How to Build a Data-Driven Culture in HR?
“Digital transformation” is a phrase we are all familiar with. Practically every organisation is going through their own - and if they were slow to move before the pandemic, they’ve certainly been thrown in the deep end of digital now.
Central to confronting digital transformation, is the need to confront an onslaught of data and make sense of it. Data analytics, big data and AI are types of projects that virtually every organisation is investing in. In the 2020 edition of an annual survey by NewVantage Partners on the adoption of big data and AI, virtually all respondents (98.8%) are doing just that. However, over 90% of respondents said the challenges to becoming data-driven are in people, process and culture - not technology.
The idea that digital transformation and culture go hand-in-hand is another notion that we are familiar with – even if it’s not being embraced. Research by Deloitte on becoming an insight-driven organisation lays out a compelling argument that business success is inextricably linked to a data-driven culture: Organisations with the strongest cultural orientation to data-driven insights and decision-making were twice as likely to have significantly exceeded business goals.
Whilst human change is certainly more challenging to achieve than technical change, it is an unavoidable process for organisations to undergo to become truly data-driven, as the 21st Century mandates.
HR is presented with the very same challenge as the department undergoes a shift to becoming data-driven and digital. In our own research at Insight222, conducted in 2019, 82% of respondents across 60 countries strongly agreed that people analytics drives business value, yet only 23% strongly agree that their company is building a data-driven culture in HR.
What Culture is… and what it is not
We dedicate the rest of this article to how to build a data culture in HR. To be clear – this is not a discussion on how to get started in People Analytics (though we have that for you in our course: ‘An Introduction to People Analytics’). Making this distinction is important because a discussion on data culture exclusively requires putting five other aspects of successful HR analytics adoption to one side. The boundaries between these six dimensions too often blur – a lack of focus exclusively on culture is just one reason why organisations are finding cultural change difficult to achieve. So, before we launch into how to build a data culture in HR, let’s contextualise the definition of culture within the five other dimensions that impact the successful adoption of analytics in HR
Source: myHRfuture
Capability – analytics skills and knowledge
Confidence – feelings toward analytics
Culture – the organisation’s underlying beliefs, assumptions and values toward analytics and ways of interacting
Mindset – attitude, opinions and ways of thinking for analytics
Training – interventions to support analytical development
Organisation – the formal structures to support analytics
Let’s break out the four components of culture from the eyes of the HR professional:
Beliefs
HR analytics is valuable
The future of my profession depends on becoming more data-driven and digital
OR
HR has been doing just fine until now, I don’t think there’s any need to change
Assumptions
Analytics in HR is just for techies, I don’t have to worry about it
I will never be able to upskill into a data analyst so there’s no point me trying to become more data-driven
It might not be worth the time and resources needed to invest in HR analytics
HR analytics is really difficult to implement
Values
Operationally minded
Care about people
Qualitative evidence over quantitative evidence
Evidence-driven
Ways of interacting
Data-driven conversations… or not
Data-driven decision-making… or not
An interesting case study looking exclusively at culture shift, comes from Allianz Benelux - taken from an interview with Sudaman Thoppan Mahanchandralal, Chief Data Officer. To design, implement and sustain a data culture Sudaman focuses on habits and shifting habits. He defines culture as a collection of common habits (or, to use our terminology, ways of interacting based on beliefs, assumptions and values).
“It all starts from a proper definition of the culture a company wants to build to deliver upon their customer needs. Once it is clear how the current culture deviates from that aspired state, organisations can start designing and prioritising their culture journey, including the most appropriate timing of different interventions.”
How to build a data-driven culture in HR
Based on many conversations with HR and people analytics leaders as well as our own research, we present the following ideas to help you build a data-driven culture in your HR organisation.
1. Measure the existing culture. More specifically, measure the beliefs, assumptions and values of the HR community as well as their ways of interacting. Take a look at our article dedicated to measuring organisational culture to understand the different types of survey at your disposal.
Tailor the rest of your efforts based on the results from this measurement. There’s no point spending time explaining the value of HR analytics if beliefs and assumptions about the value are already progressive, for example. So, tailor the following suggestions to your own results.
Interested in learning more about building a data-driven culture in HR? Take a look at our online HR certifications on myHRfuture
It’s also important to identify pockets of the population who are more data-driven than others – save those results for point 6 below!
2. Prove the value of HR analytics. This will help shift the beliefs of your HR population, if there appears to be an underlying reluctance.
a. Use examples from other parts of the business that have undergone their own shift to being data-driven, e.g. marketing.
b. Use secondary research and case studies to prove the value.
c. Inspire! Engage with a People Analytics expert, who could speak to your team over a workshop or social session to share insights and experience from the field.
3. Get real buy-in by tailoring comms to different HR personas. This is how you will start to shift the assumptions around HR analytics. Remember - not every HR professional has to become a data scientist in order to survive HR’s digital transformation.
a. Segment respondents using your initial measurement exercise and tailor communications accordingly.
b. To effectively prove “what’s in it for them” and get buy-in, you must communicate differently to those who show a keenness for upskilling into data-focused roles vs. those who understand a certain level of understanding and vocabulary is required, but don’t wish to become full-blown analysts, for example.
