The Possible Future of People Analytics

Cole: Max, I’ve got a few things I want to talk to you about today. So one of the things that I’ve been loosely doing over the last few months is trying to create a people analytics genealogy, like who were the people that were early in this space? And so I really wanted to compliment you and say you’re probably one of the, let’s say, 20 to 50 people who were one of the earliest in this space before Moneyball, before this became a cool thing. And my definition of cool is someone who’s early to something that ends up blowing up and being quite popular. And so it’s not cool to join something like people analytics right now, but it was cool when you joined it. And so I really wanted to compliment you in that space. And I had a question in this regard. So did you have any influence, like a mentor or a peer who guided you to get into people analytics? Or was this just a divine gift that you had that came to you about kind of being in this space so early?

Max: That’s a great question. And the answer is that I came to it formally when a customer or a client came and asked me to do a project involving people and analytics, but it wasn’t people analytics.

Cole: You just put two and two together.

Max: I didn’t know how to solve it, Cole. You know, those of us who’ve done research, we look at problems in a particular way. We’re taught to create a hypothesis and to go and grab a whole lot of data to test that hypothesis. And that’s all I did. And then a couple of years later, people started calling what I was doing “HR analytics,” and then people analytics came along later, and then it went away a little bit from the hypothesis testing and went into “let’s all make dashboards together.” And now I think the hypothesis testing is coming back, but an early influence of mine–this is quite funny–the CIPD, which is kind of the UK’s SHERM, asked me to put their training materials together and stuff was starting to come out. There were a lot of papers, and I worked, I think it was about 2012, with this guy called Alec Levenson.

Cole: Oh, yeah, we know Dr. Alec.

Max: You know the guy. I said, this guy’s writing some pretty cool stuff. And I just started lifting portions of Alec’s stuff.

Cole: Repurposing.

Max: Yeah. But I think that was the very early academic wave of what we call people analytics today. So it’s interesting how people like Alec, who were really leading the field but weren’t known by corporations as people analytics guys, although he was doing the same as me, was doing research work with people data and statistics, he just didn’t label it people analytics, I guess.

Cole: So you brought up things like hypothesis testing. And so when I think of hypothesis testing, I think of someone who has a formal training and education in some sort of scientific discipline. They call it STEM nowadays: science, technology, engineering and math. And I’m wondering, because this is something I’ve been noodling on lately, is there a formal education pathway that’s required from your perspective to get into people analytics, and what from your formal education do you think really equipped you to be such a leader in this space?

Max: Okay. So I think the things that you really need to know if you want to leverage people analytics and data and statistics is I think you have to have a definition of what you mean by people analytics. If we don’t have a common playing field–people analytics is the art of putting up curtains really smoothly. There is a particular set of skills for putting up curtains. And for some people, people analytics is about providing information for management, whereas I think people analytics is about informing decision making, about creating people processes. So I have a really specific definition. People analytics exists to make sure that your company has the best possible workforce to execute its business strategy. That’s it. You are there to create the best workforce capabilities, and you’ll probably do that by designing people processes. And so that is what it’s about. So in that definition, what are the skills that you’re going to need to do that stuff? Well, you’re going to need to know about business strategy, because that was the first thing, you’re enabling that. So you’ve got to know about business strategy.

Max: You’re going to be using evidence-based methods to create the best workforce in the world. That means, I’m guessing you’re going to need to know quantitative methods that link two things together. And in the world of research, when we link two things together, we call that at the most basic level correlation. And on a more sophisticated level, we would move to regression, and then we’d move to multilevel modelling, and moderation and mediation, and all those ways of linking things together. So there’s definitely a knowledge of business; it’s definitely a knowledge of stats. I guess you need to know about talent because if you’re creating the best people process to create the ideal workforce capabilities, you’re going to need to know about talent management and what does a good recruitment process look like, etc. So there’s at least stats, there’s at least business knowledge, there is at least talent knowledge–those are the three things to be an overall person in the field, and within those, there are multiple careers because you could never in a big company do all of those, I don’t think. You headed up an HR function. Did you try and do all of those?

Cole: No, it’s impossible. You’ve got to do it kind of by committee, sometimes. You need people with different backgrounds at different skill sets. In speaking of that, what are some of the competencies that you see that it takes to align stakeholders from multiple functions, either within HR or outside of HR? I know you’ve been doing some work with the civil service. What does it take to bring together those competencies or even to parse them out depending on the context?

Max: When you’re talking about bringing together, now we’re moving away from what is people analytics into structural and organisational structures, etc. There’s no question in my mind that the person who does organisational structures the best, whether it’s people analytics or whether it is the curtain manufacturing plant, bringing all of them together, is kind of leadership lobbying, political influencing-type skills. And so the people who are really good at transformation and aligning, I would say the competencies that you need to work on are going to be your interpersonal skills.

