HR Technology Conference 2014: HCM Roundtable

Every year we’re trying to figure out what’s next.  7 years ago, I started hearing about social HR everywhere, but the market really wasn’t ready.  Every HR organization thought that social was a bad idea, with personal privacy challenges looming to kill any social enterprise initiatives.  2 years ago, we all took for granted that social was going to be a part of our businesses, and this year it really seemed like social finally became its own and is permeating many of our HR processes and technologies.  It lonely took 7 years after the vendors and advisor market predicted it for it to become reality.  (LOL)

During this year’s HR Technology  Conference HCM roundtable, it was fascinating to hear what everyone was working on (it was the first question posed to the group, and I’m not trying to bash any vendor, but I am representing my opinion of the answers).

  • What was fascinating was that 2 of the vendors were talking about a great user experience (Oracle Fusion and Ultimate).  Wait a second.  We’re still talking about UX?  How did these 2 vendors get a seat at this panel and only have UX to offer up for what’s new in the product.  It’s unfortunate.  Y’all gotta do better than that.
  • 2 of the vendors talked about machine learning.  (ADP and Workday).  Machine learning was part of an overall theme of the conference, and there was a follow-up conversation in this panel about it, but these 2 vendors were the ones who brought it up as a focus area in their opening comments.  When I think about social HR 7 years ago, I think that machine learning is what the next few years might be about and it seems like 2 vendors want us to know that they’re on top of it.  What is surprising here is who the vendors were – and it shows us that there can be surprises.  It wasn’t Oracle and SAP with their deep (and legacy) analytics engines and mountains of programmers.  It was ADP (wh-wh-wh-what?!?!  I LOVE that ADP is thinking about this as they have the largest client/employee base to run analytics off of.  Maybe I don’t give them enough credit.) and Workday (ok, maybe predictable since they seem to be thinking/innovating faster than the others).
  • Last up was SAP.  Can anyone say “extensibility?”  Actually, SAP was gearing up to talk about some really cool metadata and object architecture that will create extensibility, but they got cut off from a time perspective.  Leave it to SAP to make things more complex, but if we can get to configurable extensibility, that’s pretty cool.  Honestly, I would have expected Oracle to be on the extensibility bandwagon based on their application architecture.

I’m hard pressed to say whether machine learning or extensibility is what’s next, but I’d think that all the vendors should be working on both of them.  UX is table stakes, and you should not be allowed to talk at the table (or panel as it was) if that’s what you’re working on.  My guess is that SAP will have some chops in the machine learning space, but it just was not what they wanted to focus on.  It’s also interesting that ADP and Workday were not on the extensibility front as it’s clearly a focus area for the very large customers that SAP has as its client base (but maybe that’s why SAP is so focused).

In a few vendor comments unrelated to the HCM roundtable, the HCM vendor space is going to start reaching parity in the next year.  Oracle and SAP are picking up steam and finally starting to look competitive.  First of all, lets agree that I HCM software in vendor demo booths while I was at the conference.  The following is an aggregation of vendor demos and conversations I had with conference participants.  Here are a couple of comments around gaps or deficiencies that I’m still watching out for based on those conversations:  (alpha order)

  • ADP:  I was really quite pleased to see their new UX.  I can’t remember what it’s called, but they’ll be rolling it out to all of their products so that no matter what you’re on, you’ll have a similar experience.  My concern is really still around the back end.  ADP’s ability to stitch together a common front end on top of multiple back end (and still mainframe?) systems is pretty good, and perhaps when you’re outsourcing everything but the core HCM to a best in class payroll and benefits vendor, it might not matter what the back end looks like.  Maybe.
  • Oracle:  The main question is in the UX.  It’s simply not seamless, and it goes to the point of why they were focused on UX in the panel. It’s way better than the last couple of years, but one goes from the cool “mobile apply” look and feel into a slightly different transaction screen, into a completely non-appy environment in just a few clicks.  The first couple pages are well executed, but it just feels like they didn’t finish the job as you continue through a manager transaction.  The second question is in their customer base for sold Fusion Core HCM.  As I talked to conference participants, they were getting numbers from the Oracle booth anywhere between 400 to 600 (note to Oracle, please get your story straight).  There are still a lot of conference participants wondering why Oracle is giving Fusion HCM licenses away for free if they have market demand in the 100’s of customers.  It’s just not adding up, and nobody I talked to could figure out the story.
  • SAP:  I’m pretty sure that SAP is on its way to filling a few gaps.  Certainly per the above comments, if they are working to fill extensibility gaps that its large enterprise clients will need, they are also going to figure out benefits administration, timekeeping and payroll.  I talked to one conference participant who was told that benefits administration will be available to demo this quarter, and another who said they were told it would be in Q4 of 2015.  Either way it’s coming and that’s good news.  I think SAP’s original philosophy that payroll, time and benefits get outsourced, but for the top 250 clients in size, that’s a hard position to maintain.  (I don’t consider SAP cloud payroll to be comparable to Employee Central in architecture, agile configurability, or usability, so that’s why I harp on it.  I know that SAP would disagree).
  • Workday:  Everyone has been uber positive about Workday for years.  The questions among conference participants seemed to be around the viability of their recruiting module.  Granted this is their newest module, and the top vendors seem to have the capability to innovate rapidly over a couple release cycles.  Just as I’m confident SAP is going to figure out benefits quickly, same goes for Workday recruiting.

Having said all of this, I’m actually quite pleased with the vendor space.  The last couple of years (no matter what Oracle and SAP say) have been relatively uncompetitive.  There has been one clear winner in the market, and the fact that I don’t have to say who it was is a good indicator that it’s true. I think 2015 will get a bit more competitive, but 2016 will become an all out war.  This post is definitely “negative” about what my concerns might be, but what I don’t mention is the huge progress that all of the vendors have made and the very long lists of things they have done well and right.  I’m going to get in trouble from the vendors over this post anyway, but either way, I think 2015 is going to be interesting.  More viable vendors is always a good thing.

(Last comment.  I thought long and hard whether to post this.  Some vendor somewhere is going to be pissed at me, but at the end of the day, there were only 5 HCM vendors on stage, so any exclusion is not mine.  Also, each vendor chose to talk about what they talked about.  Perhaps they didn’t have enough time, but again, if Oracle really wanted to talk analytics but didn’t get to it, that’s not my fault.  Each vendor decided what they wanted to focus on by themselves.  The opinions in the latter half of this post are based on talking to other conference participants and seeing each of the vendors demo at their booth.  Posting this also saves me the effort of writing a year end post.)

Is Cloud The Way To Go?

So I had to upgrade my cell phone contract.  I used to be on this thing where I had a bucket of minutes and text messages to use, and now I’m on exactly the opposite.  I have unlimited phone and text and about 10 GB of data I can use every month.  It really points to a shift in how we as users of wireless devices are working.  Less and less of our days are spent actually talking to each other, and more of our days are spent collaborating through various mechanisms that involve data.  I will admit to spending an exceptional amount of time browsing news on my phone, looking through facebook updates to keep tabs on people, and using my phone for work emails.  Nobody calls me anymore, and if they do, I get my voicemails through data (I read my VM, have not listened to one in years).

