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People Analytics Will Change the Way You Manage Your Business

By: Ryan Fuller

“People Analytics” has been getting quite a bit of buzz lately. To some extent, People Analytics is newsworthy because it represents a practical application of much-hyped technology trends like Big Data and social analytics to address really fundamental business challenges. It also makes for good press because a story about People Analytics is able to juxtapose the potential opportunity (“The Next Big Thing in Big Data: People Analytics,” Businessweek) with the potential privacy concerns (“They’re Watching You at Work,” The Atlantic), so there’s a natural tension of hope-versus-fear that lends itself to press coverage.  But as we go beneath the surface, it’s apparent there is something really significant here.

I believe People Analytics will support the largest improvement in business performance in the last 20 years. In my position, I have the opportunity to talk with executives of large corporations across all industries and I see first-hand how People Analytics can dramatically change almost all functional areas of these businesses, and the opportunity to begin using it is just around the corner.

What Is People Analytics?
There are many opinions about what People Analytics is and is not. Generally speaking, People Analytics is the use of people-related data to optimize business outcomes and solve business problems at the individual, team or organizational levels. You can see this is a pretty expansive definition and there could be many applications of it across all areas of the modern enterprise. 

Digging a little deeper, People Analytics can be applied to a wide variety of data – talent acquisition and retention data, collaboration patterns that show connectedness and time allocation between internal and external groups, physical proximity and interaction data, etc.  The analysis and resulting insights can be used to optimize challenges at multiple “altitudes” within the organization:

 Individual level – An example of business issue might be, “How do we maximize our chances of hiring the right person for this type of role?  What are the specific attributes that correlate with long-term success?”
 Team level – An example of a business issue might be, “Is my team really focused on the right priorities, or is it getting distracted by a low priority but noisy team or process?”
 Organizational level - An example of a business issue within a large technology company might be, “For our product development process, what is the optimal mix of resources from engineering, product development, operations, and marketing over the course of the product development lifecycle? What is our actual mix for key products currently under way?  How can we manage to the optimal mix?”

Why Does It Matter? How Can People Analytics Help Me?
Today’s global companies are at a tipping point. While everyone is busy, managers often don’t really know if their people are focused on the right things. Broadly distributed workforces and a seemingly constant barrage of demands on employees have created an incredibly fragmented existence for everyone from the CEO to junior staff members. With all these competing demands, it’s become increasingly hard for managers to focus their workforce on the most important activities amidst the other distractions of the organization.

With that backdrop, there is an almost unlimited set of business challenges that can be addressed by analyzing the behavior or interaction data that translates to outcomes. By better understanding the relationship between “what” people and teams do and “how” that leads to successful outcomes, companies can address challenges facing, HR, IT, sales, marketing, product development, and more.  At VoloMetrix, we’ve helped large organizations use these data and the associated insights to fundamentally change their businesses and save hundreds of millions of dollars per year, improve sales team results by 20% and reduce the process overhead and bureaucracy that contributes to employee dissatisfaction and churn.

Companies like Google consider People Analytics a core differentiator and have made significant investments to build out this capability “in house.”  The article, “How Google Is Using People Analytics to Completely Reinvent HR,” provides the context for why Google thinks People Analytics is core to its success:

“A strategic focus on people management is necessary because innovations come from people, and you simply can’t maximize innovations unless you are capable of recruiting and retaining innovators. And even then, you must provide them with great managers and an environment that supports innovation.”

People Analytics will fuel the next step--change improvement in business performance--and it will have a profound impact because it is a capability that applies to all industries, corporate functions, and ‘knowledge workers’ as well as ‘task workers.’  In addition, People Analytics can be applied across all corporate functions and industries – ranging from cutting-edge high tech to financial services to public utilities. 

People Analytics Is Coming, and It’s Going to Be Huge
People Analytics is an inevitability, so the question is not “if,” but “when” and “how.” Today, organizations are already using sophisticated social analytics to create a deeper understanding of their customers. The next frontier is turning these analytics inward across the broader enterprise to diagnose inefficiencies that exist at an organizational level; empowering both managers and employees with data. That is the next phase of widespread adoption of analytics in our large companies.

People Analytics has the potential to reveal how an organization’s biggest assets – its people – are working together and where their work is really focused. In the future, it will not be used by only a select few PhD statisticians, executives, and organizational design experts. Rather, it will provide everyone – from CEO to summer intern - with data and personal feedback loops that will drive changes in team allocation and personal behavior.

In the future, People Analytics will be applied to address specific customer challenges, define new operating metrics that are giving businesses new predictive insights into their businesses, and much, much more. It has the potential to be a huge competitive differentiator because it can diagnose inefficiencies and identify best practices to be replicated throughout the organization. A company that uses People Analytics effectively will be more effective, more responsive, and--ultimately – more successful because its people will be focused on the activities and initiatives that matter most to the organization.

About the Author(s)

Ryan Fuller has decades of experience helping organizations increase overall effectiveness through sophisicated business analytics. He is CEO and co-founder of VoloMetrix, a company providing actionable insights to improve organizational responsiveness and drive productivity. For more information, visit www.volometrix.com