Cole: Well, this brings up a really good point, and I want to dig into this for a second, which is, what is the relationship? Because I have a hypothesis that this is an understudied area in people analytics. What is the relationship from your perspective between optimal organisational design and the role that people analytics can play in that organisational, organisational design in trying to find things like efficiency or whatever the operative metric is for that organisation?

Max: That’s a really good question, and the short answer is I don’t think that people analytics has matured to the point where we can analyse and test what are the best organisational structures workforce-wise. I really hope that we get there, and not to use the Levenson name too much in one interview. I would fully foresee Alec being involved in something because he’s kind of the odd person in that space. So there isn’t a heck of a lot. But to your point, to the extent that people analytics, perhaps more than IT and more than marketing, needs to really get into the executives of the organisation, really needs to be able to sit down and have a great conversation with executives about, what does our strategy look like, and what kind of workforce or productive resources do we need to do it? Do we need a workforce to do it? Do we need robots to do it? Do we automation? Should we be gigging it? Should we be outsourcing it? You need to be able to be the kind of person who’s really comfortable having that kind of conversation.

Cole: Well, I think we talked a little bit about this when you were on my podcast, Max, but maybe we dig into it a little bit further. Are people having these conversations today about, is it a workforce, is it robots, is it automation? And how are those conversations being driven and who’s driving the conversations, more importantly?

Max: I’m really keen to know that as well. I mean, in all the companies I work with, it doesn’t happen. The board kind of do will create a corporate strategy from that. They’ll then allocate budget down. And that budget will already contain so much money for human capital, so much money for automation, etc. I would say as a matter of interest, one of the people in the market at the moment who has the best view on this is Adam Gibson and his book, “Agile Workforce Planning.” People are going to think that we arranged this now. And I don’t even think Adam gives the answer in that book, by the way. I think that he gives you a whole bunch of options and does that horrible thing that educators and people do is tell you that you’ve got to make the final decision.

Cole: But when it’s that critical and analytical thinking that I know you and I have discussed in the past, and I believe–doesn’t Adam work for one of the big consulting firms out there? And so I’m sure he’s done a lot of work in this space.

Max: And he knows this stuff backwards. But Adam would agree strongly with the idea that we really need to push the decision about how many billion are we going to invest in people versus how many billion are we going to invest in technology versus gig versus outsource, etc.? And that decision needs to be made more scientifically. And there’s this area that I know we’ve discussed before called optimisation, linear programmingm and that is kind of what whoever does the strategy, they said this is where we need to be. They need to handle the data to optimisation, which is why I think people analytics is going to evolve into a more generalised resource function and that predictive analytics is going to be complemented by optimisation analytics.

Cole: Well, that’s a bold prediction, Max. When I think about predictions, and not in like the machine learning sense, but in like the talking head, making a big prediction sense, I’m wondering–I always have to think about when I’m making that sort of prediction, the linkage between what the future state would look like and what today is and what would have to happen to make that future state be in place. So if the HR function truly was to transform in that way and be almost solely focussed on predictive and optimisation, what would have to happen between now and then to make that occur?

Max: Well, firstly, it wouldn’t be an HR function anymore. It would be a resource management function. So that function would be saying this is how much effort needs to go into people, this is how much goes into gigs, etc. In order to get to that place, you would need the executive team to create a new function called resource management, which would suck HR into it, and you would have representatives from operations in there, and that would be the resource management. Because if you think about how many parts of an organisation manage resources–human capital is a resource. Operations tend to manage a lot of resources. Facilities manage a lot of resources. Marketing don’t manage the same resources in the same kind of way. IT, also very localised type of resources. So it’s those three. So you would definitely have facilities management, IT, and human resources bound together far more closely into a new type of resource allocation function. I wouldn’t even think of it as management. I think of it as allocation and management.

Cole: That’s a really, really interesting take, Max. Something you mentioned earlier was about, if you were to try to make this type of change, you would need to influence with executives. And I’ve heard you be very complimentary of other people who you admire in the past who are very influential of exectives.

Max: I have my deficits in that are.

Cole: But this is where I’m going to forcefully compliment you again. I think you’re actually very adept at this. And so I’m wondering, is there any wisdom that you can pass along to leaders who are maybe trying to kick off this type of conversation with leaders, and what advice would you give them?

