Why data beats intuition when organizing people
The rise and rise of data when measuring individuals and company performance with Nigel Dias
Why I created this podcast
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Luke Szyrmer March 9, 2021 348
My name is Luke Szyrmer, and if you are new here, I am the author of the book Align Remotely and I help teams thrive and achieve more together when working remotely. Find out more at alignremotely.com. This is part 2 of the discussion with people analytics expert Nigel Dias. In today’s episode we dig much deeper into how analytics help you redesign a company culture.
Upon listening, you will discover:
Nigel Dias is a people analytics expert and managing director of 3N Strategy. With a quantitative view, he helps companies make wiser decisions based on evidence. His mission is to help businesses adopt evidence-based practices and behaviors to improve the way decisions are made. Through this, he helps businesses perform better and improve the way people experience their careers.
Nigel’s approach of redesigning company culture lies in setting non-financial types of objectives to change performance evaluations. You can measure nearly everything somehow, and also the values implied in the objectives affects the culture later.
Focusing just on the interview, here is the flow of our conversation. Download the episode directly from the feed: https://feed.managingremoteteams.co or from the main homepage https://managingremoteteams.co.
How to redesign company culture systematically
you piqued my interest with trust specifically. So gathering data , around measuring that. how is that modeled? How are you think about that?
there are two main ways of collecting that type of data. You’ve got active ways of collecting it, which is probably more related to surveys, actively asking people. Now that isn’t necessarily, we asked all like 100% of the organization, maybe it’s just pulse surveys and there’s been massive evolutions.
I don’t know if it’s an evolution of the technology, but there’s more organizations trying to do bite sized surveys that pulse ask people things. And I’ve seen more examples of people trying to process language, as opposed to just give us a five scale rating. It’s more like, give us your opinion.
And then they’ll use analytics to analyze the data. So one hand you’ve got the active way of going out and just asking people certain questions. There’s an art form to ask them the questions in the right way. And that’s one way of doing it.
And then on the other side, you’ve got more passive way. Now that isn’t necessarily to say it’s metadata, but it’s probably something which is tracking more. How are people behaving? You’d hope some organizations being transparent with their employees to say, yes, we’re tracking certain things about your behaviors that maybe normal people don’t know can even be trapped.
And there was some scandal news papers articles, which came out, , people trying to do slightly stranger things to their employees because ultimately the organization, felt they couldn’t trust people. There’s ways of, tracking behaviors. You can obviously track utilization of certain products and so on. And so you can use that data to understand how do people behave. And therefore again, use that as a treasure. How much should we have trusted them? Most organizations are quite transparent and most don’t go down that passive route. I don’t think it’s because they don’t know how will they don’t want to; maybe that’s a different question.
I know this in the context of, Larger scale software development. we were using a tool called gitprime, which was later acquired renamed, but essentially it was looking at how much the team is working, checking code in doing all kinds of stuff. It was gathering metrics. Even though we had the system, it’s still, it really depended on, being clear that when we were introducing it and we, when we stressed that it was the case and I genuinely believed it was the case that it’s just there as a tool for greater transparency and not as a way to express mistrust that people aren’t doing anything. It’s just to see what’s going on in a slightly more made a date at a slightly more meta-data or aggregated level, maybe better data.
It’s useful to have that data to measure, track the efficiency of the process, but you don’t want people to feel like you’re judging and benchmarking or something.
Specifically with trust, it’s difficult because as soon as you start trying to measure it, you possibly disrupt the trust needed to be able to measure it in the first place.
Like an ironic angle, comes into play.
There’s a strong argument. It’s not specific to HR, that data collection is no ethics to consider. And there is the transparency of, , how users of any software do they really know what’s been tracked and also how their data has been used in an HR context? People who use employee data.
For anything and do it well, we’ll be transparent about what they will do and also what they won’t do. I think that this is where interestingly, that relabeling of workforce analytics to HR analytics, to people analytics, I think there is an argument and some people would say that there’s been an expansion in scope of what people might look for in terms of data, as those labels have increased.
