Unlocking value from People Analytics: how to harness innovation
People Analytics is an innovative discipline, embraced by forward-thinking leaders determined to create new routes to value in large organisations. But harnessing innovation, turning analysis into action, and driving strategic change requires collaboration of leadership across corporate silos. For People Analytics leads looking to raise the bar, for HRDs looking to add strategic value, and for MDs looking for new solutions in challenging markets, embracing innovation could hold the key.
This article covers:
Partnering across organisational boundaries
The role and skills of a sponsor/integrator
Embracing team diversity
The mindset and approach to harness innovation
Are you an innovator?
It is nearly 60 years since Everett Rogers coined the term ‘early adopter’ and classified only 2.5% of any population as ‘innovators’ [1]; yet one third of HR leaders in a recent global study classed themselves as innovators [2]. Is this hype or reality? And do you have this rare and valuable mindset?
Innovators drive change. Innovators challenge the status quo. And as innovators are in the minority, they also need a range of skills to engage others, win support, and ‘get things done’. Ideas need execution to become reality.
Is People Analytics at a crossroads?
The field of People Analytics has been developing over the past two-to-three decades as the independent disciplines of Human Capital and Data Analytics began to be used together for the first time. I suspect many of us who play some role in shaping and developing this field consider ourselves innovators; and today I am thrilled to see the population of People Analytics innovators growing year on year.
However, for some years I have observed the vocation of People Analytics evolving at pace technologically, while often hitting a brick wall commercially. By which I mean it is easy to track the emergence of new technologies, the broader application of statistical techniques, and the proliferation of artificial intelligence and machine learning in the field of People Analytics. But there are far fewer examples of these technologies being harnessed to enable better strategic decision-making, enhance business/financial performance, sustainably improve employee wellbeing and make a tangible positive impact on society.
So could the field of People Analytics now be at a crossroads? And could it be that harnessing an ‘innovation mindset’ is key to the decades ahead?
Harnessing an ‘innovation mindset’
Recently in my research at Simply Get Results I have been interviewing experts, customers and colleagues (not mutually exclusive!) to collect examples of where People Analytics is delivering measurable commercial, human and/or societal impact; to understand the factors that can stop this from happening, and the circumstances that underpin success.
The importance of an ‘innovation mindset’ emerged clearly from this research. These have been some fascinating discussions and I cannot cover everything here but wanted to share some highlights and invite commentary from the community.
How to maximise the strategic value of People Analytics
There are five areas we’ve identified that help to maximise the strategic value of People Analytics in big companies.
1. It is essential to partner across boundaries
For People Analytics to deliver value for any business and its workforce, senior business and HR decision-makers need insight they can trust, to drive change.
Stephen Sidebottom, a veteran CHRO in the Banking Industry, has experienced the challenges of aligning business, HR and analytical stakeholders in organisations such as Standard Chartered and Nomura. Stephen argues that:
HR needs to provide empirical evidence and build better rationales for their recommendations. Good judgement requires good thought processes supported by data.
For MDs and CFOs, using data to assess and justify strategic decisions is standard practice; but for HR professionals it can be a high hurdle to align with Finance on their numbers, due to the inherent complexity of ‘measuring people’.
This is where partnering across boundaries comes in. Rather than expecting the HRD or People Analytics lead alone to triangulate business needs, financial constraints and the potential of the workforce – a multi-disciplinary team is required to combine knowledge, skills and experience across domains. Stephen Sidebottom gave an example of bringing in a data analyst from the Airline Industry to provide the technical know-how, combined with existing HR and business skills, with Stephen himself acting as a sponsor/co-ordinator.
People data can be complex. To unlock the most value you need a combination of inputs spanning human, psychological, political, commercial, environmental, quantitative and qualitative.
2. A sponsor/integrator is a key enabling role
Who should lead this multi-disciplinary team? Who plays the integrator across skillsets? One Harvard study found the most common nominee for such a role was the CIO: 50% were charged with improving horizontal integration of the business, and a third were focused on their corporations’ innovation and growth initiatives [3].
However, any skilful leader can potentially play a sponsor/integrator role. A Deloitte study on executive sponsorship to catalyse change found that “successful sponsorship requires focus, planning, tangible commitments, and a communications strategy to drive impact” [4]. These skills are not domain dependent – they could be provided from many sources.
Tim Haynes, a Talent, OD and Analytics expert in the Pharmaceutical sector, has years of experience playing the sponsor/integrator role. He says:
True innovation is an organisational change process that implies doing things for the first time. Harnessing such novelty does not happen by chance. It requires active sponsorship within organisations and requires a coalition of sponsors who share a collective vision of the art of the possible.
