People analytics is developing fast. Other lines of business have been using business intelligence for decades already. HR-professionals as well as suppliers of HR-systems & tools did not anticipate people analytics until recently.
An important driver for people analytics is the development of agile organisations. Many boards struggle with the question how to adapt to fast changes. For many years we have heard people are the most valuable asset of the organisation. Boards now start realizing people are actually the most important driver and asset for innovation and continuity. An agile culture is the key to an agile organisation. People are back in the centre!
Most people analytics are based upon traditional HR-indicators. First, we try to establish connections between those HR-indicators. For example, we find that high engagement is related to low absenteeism. Nothing new, because in scientific research these connections have already been proven for decades. The benefit is proving this connection also exists in the specific environment of our own organisation. Even better, if we can connect the development of engagement and absenteeism to the KPI’s of the organisation, the impact of engagement and absenteeism on business results is revealed.
The good part for HR not having a track record in people analytics is that it offers an opportunity for innovation. Not biased by ‘old’ truths in business intelligence, new ways of analysing have developed. I want to share one of these innovations we use with you in this article: Behaviour & Performance Analysis (BPA).
Behaviour & Performance Analysis reveals which behaviour is effective to achieve organisational goals. More and more organisations need to be ruled by human dynamics, principles and values. These formal systems, rules and processes need to reflect their human dynamics no matter what phase of development the organisation is in. The human dynamics require constant reflection on what we actually do every day: our behaviour! Behaviour is the outcome of the values we cherish. Whether it is about customer needs, quality, turnover, profit, compliance or other KPI’s, establishing the impact of our behaviour helps us to respond to the challenges we face.
How does BPA work? Communication is a strong enabler to measure behaviour: our behaviour shows through the way we communicate. Text analysis has been around for a long time and is scientifically well validated. We live in the digital era. E-mail, social media, intranet, digital documents, all these digital communication sources are immediately available. All digital communication can be analysed on a day to day basis using specifically designed behaviour analysis modules. The data are anonymous to prevent any privacy issues. Behaviour is measured on (anonymous) individual-, team- and organisational (dominant cultural behaviour) level. Actually, a film is made of our behaviour and how it develops through time. At the same time, correlations with relevant team- and organisational KPI’s are analysed. This way behavioural patterns are revealed which influence KPI’s in a positive or negative way. All data are digital and directly available so neither the board, management or employees have to spend any time collecting the data. Time and energy of the organisation can be focused on interpreting the results of the analysis. Interventions to develop effective behaviour are measured in the same way. No expensive development programs without results anymore. The development of the behavioural patterns immediately shows us whether a development program is effective or not.
How does Behaviour and Performance Analysis work in a technical sense?
The organisation only has to put effort in unlocking the data, preferable over the last 36 months in order to guarantee statistical reliability. E-mail, social media, intranet and documents offer great insights in people’s behaviour. Of course, relevant business KPI’s regarding the questions the organisation has, are also necessary input. And the best part is that all these data are directly available in all organisations. No hard work on establishing reliable HR-indicators necessary. Once the data are collected, the software takes over. First, all data are organised by timeline. Second, subsets of data are established (for instance all emails, all meeting minutes, all annual reports) and are also organised by timeline. Next is filter & assess. If the data still contains names they can be removed to create an anonymous data set. In addition, possible gaps in the timeline in the subsets are revealed. Based upon the question the organisation formulated, the right linguistic model is put together. There are different linguistic modules for different analysis’s. The results can then be analysed using different math modelling techniques. Finally, the organisation can focus on interpreting the results of the behavioural patterns and decide on what interventions could be effective. Once the data are available the results will be available in 6 – 12 weeks.
An example of the use of BPA in practice.
The Benelux division of a beverage company was struggling with the following situation:
- Gross margin
- Staff turnover
Financially, they were doing well. However, they were concerned about the absenteeism and staff turnover and wanted to learn more about the impact this has on the organization. An analysis was made of strategically chosen communication in the organisation. In this case we used the internal billboard communication, all meeting minutes (works council included) and all sales reports. Data was collected over the past 36 months.
The results we found were:
- Directive leadership proved to be highly effective
- There was insufficient insight into different leadership styles in the organisation
- If leadership is evolving, then employee and team development should be done simultaneously
The company experienced that, unconsciously, the leadership style was evolving from directive to more participative. The configuration of the organization was designed in a way that a directive leadership style was highly effective. The evolving leadership style caused uncertainty and stress among the employees. As a result of these insights, training & development of both leadership and employees were adjusted and executed. Leadership first focused on recovering a directive style again. At the same time a more controlled process was started to develop the leadership style in combination with employee and team development. The results, which showed within 6 months, were spectacular:
- Gross margin
- Staff turnover
What are the lessons learned? For instance, we did a similar assignment with another company experiencing similar problems as our beverage company did. Our first response was to suspect a similar cause. That is how the human mind works. However, the behavioural analysis showed this company suffered an opposite issue. The configuration of their organisation was designed in a way that participative leadership was highly effective. Gradually more directive leaders had entered the organisation unbalancing the employees and teams. The lesson we learned is that each organisation is unique and needs to be treated as such.
Does Behaviour and Performance Analysis make people analytics based upon ‘traditional’ HR-indicators redundant? No. I believe they can strengthen each other. There are business questions that can only be solved by analysing specific HR-indicators. As much as there are business questions that can only be solved by using innovative solutions such as BPA. BPA has one strong advantage: each organisation can start today gaining the full benefits of behavioural analysis. Why? Because all data are available and can be used almost immediately. Using traditional HR-indicators requires their availability. In many organisations we only start thinking about building the right set of HR indicators. The model that is used in all people analytics workshops and training I have seen so far, suggests that people analytics is developing through four stages (descriptive analytics, diagnostic analytics, predictive analytics, prescriptive analytics). It suggest an organisation has to start with descriptive and diagnostic analytics. In my view a solution like BPA enables organisations to start right away with predictive and prescriptive analytics. And these analytics contribute immediately to business results and to the objective of becoming an agile organisation.