The Year Ahead

New Year, Melbourne

New Year, Melbourne (Photo credit: dan taylor)

It’s been a big year for me and Kienco, and 2014 is shaping up to be even bigger. We’ve been fortunate to work with some amazing clients and partners this year.

Some of my personal highlights have included having conversations with people around the world about the connection between workforce strategy and business strategy.  At times these have come from surprising places – a glass manufacturer working through the effect of automation, for example; and an international organisation expanding into China – and facing a very different talent market than in their US headquarters.  I’ve personally been fortunate enough to speak at and chair some great conferences in Melbourne and Sydney, and to serve as Faculty at The Conference Board’s Strategic Workforce Planning Academies in New York and Brussels.

In 2014, Kienco are expanding our Strategic Workforce Planning Masterclass program.  This year we have run Masterclasses in Perth, Sydney, Melbourne, Wellington, and Auckland.  In 2014 we’ll be going even further abroad, with Masterclasses in Australia, New Zealand, Singapore, Hong Kong, UAE, Canada, and the UK.  The year kicks off with trips to the USA, Singapore, and London in Jan and Feb to both teach workforce strategy techniques, and to hear what’s happening in those markets.  We will also continue to run private in-house strategy sessions on Strategic Workforce Planning and Agile Analytics.

As well as expanding the training program, Kienco is launching two new products next year.  The first, readers of this blog may already have heard about.  In conjunction with ATC Events, we’ll be running the #masterplan2014 conference in both Melbourne (27/28 March, 2014) and Wellington (1/2 April, 2014).  This is shaping up to be a fantastic event with some insightful and interesting speakers from around the world.  If you’re interested in hearing more – or if you have a case study and would be interested in speaking at the event – please feel free to contact me.

The second new product, which I’m very excited about, is the launch of our workforce analytics dashboard.  We’ve been working for the past few months on this product which allows organisations to quickly visualise and quantify workforce data and patterns.  It is Kienco’s belief and experience that analytics don’t necessarily give you all the right answers, but they can prompt the right questions.  It’s with this in mind that we’ve developed this very flexible software that allows you to take a true data science approach to workforce data – by exploring patterns, trends, and areas of opportunity and risk – real-time, and on mobile devices.  We’re currently in private beta, and are preparing for a public launch.  Look out for more information and screenshots on our website soon.

From me and my colleagues at Kienco, we’d like to thank the readers of this blog and our clients and partners for an incredible 2013 – and we wish you a very happy and successful 2014.  Happy New Year!

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A tale of two beverages

Coffee cup

Coffee cup (Photo credit: @Doug88888)

I’ve written before on this blog about the false proxy trap.  The false proxy trap occurs when you can’t directly measure what you need, for example productivity, so you invent a proxy, something that’s easier to measure (for example, employee engagement) that serves as an alternative measure – a proxy.  The problem, as Seth Godin points out, is that “…When we fall in love with a proxy, we spend our time improving the proxy instead of focusing on our original (more important) goal instead”.  It strikes me that HR professionals do this all the time, and that employee engagement and employee satisfaction are, respectively, half-decent and fairly useless proxies for productivity and commitment.  Very few organisations understand the connection in their organisation between these measures and the actual results for productivity and turnover – even fewer understand this for different roles in their organisation.  Yet we seem willing to accept that they are important things to pursue for all roles, in all circumstances, and in all organisations.

If we accept that there is a connection between engagement and these results in general, but don’t verify the connection within our organisation, then we can easily fall into the False Proxy Trap.  The result is that we focus on improving engagement scores in ways that don’t drive business results.  That can mean a lot of mis-directed time, money, and focus.

According to Gallup’s State of the American Workplace report, 2 out of every 5 employees don’t actually know what is unique about their employer and what their employer stands for – and this is even more pronounced amongst employees who are customer facing.  It’s not always possible to “engage” your workforce, but surely it is possible to at least communicate your strategy?  That, indeed, is a pre-requisite for engagement.  If employees don’t understand the purpose of their work, you’re never going to get engagement.  A good sanity check is to see whether your employees actually know what your company does, and how their role contributes to that.

