February 22, 2012
Jac Fitz-enz is widely
regarded as the father of human capital strategic analysis and measurement. He founded the famous Saratoga Institute and published the first HR metrics in 1978 and the first international HR benchmarks in 1985. HR World cited him as one of the top five “HR Management Gurus,” IHRIM gave him its Chairman’s Award for innovation and SHRM chose him as one of the persons in the 20th Century who “significantly changed what HR does and how it does it.” He has authored 12 books, over 350 articles and trained 90,000 managers in 46 countries on strategic management and measurement. His 2010 book titled The New HR Analytics, introduced predictive analytics to HR. Dr. Jac holds degrees from Notre Dame (BA), San Francisco State (MA) and USC (Ph.D.) in organizational communications.
Predictive analytics is not the answer to important business questions. It is a tool set that helps you understand what is happening, where you are going, how well you have done your job to date and what you must do to achieve desired future outcomes.
If the issue is a simple, localized problem you can focus just on the variables surrounding that problem, apply analytic knowledge and tools and solve the problem. But if it is a strategic problem or opportunity you need to uncover the often hidden causes before you throw statistical analysis at it.
Predictive analytics rests on two pillars. One is a logical framework of inquiry. The basic questions are:
a. What is going on in the external marketplace that is affecting or will affect the way you manage your human capital (talent)?
b. What is going on inside your organization that is affecting or will affect the way you manage your human capital (talent)?
We provide an analytic framework to thoroughly review market forces such as the economy, competition, regulations, technology, customers and others. Then we assess your organization’s strengths and weaknesses around vision, strategy, brand, leadership, culture and others as they interact with market forces and impact your goals. Although most everyone claims to do this our experience is that in the rush to solutions initial analysis gives way prematurely to unsupported biased viewpoints. This practice has severely injured and even killed market leading companies. Think Circuit City, Woolworths, DEC, Blockbuster, Kodak, Borders Books; not to mention giants such as US Steel and General Motors. They were all devastated by flawed market and company analysis.
The second supporting column is a combination of statistical analysis aided by computer technology. These help you analyze the qualitative and quantitative data you collected above. Improvement initiatives then fall into one of three levels of organizational management: efficiency, effectiveness or sustainability. Predictive analysis helps you decide which actions will yield the optimal return on investment.
Organizations have resources (the things you own) and processes (the things you do). Predictive analytics reveals the connections among resources and processes applied at what point in contact with which customers will yield the greatest advantage. Improving specified people attitudes, skills and knowledge leads to improvements in products and or services that make for happier customers who spend more, return again and refer others to you. In the end, you enjoy financial and market share gains. See Figure 1.
Figure 1. HC – Business Connections
Remember, the prime question is only partly about talent. It must include vision, strategy, brand, culture and goals of your enterprise. Clearly and simply stated it is;
“What must our organization do well in order to maintain or enhance our market position?”
Predictive analytics help you answer that question by leading you in fully understanding the market and your company.