This post was posted in Umbel originally
Data helps your favorite pitcher, so why not
empower your employees?
The 2011 movie Moneyball got us all hot and
bothered about the use of data to drive breakout performance for a baseball
team. I’m still waiting for Moneyball 2 – where a visionary leader uses data to
change the effectiveness of his company. Something tells me I’ll be waiting a
long time.
What’s good for the Oakland Athletics is good
for you too!
Of course, sports data is worlds apart from
organizational data. There’s transparency, for one thing. A lot of what a
sportsperson does is on display and can be tracked closely. Secondly, there is
a clear alignment of interests – the sportsperson, their coach, the team and
franchise all want the ultimate win.
So, tracking input metrics (basic ability,
training hours, type of training, etc.) and output metrics (goals, passes,
speed, shots on goal, etc.) are watched, parsed, correlated and shared. And
then there is the environmental data (location, morale, fan support, weather)
etc., many of which can and are endlessly parsed to predict future
possibilities.
As a sports-obsessed country, we’ve been
primed and educated in the language of sports analytics. I’ve now worked in and
advised at least 20 companies and institutions – global behemoths, nonprofits, and
startups. It’s never too much of a reach to get to external metrics – for
innovation, for example, I like to track what percentage of revenue is driven
by new products launched in the last five years as an indicator of ideas
brought to market effectively.
However, once I try to get into input metrics
– the percentage of concepts that make it to market vs. the total generated and
progressed for review – things get murkier. For one, there is less of a
discipline in the early stages of ideation monitoring, and secondly, there is
less energy and leadership time spent on it. The dollars and the shiny new toy
is so much more fun to contemplate than the hard work that goes into getting
there.
Yet, innovation metrics are worlds ahead of
people management metrics.
Why aren’t you using your data?
It’s a rare company that truly mines
leadership and management metrics. Companies have made a science of reviewing
revenue and Cost Of Goods. SAP and various ERP systems can tell you exactly how
many widgets and man hours go into the last car/headphone/jar of grape jelly
produced. How about the quality of management that went into crafting those
products and services? A plethora of information exists on what makes for good
management and great teams.
It’s often not too much of a stretch to
identify the exemplary employees and managers in an organization – but rarely
do we take a data-focused approach to understanding and using those insights.
For example, it’s not a stretch for us to posit that managers who have high
retention rates, larger percentages of team members promoted relative to
others, higher revenue and productivity metrics, higher diversity, greater
throughput of ideas, more invitations to advice on cross-functional and cross-company
issues are possibly doing the right thing. You can easily see how all of these
metrics can be captured and surfaced – wouldn’t it be useful for each employee
to know where they stand against the exemplars?
Arm your people with their data.
We’re good about giving our 11-year olds a
sense of where they stand against their peers in their proficiency at various
subjects, as well as tracking key input metrics like class participation. Isn’t
it only fair that we provide that kind of transparency to managers in our
organizations, given how much of an impact they have on the bottom line. We’ve
known the key drivers for a while. For example, in the 1998 study of Sears by Rucci, Qirn and
Quinn, they found that when employee satisfaction improved by 5%, customer
satisfaction improved by 1.3%, which led to a .05% improvement in revenue. At $50
billion annual revenue for Sears at that time, that came to an extra $250 million
in sales. A 2014 study by Harter and Beck has shown
that 4 people practices related to managers – selecting managers who are
engagement oriented, the manager’s ability to hiring for skills, feedback to
their teams on strengths, interest in people management – can drive up to a 59%
increase in revenue for the team, ergo the company.
What’s stopping you now? Get beyond it.
With that kind of impact possible, why
haven’t companies stepped up to the plate? They engage in once-a-year polls, of
course. But how about using the great analytic tools we now use on consumers,
internally? If a company can truly create a trusted relationship with managers,
where the focus of such tracking is on development, rather than being punitive,
perhaps we can use email tracking, sentiment tracking, feedback loops, etc. to
better capture and understand their effectiveness. I’m not talking about the
kind of radical transparency that can sometimes drive vulnerability – take Buffer.com’s salary transparency or Ray Dalio’s principles – this is
more about giving your employees, managers and leaders useful and current data
about their own skills, practices and abilities, so that they can strive
towards excellence and impact.
There’s a lot of $$ at stake here – let’s
take your best marketing analytics people and focus them on your managers for a
quarter. You’ll be surprised how much change you can drive!