Maybe it’s because new technologies exist. And this is pick from maybe it’s this awareness, what analytics can do. And you’re not just analyzing each workforce for HR sake, you’re analyzing it for the sake of the business. I’ve seen projects where yes, we’re doing traditional things around.
Can we help people become more engaged and looking at things to do with performance. And you’re like, Oh, well, We got the data for when people arrive at work and leave the office because they scan in and they scan out. Now, obviously people know that they’re scanning in and they’re scanning out, but do they know that you’re going to join that data to their performance data?
There are some systems where, you look at what people are typing and who do they talk to. And there are very positive things that you can find like in people analytics, one of the. Hottest topics in the last 18 months has been network analysis standing who talks to who, you can do really interesting things with that to say, a salesperson who knows two product people is.
20% more likely to be a high sales performer because that person just has the connections to talk better about the product. And there’s other interesting examples, do men talk to more women, men, and therefore women get excluded and so on. And so obviously if you know these things you can put in place positive HR strategies to say, We want to make you better at your job.
We now know that if you know, two product people you’ll be better. So we’re going to include that in your development. Or we know that there is a a conversation that excludes people go on here. Let’s make sure people know that they’re there doing that. Just think just in case it helps address that diversity and balance, but the same data that tracks who’s talking to each other.
Could be used for less positive things. Right. And if you don’t know that this has being tracked, because every time you send an email it’s being tracked, but it’s not being historically analyzed for this network analysis purposes. If people don’t know that you’re doing this, I think that’s when the ethics, the trust issue between you and the employee come onto rockier ground.
Yeah. Yeah, no, that’s clear. I’ve heard about this technology a few years ago now. I think actually they were more in the context of, who works with whom and how that affects productivity and how for example , office space layout effects that, who knows whom, clearly it also affects things like silo formation. So to your point about sales and products, do you know if there is a point where a company can be to network where everybody knows each other too well? .
I haven’t seen that. You have a lot of organizations nowadays that try and go for flatter structures, I’ll reserve judgment on whether or not that’s good or bad. I think we’ll save a time. How does that play out? But lots of ambitions to have flatter structures, movement away from vertical career paths to cyclical career paths, which means you get more exposure and you rotate more than you necessarily go up.
Which has got lots of positives to it. And it suits the demographics at least of most Western organizations. I’ve never seen anyone say we’re too well networked. I suppose most people tend to
we’re connected over communicating, something like that.
I’ve never seen it, but I think, there’s definitely the potential, like that could be a great thing to analyze. Like you said, people might be analyzing to say, are we too siloed? Should we work better? Like, how can we work better together? And we want to, we value collaboration. So. Let’s measure that, if you were the head of analytics or something, you might be the person who’s saying, well, actually the hypothesis that we’re going to investigate stays, are we too networked?
Maybe there’s a potential to say everybody’s so well networked. There’s a lack of efficiency because everybody’s meeting everybody for coffees or something who knows.
That’s the extreme case where people are socializing and not actually working because they’re hanging out with each other, hang out with each other. That’s harder to track as well. Like we have a meeting invite for it. , water cooler conversations will probably, unless you get to the next level of tracking, there’s some companies which get their employees. To wear gadgets so they can measure aware in the building they are.
It’s like a monitoring where your van drivers are or something, monitoring the people, it’s hard to separate one from the other. Speaking of collaboration, what kinds of analytics are there around this that you’ve seen? How would that be? how would you think about that when trying to redesign a company culture?
you mean specific? Like how would you look at collaboration and understand it better? Yeah, yeah, yeah.
Like all analytics in, I’ll speak to people, analytics. It’s like all analytics in the HR and P policy space. There are active ways and passive ways of doing it. So the passive ways tend to be around. For example, when you send an email. There is a metadata trail, which says, when did you send it?
Who did you send it to? And things like that, usually it would be off limits to scrape the email and read it itself. That’s normally when people don’t go to that level, but it means you can at least see, where it was an email triggered, who did it go to? And you build that up across hundreds of people.
