Thomas OtterThough your balance-sheet’s a model of what balance-sheet should be, Typed and ruled with great precision in a type that all can see;
Though the grouping of the assets is commendable and clear,
And the details which are given more than usually appear;
Though investments have been valued at the sale price of the day,
And the auditor’s certificate shows everything O.K.;
One asset is omitted – and its worth I want to know,
The asset is the value of the men (people) who run the show.
Bowman, Archibald 1938. “Reporting on the Corporate Investment” Journal of Accountancy, May 1938 p. 39
This one of my favourite business related quotes. I’ve quoted it many times, but I figured it is well worth repeating here. I’m planning to use it in Vienna tomorrow when I talk about workforce analytics.
And now for my little Monday rant.
It is high time that HR analytics moved up a gear. Too many HR leaders are sitting on a pile of data and doing very little with it. Also I would like to see a lot more collaboration between HR and Finance on management measurement.
Currently both disciplines talk a lot about performance management, and even the competition for ownership of the acronyms is fierce. Is EPM Employee Performance Management or Enterprise Performance Management? Surely it is hard to do one without the other?
Yet I don’t see much collaboration, either from the vendors or departments, but I would love to be corrected.
Category: HCM HR finance measurement Tags: analytics, Bowman, finance, HR, measurement
5 responses so far ↓
1 Andrew Jacobus February 23, 2009 at 12:10 pm
Thomas, I agree that HR can do more, especially in the collaboration realm, but I also feel like there are many organizations already doing what you describe. At Infohrm, we do see organizations growing their HR analytical capabilities, but, admittedly, it can sometimes be quite a process, especially for larger, more well-established firms.
We have all heard how difficult it can be to measure productivity for non-revenue generating roles. But firms can – and should – still work to establish standard productivity definitions, improve processes for data tracking so more valuable workforce information is captured and tied to overall business data, and perform the complex analyses that provide insight into which Talent Management initiatives and programs have a causal effect on the financial performance of a firm.
One approach HR can take to do more with the data is to try to include Finance, Ops, executives, and line management in the front-end discussions on workforce issues to drive the workforce analysis to be performed, rather than take marching orders. This by nature means HR needs to ask the right questions, moving from headcount and turnover-based queries to more complex ideas like, “How can we optimize our retention and leadership development through career path management?” and “What would be the long-term financial impact of these suggested changes to onboarding and performance management processes?” In the former example, innovative firms are using more advanced talent flow analytics and visualization techniques like Markov modeling; in the latter, they can use sophisticated “what-if?” financial scenario modeling to the employee skills level of detail. These examples, and other analytics like them, should be –and often are – enabled by pretty powerful technology.
A natural implication (outcome?) of those discussions is integrating workforce data with information from Finance, Operations, Marketing, and Customer databases – not to mention external information, such as labor, market, and social networking data. The approach above also reinforces the imperative of presenting the insights to those responsible for actually managing the workforce in ways that lead to successful action on the back end of the analytical processes. Although not universal, this is happening much more now than it was five years ago, and the cases we’ve seen show some surprisingly strong impact on bottom lines.
2 Accounting’s big problem according to Archibald. « Accounting February 23, 2009 at 12:15 pm
[...] Read the original: Accounting’s big problem accordin­… [...]
3 Accounting’s big problem according to Archibald. February 23, 2009 at 1:53 pm
[...] The rest is here: Accounting’s big problem accordi… [...]
4 Infohrm’s Weblog February 23, 2009 at 1:58 pm
[...] 23, 2009 Posted by acjacobus in HCM. trackback Thomas Otter, in his Gartner blog this morning, quoted Archibald Bowman’s still-true 1938 poem bemoaning the lack of the biggest asset [...]
5 Joanne Bintliff-Ritchie March 1, 2009 at 6:23 am
Thomas, I love the quote. You are so right about HR drowning in data. A bit like “water, water everywhere, and not a drop to drink”. We encourage our clients to think of workforce analytics in phases, a journey to full talent measurement capability. Most still have difficulty with basic reporting. It starts with data integration. Single platforms are an anomaly, and a solution without a seeker. Most companies want the flexibility to select the tool that fits each process best – neither ERPs nor the more recent talent managment suites can deliver on this. And sometimes the best tool is a simple Access data base. Once the data is integrated ajtool like Workforce Insight can help HR produce the reporting, metrics and analytics that can show the impacts that your workforce – employees and others – has on business outcomes and help you model and predict future impacts. If only we had started our journey in 1938.