Recently I was sent an advertisement from a publisher of HR content (below).  While I’m sure the Nespresso  Zenius machines are great, and that your employees would be thrilled to have one, it had me thinking about the situations in which it would actually “build employee engagement” as the advertisement claimed.   Satisfied?  Perhaps.  Engaged? Seems a bit of a stretch.  Seems like a false proxy trap to me.

Nespresso-for-Employee-Engagement-01

Compare and contrast to a Bordeaux winemaker, interviewed in the film Red Obsession: “The wine is like a message which you send over the wall.  I think it’s better than those little tweets.  It will end on a table, let’s say in Seattle.  And you can imagine, a couple is meeting for one evening.  A guy is dating a charming girl for the first time.  And they have that.  And from the quality of that bottle may depend the success of their first meeting – you know?  And if I spoil their evening, what a drama – I am responsible.  Our wines should be as good as possible.  We need to please people, and not to impress them.  To please them.”

Same winemaker did admit to consuming large quantities of wine each lunchtime, but that, to me, is someone who is engaged in his work.  Understanding the connection between the work you do and the impact of it on the ultimate consumer.  Feeling an obligation to do the best job you can for them as a result.   If only everyone in every workforce could be that engaged!

From a workforce analytics perspective, it’s critical to define what you mean by concepts like employee engagement (hint: it’s not employee satisfaction), and to understand exactly what the connection is to your business results.  Don’t fall into the False Proxy Trap, and be careful of taking generic advice when it comes to people suggesting strategies to “engage” your workforce.  By all means buy your employees a coffee machine, they’ll love it – just don’t expect it to drive business results because an advertiser said so.

Amazon’s Package Delivery by Drone predicted 92 years ago

Amazon’s CEO Jeff Bezos has recently announced a plan, and the technical ability, to deliver Amazon packages within 30 minutes of ordering by drone octocopter.  You can view the drones here on Amazon’s official Youtube channel.

This reminded me of the fantastic book “The Wonderful Future That Never Was” – which you can buy, as it happens, on Amazon – and in fact it turns out that the magazine Popular Mechanics predicted something very similar way back in 1921:

The full text of the prediction was:

“The nonstop delivery of airplane mail via parachute is being rapidly developed in the United States, France, and England. Valuable matter—the only kind carried by airplanes—must be carefully guarded, which means, among other things, that it must be landed within a few feet of the person authorized to receive it. At present the accuracy with which the bags are landed depends entirely upon the skill and aim of the airman. However, some astonishingly close “hits” are being made with, and still greater accuracy is expected from, a two-speed parachute which is being developed in France. In the meantime it is quite safe to predict that parachute delivery will sometime become the rule.”

Perhaps when this prediction was made, “sometime” wasn’t expected to be 92 years later – and it took a different technology than a parachute to make mail delivery by air a reality… but in retrospect it’s very interesting that this approach which will no doubt be lauded as visionary is an almost century-old idea that only now is becoming technically feasible.

Of course, even Bezos says it’s a few years away – and then there’s the FAA to negotiate with… perhaps 92 years is not long enough after all…

Update: 

British book retailer Waterstones has responded by announcing their plans to deliver orders by owl:

Who bears the impact of underemployment in Australia?

Underemployment is an important labour market measure.  Most people are familiar with unemployment, that is those people who are not currently working but are part of the workforce.  Underemployment, on the other hand, is a measure of as part-time workers who want, and are available for more hours of work than they currently have, and full-time workers who are working part-time hours for economic reasons (for example, because they have been stood down or there’s not enough work available).

Underemployment statistics in Australia started being tracked in 1978.  This was a time of reasonably high unemployment for Australia (almost 7 percent, with 20 unemployed for every vacancy), and at the same time there was relatively high inflation.*  In February 1978, the underemployment rate was at 2.8% while unemployment rate was 6.3%.  Fast forward 35 years to August 2013, and the underemployment rate was 7.7% with an unemployment rate of 5.7%.  The underemployment rate first exceeded the unemployment rate in 2000, and seems set to stay a larger proportion of labour underutilisation in Australia for the time being.

Underemployment and Unemployment Australia 1978-2013

Underemployment and Unemployment Australia 1978-2013
(click for full size image)

Although unemployment gets all the headlines, it strikes me that as we have a workforce that is transitioning gradually to a more contingent one, then underemployment becomes an increasingly important measure labour market dynamics.  So who bears the cost of underemployment?

