People analytics is the use of data about human behavior, relationships and traits in order to make business decisions which can successfully replace decision making based on anecdotal experience.
It prevents risk with higher-quality decision making which is based on data analysis, prediction, and experimental research. Several Fortune 500 companies are using people analytics. There are mainly three ways to help understand and drive their transformation efforts.
Core functional or process transformation initiatives are often driven by digitization. People analytics have been used to measure activities. For example, in one scenario a people analytics team at a global CPG company was to help optimize a monthly financial process that was conducted in every country subsidiary around the world.
Perfect standardization was precluded by the diversity of local accounting rules and the geographic dispersion of the teams made it very difficult for the transformation group to gather information.
Therefore, people analytics data was used to set a benchmark for the time spent on the process in every country and to map the networks of the people that were involved.
The team found out that there was one country that was 16% percent more efficient than the average of the rest of the countries. The people analytics team, as well as the finance team, were surprised by these results.
The transformation office made partners with the country finance leaders in process improvement for the rest of the subsidiaries. This was possible because they involved the people on the ground who had unwittingly discovered a better way of doing things.
In bottoms-up cultural transformation initiatives, How things are done is actually more important than What is done.
Culture transformation in people analytics happens through feedback loops and other methods of data-driven storytelling. One example was when a people analytics team in an engineering company was helping to develop the company’s managers.
The data analysis conducted in the company found that teams whose managers spent at least 16 minutes of one-on-one time with each direct per week had 30% percent more engaged direct reports than the average manager, who spent just 9 minutes per week with directs.
This led to data storytelling in a lightweight way to build trust among stakeholders and bring behavioral science to cultural transformation.
Top-down strategic transformation is a major requirement by market and technology factors outside the company, but here people analytics is a critical factor for execution.
A people analytics team can help to track resources, boundaries, capacity, time use, networks, skill sets, performance. It can help point out the places where change is possible and can measure what happens when it is tried out.
When well applied, people analytics is fairer, has the greater impact, and is ultimately more time and cost-effective. It can move everyone up the knowledge curve—often times in counterintuitive ways.
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