Tag: organizationalbudget

How People Analytics Can Help You Change Process, Culture, and Strategy

It seems like every business is struggling with the concept of transformation. Large incumbents are trying to keep pace with digital upstarts., and even digital native companies born as disruptors know that they need to transform. Take Uber: at only eight years old, it’s already upended the business model of taxis. Now it’s trying to move from a software platform to a robotics lab to build self-driving cars.

And while the number of initiatives that fall under the umbrella of “transformation” is so broad that it can seem meaningless, this breadth is actually one of the defining characteristic that differentiates transformation from ordinary change. A transformation is a whole portfolio of change initiatives that together form an integrated program.

And so a transformation is a system of systems, all made up of the most complex system of all — people. For this reason, organizational transformation is uniquely suited to the analysis, prediction, and experimental research approach of the people analytics field.

People analytics — defined as the use of data about human behavior, relationships and traits to make business decisions — helps to replace decision making based on anecdotal experience, hierarchy and risk avoidance with higher-quality decisions based on data analysis, prediction, and experimental research. In working with several dozen Fortune 500 companies with Microsoft’s Workplace Analytics division, we’ve observed companies using people analytics in three main ways to help understand and drive their transformation efforts.

In core functional or process transformation initiatives — which are often driven by digitization — we’ve seen examples of people analytics being used to measure activities and find embedded expertise. In one example, a people analytics team at a global CPG company was enlisted to help optimize a financial process that took place monthly in every country subsidiary around the world. The diversity of local accounting rules precluded perfect standardization, and the geographic dispersion of the teams made it hard for the transformation group to gather information the way they normally would — in conversation.

In core functional or process transformation initiatives — which are often driven by digitization — we’ve seen examples of people analytics being used to measure activities and find embedded expertise. In one example, a people analytics team at a global CPG company was enlisted to help optimize a financial process that took place monthly in every country subsidiary around the world. The diversity of local accounting rules precluded perfect standardization, and the geographic dispersion of the teams made it hard for the transformation group to gather information the way they normally would — in conversation.

So instead of starting with discovery conversations, people analytics data was used to baseline the time spent on the process in every country, and to map the networks of the people involved. They discovered that one country was 16% percent more efficient than the average of the rest of the countries: they got the same results in 71 fewer person-hours per month and with 40 fewer people involved each month.

The people analytics team was surprised — as was finance team in that country, which had no reason to benchmark themselves against other countries and had no idea that they were such a bright spot. The transformation office approached the country finance leaders with their findings and made them partners in process improvement for the rest of the subsidiaries.

It’s unlikely the CPG company would have been able to recognize and replicate these bright spots if they had undertaken transformation with a top-down approach. And, perhaps more importantly, it involved and engaged the people on the ground who had unwittingly discovered a better way of doing things.

In bottoms-up cultural transformation initiatives, the how things are done is equally or more important than what is done. Feedback loops and other methods of data-driven storytelling are our favorite way that people analytics makes culture transformation happen. Often times, facts can change the conversation from tired head-nodding to curiosity. One people analytics team in an engineering company was struggling to help develop the company’s managers, for example. Managers often perpetuated a “sink or swim” culture that didn’t fit the company’s aspirations to be an inclusive, humane workplace.

The data analysis found that teams whose managers spent at least 16 minutes of one-on-one time with each direct per week had 30% percent more engaged direct reports than the average manager, who spent just 9 minutes per week with directs. When they brought that data-driven story to the front lines, suddenly a platitude was transformed into a useful benchmark that got the attention of managers. In this way, data storytelling is a lightweight way to build trust among stakeholders and bring behavioral science to culture transformation.

Top-down strategic transformation is often made necessary by market and technology factors outside the company, but here people analytics is a critical factor for execution. A people analytics team can serve as an instrument panel of sorts to track resources, boundaries, capacity, time use, networks, skill sets, performance, and mindsets that can help pinpoint where change is possible and can measure what happens when you try it.

