ContributorsEnabling Technology

The Culture of Analysis

Cutting-edge HR leaders want to see what they don’t know.
 
 
 By John Sumser
 
Analytics and metrics are taking the enterprise by storm. The capacity to reduce performance to a repeatable set of numbers that are consistent across the enterprise and the industry is taking hold in most departments. A little late to the game, HR is slowly but surely joining in the fun.
 
 
“Analytic competitors,” firms that base their decision making on a blend of actionable statistics, data, evidence-based management, and business intelligence, are emerging as market leaders in many sectors. Competing on Analytics by Thomas Davenport and Jeanne Harris (Harvard Business School Press) documents the tools, techniques, and mindset required to develop an analytics-driven culture. The emblematic players include Google, Yahoo!, Netflix, Marriott, the Oakland A’s, Mars, John Deere, Sprint, and FedEx (among others).
 
 
The fundamental aim of an analytics-driven culture is the creation of predictability and improved competitive opportunity. Well-managed approaches give users the ability to see opportunity where the competition sees cost. Proponents claim that analytics bring science to competition. Hyperbole aside, it’s clear that intelligent measurement across the enterprise shifts market dynamics and company performance.
 
 
“Analytic competitors” focus on wrenching every possible trace of competitive edge from high-performance business processes. They identify a few key capabilities and then focus their attention on elevating those elements to the best possible performance. They aim to execute with maximum efficiency and effectiveness, driven by highly measured and analyzed feedback loops.
 
 
These companies manage to let their data tell them where to go. In the Industrial Era, information use was a question of control, reach, and accuracy. This new approach builds on and transforms the old school idea. Analytics are most effective in the hands of leadership teams who believe their job is a permanent pursuit of improved effectiveness. They want to see what they don’t know.
 
 
Earlier this month, SuccessFactors purchased Infohrm, a small, SaaS provider of HR Analytics. Infohrm blends software, data management, and cross-customer collaboration as the premier HR analytics company. The acquisition, though small by industry standards, is an inflection point in the professionalization of HR.
 
 
Infohrm’s user groups are a hotbed of HR innovation. Cultures rooted in measurement (or the attempt to become so) learn best from each other. A key element of Infohrm’s model is this integration of statistics and users.
 
 
Infohrm is one of the leading proponents of a new model of software. In the 20th-century, software design focused on functionality. Emerging 21st-century tools make it clear that the best automation gets better the more data it includes and the more users involved. Software without information is like a Beatles album without songs.
 
 
Distinguishing the tools from their contents, contexts, and support infrastructure is an old-fashioned view. It equates software with the kinds of tools that you might find on a factory floor or in a tool box. Contemporary automation is better understood as a form of media or as a platform for learning and innovation. Absent data, analysis, and context, it is like a screwdriver without screws or a door jam.
 
 
Infohrm’s intellectual property includes a manual with more than 200 Human Capital Measurements and more than 2,500 case-specific derivatives. Over the course of its history, the company developed standardized language and data inputs for the most common metrics. User groups and data aggregation allow customers to generate insight while getting a sense of their place in an increasingly well-defined maturation process.
The acquisition confirms SuccessFactors’ strategic reorientation. Repositioned as a provider of business execution software, SuccessFactors hopes to shed the baggage associated with HR’s tendency to focus within the department. Emphasizing the real world consequences of HR decision making, the firm is attempting to differentiate with a vision that extends beyond the silo.
 
 
It will not be an easy thing to do. Burdened with stereotypes about squishy, soft stuff, many departments have a decidedly anti-analytical feel. Math majors, economists, and “quant jocks” rarely compete for slots in the feel-good department. Wickering together the disparate data streams required to make sense of already available data will take time, patience, and persistence.
 
 
Worse still, great HR analytics are the beginning, not the end. As the move toward evidence-based decision making takes firm root, people will start to notice that all of the business silos have unique analytics and data stacks. Analytics are just the gateway to a single, enterprise-wide view of the data, the problem, and the opportunity.  These are just the training wheels on a bike we can’t see very clearly yet.
 
 
John Sumser is a technology consultant, trade show producer, and webmaster of HRExaminer.com. He can be reached at john@johnsumser.com.  

Tags: Contributors, Enabling Technology

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