One of the big questions these days is about SaaS and Cloud.  Should we do it?  Should we stay on PeopleSoft or SAP HCM?

The answer for SaaS is a definitive Yes.

At some point, be it this year, next or in 5 years, you are going to move to the cloud.  I’m not an opinion about your current on-premise strategy, and I’m not making a judgment of you if you disagree.  I’m simply stating a fact.  Let’s tale a look at the facts:

  • ADP: The actual development of the Enterprise HRMS client server product is probably severely limited.  I don’t even know if they sell it anymore.  We do know that ADP Vantage is what they are selling and developing.
  • Oracle / PeopleSoft:  We’ve all heard about applications unlimited, but for those who thing that in 2020 we’ll still be going to a PeopleSoft Track at OpenWorld, I think you really have to evaluate your reality.  The developers are all on Fusion.  Let’s say you are right and there is still a PeopleSoft product in 2020.  How long do you think it will have been since your last major product enhancement?
  • SAP: Well, there’s HAHA, and there’s SuccessFactors.  Either way, SAP kind of knows that they are pouring development resources into the cloud.  Same conclusion as with PeopleSoft – it will be around for a while, but that’s not the whole reality.
  • Workday:  It’s already in the cloud from the start – no discussion here.
  • Talent Management: It does not really matter if you bought Taleo, SuccessFactors, Cornerstone, PeopleFluent, (I’m going to get in trouble for leaving out 50 companies), you bought into the cloud long ago for TM.

I’m not really trying to change your mind on the cloud here.  It really does not matter.  If you are an HR technology buyer, you simply don’t have a choice.  The vendors and the industry are in the midst of choosing for you.  In just a few short years, all of your premise based HR technologies are going to cease or significantly slow their development efforts and fully shift to the cloud.  If you want to be on a product that will be continuously developed, that is where it will be.

Just in the same way I really don’t have a choice to stay on my old cell phone plan, the world is moving on when it comes to HR applications.  It’s time to move with it.

I Don’t Want No Stinkin’ Analytics!

I’m a nerd.  I get on my bike or I go for a run, and I’ve got my Garmin GPS running the whole time telling me how far I went, how fast I went, what my heart rate was, (ok I’ll stop the list well before it gets to 20 items).  I also happen to weigh myself 4 times a day.  I like to know how much I weigh, what my % of water weight is, how fat I am, etc.  I’m a total nerd and I like my data – lots of it.

When I get home from a routine Saturday ride, the first thing I do is download all the data.  The data by itself is interesting, but only for about 3 minutes.  The second thing I do is I trend the thing.  I’ll look at my ride side by side with the prior week’s and maybe several others.  Basically I’ll compare the stats and get an idea if I was slower, faster, more powerful, etc.  In other words, within a few seconds, I’ll know if I’m better or worse off.

The thing is, I really don’t care about that either.  What I really care about is that I was really slow up Mt. Tam, or that I got dropped on the way into Pt. Reyes.  It’s not that I care that I suck (that’s a given), it’s that where I suck tells me what to work on.  Sometimes, it even tells me that I didn’t eat enough (a common problem if you guys know me – yes, I’m neurotic).

In the last 15 years, most of us have gone from minimal data in our reports, to some pretty decent analytics and/or dashboards.  We’ve started moving away from the static and columnar operational reports and into trending and drillable analytics.  With these new reports, we’ve prided ourselves with the ability to tell our executives that “turnover is down compared to a year ago”, or “the cost of hiring in #BU has skyrocketed.”  It’s a wonderful day in the neighborhood!

But I don’t want operational reports.  Neither do I want analytics.  What I want has almost nothing to do with the data.  I want insightfulness into the business.

Let’s pretend I go to the head of my business unit and tell her that turnover is up over the last 3 quarters.  “Crap,” she says.  “What is the problem and what do we do about it?”  Joe HR stammers and says, “looks like we have an engagement problem???”  Trends and drills are really nice things.  I know I’m lying, our managers really do want this stuff.  But they only want it because we’ve starved them for data for decades.  They really are only mildly interested in the data.  Just as I only look at my bike ride speed out of curiosity, I know that the number alone tells me zilch.  Just as knowing my average speed compared to last week tells me only if I was a little better or worse, ignores conditions on the road, and the environmental context.  What I really want to know is how everything fits together to provide an analysis that give me the insight to act and make a decision.  I want to know what to act on, when, and how to do it.

HR’s job in data is starting to transition yet again.  We’re moving out of the business (I hope) of creating trends and drills, and moving into the business of context.  So the turnover trend looked bad.  Now the questions is how we create a regression model around our data to figure out what the primary actors are for that turnover trend.  Maybe for once engagement only has a small contributing score to turnover.  Maybe what we didn’t know was that the leader told their entire BU that nobody was getting a bonus this year.  Perhaps the cause of that was actually some severe cost containment driven at the corporate level.  How about some good analytics here to compare the cost of total turnover to the cost of those bonuses?

At the end of the day, we have much cooler data.  I’ll give us that one (and the vendors especially).  It’s time though to stop being producers of just the data alone.  It’s not enough anymore.  Perhaps when half of HR were “generalists” a decade ago this was ok.  But we’re supposed to be partnered with the business now and we still can’t really diagnose what’s going on, let alone how to fix things.  Once again, let’s stop being producers of data and become analysts of data.  We need to start producing some insightfulness.

Leveling the Playing Field

I’ve always wondered about the benefits of doping in professional sports.  Once, I read about a journalist who decided to dope just to find out if it really was that dramatic at providing performance increases, and not only was he stronger, have significantly more endurance, but he also seemed to start reverse aging (age spots on his skin started to disappear).  Indeed, the reported benefits of doping are staggering.  Even an average guy like me could probably ride my bike over 100 miles a day for days in a row without real problems.

Lance Armstrong is once again in the news for doping.  Many of us have been pretty sure that he’s been a doper all along, but the man “has never failed a drug test” so we just let it go.  For the particular drugs we’re talking about, there is no real way to test if the drug is in someone’s system.  Instead, they test for other indicators.  In the case of EPO, they test for a blood hemocrit level above 5.0 (whatever that means).  Basically, if you tested every professional racer, there is a good chance that 90% of them have hemocrit levels at 4.8 or 4.9.  Their argument is that they are not cheating, even though they are cheating, just doing it below the level that they would get called out for it.  Instead, they argue that they are just keeping themselves level with the rest of the playing field.

A few years ago I’m sure I argued that core HR was dead, and talent management was dying with nothing to take their places.  Let’s face it – core HR functionality has not changed in a decade and Talent has been a bit of a bust because all we’ve done is automated the old crappy stuff.  Today, I’m not going to argue that HR technology is dead.  I’m going to argue that the playing field is now level.  Now I want to see who is going to perform, and who is going to get left behind.

