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.


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.


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.

Talent Branding, or Talent Advertising?

Talent (comics)

Talent (comics) (Photo credit: Wikipedia)

Recently I’ve been working with a company who are great at attracting high-quality candidates.  Their “talent brand” is phenomenal – but they are facing significant problems with high early turnover in their organisation.

At its’ core, any kind of branding (including talent branding) is a promise, a statement of what makes you important and unique, and why you should be trusted.  In the consumer market, your brand might promise value, efficiency, exclusivity, or quality.  In the talent market, it might promise a collaborative, high-performance culture; opportunity; or innovation. Your brand is a set of principles that communicate who you are and what you stand for.

Allbusiness.com suggests a set of principles to use when developing a brand:

  1. “Think analytically. A brand should provide something that warrants attention on a consistent basis, something your audience wants and is not getting from your competitors.”  A “me too” strategy destroys value rather than creating it.  What’s unique about your workplace that appeals to your target (talent) market?  If you don’t know what that target market is yet, define it before you define your talent brand.
  2. “Maintain your brand. One rule of thumb is that when you start to become tired of your …branding efforts, that’s most likely when they are sinking in with customers.”  If you develop a strong value proposition that you truly believe in, then it shouldn’t be a problem sticking to it.
  3. “Don’t try to appeal to everyone. Typically, the best you can do is to focus on the niche market for your product.”  In the talent market, this means understanding the workforce that will lead your organisation to success.  A brand that speaks to you personally is much more powerful than a blanket approach – “we’re great to work for” doesn’t compel.
  4. “Know who you really are. Know your strengths and weaknesses through honest analysis of what you do best.”  This is where your promise is kept or broken.  If you manage to hire top talent, but their experience as an employee is not what the talent brand promised, they’re likely to become disenfranchised and leave – or worse, become disenfranchised and stay.
  5. “Fully commit to branding. Treat all functions of the company, from product development to sales, as integral aspects of your brand.”  A talent brand needs to be integrated into the whole employee lifecycle, not just the attraction side.  If you look after your candidates but not your employees, you’ve got a recipe for employee dissatisfaction.

So what happens when the promise is broken?   In the consumer market, you “make the sale” and your customer becomes disenfranchised and leaves.  It’s the same in the talent market.  If you have high early turnover, take a look at your talent brand.  And consider using Strategic Workforce Planning to coordinate all of your talent initiatives, so you have a coherent strategy throughout the whole employee lifecycle.


Where is the love (for HR)?

Back in 2005, Fast Company published an article called “Why We Hate HR“.  Amongst other things, it named and shamed a conference speaker for a presentation that was difficult to understand at an HR Conference (crime of crimes)…

The article is thick with hatred for HR – the opening paragraph suggests that the conference topic, “strategic HR leadership”, signals “a conceit that sounds, to the lay observer, at once frightening and self-contradictory. If not plain laughable.”  While it’s true that many HR professionals aren’t there yet, even 8 years later, I’m not sure why we should be criticised for trying to get there. Continue reading


The Problem with Extrapolation – Predictions for Fast & Furious #50

Cover of "Fast & Furious"

Cover of Fast & Furious

The only sense that is common in the long run, is the sense of change and we all instinctively avoid it – E B White

One of the things about purely numeric forecasts is that they often show how unsustainable a trend can be.  The “No Change Future State” shows what will happen if current trends continue (even though we know in the real world they won’t).  This isn’t scenario planning, it’s not strategy, and it’s not a predictor – it’s simply a conversation starter.  Unfortunately, it’s also the point at which most organisations stop their workforce planning & analytics efforts – they’re not able to make the leap of faith from the hard numbers of the past to the “dark art” of scenario planning.  Unfortunately, this can give you a false sense of confidence in your ability to predict the future. Continue reading


Workforce Planning in New Zealand

I’m very grateful that I’m able to do the kind of work that I do. I get to work with organisations that I respect, travel to beautiful places, and do work that truly engages me.  A couple of weeks ago I got the trifecta – working in Wellington, New Zealand, in collaboration with HCMS, and helping some fantastic private and public sector organisations to build internal capability in Strategic Workforce Planning and Analytics.

I also found a great place to hide from Nazgul, had an encounter with Gollum, and enjoyed the beautiful views from the top of Mount Victoria. Continue reading


“Number Crunch: How Bosses try to turn you into code” – BRW

Fiona Smith from BRW published an article today entitled Number Crunch: How Bosses try to turn you into code, including an interview with yours truly.  You can read it here.