Most organizations and billions of emails, you can begin to just track. In email communications who communicates to who. In a way that can be useful, but it doesn’t necessarily articulate. Is there a collaborative nature to their relationship? So this meta thing, it can point you in the right direction. But it’s not necessarily going to unveil the nature of the connection. It could be anything from social to something else. , any reason that you’ve ever emailed people,
the other side of this network analysis tends to be active, which is you will work with the people. Like maybe it’s a survey, something like that to go and identify and say, , who are the top 10 people.
In your organization, who you feel, you work with the most with questions, like who gives you the most energy and so on. , you ask a series of questions and there are people who specifically specialize in this. I would like to say , these people are experts in geniuses in their own, right, for this kind of this particular type of analytics.
But unusually, at least in the way that I’ve seen it done, it’s usually a combination of those two approaches. Seeing who’s emailing, communicating, who’s taking meetings with each other. COVID has arguably made that a little bit easier because obviously everything, everything has a digital footprint, but then the active survey, but that’s when you’re really going to find out like, Who really is, the critical person in this whole network where if they leave.
Things won’t fall apart, , two teams will no longer talk to each other or no one will know how to connect with the right person. Those central nodes, like if we were looking at one of those diagrams with lines going everywhere between the little dots where every dot is a person, the one that has the most network connections.
I remember reading a book- this is like 30 years ago now back when I was getting started with everything that- in big companies that I think that like the people who are very good at internal networking and know people from all over the company in different offices, different areas that those people tend to do really well. It’s something that I’ve been thinking about lately. , Because, especially like in the nineties, , okay. It’ll say email was introduced.
When I was first getting a job, but just the fact that email was available, that didn’t necessarily mean that I could go and email the guy in Switzerland, the guy in Japan. First of all, I had to know who the person was. And second of all, even if I did, there was all of these like, who are you and why are you contacting me? It’s not even silos. It’s just like this kind of. these kind of natural barriers people have, even when they’re in an organization that’s together. That’s something that I’ve found quite fascinating. I guess this is tied to how silos form in a way where people just want to stick with their five or 10 closest people.
Potentially, no use of data and technology is going to overcome fundamental human behaviors and personality traits, right? If I referenced like, you know, you and I met so many years ago now, and here we are doing this podcast there and it probably speaks to your nature and my nature that we maintain these contexts. And so I suppose when you look across an organization companies are full of different types of people.
And some of them will be the types that, they’re just. Social. And they’re just those kinds of they’re just the people who always know everyone, and it’s a combination of their personality. Maybe their tenure, maybe their career path has just taken them through the organization at the right rate.
If we were try and make this line of conversation into a practical conversation, like if you were running a business with something, you’ve got to look and say, Firstly, do we have many of these people, just like those critical core fundamental people, those keynotes, and then you’ve got to ask yourself, well, do we want more of them?
Do we have enough? Do we have too few? And then if you did want more of them, and this is where the data will be useful, because it can partly explain some of those questions. I just asked. Now you might not have the personality. By most organizations, don’t personality test everyone. So you might not have the personality bit.
If it is, they have a certain career path, or if it is, they have a certain tenure or again, if we had no data and we were just saying, Hey, you and I solving this thing. Well, I would be asking myself. Have they had, have they been in more parts of the company? Have they been here for 10 years? Whatever it is, the data can tell us if we’re right or wrong and then let’s pretend it, then we can by, well, okay.
They have a tenure. Can we help them network put in a specific active policy?
We’ve previously relied on them, just naturally getting this network, let’s have a policy that says, we’re going to ask these two departments to just socialize more and hope that slightly improves the chances that more people become like those, but those things like without the data it’s anecdotal, it’s gut feel, everybody will have an opinion on it. The data can come along and add a real fact-based approach. To that particular problem.
if you’re looking at redesigning a company culture. There’s lots of aspects to redesign a company culture and there’s obviously these unwritten rules that people have in their own heads , when they interact with each other. There’s also explicit policies. You can play with creating a structure . That makes it possible for people to collaborate more and to meet people from Japan , or Switzerland, , or Columbia or whatever. As part of their jobs. So there’s less of a, let’s say psychological boundary between people when there’s 300,000 people there and one company under one roof, technically.