If we look around the HR marketplace, there is really good reason to be excited.  I’m not talking about new functionality in core or talent, but I’m talking about how everyone is creating new user experience, and doing it in different ways.  If we look at Fusion versus Workday versus SAP/SF Employee Central versus ADP Vantage versus (all the vendors who are pissed they got left off al already too long list), the theory and design of the experience is totally different.  What we assume about our company’s employees and managers will drive a selection, not what functionality works for us.

We are no longer in the era of “do I want PeopleSoft position management, or SAP’s?”  I actually get to make a decision that is based on my culture and how I think they will best use the application.  Do I have a bunch of engineers, or do I have a bunch of management consultants?  Do I have machinists or perhaps finance guys?  I’m finally at the point where customers and culture are the things that are important.  I finally get to make decisions based on company strategy, workforce and culture.

Functionality is dead because it is a level playing field – but HR technology is one of the most exciting places to be in a really long time.


Social Taxonomies: Tagging versus Crowd Metrics

Every now and then, I’m parked at a mall, convention center, airport, and I ask myself, “now where did I park my car?  OK, so I don’t lose my car that often, but on occasion it happens.  OK, I’m not at the mall or convention center that often either.  At any rate, the appropriate action is to walk around the parking lot for a while constantly hitting the alarm button and waiting to hear that familiar chirp.  (Actually, I do that even when I know where the car is and I’m just walking over to it – no idea why…)  At some point, I’ll eventually locate the car.  The alternative, since I’d never really go to a mall or convention center or whatever alone, is the hope that someone I’m with actually remembers where the car is, or the general vicinity.  Depending on the person I’m with, there is either a high level of confidence or not, and sometimes none at all.

Here’s the problem with social enterprise.  Stuff can be really hard to find.  Let’s say that we remember that something was said on a particular subject, but we don’t remember who said it, if it was in a group message board or a blog, or even when it was.  How the heck do we find this stuff?  Even if we did remember it from a blog, the content might be 2 years old and still take a while to find.  Social tools all seem to use a variety of different search tools, but the tools that have emerged seem to deal with either tags or crowd metrics (or a combination of each).

Tagging is the job of either the content author, or content manager.  Sometimes tags can be community driven as well.  The point being that people can tag content with topics that they feel are associated with the content they are presenting.  You’ll notice that this post will return a tag of “social” and “social enterprise” among other things so that those get indexed by the blog and search engines.  It’s not an exact science like the good old dewey decimal system we all learned in elementary school, but if authors are tagging, then it’s likely to have a decent relationship.  If you give readers and the community the ability to tag, now you have even precision as the readers are also the searchers of the content and will have a pretty good idea if the original tags are off.  Every now and then on systematicHR posts I’ll actually adjust tags based on what searches are driving hits to the content.  Lastly, if you have a content manager involved that can further tag, now you have an element of standardization, so you know that similar posts will always be tagged in a similar way – in other words there are no concerns over someone tagging only “social” and a different author using “network.”  The content manager can leave the original tags intact, but would also communize the tags being used across the community.

Crowd metrics are also a wonderful thing.  For those of us who are Facebook users, we’re probably pretty familiar with the news feed that tends to launch more popular items to the top of the list.  The assumption is that if lots of people are looking and commenting on a particular piece of content, there is a higher probability that you’ll also be interested in the content.  The same goes for social enterprise in the workplace.  If many people are looking at content that you follow in some way (through a person, group, topic…) then chances are you want to see it also.  The assumption is that hits, reads, comments, thumb ups indicates some degree of quality of the content.

Things get better when you combine tagging and crowd metrics.  If you do a search for “talent management” in your social enterprise tool, hopefully it brings up the things that are not only tagged with the topic, but also finds the ones that were most popular first.  This blends not only the topical result, but also the assumption of quality as well.  The issue with this is that you can still miss content.  Some things can be mis-tagged, or some items just go unread by the crowds, and continue to appear lower in search results because of it.  Good search should also index words inside the content automatically, but that alone does not mean a high search result.

Obviously for me, the best result is if I just remember where my stupid car is.  But if I can’t hopefully some crowd intelligence in combination with my alarm clicker will work pretty quickly.  I don’t wander aimlessly in parking lots that often thankfully.

HR Technology Conference Reactions: Naomi’s Master Panel – SaaS

Talk about a stacked panel.  This one was moderated by a thought leader, and staffed by thought leaders.   They included:  MODERATOR: Naomi Lee Bloom (Managing Partner, Bloom & Wallace), Steven Miranda (SVP, Applications Development, Oracle), Mike Capone (VP for Product Development and CIO, ADP), Sanjay Poonen (President Global Solutions, SAP), John Wookey (EVP, Social Applications,, Stan Swete (CTO, Workday), Adam Rogers (CTO, Ultimate Software)

I’ll admit that towards the middle, it got a bit salesy as the vendors started spewing stats about how great they were and what amazing market reach they have, but I’m ok with that for the 45 minutes of gold nuggets I got first.  Even the panelists eventually admitted that they could have argued with each other more, but I’m ok without that as well.  Here’s what I heard.

Theme #1:  Data aggregation across clients. I should say I told you so (I think I just did), but I was talking about this years ago.  What is really cool about this is that so many of the SaaS vendors now have the ability to mine data across their client base.  The data in a perfect SaaS world should be totally standardized since everyone is on the same software, so some instant benchmarking should be in order.  I don’t think there’s much risk to be able to aggregate and share the data, but some opt-in by clients is a reasonable tradeoff, and I’d expect that most clients would opt in with the understanding that none of the client specific stuff would be shared outside of an aggregated format.  Imagine a world where all of the analytics the vendor is providing can also show a benchmark with a push of a button.  Your CHRO pulls up a turnover trend for the last 12 months, and with a click of a button sees the trend lines for all other clients and clients in the same industry.  All of a sudden, your CHRO is hunting you down trying to understand why your turnover rates are suddenly trending higher than competitors.  This isn’t reality yet, but we could be close.

An example that was quite interesting was the ADP payroll examples.  We all know that the ADP payroll numbers come out ahead of the government jobs reports.  The government surveys a number of people every month, but ADP has an exact number of paychecks they cut.  Which one do you think is more accurate and which one do you thing most people trust?

Aggregation also benefits the vendors.  The vendors have a view into what every client is using and not using.  Thomas Otter came up with a wonderful new term this week: SaaS = Shelfware as a Service.  The truth is that vendor can now see what is in demand, what products need enhancement, and what products where the investment opportunities are.

Theme #2:  Realign focus. We’ve spent over a decade being worried about enhancements, the next patch or upgrade, and how we manage internal hardware and networks.  Let’s get one thing straight – all of that is gone.  If you no longer have 5-10-15 headcount worried about the management of the application, you have that many extra heads to worry about optimizing business processes or how to engage more users.  Instead of worrying about the request that came in from APAC and how you are going to address a small piece of code for them, you can worry about what the bigger picture is and trying to collaborate with your vendor to have it deployed.

