Managing Tomorrow Today
Jan 24, 2019
“The future ain't what it used to be,” Yogi Berra once said.
That was the first line of one of i4cp’s earliest TrendWatchers, published in 2000, on the role of futurism in the development of business strategy. As we publish our 500th TrendWatcher and reflect on the past decade, many of us probably agree that Yogi's quip remains prophetic. Time indeed flies, and thanks to ever-evolving technologies, innovative business plans, mergers, and so forth, the future seems to hurtle toward us at increasing speed, bringing change almost overnight.
In the inaugural TrendWatcher, we observed: “Most HR departments are already in the midst of transforming themselves…HR is striving to become faster, smarter, and more forward thinking…Being fast also means becoming smart and creative enough to anticipate what's around the corner…By being able to analyze and anticipate trends; HR also becomes a better strategic partner.”
Ten years and five hundred TrendWatchers later, we can say—without too much bragging—that the track record of i4cp's most widely read publication is pretty solid in terms of identifying and forecasting important human capital trends. In 2000, for example, we examined the controversial trend toward employee investment freedom. This was over a year before the Enron implosion wiped out employee retirement savings and a decade before employees in every sector saw their 401(k) s become "201(k)"s. We also looked at where the rising costs of health care might lead, noted that obesity was an emerging issue, examined the meaning of “digital capital,” made observations on the virtualization of education, and predicted that the concept of corporate social responsibility would become more mainstream.
Building on that foundation, we're forging ahead with ever more rigorous and empirical identification of trends and strategies that will boost corporate performance into the future, with a specific focus on human capital.
So, how has HR matured over the years? That depends on perspective. From one point of view, there's been some real progress. As we reported in our last TrendWatcher, 63% of the respondents to a recent study say that their organization has a strategic business partner (SBP) role. That number increases to 91% in large (10,000+ employees), high-performing organizations (compared with 70% of their lower-performing counterparts).
However, relatively few HR professionals in general—and SBPs in particular—are able to effectively “anticipate trends,” as we phrased it back in 2000. That could, however, change over the next ten years.
Dr. Jac Fitz-enz, founder of The Saratoga Institute and, many would say, the father of HR measurement, believes the HR profession is getting closer to realizing this ideal. In his upcoming book, The New HR Analytics: Predicting the Economic Value of Your Company's Human Capital Investments, Fitz-enz lays out a four-step model to guide organizations in creating an environment where the HR function can truly drive business success.
“We don't manage the future well,” Fitz-Enz explained in a recent interview. Managing the future well will become an even higher priority now that strategic business partners have moved from the realm of theory into practice. The ability to anticipate the future and take steps today to shape that future is a source of competitive advantage. “You can't change the past,” Fitz-Enz says, “and given the time it takes to analyze the present, it is already too late to effectively change because the environment has already changed.” Therefore, Fitz-Enz advocates for organizations to purposefully dedicate resources to “manage tomorrow today.”
How is HR doing in terms of using data to help shape human capital strategies? Results of i4cp's recent Predictive Human Capital Analytics Survey show that organizations that focus on metrics tend to perform better and that all companies, high and low performing alike, believe they should do better at using predictive metrics to guide decision making. Only a quarter (24%) of all respondents report that their organizations make human capital decisions based on data to high or very high extent. That number breaks out to 29% of higher-performing organizations, compared to 14% of lower-performing organizations. Survey responses also show consistent gaps in terms of the extent to which organizations generate predictive analytics that shed light on human capital issues compared to the extent to which they think their organizations should do so.
What are the primary obstacles that prevent organizations from delivering predictive analytics? The survey found a three-way tie of intertwined issues that hinder organizations: Data is in disparate systems and it is a challenge to integrate, it takes too much time given other priorities, and many organizations do not fund this effort. What was not cited as an obstacle was trust in the data.
While it's clear that HR has made significant progress in the past 10 years, focus must now turn to predictive metrics in order to ensure that, in the future, HR's reality is the fruition of the effective SBP dream.
i4cp's 4-Part Recommendation:
1. Document your organization's hypothesis. The key to starting any predictive measurement strategy is to understand the organization's beliefs and expectations. Through documenting decision maker's beliefs you can develop hypothesis to test and verify with data. There are three key sources to obtaining organizational beliefs and expectations: business strategy documents, performance management plans, and asking management directly.
2. Be deliberate. Given the amount of effort to produce predictive measurements and the potential value to decision makers, it's wise to start small with one or two issues. Starting with your organization's hypotheses, determine the key issues that would assist management in their decision making process.
3. Tell a story. “Data without a story is just numbers,” Jay Jamrog, i4cp SVP of Research says. Jamrog contends that HR professionals need to get better at telling the organizational story that is supported by data and not to just expect a series of graphs and charts will make an impact. This is even truer when you are considering the future and trying to look around corners. “The story needs to capture the executives’ imagination and be compelling to cause action,” Jamrog instructs.
4. Dedicate resources. Many organizations have the raw materials to produce predictive measurements but lack the will to do it. In the future, organizations that create a strategy and dedicate resources to predictive measurement will achieve a competitive advantage over rivals who are merely wishing for insight.