Week 6 People Analytics and Organizational Development Paper

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5/7/2019 How People Analytics Can Help You Change Process, Culture, and Strategy

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ANALYTICS

How People Analytics Can Help You Change Process, Culture, and Strategy by Chantrelle Nielsen and Natalie McCullough

MAY 17, 2018

KENNETH ANDERSSON FOR HBR

It seems like every business is struggling with the concept of transformation. Large incumbents are trying to keep pace with digital

upstarts., and even digital native companies born as disruptors know that they need to transform. Take Uber: at only eight years old,

it’s already upended the business model of taxis. Now it’s trying to move from a software platform to a robotics lab to build self-driving

cars.

And while the number of initiatives that fall under the umbrella of “transformation” is so broad that it can seem meaningless, this

breadth is actually one of the defining characteristic that differentiates transformation from ordinary change. A transformation is a

whole portfolio of change initiatives that together form an integrated program.

And so a transformation is a system of systems, all made up of the most complex system of all — people. For this reason, organizational

transformation is uniquely suited to the analysis, prediction, and experimental research approach of the people analytics field.

5/7/2019 How People Analytics Can Help You Change Process, Culture, and Strategy

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INSIGHT CENTER

Competing in the Future

How to make your company more nimble and responsive.

People analytics — defined as the use of data about human behavior, relationships and traits to make business decisions — helps to

replace decision making based on anecdotal experience, hierarchy and risk avoidance with higher-quality decisions based on data

analysis, prediction, and experimental research. In working with several dozen Fortune 500 companies with Microsoft’s Workplace

Analytics division, we’ve observed companies using people analytics in three main ways to help understand and drive their

transformation efforts.

In core functional or process transformation initiatives — which

are often driven by digitization — we’ve seen examples of people

analytics being used to measure activities and find embedded

expertise. In one example, a people analytics team at a global CPG

company was enlisted to help optimize a financial process that

took place monthly in every country subsidiary around the world.

The diversity of local accounting rules precluded perfect standardization, and the geographic dispersion of the teams made it hard for

the transformation group to gather information the way they normally would — in conversation.

So instead of starting with discovery conversations, people analytics data was used to baseline the time spent on the process in every

country, and to map the networks of the people involved. They discovered that one country was 16% percent more efficient than the

average of the rest of the countries: they got the same results in 71 fewer person-hours per month and with 40 fewer people involved

each month. The people analytics team was surprised — as was finance team in that country, which had no reason to benchmark

themselves against other countries and had no idea that they were such a bright spot. The transformation office approached the

country finance leaders with their findings and made them partners in process improvement for the rest of the subsidiaries.

It’s unlikely the CPG company would have been able to recognize and replicate these bright spots if they had undertaken

transformation with a top-down approach. And, perhaps more importantly, it involved and engaged the people on the ground who had

unwittingly discovered a better way of doing things.

In bottoms-up cultural transformation initiatives, the how things are done is equally or more important than what is done. Feedback

loops and other methods of data-driven storytelling are our favorite way that people analytics makes culture transformation happen.

Often times, facts can change the conversation from tired head-nodding to curiosity. One people analytics team in an engineering

company was struggling to help develop the company’s managers, for example. Managers often perpetuated a “sink or swim” culture

that didn’t fit the company’s aspirations to be an inclusive, humane workplace. The data analysis found that teams whose managers

spent at least 16 minutes of one-on-one time with each direct per week had 30% percent more engaged direct reports than the average

manager, who spent just 9 minutes per week with directs. When they brought that data-driven story to the front lines, suddenly a

platitude was transformed into a useful benchmark that got the attention of managers. In this way, data storytelling is a lightweight

way to build trust among stakeholders and bring behavioral science to culture transformation.

Top-down strategic transformation is often made necessary by market and technology factors outside the company, but here people

analytics is a critical factor for execution. A people analytics team can serve as an instrument panel of sorts to track resources,

boundaries, capacity, time use, networks, skill sets, performance, and mindsets that can help pinpoint where change is possible and

can measure what happens when you try it.

One people analytics team at a financial services company was trying to help the CEO manage growth while he worked to instill a new

culture in which departments would be asked to run leaner and more competitive in the market – “scrappy” and “hungry” were terms

that often came up. As the transformation accelerated, teams were asked to do more with less, generate more data, and make decisions

5/7/2019 How People Analytics Can Help You Change Process, Culture, and Strategy

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faster. Amid this, department leaders began to hear anecdotes about burnout and change fatigue and questioned whether the pace was

sustainable. To address this, the people analytics team provided their CEO with a dashboard showing the number of hours that

knowledge workers were active for in different teams. When an entire team is over-utilized, he knows they can’t handle more change,

while under- or unevenly utilized teams might be more receptive. He can also slice the dashboard by tenure, to learn whether recent

hires have been effectively onboarded before approving new hire requests to absorb extra work.

As organizations increasingly look to data to help them in their

transformation efforts, it’s important to remember that this doesn’t just

mean having more data or better charts. It’s about mastering the

organizational muscle of using data to make better decisions; to

hypothesize, experiment, measure and adapt. It’s not easy. But through

careful collection and analysis of the right data, a major transformation

can be a little less daunting – and hopefully a little more successful.

Chantrelle Nielsen directs research and strategy for Workplace Analytics, a new organizational productivity category at Microsoft. She led product management, marketing, and several other functions at VoloMetrix as they grew and were acquired by Microsoft.

Natalie McCullough is General Manager for Workplace Analytics and MyAnalytics at Microsoft. She has spent two decades driving organizational productivity and growth at McKinsey, ServiceSource and VoloMetrix.