Theme #3:  Shelfware. We talked a little bit about shelfware in theme 1, but I think it goes beyond knowing what gets used and unused.  Organizations used to have trouble with buying applications that were never deployed.  Or buying applications as part of a package that were never deployed.  The problem is a bit different now.  With 2-3-4 releases a year, clients just can’t keep up.  One of the great quotes of the conference, “God could create the world in 7 days because he didn’t have install base.”  Since everyone is on one system, you don’t have to worry about coding for multiple upgrade paths, multiple back end databases, etc.   It’s also a great thing that everything comes turned off, but after a year, there is so much “stuff” not getting used that the planning process of how and what to deploy can get pretty complex.   Vendors have to be really thoughtful about what functionality to deploy, and one of the ways many are dealing with this is by creating social communities where customers can vote on what functionality gets released next.  By doing this, vendors minimize the impact of releasing functionality that nobody wants.

Theme #4: Social. Social was the theme no matter where I went at this conference.  That’s not a bad thing, it just shows where everyone’s brains were.  Partly because of the SaaS strategy and not having multiple environments to grapple with, mobile applications can be created quickly and with little fear of platforms.  Similarly, social may be threaded into processes and functionality more seamlessly, although with so many customers going with third party social tools, this might be getting hard to embed in SaaS HCM business processes.  At the end of the day though, the idea is simple.  Engage your employees where they are comfortable engaging and where they do their work.  This might mean extending functionality to mobile, or creating tools to facilitate conversations in social tools.  Unfortunately, in today’s worls this might also mean embedding ways to perform actions in email since that is where people are comfortable today.


Switching Gears

A long time ago, I used to work for ADP doing pre-sales.  We had great relationships internally with services and implementation, but nonetheless it always seemed to come up that we didn’t always sell with the full lens of reality.  On the other hand, I’d say that we came up with some pretty cool solutions to some pretty tough problems.  In today’s world, I’m generally thought of as a strategist.  I do lots of planning type of work whether it’s strategic 3 year plans, some implementation planning, or just some business case writing.  My current project (depending on when this posts), is a global implementation of a new core HR system for which I had a major hand in writing the business case.  I’ll start by saying that I’m really not suited for implementations, but the experience is quite eye opening.

There is no blame for anything that happens in pre-sales here.  For this current project, we had probably one of the best consultants available both from functional and technical resources.  The problem that happens in pre-sales is that you don’t actually have finalized design yet, so all discussions are really quite hypothetical.  “So how would the application perform ABC?”  “Well, there is option 1, or 2, or 3.”  And of course if we wanted to solve for problem XYZ, there are solutions 7, 8, and 9.  Where the hard part comes in is that while all of the presented solutions are not only possible, but implementationally viable, mixing and matching does not always work.  Solution 2 might be dependent on implementing position management, and solution 3 might not work with solution 7.

When I was with ADP, there was sometimes the thinking that we threw things over the fence.  First of all, I think this happens with all vendors.  Second, I don’t think we ever really threw things over that proverbial fence.  Instead, we just didn’t know what a client was ultimately going to do, so we presented all the possible options.  In a sales cycle, you really don’t have the time to go into every nuance of every solution, and most of the time you have consultants like me driving tight timelines and moving discussions forward before “analysis paralysis” occurs.

I remember back in the day when ERP implementations would last for years – things would come up, we’d switch directions, something else would come up, we’d backtrack because the application didn’t work the way we expected it to.  Reflecting on my own experience, I realize how much we could not have known in the sales cycle, and what that meant for the implementation.  Implementation consultants have a really challenging job.  “But you guys told us we could do option 3!”  “Ok client, but you didn’t tell us that you wanted 1 job code for the entire company.”  (I’m kidding about that one)

Once we have requirements and design, I have a whole new respect for how implementers get around to explaining how the whole application actually works with all the nuances of each functional component.  I’ve always loved how sales consultants can dance around solutions for a system that if completely fictitious at that point, but am equally amazed at watching implementers dance around requirements once they start to solidify.  Hats off.


Missing Steps

I started my day on Monday at 4am when my cab picked me up to head to the airport.  As he missed the airport exit (how does that even happen?) I thought to myself that missing my plane would cause me to miss a series of 4 conference calls in the afternoon.  Given that it was a 5 hour flight, that would also mean that I’d wind up on the redeye later in the afternoon, but still miss the start time for my meeting the following morning.  One I realized that there seems to be very little slack in my week’s schedule.  Any one thing goes wrong, my week falls apart and I start cancelling things.  Luckily for me, I actually had to build some time for me to get to the airport early and do a call in the airport lounge (which I missed).

We often time our HR technology projects based on fictitious end dates.  Sure, there are a few out there that make a whole lot of sense.  It’s really nice if payroll implementations can go live on January 1.  It’s nice if new benefits vendors go live in time for a new open enrollment season.  But every once in a while, our CEO tells us in October that we had better have a new, global talent management system by January 1 in time for February performance reviews.  Huh?

In most of our projects, we have actually messed up our overall project timelines.  We don’t spend enough time thinking about some fairly significant parts of an implementation.  We’re all about getting the requirements blueprint down and hitting the config tables.  As you all know, I’m a big fan of prep.  When we rush into implementations, there just isn’t enough time to reengineer our processes and realign what we are doing to our core HR strategies.  We find out over and over again that we’ve simply reimplemented the same processes or the same config and not made HR any better.  We find out that we didn’t spend time cleaning up our data and our reports are still horrible.

  1. Map to our mission and create actionable measurements of progress – Just because we map to our mission in the business case to implement a new system, does not mean we can stop measuring success.  Success needs to be measured before implementation, during implementation, and score carded repeatedly after go live.
  2. Improve the quality of our data – data cleansing is not always sufficient.  Yes, it’s true that we should not just import data and begin a new system with the same crappy data that we had before, but it is equally wrong to clean the data without addressing the fundamental problems that created the bad data in the first place.  More on this in the next bullet.
  3. Redesign our processes – Process redesign is not just for the sake of aligning process with the new technologies.  It’s an opportunity to address other issues within your environment.  Often, our processes are actually the cause of data issues we have.  Because we don’t use high quality data practices throughout our workflow, we end up auditing data on the back end when we catch only a fraction of the issues rather than ensuring high data quality throughout.

If we miss a step, it does not mean we don’t go live.  Nor does it mean that our implementation was not any good.  However, it might mean that our long term success is suboptimal.  For HR to have continued credibility with upper management, we have to do all the steps that it takes to create long term success.

The Technology Does Not Sell

Years ago, there is a motorola executive was speaking to a group of students. He asks the students to answer a couple of simple questions, “who among you owns a motorola cell phone?”. A small group of students raise their hands. He continues to as them, “who among you own a Nokia cell phone?”. The large population of remaining students raise their hands. They go on to discuss why the students own Nokia cell phones, and the executive explains how much better Motorola’s technology is than Nokia.