Max: I think that is such a good question. I would say the first thing you need to do is learn a little bit about business and learn to see things through the eyes of that leader. So go and do an Udemy course, a mini-MBA. I’ve got a spreadsheet, which I put onto LinkedIn a couple of months ago. I’m really happy to put it out again, and it’s got a whole curriculum on it. Once you’ve gone through the curriculum, you’ll know quite a bit about business, about how resources are allocated, and then you can go and sit and have a conversation as an HR person or as a people analytics person with an executive and say, “What do you think the biggest issues are in our organisation with regard to the workforce?” And they may talk about retention, for example, but retention isn’t really an outcome for an executive. Retention is like an irritating blip. It’s really about productivity and innovation. Productivity is something technically that you could probably get from robots more reliably than you could get from people. Innovation, on the other hand, if you really were to say to executives, “What do we need from our workforce to make us competitively differentiated?” the number one argument really has got to be the one thing humans can bring to bear that no one else can bring to bear. I’ts got to be innovation. Yet people analytics–when last did you see a good innovation project in people analytics?

Cole: And we can talk about that some other time, Max. First of all, I want to I want to make sure we circle back to the OneDrive document that you put out there. I worked through all of those resources that you put out there, and I think that’s incredibly kind that you’ve done something like this for this community. I’m hoping that People Analytics World can share that in the show notes for anybody who’s interested, because that really is like getting an MBA in people analytics. And I’m wondering maybe we can switch gears here for a second.

Max: Did you really do those?

Cole: Yeah, I worked my way through the whole entire document, and all of your videos, even the ones when you had hair back in the day. So, you know.

Max: That’s a long time ago.

Cole: That’s how, you know, I actually watched it.

Max: I didn’t have cool glasses, though.

Cole: No, you do have cooler glasses now. Well, just in the vein of kind of switching gears and thinking about things along these lines, Max, I think you have so much to give back to the field in addition to what you’ve already given back. And so I’m wondering, is there any career advice that you would give for somebody who’s starting out in people analytics or maybe coming to people analytics from another HR discipline, and where even a person’s career can go after they get into people analytics?

Max: Yeah, that’s a really good question. If you’re coming into people analytics, it’s a big place. You need to know what part of people analytics really turns you on. If you’re kind of 20-something and you don’t really know yet what turns you on, there’s nothing wrong with doing some psychometric testing. And again, we can publish that with the show notes. I have a whole battery of psychometric tests. They are fairly random, fairly arbitrary. Do I look at the results and get weighed to them? No, not really. I use them as conversations with people.

Cole: Well, for just a quick point, Max, for those who don’t know. What is psychometric testing, just for those in the audience who might not know?

Max: It’s a kind of a standardised way of getting answers about you. So it might be preferences that you have that you are really extrovert or you are really introvert. It might be attitudes that you have, that you are conservative or you’re liberal, or you like working with people, and it could be skills like your reasoning abilities, etc. It allows somebody to form a picture of you, and I use those to find out what kind of work in people analytics are you likely to excel at? For example, Cole, you had a really interesting discussion with, what was her name–Amber, a psychologist the other day. And in that, you and Scott and Amber were debating, what is the role of personality testing in coaching? Because as you pointed out, personality by definition is the parts of us that we can’t change. So that is the extroversion and openness to new experiences, neuroticism, agreeableness, conscientiousness, the five things, as opposed to things that you can change, like your presentation skills and the ability to work with other people or to present. Those are changeable as opposed to personality. You said, “Well, what’s the point if you’re coaching somebody of measuring their personality because you can’t do anything with it because you can’t change the person short of electrodes or giving them lots of drugs.”

Cole: Yeah, it’s like their default factory settings.

Max: It’s their default track. You cannot change that. And the answer is, is that personality is most useful for placing people in the right environment and in the right job. So when I get somebody, and I see their personality is they’re really introverted. They do not like dealing with other people very much. They are actually quite disagreeable. I won’t believe the scores, and I’ll have a discussion with them to confirm it, and then I’ll say, “So why are you the ambassador for Nicaragua? That does not sound like a great profile for a Nicaraguan ambassador,” or whatever. “You maybe should not be a business partner. What are your reasoning skills like and your mathematical skills, statistical? Maybe you would be better as a data analyst or a data scientist.” And so it’s that kind of thing. But when you’re in your early twenties, you don’t always know that stuff about yourself. Yeah, even in your late twenties. I don’t think I came to my career until my late thirties. Yeah, that’s true. So having somebody like a coach to sit down and talk through that with you just makes such a difference. So that’s the answer. That’s my process. I put people through a whole bunch of these tests. We talk about them, and then we explore options. So might you be good in that environment? Might you be good in that environment? Oh, okay, you are suited to the environment you’re in. Have you considered doing these courses or those courses to develop yourself, etc.?

Cole: Well, I’m so curious about this, Max. And I hope you actually take this question on, but I have a feeling you’ll just say it depends. I’m wondering, is there an ideal personality profile to be successful in people analytics, or are there ideal profiles in the plural? Or are there any specific personality characteristics that you really think help or contribute to or a force multiplier for people analytics?

