How to set up your people analytics function?
No, you don't need to be a huge company
Hey, Friends,
So, this question comes up often:
How do I set up people analytics for the first time?
Alternatively, my CEO is asking me to build an operational dashboard.
In essence, these are the same questions but at different company stages. The former is more mature. The latter is young.
But you are trying to figure out how to use data to manage your business more effectively.
And that is People Analytics!!!
Btw, if you have not seen my Practical People Analytics Certificate course on how to leverage data for strategic insights, check it out here:
This comprehensive Practical People Analytics Certificate will teach you everything you need to use people data to build HR strategy, getting you from zero to hero in just a few short hours.
Back to the letter now!
All!
I strongly advise you to build a people analytics function from the get-go. Sure, it might be just a few people at first. Sure, you might not have fancy tech.
But you will achieve two things by starting early:
You will develop a proper mindset at the company to use people data well to drive outcomes for both your business and your employees
You will establish a foundation for proper data storage and use, alleviating the pain of bad data in the future
At the helm of building a function is, of course, strategy. And that is exactly what we will talk about:
Define your why
Set strategy
Create a management system
Create a people system
Create a marketing system
Let’s go!
Define your why
As with any business or personal strategy, you have to figure out why you are introducing people analytics to the business.
You can say better employee engagement, revenue and sales, and cost-effectiveness.
And all of these are valid reasons.
However, if you think beyond them, another layer is a bit more personal to you as a leader. It could be that you want to learn a new skill that is respected in the industry, you are looking for a challenge, or you are looking to connect with other operational leaders at the company.
Every one of us has our personal why.
And while you may not need to announce it to every one to hear. It is good to remember what you personally are trying to achieve.
Why is this important?
Well, your function (and any organization, for that matter) directly reflects its leader. This is exactly why we see the founder's personality etch through all of the hallways of your company. They create the company in their own image.
Sometimes it’s great. Other times, it is a nightmare.
And the more you understand your motivations, the more you will know what the function will look like. They will drive the outcome you want.
Assignment:
Spend a few hours reflecting on why you want to build a people analytics function.
Set Strategy
Now that you have connected with your inner demons, next comes the strategy.
Strategy is a composition of choices around what you will and will not do in your people analytics function.
At least for the next year.
Side note:
I don’t like a 10-year strategy: no one can predict a pandemic, a war, and the emergence of AI, after all. Our strategy needs to be focused on a short time frame of 1-3 years.
Here, you can use any framework to define your 1-page strategy. Here are two of my favourite frameworks:
Roger Martin’s Strategy Cascade: It will help you define where you play and how you will win, including the capabilities you need to win. This highly organized framework has been a proven beacon for many companies, including P&G and Deloitte.
Patrick Lencioni’s Advantage: Focuses on what will differentiate you from the competition and defines short-term goals, actions, and desired outcomes. Super useful to create clarity fast.
Either one will work as it defines your playing field and clearly shows how you will win. Here is an example—click on the image for a template.
Assignment:
Spend a few days defining your strategy.
Then, validate it with your team.
Create a management system.
And I really mean the system here.
Usually, when people think about management, they think about the best manager they can hire to help them succeed. Who has done this before?
But here is a problem with this.
Someone who has done this before will not always know what to do now.
In fact, they might bring something outdated from their previous (and sometimes, legacy) organization to you, which might not fit at all.
You need to build the system for your function.
Do not copy someone else.
Hence, start with your strategy and define what you need to get you to your end goal, including the organizational chart with all the roles and processes by which you will develop the end outcome.
And, when thinking about the processes, don’t forget to create a process the lowest skill employee can operate.
Wait, what?
If you build for the lowest-skill employee, you must create a reliable system that can operate effectively. And on top of that, you are eliminating the fear of the employee leaving as you can replace them easily with other talented individuals.
Yes, it’s a lot to do at first. Why not just start with a dashboard?
It is true. You can start with step-by-step solutions.
But the risk you assume is not reaching your vision, “building the plane as you fly it.”
So, spend a few hours thinking through these dynamics. It will pay off in the end. I promise.
Assignment:
Draft your People Analytics Org. Chart
Define the key processes you need in the ideal state
Create a people system.
Focus on who will deliver your work and connect it back to your organizational chart.
Beyond that, add two things:
Building for the role, not the person
Building for motivation
The first rule is simple, well-known, and often forgotten.
Time and again, we try to accommodate our people’s desire for the role versus fulfilling the requirements of the business. This can be seen every time we invent an unnecessary job title.
I know it’s harsh.
But, you must focus on the role, not the person, no matter what. Whenever you focus on the person, you are guided by personal motivations, not what is needed for the business.
Next, build the system as a game for your employees. Make them want to participate in it. And make it fun:
This means constant challenges that your people can achieve.
This means an organizational system where you meet with people continuously.
This means a reward for exceptional delivery.
This means rapid feedback and correction when things are not perfect.
Assignment:
What are you going to use to enforce positive behaviours?
How will you turn the work into a game?
Create a Marketing System
Marketing system? For people analytics?
What?!
Yes, you read correctly. You need a marketing system for people analytics to run a people analytics function successfully.
Why?
Well, suppose no one knows about people analytics, and no one is buying into what you are selling. How can you expect any insight generated by the people analytics function to drive action and change?
The entire function falls apart.
This is why you must know how to market your people analytics system.
To do so, you need to start with the market research:
What do your stakeholders expect to see from you?
What is the format?
What is the frequency?
How can you help them drive action?
Once you know the answers to these questions, you can start building messaging around your function. And this does not mean more promotion.
It means more value to the business.
More communications that have something to say.
More active outreach to become a business partner.
Assignment:
Do market research internally:
What do they expect from you
What are their pain points
Where do they want to get to
What is blocking them
I hope you all found this helpful—special shoutout to Michael E. Gerber for the inspiration for this post!
K
P.S. I know this was a lot—let me know if you want to bounce ideas.
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What metrics should I use?
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