Culture analytics is a very interesting space in itself. maybe you could even think of Culture as the personality of your organization, , you and I could do personality tests on ourselves and, , just like people organizations grow, they have a way of behaving, there is something let’s reference, actual examples, when you look at financial companies like banks and things like that, some.
And naturally really safe, super cautious. You might consider them slow, you might consider them dull, but they’re safe. And that’s what their culture is. Whereas others are aggressive. They take risks, they break the law and they almost don’t seem to care. And yes, you could say step back and say, , no one person usually caused and either one of those cultures, but again, what has happened to get a culture of that is people have been hired in a certain way. Other people have replicated that and people have been trained and people have been managed in a certain way. If you only reward the generation of, , financial gains in trading and don’t mind, like are ways the risk of getting in trouble with regulators.
Then obviously people will just take more risks if you let them. Culture analytics in banking is quite fascinating if you ever looked at that in detail, because the sum of everybody’s small actions result in that overall vibe of the business.
And when people try and change that, like redesign company culture, it’s incredibly challenging, but also interesting because you’ve got to do certain things to reel in some of those tendencies. And so it’s almost like, if you’re trying to lose weight and you have to get the self control, not to any of that extra chocolate bar, but therefore requires you to actually change your shopping process before it even comes to.
So there’s no talk about running you, when you analyze culture, you have to really dig deep to find out well, yes, this is what the current face of culture looks like. This is what traits and values and stuff are. People tend to exhibit. But where did that come from? What drives it? How do you tweak them is, and again, keeping it ethical and transparent.
This is why it’s such a fascinating space for me anyway.
Yeah. Yeah, no, I agree. It’s really interesting. If you don’t design a culture, then it evolves based on defaults and it is somewhat random and sometimes it evolve as well. And sometimes it doesn’t, but therefore, it’s still worth thinking about it and I’m sure, in larger companies, people are thinking about it,
100%, but you can’t not have a culture, even if you haven’t taken responsibility for our culture, because what has a culture.
Yeah. Yeah, exactly.
so what about the culture implications, like on things such as how people are promoted or how, how people feel like the wellbeing, while at work, can all of this stuff be measured or how, how would that be?
most things would be, want to, can be measured. This is where, , the different ways of how we just talk about culture. Play ins where at least in how I would think about it now is if we say culture is maybe the way that we act in the way we behave and the values that we try and push then to address your first point then. So when it comes to promotions and career development and talent management, Which would be either the buzzword to Google.
if you were looking for more information on the HR practice side of things, it comes down to, well, what are the values that you want to, that you want to promote by? And in fact, this kind of goes a little bit back to your performance question from earlier because yes, performance five scale rating. But most organizations will have a little bit more texture to that.
Like I said, especially if they’re using these more systems, cause they’ll have like goals and objectives related to some what somebody is going to do in a year. And again, I am, I’m pretty sure that has always existed. But now this systems that capture these things better, if all your goals were just about making money, then that’s what people are going to focus on and therefore. That’s presumably what you’re going to promote on.
If all, if everybody gets five goals and all five goals are make our business money and that’s the culture you’re promoting. Whereas if you have a wider selection of ways of judging, what goals are set and so on, and how do you cascade goals from the chief executive all the way down so that every goal still contributes to like their top, like their key agenda for the company, but it translates into your world.
Partly who you decide to promote.
It’s probably going to be related to that performance. And so therefore it’s going to be partly well, your organization, the culture of it may probably reflects your chief executive team. What did they say were the goals and therefore, how will we deem who’s better at performing in the context of those goals?
Yeah, there’s obviously there’s, there are other dynamics in play, obviously like maybe culture around fairness and so on, and you can invest like we’ve referenced so far in ways and using technology to identify when things are less fair.
Be more fair and so on. so I suppose that’s how it does the first half of your question, but when it comes to the wellbeing and so on, again, investing in wellbeing is probably a statement in itself, like companies that are willing to actually invest in employee wellbeing, that’s a decent step to begin with.
