How Big Data Will Change Everything About Managing Employees
The analytical tools that have revolutionized marketing are set to do the same for leading your team.
Opinions expressed by Entrepreneur contributors are their own.
It is no secret that today's employees are being driven to distraction by technology. With the beckoning ding of a new tweet, email or instant message, we may be prone to abandoning a particular task—but obvious forms of distraction are not solely to blame for competing demands on our time.
To succeed in today's economy, managers need a nuanced understanding of how workplace policies, employee behaviors and team dynamics also impact productivity. They need to use data. The impact of data on workforce management is staged to revolutionize how leaders evaluate the effectiveness of current policies, leverage their employees' strengths and empower teams to perform effectively.
Facing a fragmented and distracted workforce, many companies turn to corporate restructuring around key initiatives, such as Microsoft's "One Microsoft," which sought to create more streamlined teams. However, these decisions are often made with little hard data around how critical teams actually work together. Harnessing data on actual employee behaviors is an essential tool to inform corporate restructuring and empower employees to be more productive.
People analytics, a new trend in people management, emerged in the larger context of using big data to inform business decisions. It provides transparency into the ways a company's biggest asset—its people—are really working. Many companies already use sophisticated social algorithms to create a deeper understanding of their customers' patterns and behaviors. The next frontier is turning these analytics inwards to diagnose organizational inefficiencies.
Google recognized that people-management decisions should be no different than engineering decisions. Key business decisions need to be rooted in data. By eliminating the subjectivity from people-management decisions using analytics, Google has promoted productivity more effectively than policing employees' time surfing the web.
For example, Google's workplace and HR policies are informed by data garnered through people analytics. Google's perks are highly lauded, including their complimentary gourmet food and paid family leave, but it is important to note that these initiatives were based on data. They are proven to increase employee satisfaction, productivity and innovation. They are not merely for show.
Data-driven perks like catered meals and "massage credits" (yes, Google has those) may not be viable at every workplace but, to drive productivity, companies need to move beyond outdated, subjective forms of people management. The potential for people analytics to help promote efficiency and innovation in a business is far-reaching and exciting.
Here are a few examples of how people analytics can help managers create a productive work culture.
1. Objectively evaluate the effectiveness of current policies. By synthesizing multiple strains of data, people analytics helps leaders understand how policies impact efficiency. For example, data may highlight that employees are spending almost no time collaborating, despite the fact that collaboration has been proven to promote innovation and increase worker satisfaction. Conversely, data could illuminate that employees are spending more than 25 percent of their time in meetings in which their presence is not crucial, helping leaders more strategically decide who attends which meetings.
2. Create transparency to drive productivity. To reduce organizational distractions and encourage efficiency, a high tech company delivered personalized weekly reports to both employees and managers. The reports allowed both parties to see trends in their work patterns and identify issues leading to distraction from key initiatives. These insights opened the door for meaningful conversations about workload, productivity and priorities.
3. Recognize and foster employees' passions to reduce distractions. After reviewing multiple strains of data, an executive may notice that particular team members spend an inordinate amount of time pursuing a particular interest in the business.
By understanding employees' interests and passions, managers can more strategically allocate work assignments. When employees are engaged in work that is meaningful, they are likely to be more productive and less distracted.
4. Manage merger integration across teams. A large software company, alarmed that deals were failing, realized poor integration across newly merged teams and divisions was causing delays with major product launches that resulted in missed revenue targets.
Instead of relying on quarterly financial reports after the fact, senior managers used people analytics to watch execution problems in real-time. The insights allowed the company to make evidence-based decisions to integrate teams and meet revenue targets.
5. Provide sales teams with an early warning system. For two consecutive quarters, a sales executive at a large manufacturing company was unpleasantly surprised when anticipated deals with new clients fell through.
Rather than just speculate, the executive used people analytics to understand the level of engagement with prospective customers. He identified high value prospects who were neglected and low value prospects that consumed too much time. The executive relayed this information to his team, helping them avoid the unwelcome surprises of missed deals. Sales revenue increased by 20 percent.
While the potential of people analytics is indeed promising, it is not a panacea. Organizations are complex and dynamic entities that require thoughtful contemplation. To be truly impactful with people analytics, companies need to garner data and interpret it in context, taking into account changing market conditions or the learning curve associated with a new initiative. Additionally, companies that utilize people analytics should factor in a period of adoption, as people determine how to use the data and its specific value for their organization.
At its core, people analytics can transform companies by shedding light on people management issues. In the next five years, managers will no longer rely solely on subjective measures or repeating what worked in the past. With the help of people analytics, tomorrow's leaders will unlock a treasure trove of untapped information to better diagnose problems and optimize the impact of every employee across an organization.