are encouraged by our collective progress, but also know that HR has much further to go.
Embracing data analytics is key to advancing as a profession and successfully transitioning our organizations into the future. Josh Bersin, a foremost HR thought leader, identifies people analytics as a top HR development: “This new function is critically important and of very high value – just as marketing departments analyze the results of campaigns, create personas and segments of the customer population, and understand the drivers of market share success, we can now do the same thing for our employees.”4
It is challenging but essential to change our mindsets. Intuition and emotional intelligence, once the hallmarks of successful CHROs and HR professionals, are no longer sufficient. We must now be anchored in data and analytics. But this is good news! Integrating a new analytical approach into our work will make our key capabilities even more powerful. We can deepen our ability to determine root causes and predict the outcomes of programs, not just oversee their implementation.
Whether you seek practical approaches to beginning your analytics journey or additional insights to further develop your analytics efforts, this book is for you. Our goal is to inform, motivate, and inspire you to combine the power of data and analytics with your HR expertise, thus enabling you to more effectively use your organization’s most precious resources: your people’s time and energy.
A CRITICAL TIME – AND OPPORTUNITY – FOR CHANGE
Studies show that, although many CEOs feel talent is a top competitive differentiator, an increasing number aren’t sure they have the employees they need to succeed now or in the future.5 Worse yet, they don’t feel their human resources organizations are equipped to help.6 It’s no wonder we see more CHROs replaced by executives from marketing, operations, or finance – disciplines that have been using data and analytics for years to drive their operations and outcomes. We must rise to the challenge, designing data driven people strategies, and the programs to achieve them, as catalysts for change and transformation.
This starts with changing how we think about metrics and measurement. Too much HR reporting uses only descriptive analytics, which capture what has happened: number of people hired, time to fill requisitions, and employee engagement scores are all examples of these “rear view mirror” metrics. We need to move toward diagnosing the “why” behind these metrics, using diagnostic analytics, or, in the case of predictive analytics, what might happen. Once we quantify these metrics, we can act, guided by prescriptive analytics.
Moving from simple reports to predicting the future is a crucial journey we all must take, and the time to start is now.
ANALYTICS IN ACTION
Here’s an example. You want to improve hiring results. Your best hiring managers reliably bring in high performers who become more productive more quickly than their peers. You want to identify what those hiring managers do differently and train your other people managers to do the same. How can you build a business case for such an endeavor?
Here’s one approach. Partnering with an analytics expert, your finance team and a line of business such as sales, measure the benefits of hiring stronger candidates (for example, faster time to productivity, higher sales, lower attrition) versus the costs of weaker hires. Then, studying the profiles of top performing hires, predict what kind of job candidates will be most successful. Finally, using prescriptive analytics, introduce a program designed to hire people who are X percent more likely to stay, Y percent more likely to reach productivity faster than the average hire, and provide a Z percent higher level of customer satisfaction than the average hire. This approach and these data position your training program for hiring managers as driving business performance, a language every executive speaks.
Throughout this book, we introduce business challenges like the hiring example above, then propose business solutions using sound human resources practices coupled with analytics. While reading The Data Driven Leader, imagine the possibilities for people analytics at your company.
WHAT YOU CAN EXPECT FROM THIS BOOK
To make this book accessible, enjoyable to read, informative, and practical, we begin each chapter with a fictional narrative, based on analytics programs we and our teams have developed. We then offer insights and practical suggestions related to that chapter’s plot in a commentary section. The fictional company, Exalted Enterprises, represents a realistic composite of the many organizations we have come to know over our careers, including Borland, Business Objects, Chevron, Hewlett-Packard, Interwise, KPMG, Kroger, Microsoft, Motorola, Nordstrom, Oracle, Salesforce.com, SAP, Starbucks, SuccessFactors, Sun Microsystems, T-Mobile, Verizon, and others. As a result, you will likely be able to relate to the concepts, themes, issues, challenges, and characters.
You may identify with our fictional protagonist, Pam Sharp, the new chief human resources officer of Exalted, as she helps turn around her company amidst intense pressures. You’ll likely recognize colleagues, past or present, in Elke, Marcus, Martha, and Sameer, Pam’s leadership team. We aim to portray an organization and a team like yours, which, with the application of people analytics, will hopefully experience similar triumphs.
Although the approaches they take are applicable to any aspect of a business, we focus on sales because about 80 percent of any company is typically involved with some aspect of sales, so a sales-focused initiative will usually attract significant buy-in across the organization. Once you have implemented people analytics for sales, you can replicate your initiatives in other areas.
The book that inspired this one, Data Driven: How Performance Analytics Delivers Extraordinary Sales Results,7 also stars Pam Sharp, who leverages analytics to understand and triumphantly overhaul sales at Trajectory, an Exalted subsidiary. The Data Driven Leader brings Pam back as Exalted’s CHRO, using HR analytics as a prism through which to view the ways data can transform how leaders think about and solve business challenges.
GETTING STARTED
Dive in and discover the world of analytics. Use data to drive measurable business outcomes, prepare the workforce of the future, and be a key participant in driving the strategy and sustainability of your organization.
As Mark Twain is often quoted: “The best way to get ahead is to get started.” We hope this book will inspire you to start or to energize and advance the work you have already begun.
We wish you tremendous success.
Chapter 1
PLAYING THE BLAME GAME
The