And then after that again, How did they invest? The analytics will tell you the impact. If you were trying to reduce stress, if you, companies who are currently saying, you know what, online working is intense. Everybody doesn’t take meetings on Fridays anymore.
Everybody gets an extra, a hundred pounds to spend , on their personal e-learning course, based on this new technology that we’ve invested in. It’s a different way of looking at cultural. Right. But I suppose it’s still working out.
What does this company value?
If a company is considering doing HR analytics, how would they start thinking about it? Even assuming they aren’t doing it already.
Yeah. I think the key thing, the very first thing that I would do, if I was running a function, you’re going to have to get the buyer more than the buyer. And you’re going to have to get the senior leadership of your organization, or at least your HR function to understand what is analytics and set the direction for going to we’re going back to that. Very first thing I said, which are the decisions we want to help Know, what are the types of things that we want to do better? What are the decisions that we’re going to prioritize more?
If they can understand, like the value that analysis can create in the context of its impact on people or the impact on the business, that will give you the best context for everything else that you do. Because if you know that well, then you can decide.
If you were to, again, I’d say again, if anybody wants to check out the research by the atrium is extinct tank, it’s free for everyone to read that.
You can see that , these functions evolve over time and most organizations start with small bite-sized steps in the foundations. So solving problems basically.
COVID has accelerated this, like COVID was an opportunity for analytics people to, instead of making small bite-size steps to prove themselves, some functions were literally like thrown into the fire and it was like, Whether you like it or not, we need you to give us some evidence good or bad.
Like this is your opportunity to say, mix it up, but you got to give us evidence. Most organizations in that research said, yes, COVID has provided us with an opportunity to show off data-driven HR and people analytics in general, did all of them achieve what they wanted to achieve? Jury’s out. And I think the co the crisis isn’t over yet, we have a research topic that we will look at post COVID. Let’s reflect and see the learning is. And let’s see if that hopefully the profile for data-driven evidence-based management and HR will stay even after the crisis. And the urgency has.
Hopefully let off, just for the sake of everybody in life, but all of them started off by basically the senior people wanting to make those choices. As soon as they knew that, where it’s like, well, we need these tools. I need this team. there is an unspoken factor in a lot of these things. you could do the best analytics in the best tools, but if your decision-makers can’t use the insight you provide, then what was the point? It’s not going to have an impact, but so you can say, well, we want line managers to make these choices, better HR directors, and this is what we need to do to help them. Usually it’s a bit of a handshake journey and it, on average research shows, it takes 35, 36 months to get to the advanced analytics. If you look at our global benchmarking set, some organizations do it faster, some take longer. This year, I think has given a lot of opportunities to go more quickly. Which is exciting, I think for everyone.
Yeah. Yeah, definitely. these reports are available, , at what URL?
And to say, it’s an evolving practice. When I think about my career and how I describe my job, I often don’t use the words, data or analytics. Ironically, for me personally, I feel like it’s my job to help organizations make better HR decisions. In my perfect world, anytime somebody makes a choice about either how the workforce impacts the business, but also anytime somebody makes a choice about someone’s career, assuming people want to do good things, we should be helping people make better choices.
Anyone who has ever had a bad recruitment experience, had a bad learning experience, had a bad promotion, pay all these things. Now, obviously these won’t be eliminated and some people will always be annoyed for whatever reason and, not everything is perfect, but if we can help all HR people from like the top of the organization to line managers make just slightly better choices, I personally think it would just result in people having better jobs and organizations doing better. And that’s the exciting thing.
Yeah. How do people get in touch with you to ask more?
There’s HRanalyticsthinktank website also, and 3N strategy that’s the business, which means also 3nstrategy.com on Twitter. My handle is Nigel D 27. So if you want to tweets at all or anything like that, I’m fairly responsive.
Growing family and everything like that aside. So I, I I’ll respond if I can. Um, and on LinkedIn, I suppose, Nigel dice, if you want to find me that. Great. Thank you very much.
The rise and rise of data when measuring individuals and company performance with Nigel Dias
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