It is hard to imagine two organisational activities that result in more high profile, costly failures and reputational damage than corporate acquisitions and senior level recruitment (although culture change probably comes close). Situations where high hopes and strong rationale underpinning an acquisition or senior level hire can quickly give way to the realisation that a big mistake has been made are all too common. At first glance they may not seem to be too similar; yet both activities share some of the same fundamental problems and issues. Given that failure in these activities is hugely damaging to businesses, isn’t it time businesses changed their approach to hiring and acquiring?
Let’s start with the obvious; both senior level recruitment and acquisitions are notoriously hard to get right, failure rates for recruitment are estimated to run at around 40%, whilst anything between 50% and 90% of M&A transactions fail to deliver on planned outcomes. Interestingly, these high failure rates seem to be consistent over time and despite new understanding and advances in knowledge of organisational behaviour there has been little change or innovation in the way businesses approach these activities.
Posted in Venture Capital, Culture, Intangibles, Leadership, Strategy, Teams Tagged relationships, networks, Recruitment, advisors, Mergers and acquisitions, corporate finance advisory businesses, culture, performance
Despite tangible benefits in other areas, the value of HR and Big Data is unclear.
Much has been written in recent months about the potential for HR and Big Data (here) to transform the way HR can influence a business. Meghan M. Biro wrote a piece at Forbes (here) about how some forward thinking, predominantly tech focused businesses are investing in sophisticated data mining technologies in order to uncover the hidden behaviours and characteristics that lead to successful performance.
Big Data’s greatest HR value may well be as a predictive tool. By analyzing the skills and attributes of high performers, Big Data allows organizations to build a template for future hires. HR and leaders can learn what to look for with incredible precision.
Big Data is undoubtedly a buzz word in the wider economy. The use of new database analytics capable of crunching huge amounts of data, offers up the tantalising prospect of being able to uncover hidden patterns, trends and relationships that have until now remained unknown. Given the escalating amount of #hr247 information we generate every day of our lives, it seems to make sense to try and use this information to gain genuine insight.
Posted in 4G, Culture, General, Intangibles, Leadership, Relationships Tagged Business intelligence, Data mining, Data analysis, decision making, Statistics, Predictive analytics
Following on from a discussion on Linkedin, Steven Forth, co-founder at Nugg recently asked the following:
Are there also analytics than can let teams know, in advance, that a project is likely to fall behind or fail?
This question gets to the heart of the recent ideas around predictive team analytics and the notion of a 'Physics of People'. It also follows on from another piece from Steven where he wrote:
Emotions matter and teams need to have some form of empathy. Not something software is generally good at, so we need to find ways to compensate for this.
In addition to the points raised by Steven is research from Harvard, MIT and others, pointing to the fact that 10 - 40% of team performance is determined by psychological factors such as empathy, relational cohesion and the nature of interpersonal communication.
Predicting Team Performance
Posted in 4G, Psychology, Relationships, Tools Tagged physics of people, Analytics, Nugg, team performance, Group dynamics, prediction, performance, teams
A recent post by Om Malik (here) sets about dissecting the recent departure of JC Penney CEO Ron Johnson after only two years in the job. Formerly the head of retail for Apple; clearly it was expected that he would be able to bring some of the Apple retail magic to JC Penney. Malik's assertion that spectacular success is as much down to the collective efforts of groups and contextual factors as it is the ability of key individuals to drive things forward reminds me of Bill Taylor's HBR article (here) questioning the emphasis organisations place on "superstars". At the time Taylor's article generated a huge (mostly negative) response. However, I'm starting to think that the unquestioning belief in the "we only hire the best" mantra is rapidly losing its allure.
The notion of the superstar is a beguiling one but unfortunately for corporate HR departments, it is an overly simplistic view. Surely, success has far much more to do with more complex variables such as; working environment, culture, relationships and other contextual factors than with the brilliance of a few key employees. As Boris Groysberg wrote (here) we really are fooling ourselves if we think that success can attributed to the abilities of talented individuals. In short, to transform any poorly performing group or organisation, requires far more than the parachuting in of someone with a great track record in a completely different environment.
I've been thinking a lot about the value of actionable and predictive team analytics recently and a post from Naomi Bloom struck a chord.
From her piece:
Analytics — what types of actionable, embedded, and/or predictive analytics with what types of visualizations, e.g. network analyses is becoming quite prominent when organizations try to figure out what roles and individuals have the greatest business impact? And I should emphasize here that this is about getting real insight to decision-makers in a form they can use when they’re in the middle of making that decision rather than just having a wonderful report-writer or business intelligence solution with which they can figure out the questions and search for the answers. Please note that I haven’t treated so-called “big data” as a separate topic (although everyone’s calling anything big data at the moment) because the real goal is actionable, ideally predictive, analytics, for which the management of big data is a necessary but not sufficient capabilities.
The significance of actionable and predictive team analytics cannot be understated. Tools that offer decision makers simple, actionable, valuable and consistent advice is key. Additionally, these capabilities have arguably been missing from the practice of anyone wanting to improve the engagement, well-being and performance of their staff or team members.
Posted in Relationships, Tools, Intangibles, Psychology, Teams, Technology Tagged prediction, predictive team analytics tool, team member, Predictive analytics, Business intelligence, Analytics, team manager
Based on the recent comments from Stowe and Justin, the idea of a Physics of People is both valuable and represents something potentially unique. Given that the idea has the potential to transform business, the following post outlines the five criteria by which any transformation might take place.
A Starting Assumption
Although there is no shortage of models, assessments, psychometrics and techniques that help raise self awareness and provide insights, none offer predictions about people that are either regular or reliable enough to be used on a widespread basis.
The large number of tests, models and approaches is evidence of this. If a particular tool did provide useful and reliable predictions that improved understanding and decision making, then it's usage and popularity would increase over time. Given that the vast majority of techniques and approaches have been on the market for 20 or 30 years plus, this is ample time for a consensus or market leader to have emerged with these qualities.
The other example that illustrates this assumption is the perception that HR doesn't add value to the business. There is no shortage of commentary around this and in many cases, this line of reasoning has persisted since the Personnel Department was renamed Human Resources. The fact that HR can't call on any widely used method or approach that offers reliable and actionable predictions and insights about people is probably one of the reason's for this current perception of HR.
Posted in 4G, Culture, Intangibles, Psychology, Relationships, Tools Tagged physics of people, business transformation, ssumptions, model, theory, prediction, transformation, Scientific method