The statistics show some interesting patterns – firstly, although inequality in unemployment between males and females has been largely eliminated over years, underemployment still has a significant (albeit slowly reducing) gender gap:

Underemployment and Unemployment Female Representation

Underemployment and Unemployment Female Representation
(click for full size image)

But where we see the most significant difference over the years is between age groups, and between the states.  

Underemployment by Age, Australia  - 1978-2013

Underemployment by Age, Australia – 1978-2013
(click for full size image)

Underemployment by State, Australia - 1978-2013

Underemployment by State, Australia – 1978-2013
(click for full size image)

So it seems that inequality in underemployment is slowly narrowing in terms of gender, but getting wider in terms of age groups and between states and territories.  The 15-24 year old underemployment rate is 5 times what it was in 1978, and trending upwards; and the gaps between the states is widening.  I’m interested to hear your perspectives on what’s happening here, and what the implications may be for 15-24 year olds today, who, in aggregate, are struggling economically with underemployment as they enter the workforce.  Will this turn around when they reach the magical 25, or will underemployment become entrenched and continue throughout their careers?  Is it the casualisation of the workforce that is causing these trends?

* The rise of both unemployment and inflation simultanously is a rare economic combination known as stagflation, which occurred in the USA in the early 1970’s and Australia in the mid 1970’s.  This was a new phenomenon globally that contradicted the economic theories of the time.  Stagflation was particularly troubling as any policy response to improve either unemployment or inflation, it seemed, would exacerbate the other.

The Nerdification of Nearly Everything

NERDS

NERDS (Photo credit: MacQ)

Strange and nerdy times we live in.  If you don’t believe me, here are the top 20 signs you might have missed:

1. People camp out overnight to get Apple products as soon as they are put on sale, and others pay other people to do that for them.

2. Fast Company names Nate Silver, a statistician, as the most creative person in business.

3. The Big Bang Theory, a show about Physicists, enters it’s 7th season, after being the highest-rated comedy on US TV in the 2012-2013 season.

4. Four out of the top five most watched shows in the USA are either Nerdy (NCIS, NCIS: Los Angeles – Law Enforcement and Counterintelligence in the Navy) or Very Nerdy (Big Bang Theory, and Person of Interest, a drama about a machine that analyses big data to predict who’s going to die in a violent crime).  Sunday Night Football at #2 is the only non-nerdy show in the top 5.

5. In 2011, Barack Obama invites some of the most influential people in the tech industry to dinner.  These include the (then) CEO’s of Apple, Google, Facebook, Yahoo, Cisco Systems, Twitter, Oracle, and NetFlix; the president of Stanford University; the chairman and former CEO of Genentec; and the managing partner and founder of Venture Capital fund the Westly Group.  The New York Magazine reports it in a piece headlined “The World’s Most Powerful Man Meets President Obama“.  They were referring to Mark Zuckerberg…

6. …who was Time Magazine’s person of the year 2010.

7. The top grossing movie this year so far is Iron Man 3, which has the double nerd distinction of being based on a comic book and having the main character modelled on Elon Musk, a Silicon Valley Tech Founder.

8. In a life-imitates-art-imitates-life twist, Musk is building real life technology used by the fictional character he was the inspiration for.  (Source: His Twitter)

9. The top grossing movie for each year since 1999 has either been based on a comic book; is a Pixar, Harry Potter, Pirate, or Star Wars movie; or is set on another planet (Avatar).

10. The odds-on favourite for the top-grossing movie of 2014 is the Godzilla remake. (source)

11. Google is a verb now.

12. Steve Jobs, co-founder of Apple gets a(nother) bio-pic.

13. This follows the success of Aaron Sorkin’s The Social Network about Facebook.  

14. Sorkin, king of nerd pop culture, also wrote the screenplays for Moneyball, a film about analytics in baseball, and The Newsroom, a TV series about – perhaps not surprisingly – a newsroom

15. Speaking of Jobs, the JOBS Act is passed into legislation in the USA.  It isn’t named after Steve Jobs, but may as well have been – it stands for Jumpstart Our Business Startups, and at the heart of it, makes it easier for “moms and dads” to invest in startups via crowdfunding.