Max: So people analytics’ favourite saying, “It’s a big place.” So if you’re more specific–what are the key kinds of roles in people analytics? There is the consulting role where you find out about the business strategy and you elicit information, and to do that you need to be able to read. So there’s one skill, but I guess a lot of people will have that one. But there’s the ability to interview people, and there’s the ability not only to interview senior executives, but there’s the ability to get into their office, because you will not be the only person trying to get to the office. I spoke to an exec interestingly the other day, and I was trying to explain this to a group of consultants. And I said, “Your job is you’ve got to say something that is on her agenda; otherwise, she’s not going to hear you. She’ll smile and nod, etc., but you’ve got to do a lot of homework. So you’ve got to be the kind of person who can influence, get in the door, research the person, enjoy speaking to them, find interest. That’s if you want to be that kind of consultant role.

Cole: Interesting. So are there any tips and tricks that you have for finding what her agenda is in advance? How do you even know, especially if you’re meeting someone for the first time?

Max: Well, a lot of it is kind of known in a large organisation, but really what you want to do is you want to find out what are the key criteria on her performance review. What is she or he going to be marked on? So that’s what I try and get to. And I might get to that circuitously by talking about annual performance reviews. Who needs them? And what I’m really doing is I’m trying to elicit their view on reviews, and then I’ll say, “Well, what are the kinds of things that you would measure a senior person on?” And sooner or later in the conversation, they’ll be telling me what their criteria are. Now, if I can link workforce behaviours to their performance, we have a people analytics project in the offing.

Cole: Well Max, that is some Jedi-mind-trick-level insight. This is why I really enjoy our conversations, because every time we talk, some new nugget like that comes out, and I’m like, “This is brilliant!” So thank you so much for sharing that with me and with everybody who’s listening.

Max: Andy Chorleywood said, we did a workshop the other day from from Leeds University. He said, “Max, it’s great watching you and learning the tricks of the trade.” And I wasn’t aware that I’m using any tricks, so I thought that was quite funny. I said, “These are clearly baked-in behaviours over hundreds of years that I’ve just learned,” you know what just loads them then don’t, they’re not conscious to be put at that point.

Cole: You know here’s a word that’s not used very often anymore, but I think about it every time I talk to you. It’s the word mirth. I feel like mirth abounds in your personality, Max. And I think that it’s delightful to interact with you. Well, I’m wondering, because you’ve done a lot of work in coaching and you’ve done a lot of work in people analytics and you’ve done a lot of other things in your career, which I want to get to in a minute. But I’m wondering, because I know you and I have briefly chatted about this in the past, but I wanted to dig into it a little bit more, which is what do you see as the relationship between coaching effectively and people analytics effectiveness?

Max: Just go into that a little bit, Cole. What do you mean? Just explain that.

Cole: We had this book chapter that you shared with me on coaching and doing coaching effectively. And one of the things that we noticed when looking through it was the relationship between a lot of the advice with coaching effectively in people analytics. I was wondering if you could share that with our audience.

Max: Well, when you’re coaching people–so now we’re getting down to finance, so we’re getting back to the big evil world of big finance and ROI. Anything that you do in an organisation has to generate ROI offsite. In other words, people analytics has to pay its way, or they’ll take the money away and they’ll put it into something that can pay its way. Coaching needs to pay its way or they’ll put it into something else. Both coaching and people analytics need to result in an improvement in something and the things that they need an improvement in are very similar. Both of them require the four aspects, which you can see in in my value profiler. But both of them could increase productivity, they could improve innovation, quality–the extent to which products and services meet the needs of your market, and customers–customer growth, customer satisfaction. So depending what kind of leader you are, you’re going to be interested in one of those four things. I have not made this connection as clearly as you have. You’ve just made me make it right now. You see, that’s a great thing that you do. But you’re right. And maybe L&D in general. You know, I hadn’t thought about this, but maybe L&D needs to change its outcome variable, its dependent variable to start looking at–you know, we don’t improve your cognitive status, sort of like a Kirkpatrick. The outcome, although it’s difficult to measure in dollar terms, the outcome of training, which is where Kirkpatrick fell down, and the Phillips model–Jack Phillips. Do you know the Jack Phillips model?

Cole: Vaguely. I covered it a while ago.

Max: He kind of extended the Kirkpatrick. Again, our friend Alec has written quite a bit on this. But anyway, the bottom line is we all know how difficult it is to measure the financial return on people analytics. So for example, if you in L&D say, “You need to go to Harvard and do an MBA.” What does an MBA at Harvard cost these days anyway, Cole?

Cole: Maybe $200,000. I don’t know. It’s a lot of money.