PA Consulting say: “if you’re serious about innovation, then you need buy-in from stakeholders across the organisation in order to succeed. Taking an idea and translating it into your business isn’t easy – you need to take a systematic approach that demonstrates the value innovation can bring.” [5]
3. Innovating is about embracing diversity
Alexis Bonnell is division chief of applied innovation and acceleration with the United States Agency for International Development U.S. Global Development Lab. “An integrator is as much about a way of thinking as it is about hard skills. It is someone who seeks out ‘others’, whether that involves new partners, technologies, thinkers, or approaches”. [6]
Fiona McDonnell, Director of Consumer Retail at Amazon says: “diversity is the engine of innovation, so it's crucial we make changes now for future success. The research is there: diverse teams perform better, innovate faster and ultimately deliver right down to the bottom line”. [7]
Charlotte Starkmann is a business transformation advisor in the energy industry. She references research [8] that:
More diverse teams create more innovation by 19% - In the fast-changing business environment that we are now facing, creating an environment where diverse teams can succeed is a business essential not a nice to have. The challenging conversations are what drive the innovation, so leadership of these teams is key to success.
4. Breaking new ground may feel ‘uncomfortable’
According to a study by MIT Sloan School of Management: “innovation is all about disruption and that uncomfortable space when you encounter a new idea and don’t yet understand it. How well prepared is your organization to learn, rather than know? How comfortable is your organization with being uncomfortable in order to grow?” [9]
Harriet Hounsell is a seasoned CHRO in the retail and hospitality industry, including John Lewis, McDonalds and Marks & Spencer. In Harriet’s experience learning a new skill always feels uncomfortable, and leaders need to be supported in their journey to lead innovation and drive strategic decision-making.
Leaders need the right combination of curiosity, determination, critical thinking, and a ‘change mindset’. They also need the people skills to build political will and overcome inertia and resistance.
Stephen Sidebottom describes this as the courage and capability to “challenge the dominant logic”.
5. Aim higher: to get great results you must explicitly target them
Today it is not just companies like Netflix, Amazon and Apple that are embracing innovation at an enterprise level, disrupting markets and outperforming established competitors. It is also the growing army of disruptors, the myriad start-ups and scale-ups, and many ‘super-tanker’ corporations too. Fast Company’s 50 Most Innovative Companies of 2019 included veterans like Disney, behemoths like Alibaba and newbies like Twitch [10].
In some industries like drug development and renewable energy, innovation is deeply embedded and established in the culture and processes across the enterprise. Yet People Analytics professionals in these industries still find it an up-hill battle to engage senior leaders in data and insight that is fundamentally valuable at a strategic level.
Harriet Hounsell suggests “partnering across functions and finding a balance between presenting strategic and operational data and insight; using external drivers and imperatives to drive action that will impact share price and get senior attention, whilst recognising the value of day to day operational data to drive excellent execution”
KPMG’s 2019 report on Innovation in the Tech Industry found the top 3 measure of innovation success were all financial and externally visible: market value, RoI and revenue growth [11]. How many People Analytics teams are tracking their success against such measures?
All this makes me question how many People Analytics leads are getting adequate practical support from their sponsors and stakeholders to execute, land and embed innovation; to build diverse, multi-disciplinary teams; and to track their work through to strategic outcomes.
In their survey of over 800 senior executives, PA Consulting [5] found that:
66 per cent of organisations won’t survive without innovation but only 24 per cent are fully confident they have defined the skills and activities needed to be innovative. Moreover, 50 per cent of the executives don’t believe their leaders show the vision and passion needed to make innovation happen.
Innovation is a team sport
One conclusion I have drawn from this research is that – while People Analytics is an innovative domain and a ‘team sport’ - the ‘best’ team members may not be the first, most obvious selection. They may include disparate disciplines like Finance, Customer or Risk. They may be drawn from various functions and locations, with a range of seniority, age and experience. And it has reinforced my belief that the most successful People Analytics teams should be inclusive in the truest sense, embracing the views and experiences of diverse contributors.
So, in your organisation, who are your People Analytics innovation champions – who has the ‘vision and passion needed to make innovation happen’? Is this you, members of your team, and/or some of your stakeholders? Is this a critical capability that you need to develop, hire or secure through an experienced partner?
What’s your next move? Have you cracked this already?
I would love to hear your stories.
With thanks to Stephen Sidebottom, Harriet Hounsell, Tim Haynes, Charlotte Starkman and the individuals and teams referenced below.
Citations
[1] Rogers, Everett, 1962
[2] Thomson Online Benefits, 2020
[3] Harvard Business Review, Nov 2008
[4] Deloitte, 2020
[5] PA Consulting, 2020
[6] Emma Smith for Devex, 2020
[7] Fiona McDonnel for Kings College London, 2019
[8] Boston Consulting Group, 2018
[9] Bill Fischer, MIT Education, 2019
[10] Fast Company, 2019
[11] KPMG, 2019