4. Make interacting with data the norm. A top down approach will help embed the new culture. Leadership should exemplify the ways of interacting that they hope to emulate amongst the HR community.
a. Ensure sponsorship of your cultural change and senior buy-in by directing all future comms to be data-driven.
5. Showcase advocates who exemplify a data-driven culture. Another key group who will help embed the new culture are those identified (step 1) as already having beliefs, assumptions and values that are positive towards data and analytics in HR.
a. Identify your advocates network (and communicate your selection process in a data-driven way!)
b. Set the advocates up with accelerated learning and development so they can become go-to colleagues for discussion, advice and inspiration.
6. Practice patience. Culture change doesn’t happen overnight. Enacting human change isn’t like implementing a new system and switching it on. We spoke with Patrick Coolen about culture change in HR at ABN AMRO, and he said, “sometimes it simply takes a few years”.
a. Ensure that key stakeholders understand that cultural change requires sustained investment.
b. Consider exploring tools like nudging that can help shift behaviours.
c. Monitor ways of interacting to measure success and communicate progress.
Final thought and one last case study
Culture and digital transformation go hand-in-hand. Your HR organisation cannot expect to become data-driven by implementing new technology solutions alone. There is work to be done to encourage data-driven ways of interacting, by shifting the values, beliefs and assumptions of your HR colleagues.
We had the privilege to catch up with Rosa Lee (SVP, HR at Bosch) at the Insight222 annual executive retreat in 2018 and ask her about her experience of building a data-driven culture in HR at Bosch. Check out the video of her interview below as well as the transcript from our discussion. For more videos on the future of HR, don’t forget to subscribe to our YouTube channel.
myHRfuture: How do you convince business leaders of the importance of people analytics at Bosch?
Rosa Lee: I think with business leaders actually it's easy to convince them that they want it. Business leaders are used to data-driven insights for all aspects of their businesses and for evaluating business performance. You have to realise and show that decisions can be demonstrated by data. So for us it's not difficult to convince business leaders with data. Once they understand it, they ask for it and they want it.
myHRfuture: How do you convince the rest of HR that people analytics is important?
Rosa Lee: I think convincing HR is comparatively more difficult than convincing business leaders because HR is used to managing the people side with qualitative things but not really quantitative things, so most of HR does not have a data background and data-driven decision-making is not a common practice.
In the past, we really needed to show why, what's the benefit of data or insights from data that can help HR perform a higher strategic business partnership? And then once they were convinced it's really about helping them to understand how can we enable them and create a mindset change to really drive a data-driven decision process?
myHRfuture: How do you use people analytics to drive change at Bosch?
Rosa Lee: Implementing people analytics as part of a digitisation strategy is a change for the HR community at Bosch. So, just like for all other change initiatives, you really need to embrace a small portion of early adopters and they can positively influence the people in the norm of the adoption bell curve and also those that show resistance. That's why we try to identify people who really have a passion for digital HR and people analytics. Then we form a community and we apply design thinking and a UX-driven approach to identify pain points via our scrum and UX-based process. Then, when we focus on the things they want to focus on, they get even more energised or stimulated and that's the process we try to use to drive people analytics as a change initiative in Bosch.
myHRfuture: As a global head of HR, where do you think people analytics should sit within the HR organisation?
Rosa Lee: Again, people analytics is a new change initiative, and like all change initiatives, in the beginning it has to be positioned to be highly visible, highly important, and highly impactful. That's why in the beginning we have positioned people analytics at Bosch to report directly to the three HR board members. I think once our HR business partners not only have the mindset but also the (analytics) capabilities, and when the changes are really implemented, then maybe we won't need a big team in headquarters. Maybe eventually it can be embedded much more on the business side, but in the beginning we really have to position it to be highly visible.
Organisations are becoming increasingly interested in understanding their company culture and culture is becoming a top priority for CHROs, but how do you drive culture and mindset change? In our skillbooster certification on myHRfuture Sonia Allinson-Penny empowers you to build the technical skills and knowledge you need to be able to drive cultural change in a digital era, creating a sense of purpose and successfully bring your employees on the change journey. Learning in the myHRfuture academy is so much more than just HR training and certifications, with over 600+ pieces of expertly curated content, structured learning pathways and a thriving community of HR practitioners to collaborate and problem solve with, however you like to learn we’ve got you covered.
ABOUT THE AUTHOR
Carolin Styr is the Research Director at Insight222. She is a thought-leader, researcher and writer on people analytics and the future of HR. Prior to joining Insight222, she worked at the Center for the Future of Work where she was an advisor and in-demand speaker on topics related to the future of work. She has also held roles in digital services and transformation consulting at Cognizant. Contact Caroline at caroline.styr@insight222.com