16. Apple has the highest market cap of any company in the world.  Google and Microsoft are in the top 10.

17. Twitter and Facebook are cited by many as key tools in the Arab Spring.  Vodafone is named as a key to inspiration in the Arab Spring by… well, only by Vodafone themselves actually.

18. Harvard Business Review dedicates an entire edition to Big Data (It’s THE management revolution, don’t you know?)

19. Eric Schmidt, (former) CEO at Google, famously uses the line “In God we trust, all others bring data” (source).

20. This week British Airways set up a seriously nerdy billboard advertising campaign, and Both Virgin America and Air New Zealand (here and here) nerdified their in-flight safety videos earlier this year.

The nerds are taking over everything, and HR isn’t exempt… more on that next post.  If you have any more examples of the nerdification of nearly everything, please share in the comments!

What works there won’t work here

I’ve just gotten back from the HR Technology Conference in Las Vegas – an amazing event with thousands of attendees, hundreds of products exhibited, and 65+ product launches and announcements.  There were some truly innovative new products there, including some very interesting takes on workforce planning… but that’s a topic for another post.

Between the exhibition, the conference sessions, and nearly getting mauled by a bear in the Sequoia, my very good friends Trevor and Kevin joined me at Coca-Cola world for a tasting of different Coke products from around the world.  The general consensus was that all but one of them were unpalatable – from the Chinese apple-flavoured one to the one from Djibouti that tasted like mouthwash, most of the drinks were at best very unusual to western tastes.

Image

Of course, these products are best sellers in their home markets, because every country has its’ own culture, tastes, and preferences – a lot like organisations, really.  Coke gets differentiation.  They know that what works in one culture won’t work in another – so they tailor their product offering to their market.  Differentiation is at the heart of market strategy, and make no mistake – the talent market is a market too – yet organisations who want to win in the talent market often don’t differentiate.  That’s why we have so much “best practice” HR initiatives, and so few outstanding companies who understand their talent market, craft their practices to benefit those market segments, and validate their results continuously.  One size does not fit all – in fact, it fits no one.  Take a lesson from Coke – understand your market, and craft your offerings accordingly.

Workforce Analytics – Alex Hagan and Steve Pell in Conversation.

Last week I had the honor of being invited to speak at the Melbourne HR Talent Community with Steve Pell of Intrascope Analytics. Steve and I discussed analytics for HR, why “Big Data” is all the rage, and why most of the valuable data about your workforce is already sitting inside your internal systems (Big Data or Small Data, it’s all about the insights). The below video is 8 minutes extracted from the 45+ minute conversation.

Steve is the Founder and CEO of Introscope Analytics.   Intrascope’s mission is to help business and HR leaders connect the dots between people strategy and business results, by delivering powerful insights about workforce behaviour in real time.

The Melbourne HR Talent Community isn’t your usual networking group.  It now has over 600 members, and 70+ members meet monthly to discuss a broad range of current HR issues.  If you think networking is a 4-letter word, you can’t count but you can enjoy their monthly meetings and the conversations in the LinkedIn group.

Transcript (provided by Rev.com):

Alex Hagan:     Big Data is used very extensively in the consumer space to take all of these different interactions that consumers have with brands, and find patterns in that data to essentially, to put it cynically, sell better to those people.  So, the type of data that people are crunching in the consumer space are things like Visa that apparently can predict whether you’re about to get divorced based on your spending patterns of those of your spouse.

Steve Pell:       But, I think just to jump in there that kind of takes it to a scary level that can be intimidating for a lot of people to think about …Or you read the case about Target where they were talking about predicting pregnancy, but do you want to go back to the way that we kind of talked about it in terms of, the best way to think about what everyone’s talking about, when they talk about big data, is really just understanding patterns.  Instead of thinking about this as being a huge scope of plugging together everything in your digital life, it’s really just looking at data whether it be big or small, and finding patterns about people.

Alex Hagan:     And that’s the thing about big data as well, it’s increasing the consciousness that using data to support your decision-making, leads to better decisions.  So, whether you’re analyzing segments from Twitter feeds or whether you’re analyzing Visa transactions, and all this very complicated stuff that people are doing, the value for HR is realizing that there is a lot of data we already have within our systems; within our organization, that can give you insights and we’re not getting today.