I should mention here once more that this was all years ago.  I now own a Motorola Droid 2 Global on the Android platform, after having owned the Motorlola Droid 1 and the Droid 2.  Absolutely love these phones.  I don’t know about you, but I have basically owned the popular cell phones of whatever era we were in (iPhone excepted since until very recently it was not available on my wireless provider of choice). I had that huge motorola flip phone in the late 90s, had the nokias like everyone else around the turn of the century, been given the blackberries by my employers, and I’ve been on the motorola droid for the last couple of years.

Phones are popular not because of their technology. They are popular because of what they do for us. Sometimes its the image. We all remember theMotorola Razer (or something like that – i didn’t own one of those) that everyone loved because they were small. We remember the nokias because at the time they were the simplest to use. We realize that many of us bought iPhones even though they were useless as phones in the US. The point being that the choices had almost nothing to do with technology. We sacrificed the ability to make phone calls on a phone so we could buy an apple product that had apps.

The point is this, if you have to explain why your product is better, your product has failed, and you will fail in marketing it. All too often, we deploy new HR systems and tell our clients (employees and managers) how great it will be that they have new tools and self service, only to find out that they hate the new system since they can no longer delegate manual tasks to their assistants – that we have actually just given them more work. We continuously fail in our change management programs for a large number of factors, but one of those facts is definitely hat we are trying to sell the wrong thing. It’s not about what they can do with the technology, it’s what the technology can do for them. (I am feeling like a Kennedy at the moment i suppose.)

In a perhaps more appropriate appropriate approach, applications like alert management must be acknowledged to put more activity on the individual manager’s proverbial table. Indeed, many a survey have shown that manager activity either stays the same or increases any time we give them more technology, but we keep advertising how much easier their lives will be. Instead, we should be owning up to the fact that their lives get busier and more complex, and that’s not a bad thing. The whole point of modern human resources is t hat we continuously get better at managing our people. What are our direct managers if not people managers? Sure, they have to manage activity and process, but it’s the people who have to execute those activities and processes. The technology enables managers to actually do their jobs better, and sometimes just to do their jobs. The fact that more work comes with doing jobs that they are supposed to have been doing all along is merely a byproduct of the technology. sure, you get more work, but now you can do it effectively. In the end, you’ll have happier people, they will stick around longer, have stronger capabilities, and you’ll look really really good.

Or, you can be like Motorola a decade ago when Nokia was cleaning their clock. Instead, give them something they can use, and understand easily. “It’s your job, dammit, and we’re going to make you better at it.” If we have to explain the technology, we’ve already failed.  Today, Motorola has transformed the market and you see Motorlola and iPhones everywhere, but not so much Nokia anymore (in the US).  Turns out that the technology is important, but it’s really about the experience.

Commonizing Meaning

I have some favorite phrases that I’ve been picking up for years.

  • “Eh, voila!” universal for “eh, voila!”
  • “Ah, asodeska” Japanese for “I understand”  (sp?)
  • “Bo ko dien” is Taiwanese for highly unlikely or that’s ridiculous. (sp?)
  • “Oh shiitake” (shitzu is also appropriate), is an imperfectly polite way of saying “oh &#!+”

Basically, these are phrases that i love, but at least the latter two are meaningless to most people i say them to. I could of course go to Japan and most people will know what I’m talking about when i tell them I understand them, but they will then look at me funny when i exclaim in the name of a mushroom in anger.

We face the same problems when we talk about data calculations in HR. The most common of which is the simple headcount calculation. “Simple?” you ask. I mean, how hard can it be to count a bunch of head that are working in the organization on any particular day, right? The smart data guys out there are scoffing at me at this very moment.

First, we put on the finance hat. Exactly how many heads is a part time person? HR exclaims that is why we have headcount versus FTE. But finance does not really care, and they are going to run a headcount using a fraction either way.

Second, we put on our function and division hat. Every division seems to want to run the calc in a different way. And then there are realistic considerations to be made, such as the one country out there that outsources payroll, and does not have a field to differentiate a PT versus FT person. or the country that has a mess of contractors on payroll, and can’t sort them out.

Then you put on the analytics hat, and realize that when you integrated everything into your hypothetical data warehouse, the definitions for other fields have not been standardized around the organization, and you can’t get good head counts of specific populations like managers, executives, and diversity. I mean, is a someone in management a director and above? Or is she jut a people manager? How many people does she have to manage to be in management? Are we diverse as an organization simply because we have a headcount that says we are more than 50% people of color even though 2000 of those people are in Japan where the population is so homogenous that any talk of non Japanese minorities is simply silly?

Then you put on your math hat and some statistician in the organization tells you that you can’t average an average, or some nonsense like that.

So the Board of Directors comes to HR and asks what the headcount of the organization is. You tell them that you have 100,000 employees, plus or minus 10%. Yep, that’s going to go over really well.

I’m not saying its an easy discussion, but all it really takes is getting everyone into the same room one (OK, maybe over the course of a couple of weeks) to get this figured out. I’ve rarely seen an organization that is so vested in their own headcount method that they can’t see the benefits of a standardized calculation. I fact, most of the segments within are usually clamoring for this and we just have not gotten around to it yet, or we think they are resistant. In the end, it’s really not so hard, and we should just get to it.


Fusion HCM Website is Up

Just an FYI since this appears to be about the softest launch we’ve seen in ages.  Considering we’ve been waiting for Fusion for a while.  Here’s an FYI that the website is up and perhaps the software is in GA (but you’ll have to ask Oracle to confirm that)

Back to Basics

It seems to me that there has been a renewed focus on core HR.  Now I need to tell the truth, I really thought core HR was dead.  I mean, it will always be around, but with the whole industry moving on to cooler things like analytics and talent management, who cares about core HR anyway?  Seriously, core HR is core HR, how many ways can you present an employee transfer or termination process?  How many different vendors can effectively pitch OSHA functionality and expect to win?  Within reason, all the core HR vendors are pretty much on an equal playing field, for one reason or another that I won’t bother going into.

So the industry if focused on talent and analytics.  The problem is that nothing seems to work if you messed up core HR.  People deployed a nice, automated performance process 3 years ago, and they got themselves away from paper.  But at the same time, the industry told them that they didn’t get where they needed to go, and a number of reasons went into this.  First, deploying a talent process just wasn’t enough, and the vendors are madly working on the next level of functionality that will actually help us manage talent as opposed to automating a process.  Secondly however, talent management did not work the first time because we implemented it assuming our core HR systems were already healthy, and they were not.

