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Nov 23 2011
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Business, Employee Engagement, Human Resources, Management

After Your Employee Survey…Bias For Action

I work with several companies on rolling-out the results of their employee surveys. I do executive presentations, employee town-halls, enterprise-level action planning, frontline action planning, KPI setting – the whole works! In my experience, the companies who come out successful from such initiatives are the ones with a strong “bias for action”. They have a sense of urgency for getting things done, for making the workplace better, for taking the organization forward. Often companies, leaders and HR professionals fall into the “excessive deliberation” trap. Deliberation is good, but an overdose of it can paralyze actions. It can be demotivating to people. Timelines can go for a toss. And employees are left in the lurch.

Tom Peters talked a lot about bias for action in his book “In Search of Excellence”. He also shared some slides on this on his website. I just loved the quote on the second slide:

“We have a strategic plan. It’s called doing things.” ~ Herb Kelleher

 So, stop staring indefinitely at the employee survey results. Make things happen.

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Oct 22 2011
1 Comment
Business, Employee Engagement, Human Resources, Management

Building A Sustainable Employee Engagement Strategy

Here is a link to an article I published on Towers Watson’s website, titled “Building A Sustainable Engagement Strategy”. Through this article, I urge companies to take a hard look at their employee research constructs and make sure that the frameworks they are using are helping them focus on the right issues. We need to make sure that the Employee Engagement models we are using are evolving with the times.

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Oct 15 2011
3 Comments
Human Resources

Key Analytical Skills for HR Professionals

HR organisations in several companies seem to be getting better at collecting data from multiple sources – HRIS data, financial metrics, people metrics, performance metrics etc. However, still, top-notch data analysis remains under the domain of a few specialists. I just come across a few HR professionals who can readily grasp the technical details of a multiple regression or a utility analysis for measuring the impact of engagement on attrition. As HR functions vie to get that seat at the table and position themselves as true business partners, senior executives will be looking at HR for persuasive, data-driven analytics to support key decisions and initiatives. In other words, HR has to get its game right for preparing a “business case” for all its programs.

I would like to propose a some key analytical skills for the HR professionals of tomorrow:

  • Research / Hypothesis Design: HR needs to understand how it can design experiments to validate hypotheses or come up with alternative explanations to organizational phenomena. At the same time, knowledge about effective sample design techniques can come in handy as well. It can help HR design research studies which can be administered to statistically representative samples, instead of the entire workforce. This could help generalize findings and help save on precious time & efforts.
  • Correlations & Regressions: I cannot count how many times I have seen these two key techniques completely misinterpreted or used senselessly. Most importantly, we need to distinguish between the two. Correlation is, simply, two variables moving in the same direction. For instance, employee engagement and financial performance might be positively correlated implying that both generally, move in the same direction. However, we cannot say that one causes the other for sure. On the other hand, regressions help us to form models to explain causality i.e. variables moving in the same direction because one causes the other to happen. For instance, among an employee engagement survey of 50 questions, you can use this to analyze what factors have the largest influence on engagement levels.
  • Financial Analysis Techniques: Now, this is a potentially long list, but there are a few key things that help in working out the business case for key initiatives / decisions. Firstly, there has to be a fine appreciation of costs – fixed costs, recurring costs, and variable costs. Secondly, skills around conducting cost-benefits or break-even analysis would be extremely helpful. And speaking of that, if HR professionals can master concepts around “the time value of money”, they can really start demonstrating the rigour of their analyses.
Of course, this is not comprehensive and I look forward to your views in the comments. What analytical skills would matter the most for high-caliber future HR professionals?
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Sep 23 2011
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Business, Human Resources, Leadership, Management

Transformative HR: Book Review

As many of you know, I love to read! While I have an appetite for all kinds of books, news & blogs, I just love great content on HR. And often, that’s the hardest to come by. One of my favourite authors on HR is John Boudreau. I became an instant fan when I read and reviewed his book Retooling HR. I felt that the frameworks, approaches and tools he talked about can not only help HR professionals to up their game, but can also help in talking coherently, logically and meaningfully with the business. The application of usual business analysis tools such as portfolio management, segmentation, conjoint analysis etc. to HR issues was extremely appealing.

So, when I got a copy of the book Transformative HR, I was thrilled. Transformative HR has been written by John Boudreau and Ravin Jesuthasan. Ravin is a senior colleague of mine and is the Global Practice Leader for Talent Management at Towers Watson. I hungrily read the book and I think it is one of the best I have read so far. The key takeaway is that HR professionals and leaders need to make informed human capital decisions to keep their organisations competitive. ‘Informed’ is a key word here and the book outlines an evidence-based approach to human capital decisions. They outline 5 basic principles of evidence-based change:

1) Logic-driven Analytics: How often do we HR professionals have an overload of information and metrics? Do we just have numbers or can we tell a powerful story? In a transformative HR future state, the authors share how we can use frameworks & mental models to go behind the metrics, understand the real picture and produce insights which are in high demand by other organisational stakeholders. After all, getting the numbers right is just the beginning. The real value-add comes from using a multi-dimensional approach by synthesizing business strategies, business metrics and talent metrics to produce real insights that help in achieving those business objectives.

