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Human Resources

The Analytics Payoffs

For a lot of years I’ve been sharing a conclusion from decades of observing small group activity. I believe that when 5 or more people work together effectively on a challenge they bring the intellect of at least a genius to the work. It doesn’t matter if the group members are smart or high in an organization or what we believe is well-educated. I watched it for years and then put a measure to it.

Back when we used to have more time during training or planning or decision-making settings I used to administer a short quiz fashioned after the preliminary entrance exams for membership in Mensa, the society of genius-level IQ holders. I would do it as an intellectual warm-up. In order to determine if you could gain entry to Mensa you would need to score at least 7 out of 10 correct answers.

Every group, whether made up of corporate executives or hospital maintenance workers, to which I gave the test scored 7 or higher. Around half would score perfectly.

Today, the use of analytic techniques is proving my point. At the Wharton People Analytics Conference an interview published on Knowledge@Wharton cited Google’s head of HR Laszlo Bock who is an evangelist for the use of analytics in the field. Teams, when put together correctly, are at least geniuses.

The Wharton interview is full of useful bits of information. Make sure an employee being “on-boarded” meets their management on the first day. A person’s success at a company depends heavily on who they work for. A team IQ is often greater than the sum of the parts. A mix of introverts and extroverts along with norms of behavior make the most productive teams. Moneyball got it right and is at least partly responsible for the upsurge in the people analytics.

Surprisingly, the best firm on hiring, according to Wharton experts, is Teach for America. A not-for-profit that has embraced analytics in order to get better teachers in front of kids. But the organization also knows that they don’t know enough yet. That’s a good lesson for those of us who are futurists. Go with the best information you have but always doubt it and find even better ways of making good decisions.

The biggest question about the use of analytics overall? Why more top leaders are not embracing it. Whether it’s a lack of hubris or a fear that it might replace jobs it’s a baffling question but the condition exists. I hope for a change.

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In almost all of my busiest industry niches there’s buzz about “Big Data.” Mostly buzz. Not much there, there yet. But it’s coming in a big way and the harbinger may be people measurement, especially help in hiring. Another observation I’ve made over the years of managing my own businesses was that a bad key person hiring (manager, salesperson, technician, creative talent) would cost at least 3-4 times their annual compensation. People analytics is proving it now.

While there’s more buzz about marketing analytics than anything else in the media my bet is on human resources as the place where the first major inroads will be for analytics in organizations.