Max: It’s probably 300 grand. And pay for two people to go and do MBAs at Harvard, at three hundred grand a shot? How can you predict ahead of time whether you’re going to get your ROI on that money? Because that is a kind of a people analytics decision. You know, we are going to make a human capital investment of 300 grand and 300 grand. How do you know? And companies are doing this every day, aren’t they? I mean, this is not like a way-out story I’m making up. Somebody is doing that without any people analytics input. They’re doing it purely based on gut feel and the theory that if you go to Harvard, you’re going to come back with a great network, and that’s going to be good for the business, kind of thing.

Cole: Or it’s going to be good for that person’s career and they’re going to go and be an executive at some other company now.

Max: Which happens all the time. But I mean, those are the outcomes you want to know. So what you should be doing in people analytics is say, “If we’re going to spend money on any kind of training, which of the following categories is it going to touch? Productivity, innovation, customers or quality?” And you boil it down, and you should do that on any spend.

Cole: Yeah, Max, you don’t even know this, but you’re baiting me right now because you’re treading on an area where I have such a strong axe to grind. And so I’m not going to go into it too much, but I want to throw something out there just for you to react to it, because I think you of anyone would have such a good reaction to this. When I’ve managed L&D teams in the past, I’ve told them, thinking about Kirkpatrick’s model, that level three, which is behavioural change, is all I care about because you can’t have the ROI without first having behavioural change. And oftentimes when I’ve done research in the past that showed this, that there’s actually a negative correlation between level one, which is positive reactions to training, and level three, which is behavioural change. So if people have negative reactions, they’re more likely to change, and if they have positive reactions, they’re more likely to stay the same.

Max: Positive reactions is like people who talk a really good game.

Cole: Exactly. Yes.

Max: You know, it’s the guy sitting at the end of the bar on a Sunday night saying, “I could have been great. I could have been.” It’s that dude that never actually changes behaviour in any way.

Cole: Well, that’s really interesting. So I’m wondering though is level three the Holy Grail, or is it something else? And how can people analytics–how can they amplify L&D being more effective?

Max: This really is the subject area of IO psychology. There’s so much written about that. How do you get behaviour change in people? So the whole literature about transformation and freezing, make the change, refreeze–

Cole: The current Lewin model.

Max: Absolutely. It’s huge. So how do you get behaviour change? There are many methods. How do you measure behavioural change? That’s the really interesting thing. So there’s a tendency in performance reviews, for example, to measure competencies but not to measure observed behaviour. So Skinner would go nuts if he looked at the way that we conducted performance reviews. He’d say, “There’s nothing observable. You’ve got the guy at the end of the bar rationalising what he’s going to do, but no change in the behaviour.” You know that next Sunday, he’s still going to be sitting at the end of the bar telling you that he could have been a millionaire, if only.. And the “if only” is, if only he’d changed his behaviour a little bit. And we don’t measure that in people analytics.

Cole: No, no we don’t. And to our detriment, we have really thrown out the behavioural background in psychology. Operant conditioning is one of the most proven psychological techniques in history. But I do want to say, you touched on transformation a few times, and I was so curious to bring this up with you on the podcast. So you personally have transformed many times in your career. I just made a list of a few things, and you can go into it if you want. You can gloss over it or if you don’t want to. But I think you’ve run a company yourself in the past that had nothing to do with people analytics. You’ve pursued a PhD. I think you were a host of a BBC television show, and you’ve even sort of been an activist in the past of sorts. And so I’m wondering, you have transformed yourself multiple times over, Max.

Cole: How has that made you into who you are now? And how is that equipping you to be kind of one of the leaders of our field in the future?

Max: Well, I can’t guarantee that I’m going to be in the field in the future. I’d like to have an influence on it, but a field only interests me for as long as it’s pushing me to do new things. And I love people analytics. I loved it in 2012, when I created that first Cipd course. Somebody came to me at the workshop yesterday and said, “Max, I did your course.” I said, “No, no.” “Well, it could be a different course by now because it’s kind of ten years later.” And I said, “No, that’s the same course.” And most people, most people analytics functions are not yet even doing a lot of the stuff there. So, I like to be pushed forward in a field. The PhD was because I just didn’t know whether I was capable of doing one. You know, I’m pretty ADHD. I have a lot of interests. I wondered whether I’d be able to focus long enough to achieve a PhD. The technology company was again, I wondered whether I could do it. So I’m really turned on by things where I’m not sure whether I can do them or not. If I know that I can do something, it’s no longer interesting. So when I was a programmer, I loved programming until a day came when I discovered that most programs that people threw at me, you know given enough centuries, I could write them. And then the challenge went out. Let’s say everybody catches up with AI and machine learning and starts implementing that in people analytics. That would allow me to start saying, “Right, here’s how we can use linear programming and optimisation in people analytics,” and it would take me to the next level. But since we aren’t even doing the basic predictive stuff properly yet, I don’t know how many years I can carry on doing ML and AI.