2) Segmentation: Conceptually, most of us agree that one size doesn’t fit all and we need to segment our workforce. But, how? John and Ravin propose 3 fundamental questions:

  • What are our vital talent segments?
  • Which employment elements induce the desired responses at optimum cost (supply-side talent segmentation)?
  • What do we need employees to do (demand-side talent segmentation)?

I think this is a powerful way to think through key talent investment decisions, as it helps to understand how to customize the employment deal to create the highest payoff in terms of business outcomes, at the optimum costs.

3) Risk Leverage: I feel that Human Capital Risks are often under-reported and worst, not well-understood. Now, all organisations face HR-related risks, but instead of just mitigating risks, the focus should be on optimizing risks. The book presents a number of systematic approaches to optimize risks and develop sustainable advantages. Again, the approaches are rooted in management tools that business leaders are used to – tolerance analysis, portfolio theory, stochastic simulations, probability matrices etc. In two words: cutting-edge and powerful!

4) Integration & Synergy: Often, HR processes operate in silos which prevents us from getting the “1+1=3″ effect. This principle talks about how to integrate various HR sub-functions as well as integrating HR with other organisational units. The live example about the Talent Management Game at Shanda (one of China’s largest online gaming company) is just fascinating!

5) Optimization: The principle of optimization follows from segmentation. It is all about identifying where & how the payoff of certain HR investments will lead to exponential returns. It is all about identifying the mix of investments that will have the most desired business outcomes. So, instead of spreading HR investments across the board equally, the focus should be on understanding & positioning ‘fairness’ to mean strategically differentiated treatment.

The book is full of great examples and brilliant case-studies from leading global organisations such as IBM, Coca-Cola, Royal Bank of Scotland, Deutsche Telekom, Ameriprise, Royal Bank of Canada, Khazanah Nasional Berhad etc. Overall, it’s a compelling read. It is for anyone who wants to bring rigorous thinking, informed decision-making and sustainable impactful change in their organisation. Did I say that you just can’t miss this book!

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Aug 24 2011
3 Comments
Business, Employee Engagement, Human Resources, Leadership, Management

How Can HR Use Engagement Surveys to Drive Business Performance?

Several companies invest thousands of dollars in running Employee Engagement surveys. Typically, they use the survey results to benchmark workplace experiences with other organizations,  determine enterprise-level priorities, drive key HR programs, set engagement-related KPIs, involve managers in the action planning process etc. But one of the key elements missing is how do we use these insights from the survey, fortify them and use them to really drive business performance. I often find that we miss connecting those critical dots. If HR has to ‘get a seat at the table’, then all it’s initiatives should link back to business performance, including employee engagement.

I could think of one potential approach, and it may be suitable to larger size organizations with a decent number of “units of analysis” i.e. bank branches, retail stores, production sites etc. If we have sufficient number of units to study, the first step would be to start linking the employee engagement survey data to business metrics. Think sales, profitability, productivity, employee attrition, customer survey scores, safety incidents, customer waiting time etc. Then you would need some analytical wizardry to examine how these metrics link to employee survey data. Do highly engaged bank branches have higher loan growth and higher net interest margin? Or do low engagement manufacturing plants showlow productivity as well? Or worse, the linkage is not meaningful or not strong enough (in which case you really need to go back to the drawing board to design a good survey). Such linkages help to establish the validity of your employee research frameworks and help create buy-in among the senior leadership team.

The next step is really to take it a notch further up. Based on the above linkage analysis, you would have identified your high / average / low performing units. Now, the way HR can really add value and improve business performance is by replicating the high performing units. How do you do that? Well, you try to examine what differentiates these high performing units from others. You could look at a range of variables for employees in these groups – age, tenure, experience, competencies, managerial practices – anything that can hypothetically differentiate performance. And yes, you could also connect it all back to the employee survey and see what issues are these “high engagement – high performance” units particularly satisfied on as compared to other units. Again, we are just looking for factors which can differentiate or even predict engagement and performance

Only when you have insights of this depth, then you could work out a plan for replicating such high-performance. Such insights can provide inputs into recruitment plans, talent management, rewards, training & development, career progression etc.  And all this will potentially have much more credibility since you have validated these against business outcomes.

What do you think? How are you using employee survey data to improve business performance? Drop in a line if you would like to discuss this in details.

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