SBCo December Newsletter: Are you closing the Great Divide in HR?
For our final newsletter of 2014, we decided to highlight what we believe is the next phase of the data revolution. Imagine if you had insights when you needed them? Do you have a 2015 game plan for what the best future might be 12 months from now?
Gene Tange is a long-time friend and colleague of S. Benjamins & Company. He is CEO of PearlHPS Inc., which is a cloud-enabled predictive analytics company. As their website states, “In 2009, we discovered the missing analytics link, Execution Analytics®, that provides true predictive insights to achieve future high-performance financial and operational outcomes.“
We sat down with Gene to further understand his work in this evolving big data space and what he means when referring to the Great Divide in HR. As he shared with us, a recent Gartner report states that, “Seventy percent of high-performing companies will manage their business processes using real-time predictive analytics or extreme collaboration by 2016.”
Sherry Benjamins: What is the Great Divide?
Gene Tange: The easiest way to explain the great divide is through a visual (See below). At the base level, the Great Divide is caused by an evolving business model that includes team driven business initiatives, while HR remains aligned with the old business model of individual performance. The new models are a factor of the complexity of the market, vast improvements in technology, and an increased demand for speed for results. The HR Levers (Talent Acquisition, Performance Management, etc.) have not yet evolved with this new business model which is causing a misalignment.
SB: HR leaders would say, “I am working on raising the performance of our teams.”
GT: I think it is important to understand the term “team” when applied to business. I am not talking about this idea of “team-ness” which acts as the glue that makes everything work better. There has been a migration to a collaborative model which is in part due to a demographic shift. As millennials enter the workforce they are looking for more collaboration and also it is linked to improving creativity.
We have found through our research that there are 20 variables of a team. We look at three main variables; team leadership capability, team continuity, (especially within cross functional teams that don’t own their resource person), and the goal load of a team.
SB: Ok, let’s get to the burning question: How do we begin to close the Great Divide?
GT: First we have to understand the variables of a team. We can do this through predictive execution analytics, which you can learn more about here This work starts with gathering data and insights on team leadership capability, continuity and goal load. We are the first organization tying algorithms to variables to measure team. There has been this long standing stigma that individuals can impact an entire organization, but the reality is times have changed, the research shows that it is about teams.
You talk to experts like John Boudreau and they are especially excited about this because it hasn’t been explored in this way before.
SB: Yes! In fact, Boudreau was speaking about this when I saw him in Orange County recently. He and Ian Ziskin are working on the future model of HR and re-mastering of the role by looking at data that matters most to the line leaders. It will help connect the dots between desired business outcomes and people initiatives – only the ones that directly support the business outcomes.
SB: What has to happen in HR for this to work?
GT: First and foremost, we have to recognize that as much as we believe we have done great work, we’re in a dynamic workplace. In other words, what has HR done to advance their practices? Leadership is expecting dynamic change from HR that parallels the transformation in other areas of the organization. We have seen this in changing customer models, financial forecasts and now it’s time for HR.
SB: Most would agree that HR has been saying they will change for some time…
GT: We have seen some industry leaders say, “I’m tired of HR; I’ll just bring in marketing/finance/operations people to lead this function”. It is my belief they are reacting to a problem, not finding a solution. The solution is really to re-evaluate processes to understand the needs of the business. If HR reverts back to its departments focused on Talent, or Rewards or Development, than solutions are less likely to solve for the mission critical outcome in the business.
SB: It seems like this kind of work could also be useful during acquisitions?
GT: Definitely. I have done over 50 acquisitions and the reality is 70% of deals will fail to achieve first year financials. In 2013, publicly traded acquisitions accounted for almost $2 trillion in deal value. However, only 30% will achieved first year financial targets. On top of that, 70% of all strategic initiatives fail due to lack of planning and thus poor execution. The million dollar question is always, “How do you know acquired teams and current resources will work?” We can know that with predictive analytics.
SB: What has been the most surprising thing you have learned with this research?
GT: That’s a great question. As a former CHRO of an organization with 50,000 employees I didn’t realize that 40-50% of the programs I had developed/implemented/advocated for were misaligned.
Also, I think there has been this idea that CEO’s are the answer to success. After 12,000 hours of research and counting, I’ve found that CEO’s are critical to the vision and architecture of the organization, but that is the extent of their impact on business outcomes. The teams below them are the really impact drivers.
SB: Thank you Gene, for taking us into the discussion of predictive analytics. We decided to highlight this topic when learning that more than 90% of HR leaders plan to significantly increase their investment in HR analytics by 2016 according to The Conference Board. Best practice firms report that analytics helps them achieve better outcomes with their talent. This is something we will hear more about as HR continues to speak the language of business.
Thank you for a Great 2014!
Thank you all for your amazing support, valued friendships and curious minds this past year. We know you have lots of choices in reading online newsletters and utilizing search services. Corey and I enjoyed the chance to interview our colleagues and share their chapters on change, challenge and learning. We appreciated the great feedback and encouragement that we peak your interest to read on.
On our business front, our SBCo team thanks you for being our search partner. We value all of our relationships and appreciate that you enjoy our hybrid retained model with weekly deliverables. Our clients this year have been the most diverse set of companies that I can recall in a long time. We loved it all! We learned about oil and gas, sports motorcycles, a growing entertainment and gift business, our rocket science friends in Pasadena, and several health care companies that are truly transforming patient care.
We are excited about the New Year and expanding our work to support you in several areas. Let me share where we are focusing in the changing landscape which you can read more about here