Cole: Well, I want to get to that in just a second, but I want to dig into something here that you said, because fundamentally, you’re such a curious person. And my definition, when I talk to my teams in the past, is I say like development. If you’re not feeling uncomfortable, you’re probably not being developed. And it seems like, Max, you sort of have almost an addiction to developing new things and covering new territory. Would you say that’s like a fair characterisation of your personality?

Max: I embrace the existential view of life, is that we have three levels. We have the animal, we have the social, and we have the meaning-making level. And if you just fit in to society and have the nice house and the physical stuff and socially you always say the right thing and you do the right stuff, chances are that you’re not making meaning in your life. You’re not taking any risks. So you’re not going to be a kind of a Mandela or a Mother Theresa or somebody that really changes or even a Barack Obama. Come to that. Dare I even say a Trump, you know. Well, no matter which side you sit on, there is somebody who in his own life made meaning, as did Obama. These are people who went against what the social norms were and said, “I’m going to operate from my inner compass. I’m going to ignore what the normal physical and social levels do to make meaning.” And I’m strongly for that, that it’s through discomfort that we make the best meaning. In your own experience, Cole, wouldn’t you say that the times of discomfort in your life have taught you more than the times when you are hyper comfortable?

Cole: Oh yeah. The times of discomfort are usually times of the paramount change that’s occurring, and it’s only through that change that one truly evolves. And so I think that it’s usually very much a precursor to better things, and I’m a big believer in that, and it’s probably something that you and I share in common. Well, it seems like–this is going to be a terrible transition–people analytics is also going through its own change and evolution. And so I’m wondering, on our podcast, we talked about how it would be such a shame if people analytics were to plateau so soon. We have so many more opportunities. We have so much more ground to cover. In your perspective, where are we going, or where should we be going that we’re not, and how can we get there?

Max: So I think that while people analytics is within HR, it’s going to be mostly dashboards and playing around with data and looking at workforce outcomes rather than organisational outcomes. So we’re going to be far more interested in the employee experience and stress and engagement and retention and those variables, rather than the stuff which the execs who have the budget and who will withdraw that budget are interested in, like the four things we’ve been talking about a lot today: productivity, customers, innovation, quality. So when people analytics comes out of HR and becomes a more of a group function, then you’ll find a whole bunch of really smart, analytic people–the data scientists crawling all over the data, because they’ll be linking the workforce data to the operational data, to the logistics data, to the marketing data. And we won’t think of it as people analytics anymore. It’ll just be analytics, the same as there won’t be human resources, it’ll be resource management, it’ll be organisational analytics. And if you Google “organisational analytics,” there isn’t really a whole bunch out there yet. But without a doubt, if people were listening to this and said, “What should I do either for my kids, if I’m over 35, or what should I do if I’m 20?” I would say, if you want to do analytics, don’t focus just on people on the HR side. Get a really broad education in marketing analytics, financial analytics. Become an analytics expert, because analytics is going to be taken to a group function and you will be expected to know a little bit about each of those domains.

Cole: What I think kind of a rigorous boot camp, and I’m hoping that People Analytics World can also share this in the show notes. But it is your human capital value profiler, because I think where many people analytics professionals–I won’t say go wrong, it’s just they lack the knowledge. They only know what’s in front of them. They only know what’s in front of them. And what’s in front of them is the data and people requesting data. And I’m thinking about optimisation, I just think about, I need to optimise. How do I get the data to them as quickly and in the format that they’re looking for? And that’s the plateau that we’re discussing. But if you look at something like the human capital value profiler, you see that that’s just the first level and that you’re trying to influence the higher levels–

Max: It’s actually the fourth level.

Cole: Oh, sorry.

Max: But you’re right.

Cole: I’ve inverted it. Yeah, sorry.

Max: And I wrote an article like that, which we could also potentially put into the show notes, and this came up in the workshop the other day. We must stop being data waiters in people analytics. Truly we are more than that. We can be more. When somebody says, “Can you give me all of the performance scores and the attrition data for the last year?” You shouldn’t say, “Yes, it’ll be on your desk at 3:00.” You should be saying, “Why? Why do you feel you need that? What problem are you trying to solve?” And the answer is probably, “Because my boss asked me for it.” Fair enough. Then say, “Well, can you ask your boss, or would you mind if I went to your boss? Because you asked me what to do to improve your career and to develop, etc.” The answer is you want to be starting to go network. I always use poor old Oliver Kasper as my example, who is a genius at doing this, but he would never miss that opportunity. If somebody said, “We need this data,” he would say, “Why?” And I tell you, he would be meeting with the CEO about it within two or three weeks. That is his skill and that’s why he does what he does. So the answer really is, it’s about moving. It’s about not being a data waiter. It’s about adding value to data. Maybe that’s the term we need to use. What value do you add to the data if you just hand it out to people? Are you any different to a management information system?