One people analytics team at a financial services company was trying to help the CEO manage growth while he worked to instill a new culture in which departments would be asked to run leaner and more competitive in the market – “scrappy” and “hungry” were terms that often came up. As the transformation accelerated, teams were asked to do more with less, generate more data, and make decisions faster. Amid this, department leaders began to hear anecdotes about burnout and change fatigue and questioned whether the pace was sustainable.

To address this, the people analytics team provided their CEO with a dashboard showing the number of hours that knowledge workers were active for in different teams. When an entire team is over-utilized, he knows they can’t handle more change, while under- or unevenly utilized teams might be more receptive. He can also slice the dashboard by tenure, to learn whether recent hires have been effectively onboarded before approving new hire requests to absorb extra work.

As organizations increasingly look to data to help them in their transformation efforts, it’s important to remember that this doesn’t just mean having more data or better charts. It’s about mastering the organizational muscle of using data to make better decisions; to hypothesize, experiment, measure and adapt. It’s not easy. But through careful collection and analysis of the right data, a major transformation can be a little less daunting – and hopefully a little more successful.

By: Chantrelle Nielsen & Natalie McCullough

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AIHR – Academy to Innovate HR

What is People Analytics and how is it different from HR Analytics, Workforce Analytics, or Talent Analytics? What has made it so popular all of a sudden and why should you be excited about it? What is the ROI of People Analytics? These are the questions that will be answered in this video!

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How To Budget In Uncertain Times

It’s that time of the year again… time to create next year’s budget. Budgeting in the best of times is difficult, and now it’s even more tricky with the uncertainty of the pandemic, and more. It’s time to take a new approach. 

So before you dive too deeply into the budget tar pit, here are my key takeaways from discussions with my executive coaching clients: 

1.Rethink Budgeting To Focus On Outcomes. Why do we budget? The same reason we do any type of planning—it’s an attempt to control, predict, effectively allocate resources, maximize growth, profits and earnings per share, ensure stability and certainty. Yet in today’s world of relentless and rapid change, we must be nimble, a collective (no more silo-ing departments and then punishing poor performers that usually have performance problems due to failed dependencies/contingencies with other departments!) And have you noticed that things always change? And then, the vast majority of the time, the plan does too. But in today’s new world are we measuring the most impactful outcomes? Here’s what our most financially and culturally effective clients are considering as updated outcomes they want to see in a healthy business:   

a.Customer experience and engagement 

b.Employee experience and engagement (this include cross-functional, inter-departmental effectiveness and collaboration) 

c. Ecosystem experience and engagement (your strategic partners, resellers, other partnerships are here) 

d. Sustained profitable growth (we’re ensuring we don’t rest on our laurels here) 

e. Sustained profitable operational effectiveness (we’re watching expenses here) 

f. Sustained innovation (we’re keeping our competitive edge here) 

g. Departmental and organizational Key Performance Indicators (KPIs) to keep everyone focused 

… all of which help us to predict the ultimately unpredictable, because people are creating the results anyway. That’s why we measure their outcomes first. 

2. Set Strategic Guidelines For Financial Focus. Like Core Values, which help us make behavioral decisions in the heat of battle, Strategic Guidelines help us make effective decisions when the grenades are flying, when the rug has been pulled out from under us, when supply chains have dried up, when currencies have crashed, when competitors have blindsided us, when the calamity of the day has occurred. When we focus on Strategic Guidelines (which you’ll draw from the bulleted list in item #1 above), we will be better equipped to allocate financial resources in line with what we need to achieve as an organization. Then we’ll be more likely to consider cross-functional dependencies and contingencies and create effective (and not siloed) departmental budgets.