First, Job.  There seems to be a renewed effort around job these days.  I think we’ve realized that even with all the focus on competencies as a foundational building block of talent, job is still the foundational building block of HR.  Without job, nothing else seems to work.  The problem was that we’ve been neglecting job for eons.  Ok, so that’s a stretch, but it’s certainly not uncommon for many of our organizations to have 5 times as many jobs as we need.  They are not standardized, they are redundant, and they have mismatched naming conventions.  They appear differently from country to country and business unit to business unit.  At the end of the day, a corporate organization can’t make any sense our of our jobs.  So we’ve gone back over the last few years and tried to start tightening up our job tables, which will in turn enable tighter competencies, performance, recruiting, succession, etc…  Not to mention that your analytics are worthless if you can’t use Job as one of your core dimensions in your datamarts.

Second, Organization.  We don’t often think about how we think about org.  Is it a financial hierarchy? Operational? HR? People manager?  When we first implemented organization in core HR years ago, we may have tied it tightly to the payroll engine, and cost centers were the priority at the sacrifice of supervisor chains.  Or we decided that an operaitonal structure made better sense and we sacrificed how HR generalists needed to interact with employees in the structure.  Whatever the tradeoff we made, we didn’t realize that a couple years later, this thing called talent management was going to assume that core HR could provide a clean structure to talent.  I’ve been to organizations where the performance, compensation, succession, and hiring managers were all different.  Who the hell was going to think of that 5 years ago?  huh?  The point is, that we’ve needed to go back to core HR and make some sense of our initial implementations.  And oh yeah, if you’re org is not clean enough to be a dimension in your datamarts – worthless again.

So the moral of the story is this:  if you’re late the the game and just getting to talent now, learn from those before you – fix core HR.  If you are not late to the game, but have not fixed core HR, go do it now.

HR Technology Deployments

I love it when consultants come in and talk to you about all the things you need to do around an implementation.  Obviously your implementer is going to do all the normal things around table configuration and testing, but they often miss some of the bigger items.  When consultants come in to talk about the other stuff, they are usually not particularly comprehensive – they like to talk about change management.  Change management is a wonderful thing, but it still does not mean you’re going to have a successful deployment, no matter how good the change program is.  There are so many things that go into swapping your HR technologies out that missing any of them could spell disaster.

  • Foundation.  I don’t know why so little time is spent on the foundation of any HR system.  Whether it’s core HR or talent management, there are some pretty big foundation issues that you should be looking at before you even think about starting an implementation.  Whether you like it or not, half of your problem with your prior system was not the system.  Half of your problem was that you screwed up the foundation, and had you gotten it right, you’d never be moving to a new system anyway.  Either you messed up the organizational structure and after that it was all downhill, or your jobs never made sense, or your security was horrible and ultimately your own poor security decisions ended up in horrific data quality.  Perhaps you didn’t really think through competencies or goals well enough when you did your first talent management implementation because the talent market was so young that nobody really knew what they were doing.  Either way, fix it now before you configure tables, because your implementer really just wants to get values in the table and stay on time – not help you figure out what the right org structure is for the next 10 years.
  • Decommissioning.  Ok, there are easy parts and hard parts.  The easy parts are reports, interfaces and data conversion.  Heck, that’s just part of any old implementation.  Of course we’re going to convert those.  But wait, did you say we’re not converting history?  How long are we going to have to access the old system for?  Does that mean we’re running reports out of 2 systems?  Wait, have we done analysis around the downstream systems and not just creating interfaces?  Listen, if you’re changing the org structure (see #1 above), you had better prepare every singe downstream system (and downstream from the downstream system) to get ready for new values or structures.  It’s not just about an interface or a report.  What you are doing is going to have far reaching impact – especially if it’s core HR.  Last thing you need to do is mess up some random headcount report that goes to the board of directors just because it comes out of a system 2 interfaces removed from core HR.
  • Implementation.  This is obviously one of the things that will get covered.  Your chosen implementer is going to be all over table configuration, and they are motivated to be on time and under budget.  That’s really where the problems comes in – you want them to be on time and under budget, but you’d also like to think that they are going to be strategically minded and help you out with other things above.  90% of the time they are not.  The cost model that your purchasing people drove them to simply won’t allow them to help you out, and even if thoy could, do you really want a group of people operating in the weeds of table configuration to also operate at the highest strategy levels?  Usually not.
  • Change Management.  Can we please get away from thinking that training and communication is all there is to change management?  Realistically, the estimate you should be using for change management should be about 20% of the implementation budget.  That’s right, if you are spending $1M on implementation, you should have a $200k budget.  When things start to get tight, the first things to go are any real hopes for change management.  If you don’t get your audience analysis and change strategy right, all you’re going to have are vendor provided training and generic communications.  Listen people, the new technology is 80% adoption and 20% everything else in the equation of success.  If you want to be successful, don’t cut the 20% of change management budgets, cut $200k out of your implementation and live without a piece of functionality.

Sorry – am I ranting?  It’s not just implementation, table configuration and change management.  You can get all of those perfect and still have a bad outcome.  In order to get it right, you have to do all of the activities, including the ones that are not totally obvious at first, and including the ones that your consultants are not trying to sell to you.

Evaluating the Demo

I’ll admit that a while back (wow – are we going on 10 years now?) I was an SC.  You know – those guys from the vendors that the salespeople count on to demonstrate product during the sales cycle.  SC’s are a highly valued commodity.  They are highly trained product experts that must float between the functional world that many of the HR practitioners in their audience live in, the technical world that many IT people in their audience live in, and the sales world that they are part of.  I mean seriously, how many people do you know that can have a functional, technical and sales conversation all at the same time?  The best SC’s are truly rare, have extraordinarily hard jobs, and in my humble opinion are actually quite underpaid for what they bring to the table.

I was attending the HR Demo show in December (put on by the one and only John Sumser) and it was really quite interesting watching back to back to back demos.  It was even more intriguing to listen to the commentary and watch the twitter feeds at the show.  Personally, I watched 3 demos (I was only there for the first day).  Not in any order, there was a horrific demo of a terrific product.  There was also a middling demo of a middling product, and a terrific demo of a fairly poor product.  However, I’m not sure that the verbal or twitter commentary really reflected this.  Part of this is the varying degrees of capability in driving through to what the core product capabilities are from either a functional or technological perspective, and reading past the SC’s ability to sell (that is after all what they are there for).  Let’s face it, a 1-hour demo of a product is designed and probably scripted to show all the best that a product has to offer.  The best SC’s are going to show all the flash in a way that looks incredibly simple.  Even if the product is absolute crap (I’m not saying I saw anything that was), the sales job is to convince you that you can do everything you need to do within the product and that the capabilities are not only sufficient, but that you love them.

At the same time, the technologists in the room are looking around at the exact same demo and not listening to a word about functionality.  Instead, they are watching the screens, table driven values, background integration, web architecture and all sorts of other things that are not being explained verbally.  Thus, I can watch an incredibly dry presentation but still come out of it saying, “wow, that was cool” while the functionally driven people in the room might be saying, “wow, that sucked.”  Functionally, if we are talking about core HR, I’m going to say that the product capabilities of the best demo and the worst demo were within 5% of each other.  However, technologists and functionally driven practitioners are going to come out of a demo with different perspectives.  Unless you are an analyst or have a specific background, I’m not sure that you’re going to be able to pull together these perspectives in a single individual.  That’s why, even though some HR people get a bit tight, we invite very broad teams of HR, IT, Finance, etc to watch demos.