Cole: Well, not only that, Max, I think about like a data waiter is just somebody who repeats the same thing over and over again. And as you and I both know, that is rife for automation and optimisation, all the things that we’ve talked about. My new organisation, Worknostic, they are going to be the data waiters that automate a lot of the people who are doing this right now. And so, people should be looking into that space and saying, “What’s the value I add beyond this?” And again, this is the critical and analytical thinking that you and I have discussed in the past, that people analytics has to level up. Sorry I had to inverted earlier. It has to go from level four to level three to level two to level one to truly be relevant to the stakeholders in organisations.

Max: So maybe the question you could ask, and let’s swap roles here, I have a view on this, maybe we can discuss it. What are the hardest things to automate?

Cole: The hardest things?

Max: You said what the easiest thing is. Serving data is dead easy. What is not dead easy in people analytics.

I think there’s a broad question and there’s a narrow question. The broad question is, what is difficult and what’s easy to automate? I’m not an expert in this space, but it seems like people used to think it was things like creating art or creating music or the truly generative task. And it turns out that’s not true. Like Dolly’s creating art, GPT three is writing whole novels, so it seems like that’s not really–

Max: And within people analytics, what is easy to automate and what is not easy.

Cole: And so that’s the narrow question. And I would say the thing that truly sets people analytics apart–and I want you to answer this question too, but this is my perspective–is being able to identify and solve problems because problem identification and bringing novel solutions to answering and solving the problem are where people in analytics can truly add as much value as possible. What’s your perspective on that, Max.

Max: I couldn’t say it any better. I might just qualify the kinds of problems.

Cole: Yeah, no, let’s dig into it.

Max: So that there’s no doubt about by problems you mean organisational problems?

Cole: Yes. I mean working your way up to value…

Max: Not workforce problems–organisational problems. Correct. I would say exactly the same thing. I call it eliciting–eliciting problems, organisational problems. You can’t automate that. I’m confident that you and Orgnostic will be automating the delivery of data, the cleaning of data, even the hard stuff that we did on the PhD, where you had to make judgement calls about, is that a screen plot? And oh, is that two factors or three factors? Even that stuff that is so subjective, because people think that statistics is completely objective, and of course, once you’ve studied statistics, you discover there is nothing–

Cole: There’s lies, damn lies in statistics.

Max: You wouldn’t need to do a defence or a viva if it was objective. The fact is the via the defence for a PhD is where the person says, “Justify the conclusion that you took from analysing the data.” What? You mean there’s more than one conclusion that you can get from analysing data? All of that can be automated, the whole process. The one thing you can’t automate is finding out what is the organisational problem, especially with reference to workforces if you are in people analytics, fair enough, or in marketing, if you’re doing marketing analytics, but people here will be listening to that. What is it, and what is an innovative solution? And recognising that the solution can only lie in either moving the problem away from workforce into gig or robots, or changing a people process. Once it’s in your head that people processes are the only path, the only intervention to changing workforce, to creating workforce capability, to creating the best workforce, it can only be done through a people process, recruitment, learning and development, succession plan.

Cole: You know, I have a riff on this, and I don’t want to dig into it too much, but it kind of gets into what you’re saying. There’s two different kinds of reasoning. There’s deductive reasoning and inductive reasoning. And I think anything that’s deductive in nature will eventually be automated or algorithmictized, or what the right word is there. And inductive is the only space where people are still going to be playing a role, because it’s about bringing generalisations from essentially nowhere. Like if you really dig down–yeah, exactly.

Max: That is the ultimate type of creativity. And in fact, I know a guy who researches this as a specialist area. The greatest inductive story I know where somebody was trying to fault induction was they say, “What’s an example?” And they say, it’s the chicken at the farm. Every morning the farmer comes in with a whole handful of corn. And the chicken assumes that every morning that is what happens in life. Is that because it happened yesterday and the day before, I’ve got corn, I’m going to get corn tomorrow and gets a huge shock when the farmer comes in with that axe.

Cole: Yeah, that sickle. What a magnanimous farmer until that day.

Max: Oh, well, exactly.

Cole: Well I’m wondering, kind of to going back to our point earlier, Max, about people analytics sort of plateauing. Two things that I know you and I have talked about. One is about the role of things like linkage analysis. Another is about the role of things like qualitative analysis. And I’m wondering, what are some of the areas that you feel like are understudied or underutilised in people analytics that people analytics practitioners should be adding to their toolkit to add value in new ways.

