human resource

© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.

JWI 522 (1192) Page 1 of 6

JWI 522 Strategic Partnering with the C-Suite

Week Three Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.

JWI 522 (1192) Page 2 of 6

LEVERAGING DATA TO IMPROVE PERFORMANCE

What It Means For HR to be a strategic driver of the business, HR leaders must bring a deep knowledge of “people data,” including knowledge of market conditions that impact staffing, succession planning and talent development. They must be the go-to experts for the Executive team to rely on when assessing how to build a strong and winning workforce that positions the company for success. Why It Matters

• Good data is the foundation of sound decision-making.

• Leveraging accurate data reduces the risk that strong-willed people are able to win debates based on their persuasive skills rather than facts.

• People analytics helps HR leaders identify issues that may be hard to see without the data, and communicate those issues to others in ways that show important patterns and trends.

“Beware of data masquerading as fact; data is only as good as the conclusions it allows you to draw from it.”

Patty McCord

© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.

JWI 522 (1192) Page 3 of 6

COLLECTING AND ANALYZING CRITICAL PEOPLE DATA

In our work last week, we discussed the importance of HR leaders and business leaders focusing on the strategic needs of the organization, and assessing how those impact staffing and talent development. The topics we're going to cover over the next two weeks are tightly interwoven. We suspect you'll find yourself going back and forth between the materials for these two weeks, to re-watch videos and compare positions taken by authors in different articles. The common theme in both weeks is the use of data to make better people management decisions that improve performance. We have organized this section of the course around two sub-themes:

• In Week 3, we focus on the role of people analytics in identifying, collecting and analyzing data that sheds light on the forces – both environmental and behavioral – impacting staffing.

• In Week 4, the focus shifts to the role that HR should play in communicating and leveraging that analysis to help business leaders build stronger teams.

Why so much emphasis on data in a course about people?

1. The first part of the answer is that data can shed light on patterns in ways that enable us to make better predictions about future performance and cultural fit. This allows us to hire better, promote better, and target our development efforts better. Used properly – and yes, that’s a loaded term – people analytics can increase the return on the investment we make in our people.

2. The second part of the answer is that CEOs tend to think and speak with data. If you expect to have a seat at the table, you not only have to understand what the CEO and CFO are concerned about in terms of the finances of the organization. You have to be able to bring hard data to the discussion that connects talent management to financial results. Demonstrating the (positive) impact of this connection may well be the single most important step in transforming the perception of HR from a cost center to a profit center.

While it may be reasonable to expect that HR leaders will not be as fluent in the nuances of a particular business as the people who live it every day, there is one area in we should excel – people analytics. We expect our managers to possess a thorough understanding of their businesses, including the cost of getting their products to market, the return on that investment, and knowing what their competitors are up to. Think about it … we’d never let a finance manager get away with saying, “We made a little more money this year than we did last year,” or let a VP of Sales say, “Our renewal rate is not quite as good as that of our competitors.” We expect specific data points, facts, and figures that give us quantifiable metrics to measure our performance against. As HR leaders, we must demonstrate similar expertise. For us, this includes the cost of acquiring, retaining, and developing the talent we need to remain competitive.

© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.

JWI 522 (1192) Page 4 of 6

The CHRO must bring to the table the ability to assess talent needs – now and in the future – against market conditions, using data to answer questions like:

• What is the market supply for the talent we need? • Can we develop the talent we need internally? • What is the real financial impact on the business from low, average, or top performers? • Do we have opportunities to rethink the organizational chart, perhaps creating additional junior

positions at a lower pay and a few positions at significantly higher pay for top performers?

METRICS THAT MATTER In many organizations, people costs are by far the largest operating expense. Even in companies where other expenses outweigh personnel expenses, we still have limited financial resources available from which to derive maximum performance from our workforce. So what data is most important? Retention? Net Promoter Scores? Pay standards? Something else? Patty McCord argues that in most cases, HR does not need special metrics. The data that matters to HR should be the same data that matters to the business as a whole. The simplest expression of this is the return on investment in human capital. How does an organization identify, hire, and manage employees in order to deliver the greatest return on the salary and other expenses they have to pay out? Jennifer Carpenter and Patty McCord both make strong cases that the value of analytics in HR is in guiding us to ask the right questions, tracking the most important data, and bringing that data to the C- Suite to ensure we are actually solving the right problems. HR leaders have to maintain focus and not get caught up in the minutiae of metrics that carry little weight outside the walls of the HR department. McCord cautions, “One of the biggest mistakes is fixating on metrics that don’t matter.” (Powerful, P. 59) She writes:

There’s been something of a deification of data in recent years, as though data itself is the answer, the ultimate truth. There’s a dangerous fallacy that data constitutes the facts you need to know how to run your business. Hard data is absolutely vital, of course, but you also need qualitative insight and well-formulated opinions, and you need your team to debate those insights and opinions openly and with gusto.”