As a parting thought, here are a couple of hints when you ask questions during the demo:

  • When the SC says, “Our clients handle that situation by using this functionality over here” means that it’s a workaround.  No matter how good and convincing the demo was, it’s a workaround and does not really exist.  You should also be aware that many of the workarounds that SC’s come up with are totally legitimate, but that the implementation groups may not be aware how to implement them.
  • When an SC says, “We suggest that you handle the situation this way” means there is a band aid.  You might be exiting the application, or using a workaround, but be in no doubt that once again the functionality does not exist.

How to Read a Newspaper

So, when I get on a plane, I often have a newspaper with me.  Whether you are on a plane, train, or anywhere with close quarters with other people, there is a bit of etiquette involved, and a standard trick that frequent travellers are supposed to know about.  Adherence with this trick is unfortunately minimal however.  The trick is as follows:  Take the paper as it was delivered, and unfold just the middle crease without opening the paper – you have only page 1 in front of you.  Fold the paper in half lengthwise and backwards, you should be able to see the left half of page 1.  Using this fold down the middle of the paper, you can read the entire paper without ever bothering the people sitting next to you.

When it comes to data, keeping everything in it’s place and not dispersing data into unwelcome areas is paramount.  HR data is probably the most sensitive data in the organization.  I’m not saying that other data that may contain trade secrets is not equally important, but HR knows stuff about our employees that they really don’t want released.  While openness about jobs and salaries has seemed to increase with the younger generations, there is still a great deal of sensitivity around many issues, and certainly a large amount of data that must be protected from a compliance perspective (such as diversity information and ER claims).  While we have tried to segregate data in such a way that prevents unauthorized access into the database, security and access rights to the systems of record is only the tip of the iceberg when it comes to unraveling the solution to this problem.  Like an email, once a report is generated or an interface is created, the owner of data simply loses control and can’t really ever be sure where that data is going to land.

There really aren’t any good solutions at this time.  You can restrict data so that it does not land in a data warehouse, or prevent integration to other systems, but at some point, there will be a hardcopy report floating on a desk, waiting to be whisked off by the wrong person’s hands.  I’m not really an advocate of putting huge amounts of controls on data.  I think that you appoint a system of record, data owners, access rights, and do your best in a well managed data environment.  I am curious about what others are doing out there to prevent unauthorized or unplanned dissemination of sensitive data other than simple data governance and data management measures.  Is there anything out there that can handle this yet?

The Lowest Common Denominator

I’ve been trying to sell people on the Google Android operating system for smart phones lately.  I’m not sure that it’s really about the Android versus the iPhone for me – more likely it’s the fact that I’m a long time Verizon user and won’t leave – since Apple is not currently available to me, I get the Android.  However, the user and market perceptions of the iPhone versus Android seem to be a significant difference in philosophy.  This is odd since both companies are basically known for ease of use (each in its own way).  Google is well known for the “single field search engine page finds all”, and Apple is well known for the “single dial does all” iPod.  But in the world of phones, Apple still caters to usability, and Google seems to cater to people who want more advanced ability to customize their environment.  Either way, until this latest departure, both organizations seemed content to treat all of their end users as idiots – and it worked.  They were able to bundle incredible functionality in a single element.

I recently had the pleasure of sitting in on demos of core HR platforms, a variety of talent management and learning systems.  It occurred to me that each category of software seemed to have varying differences of usability between their different types.  While my thinking is in no way complete since I have not actually seen that many vendors of late, I’m wondering if indeed there might be something to the following usability argument.

Core HR platforms have in general  catered to just the HR user community.  In effect, these are generally specialists and power users of HR systems.  Next in line, talent management systems rolled out HR technology to employee and manager populations, but most of the major interactions in the first couple of waves of TM were manager based.  These technologies really stewarded managers through employee, compensation and succession review processes.  Lastly, learning systems seem to be the most employee focused.  Managers have proportionally less interaction (compared to TM) while employees actively look up courses, participate in learning, and manage their transcripts.

My theory is that learning systems will tend to evolve the fastest when it comes to highly usable systems (again, assuming that legacy systems can adapt quickly, or newer platforms will already be there).  Basically, the more end users you have, the less room for error you have when it comes to creating simple transactions.  Lets say for learning, you have at least 5 times as many end users as with most core talent processes.  (I realize that many of you will want to tell me that employees participate in reviews and talent profiles, but come on, I think we can all admit that most TM processes are really focused on the manager in today’s world).  Similarly, core HR has about 20 times fewer users than TM and 100 times fewer users than learning.

Basically, what I’m saying is that we all complain about the usability of some systems.  Some vendors are burdened by legacy technology that they simply can’t get out of.  but other vendors who seem to be more capable of advancing usability have not.  My theory is that when we talk about core HR, vendors simply have not had to make systems significantly more usable.

Android versus iPhones

The web is alive with comparisons of Google Android phones and Apple iPhones.  While it seemed for a long time that the iPhone was going to own the market, Android has slowly picked up steam.  In fact, Apple may have made a serious miscalculation in tying themselves with the AT&T network and a limited population of cell phone users.  Meanwhile, Google Android has snuck into all the other providers as the operating system of choice since those other providers can’t get their hands on the iPhone.

However, what has emerged is not only a discussion about who will ultimately dominate the market, but the varying philosophies of the two competitors.  The iPhone touts ease of use and intuitive user experience.  Alternatively, the Android is about personalization and the ability to modify applications to suit your own specific requirements.  Truth be told, I don’t really think there is that much of a usability or personalization gap between the two systems, but this is how the market is portraying it.  The fact of the matter is that both systems are enormously easy to use and give you enough personalization opportunities.

Personally, I’m an Android user, but that’s neither here nor there.  The point is that what I want is to tap an application and quickly enter in what I had for lunch (translated to caloric intake), look at the weather delays for airports across the country, or quickly locate somewhere to have dinner.  At the end of the day, users just want to get to the applications and data they want.  They want a quick reference and that’s about it.

The future of HR applications may be 5 years away or more, but I like to think about managers who just want to quickly log into their phone and add a note about their employee’s performance and then check a quick metric around productivity.  I think about the employee who logs in later that day and logs in their learning experiences in less than a minute and then uses the same phone to check their paystubs.

Theoretically, the presentation of data is all possible today, and quite easily.  All applications should be able to ship out widgitized content that can be adaptable to phone technologies, so long as an application is written for it.  Transactional processes are a bit tougher since legacy applications have to be reworked to accept transactions through these phones, but I’m convinced that these capabilities are not that far away either.