Doing an outcome frame for each objective in item #1 above will help you ask the most appropriate questions to uncover what the priorities are, the appropriate allocation, what the business needs versus what is sexy/compelling/a bright shiny object, and more. Here are the outcome frame questions: 

· What would we like? (tangible outcome we can create and maintain) 

What will having that do for us? (specific benefits and how we’ll feel, how our key constituents will benefit) 

·  How will we know when we have it? (specific measurable proof) 

·   What of value might we risk/lose in order to get it? (what is the “cost” of getting the outcome we want? What side effects may occur?) 

·      When, where, with whom would we like this outcome? (time, context, key players) 

·      What are our next steps? (key planning steps here) 

The Outcome Frame sheds light on what will truly move the needle  for our business. It helps my clients see into their pet projects, their assumptions, the costs, and they make much better decisions  and avoid caving to unconscious bias too. For example a few years ago I was helping a client with their annual planning. They had a distribution partnership with an enormous Big Box retailer that, although impressive on their web site, was high maintenance and very low profit. It was clear that the business would be better off without this partnership, so after some agonizing they terminated it. This led to my client having the time/energy to secure 2 new partnerships that were far less work and far more profitable. The Outcome Frame exposed this. 

The Net-Net 

·      Create budgets based on the outcomes you want—they’ll be more likely to be achieved 

genesis

·      Ensure all departments are aligned with the overall strategic guidelines so everyone is “in it together”—it’s “our” overall budget, not coveted by a certain department 

·      Learn to love change and to zoom out to track how the business is doing at a high level, then zoom in to the details 

How’s your budgeting going? Follow me on Twitter. Check out my website.

Christine Comaford

I’ve lived many lives: serial entrepreneur, technology and CEO advisor, venture capitalist, engineer in the early days of Microsoft. Today I help CEOs in rapid growth and turnaround scenarios to achieve previously unheard of results through seeing into their blind spots, aligning their team and board, changing challenging behaviors, increasing team accountability and execution. Some call me a business strategist, some call me an executive coach.

 Christine Comaford

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Critics: 

Budgeting is the process of creating a plan to spend your money. This spending plan is called a budget. Creating this spending plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. Budgeting is simply balancing your expenses with your income.
Performance Based Budgeting  attempts to solve decision making problems based on a programs ability  to convert inputs to outputs and/or use inputs to affect certain  outcomes. whatever Performance may be judged by a certain program's  ability to meet certain objectives that contribute to a more abstract  goal as calculated by that program's ability to use resources (or  inputs) efficiently—by linking inputs to outputs—and/or effectively—by  linking inputs to outcomes. A decision making—or allocation of scarce  resources—problem is solved by determining which project maximizes  efficiency and efficacy.

 Zero-based budgeting  is a response to an incremental decision making process whereby the  budget of a given fiscal year (FY) is largely decided upon by the  existing budget of FY-1. In contrast to incrementalism,  the allocation of scarce resources—funding—is determined from a  zero-sum accounting method. In government, each function of a  department's section proposes certain objectives that relate to some  goal the section could achieve if allocated x dollars.
 Flexible Freeze is a budgeting approach pioneered by  President George H. W. Bush as a means to cut government spending. Under  this approach, certain programs would be affected by changes in  population growth and inflation.

 Program Assessment Rating Tool (P.A.R.T.)  is an instrument developed by the United States OMB to measure and  assess the effectiveness of federal programs that review the program’s  purpose and design, strategic planning, program management, and program  results and accountability. The scores are rated from effective (ranging  between 85 and 100 points), moderately affective (70-84 points),  adequate (50-69 points), and ineffective (0-49 points).

 Priority Based Budgeting is a response to poor economic  conditions.  As opposed to incremental budgeting, where resource  allocation is determined based on marginal shifts in costs, priority  based budgeting fixes the amount of governmental resources and then  allocates resources across the various programs.  The programs receive  their allocation based on their priority; priorities may include safe  and secure communities, health, education, and community development  among others.  Outcome assessment then determines the efficacy of the  programs.  Although this approach is pro-democratic, critics suggest the  administration of this process is extremely difficult.
See also
Budget
 Budget process
 Budget theory
 Constitutional economics
 Political economy
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