Powerful, P. 55 She argues that one of the greatest dangers companies and hiring managers face is working with averages when building compensation models. Every employee is unique, and a top performing employee is worth many times the price paid for an average employee. To help assess and calibrate this at Netflix, she adopted a radical approach:

“We suggested that our employees interview elsewhere regularly, so that they could gauge the market of opportunities. This also allowed us to get a better understanding of how sought after they were and what we should be paying them.”

Powerful, P. 82

© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.

JWI 522 (1192) Page 5 of 6

LEVERAGING ANALYTICS TO IMPROVE

PERFORMANCE AND CULTURE People analytics is not an end in itself. HR leaders seeking to earn a seat at the table must be able to “speak with data” in ways that are clear and which help others improve performance and culture.

Data is great; data is powerful. I love data. But the problem is that people become too wedded to data and too often consider it much too narrowly, removed from the wider business context. They consider it the answer rather the basis of good questions.”

Powerful, P. 56 We’ve all experienced the torture of listening to experts rattle off reams of data, or have had to wade through reports with endless charts, tables, and references that lost the message in the mess. Your success in elevating the role of HR hinges on not just collecting and analyzing the data, but in parsing it in ways that highlight what matters and why, and then in helping your C-Suite colleagues turn analysis into action. However, even the most data-driven companies – including GE and Google – never let the data replace the human element in making decisions about people. Even with the focus in GE on the formal system of review through the Session C process, Jack and Bill were always strong proponents of performance feedback that is frequent, clear and actionable. Gathering and implementing this feedback could not rely on data alone.

Masters of talent build a… depth of knowledge about people, a database in their minds. They make detailed, specific, accurate observations about them and compare them with other people they’ve observed. Every encounter invokes an observation. Accumulation of these observations, done consciously, produces a complete picture of the whole person. This deeper, more accurate knowledge is the key to high-quality decisions about leaders.”

The Talent Masters, P. 8 The goal for HR leaders is to help the organization understand the balance between personal knowledge and hard data, and to identify which decisions about hiring and promotion could be better informed with the use of data – even if the metrics are never perfect. In sum, the goal of people analytics is to guide a shift from intuitive decisions to data-driven decisions. It’s not to do away with the human element in actually making the decisions.

© Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University.

JWI 522 (1192) Page 6 of 6

GETTING THE MOST OUT OF THIS WEEK’S CLASS As you read the materials and participate in class activities, stay focused on the key learning outcomes for the week:

• Understand how to analyze critical people data and metrics You need to be an expert in the “people forces” that impact the business. Just as your CEO expects expert insights and contributions in areas of production costs, supply chains, finance charges, competitor intelligence, and product design, you have to be the go-to resource for people data impacting your organization. What is the employment market doing, and how does this guide your staffing plan now and in the future? What will it take to get the talent you need without overspending? These are the areas that we must know better than anyone else in the business.

• Identify the metrics that matter most in building a strong workforce Are you staying on top of what’s going on in areas of people analytics? Are you asking the right questions about what data would help you better understand the forces that impact the performance of your workforce? What tools does your people management software have that you are not using? Are you up-to-date on what metrics your competitors are tracking? Is there something going on in the way of people analytics in an entirely different industry that could shed more light on how talent is managed in your organization? But remember our warning: do not let these pursuits lead you to create a set of metrics for HR that are entirely different from what matters to the rest of your business, and don't allow data to displace the human component of people-management decisions.

• Leverage analytics to improve performance and culture Finally, it’s not enough that you and your team collect and analyze lots of people data. What really matters is what you do with it. How do you share this with others in the organization, and what do they do with it? Sending out excessive data won’t change the way other teams work. Remember the advice from our first week: C-suite leaders – and most leaders of any business unit – are busy people. From their perspective, more data is not necessarily better. Meaningful data that is targeted at improving specific business outcomes is what's needed. It's up to you as an HR leader to clearly frame what the data tells you, and how it can be used to improve performance and culture.