The core problem is that we have barely gotten to complex transactions on our intranet portals let alone getting to them on the phones.  However, I think we’re largely making a transition from legacy email and portal applications as the places we do our work, to smart devices and Web 2.0 technologies.  Back to the phone comparisons, it’s not about picking a winner – it’s about realizing what the customers want, and that is quick, fast, easy and on their device.

Meaningful Experiences in Web 2.0

I’ve complained about information overload before.  As we get into lists and networks and blogs, and microblogs, we subject ourselves to information from increasingly diverse sources.  Some of these are annoying sources that we wish we didn’t have anything to do with (your nephew’s farmville updates on Facebook), while others are truly valuable if you could just keep up with them (that HR analyst that has 50 posts per day on Twitter).

I’ve also written before that I think that the value I provide will never be on Twitter – I honestly just can’t stay on top of it that often considering the work that I do for clients.  However, I do feel that I can provide value to my readership with longer, more thoughtful pieces like this on a more mainstream and “traditional” blog.  Personally, I basically have 4 sources of information and the same 4 sources that I use to connect with the Web 2.0 world.  These are this blog, systematicHR, Facebook, LinkedIn and Twitter.  The first two I use every day, the last two I use very little.

The point of this is that I have decided that it’s impossible to have any sort of a meaningful experience if I’m spread too thin across 10 different networks.  Yes, I’m registered on all sorts of social media accounts that I never check.

As an employee, you need to determine what the method is going to be right for you (facebook once a day? twittter 50 times a day?)  You also need to figure out what your goals are for participation.  Is it about career?  Is it about networking? Getting on the cutting edge?  Is it about increasing your own personal effectiveness or a team’s effectiveness?

The great thing about information overload is there is a solution,  While information overload is problematic for just about everyone, the problem is also the solution.  If you have many choices about where to go for information, then you have a more manageable environment.  People need to apply their time spent in networks with more thoughtfulness.

This is actually where it gets tricky.  We as an HR organization can help employees decipher what type of participation they should be having based on their habits and goals.  However, determining the overall set of Web 2.0 technologies to deploy within our organizations that will support the many types of interactions that are possible while not limiting the possibilities is a tight rope to walk.  The organization has to determine what the best methods are without restricting too many modes where people will find meaningful experiences.

You might automatically say that microblogging will never happen, but what about microblogging the town hall for people who could not attend the event live?  How about the opportunities to constantly update the project team in the week right before a major implementation go-live?  Based on the goals of employees, the goals of the organization and the culture that you operate in, there probably is a good answer for a set of Web 2.0 technologies you should deploy.  The answer however, is less around how you want employees to collaborate, and more about how you create meaningful experiences for those employees.  Without meaningful experiences, a collaboration environment never takes off.

HRs Correlation to Business

When we talk about the impact of HR activities on our business’s operational production, we don’t usually think that there is a direct correlation.  In fact, some of our activities probably do have a relatively high correlation effect on business outcomes that we might be surprised about.  In defining correlation, we usually think about it on a –1 to +1 scale, with –1 being negatively correlated, 0 being no correlation, and 1 being positively correlated.  From an HR point of view, if we were able to show that there is a positive correlation from our activities to the business outcomes, that would be a pretty big win.

Personally, I don’t have any metrics since I don’t work in your organizations with your data.  However, with modern business intelligence tools and statistical analysis, it’s certainly possible to discover how our HR activities are impacting business outcomes on a day to day basis.

Take a couple examples.  We know that things like high employee engagement leads to increased productivity, but we don’t always have great metrics around it.  Sure, we can go to some industry survey that points to a #% increase for every point that the engagement surveys go up, but that is an industry survey, not our own numbers.  Especially in larger organizations, we should be ale to continue this analysis and localize it to our own companies.  Similarly, we should be able to link succession planning efforts to actual mobility to actual results.  Hopefully we’d be showing that our efforts in promoting executives internally is resulting in better business leadership, but if we showed a negative correlation here, that means that our development activities are lagging the marketplace and we might be better served getting execs from the external market while we redefine our executive development programs.

I’ll take a more concrete example.  Lets say we’re trying to measure manager productivity.  We might simplify an equation that looks something like this:

Manager Unit Productivity = High Talent Development Activity / (Low Recruiting Activity + Low Administrative Burden)

If this is true, we should be able to show a correlation between the amount of time a manager spends on development activities with her employees to increased productivity over time.  Also expressed in the equation, recruiting activity should also be negatively correlated to the manager’s team performance.  If the manager is spending less time recruiting, that means she is keeping employees longer, and spending more time developing those employees – therefore any time spent recruiting is bad for productivity.

I’m not saying that any of these things are the right measures or the right equations.  What I am saying is that we now have the tools to prove our impact on business outcomes, and we should not be wasting these analytical resources on the same old metrics and the newfangled dashboards.  Instead, we should be investing in real business intelligence, proving our case and our value, and understanding what we can do better.

Which Version of Reality?

I’m an advocate of reality.  It’s nice when you can look at something and immediately recognize it.  In most cases, a reflection of reality is quite obvious.  When I say the word “chair” each and every reader automatically has a concept generate in their heads – some with an armchair, some with an office chair, some with a wood dining room table chair, etc.  Everyone immediately thinks of a chair.  The problem with this is that one persons chair has fabric, another is made of wood, someone else might be thinking plastic or the nylon that makes up modern office furniture.  This is actually one of the reasons why stereotypes and words can be so offensive.  In certain derogatory words, while we all subscribe to different versions of reality, some words take on realities that are predominantly negative and untrue.

From a systems perspective, we need to be particularly careful about defining realities.  Incorrectly defining reality can be problematic not only to the end user and customer audiences, but it can be problematic for downstream systems as well.  Take for example, the way that you build the organization structure in your core HR system.  There are various ways to represent reality.  For starters, there is a definitive reason there is NEVER a single hierarchy.  Financial hierarchies never really match that well to the way HR needs to create supervisor relationships.  Some of us have matrixed organizations that are especially hard to depict.  Some of us have workflow and approval processes that differ between core HR transactions, performance, compensation and succession.  Who pays for a department organizationally may not be the direct supervisor relationship.

When we chose an organizational hierarchy most HR products (not all) embed organization structure, manager structure, and security structure all in the same hierarchy.  While there might be some flexibility, your choices of using a cost structure, an operational structure, a manager structure or anything else becomes critical in how the rest of the world is going to see your company.

Your core HRMS, whether you like it or not, is the system of record for almost all of your employee data.  This means that any downstream interfaces will likely receive some hierarchy information with the employee data, and if those downstream systems don’t realize that you used (example) a manager hierarchy that is not at all reflective of the operational structure, they are going to make the wrong assumptions in setting up how they utilize that employee data.

Reality is pretty important, but we need to recognize that there are multiple versions of reality going on.  HR’s reality is not necessarily how managers perceive the organization, and it’s certainly not how finance sees it.  The solution is simple though, we just need to first recognize what our assumptions were, and second publish those assumptions very specifically.