Steve Pell:       The first take-away is size doesn’t matter in this game.  Big or small it’s about finding the patterns in the data.  Whenever anyone says big data, they’re usually it as a term for basically finding patterns in data, but it doesn’t really matter about scale here.  Don’t get caught in the technicalities.  Do you want to jump into; I think the ‘Moneyball’ analogy is a really good one.

Alex Hagan:     Has anyone seen the film Moneyball?

Speaker 3:       I’ve seen it yes.

Alex Hagan:     So whenever someone talks about data particularly for HR, it’s kind of a gimme – someone wrote a book, and then made a film about analytics and using data to support HR decision-making.  So you can’t hear about analytics for HR without hearing about the ‘Moneyball’ analogy because it’s a great one.

Moneyball essentially was about the Oakland A’s in their 2002 season, reinventing what success looked like for that organization, and then hiring to that profile of what meant success.  The common wisdom was that if you want to put together a team of superstars, they could all hit home runs, they look really good on the field, they were good for the marketing dollars, but when they analyzed the data, what they actually found was, those things didn’t matter so much, as just getting on to the next base – however you did it.  You could walk, you didn’t have to hit a home run.  The measures of success; what actually drove how many games that you won, was much simpler than that.  A hundred plus years of the way they’ve been recruiting these people was wrong essentially – or at least efficient.  What they did was realigned all of their talent acquisition strategies, which is essentially what they were, and they found they could get three players and pay them a quarter of a million dollars a year each, still a pretty good salary I would suggest, but that would get them the same result as one superstar player that they would pay seven million dollars a year.  In that way, they were able to compete.  They had a payroll budget of thirty two million, I think it was, and they were able to compete effectively with teams like the Yankees who had a hundred million dollar payroll.  So, three times their payroll.  They did it essentially through data.

Steve Pell:       I think frankly for me, one thing that’s really meaningful about using Moneyball as an example, is that to use the HR analogy, none of the day-to-day stuff really changes.  You’re still stepping up to the plate.  You’re still hitting, you’re still pitching you’re still throwing, in the same way that the day-to-day practice of what happens, from a transactional HR perspective, doesn’t really change.  Where this changes the game is at the strategic level.  When you’re planning for the future of the business, and when you’re dealing with the C-Level.  That’s where this fundamentally changes the game.  But in the day-to-day level, not so much, you’re still doing the standard practices that people know and recognize as HR.  That’s kind of I think, an important distinction to make.

Alex Hagan:     I think what you get is the ability to find out where those practices are actually delivering value for your organization as well.  So, to give you an example, does anyone here use psych assessments in recruiting within their organizations?  Okay.  So, psych assessments are used to predict who’s going to be a top performer once they become an employee and get into your organization.  But how many people have actually connected that predictive value to results once …one person, (laughing) a psychologist studying for your PhD so, that’s the one person who’s done this.  (Laughing)  So, we’ve got all of this data available to us.  We have the results of the psych assessment, and then in the long-term we know how well these people perform, how long they stay with the organization, or whatever it is that’s your measure of a successful candidate.  But actually connecting those two can give you a great deal of value.

Steve Pell:       There will be so much more valuable data sitting within the organization than outside the bounds of the organization that focusing efforts there because it’s so much deeper in terms of you have these longitudinal, the history of data where someone’s contributing inside of an organization between a couple of hundred, and a couple of thousand pieces of data a day potentially.  If you go external and look for these data points you might get one or two.  One of the really interesting things we can do is say, this is success.  We’re not going to tell you what success looks like.  You give us your talent ratings.  What is it in the way that people are behaving that is leading to that outcome?  What are the patterns that are happening at three, six, twelve months prior leading up to that review, that are different across your review levels?  In some of the cases that can be as simple as having … I commonly see major difference in senior sponsorship, so you look across the people you’re giving really high performance reviews to, and people you’re giving really low performance reviews to, and there’s just a really big gap in how many people at senior level in the organization those people have access to.  It’s common sense but when you quantify that, and say that there’s this 60% gap between these people, you can go out to the workforce and start talking about practical things that you can do to really push yourself potentially up those performance categories by doing the links.