Max: So let’s just look at the two that you mentioned: linkage analysis and qualitative. Linkage analysis–most people will know it as causality. And so most people have heard “correlation is not causation.” So if two things happen at the same time, like performance increases and engagement increases, you can’t say which one caused the other. You can’t say that engagement increased performance. Because the real example from Thomas Kumerow pre music, whose work I know you admire–Thomas did some great research showing that higher performance scores increased employee engagement, not the other way around. So here you are spending $2 million on that engagement program and giving them a swimming pool and a health centre and a fitness centre to improve engagement. No, it was when somebody had a lot of development and training which caused their performance score to increase, and they came out of that office saying, “I really love working at this place. I think I’m going to work harder.” So performance increased. So you see, if, you know, linkage analysis like Thomas clearly does, you would be able to test that sort of thing. At the same time, in the real world, this is not an academic laboratory where you can easily have control groups and experimental groups where you’re testing things. So I have a famous case study that I did. I had the luxury of being able–I created a new recruitment process because processes are the only way you can change workforces.

Cole: Let’s dig into that in a second. Let’s come back to it.

Max: And then we were able to put half the applicants in each country through one process and the other half of applicants through the other, so that we could measure whether the new process, based on people analytics as opposed to gut feel, was doing the job or not. So you can sometimes do that, but you can’t decide that we’re going to give half the employees a salary increase and not the other half. So you can’t kind of do as much experimental work or research design as you’d want to, but you can do some. That sort of training background is one of the hardest things for people to learn, and it’s part of the skill people have the least. The other one you mentioned was qualitative analysis, and truly to understand the culture of an organisation–and I’m sure nobody listening here today would argue that qualitative culture is an enormous driver of performance outcomes, if not explains the most variance arguably, I’d like to see some research on that actually. But to understand culture, you kind of almost need to do what they would call an ethnographic study, and that involves camping in the organisation, living there, being part of it, being part of all levels of the organisation, including those all-important executives that I’m encouraging people to go and interview and learning how they think, to really drill into the culture.

Max: Because once you can get that culture, you can start to quantify it, which you can’t do with just an off-the-shelf culture instrument. You can buy a culture instrument, but that might be right for that organisation, but there’s no indication that it’s right for your organisation. So qualitative skills, which includes interviewing and focus groups, but looking at the words–so Andrew Merritt is a master of this kind of stuff and analysing textual stuff where he picks up the soft data arguably, and I don’t think it is arguably. Andrew would say it is qualitative analysis. He’s not doing predictive regressions and multilevel modelling and so on. He’s using AI but in a qualitative way. So those two areas are really underused, and arguably, the experimental–I could let that slide and say maybe not so important, but the qualitative… If a client says you can only do a qualitative analysis to solve this organisational problem or a quantitative analysis, if I was only allowed to use one to your point about inductive, I would use the qualitative to get it, because I’d interview shed loads of people. I would use crowdsourcing. I’d get them to vote on the best solution and I’ll implement that one without necessarily having hard data behind it to do it. And I’m pretty sure that 99% of the time, it would be the best solution.

Cole: And I promise I’m going to come back to processes here in a second. But I’ve got to dig in a little further here. You mentioned culture and the importance of understanding qualitatively culture. And I look at the news, and it’s just one thing after another. It’s the great resignation. It’s the great boomerang. It’s the return to office. And the new one is quiet quitting. And I think about all of these–culture at companies, for the first time, at least in my lifetime, is becoming a big focal point of the news. People are starting to care about this, and in my mind, that is a challenge to the people analytics community to step up to the occasion and to be able to really provide insights and drive cultural change or to recede from the occasion. So I don’t know. Do you want to speak to that at all, Max?

Max: And I mean, the quick answer is build your own culture instruments. Build all your own instruments, actually. It’s not hard data that decides whether an organisation is going to make a profit or whether it’s going to be competitively differentiated. It’s the attitude of the employees. And if we’re using culture as a proxy for that, which I think is fair, you need to recognise that your culture is so unique, it’s got its own parameters. So for one organisation, you may measure culture on innovation, team collaboration, whereas in another organisation, it might not be about those at all. It might be all about motivation, spreading a positive message out into the world, because that really is a differentiator. You wouldn’t pick that up if you had the wrong instrument or if you had the other instrument. Each one would be getting the wrong readings for their organisation. So culture is one area, and it’s so deep that you really need to do–there’s a big word for it by the way, and the word is ideagraphic. Did you never come across that when you were studying?

Cole: I don’t think so, Max. You always throw out like these European words that I’ve never heard of. I’m just a lowly Southern gentleman.

Max: There are nomythetic instruments, like the big five is nomythetic, where the axes are defined ahead of time. Ideagraphic you first elicit what are the important axes and then you kind of measure them.

Cole: Okay, okay, I get where you’re going.

Max: Huge difference. But of course, product vendors don’t like ideagraphic.

Cole: Sure. Well, and the way I would put it, is I would say, there are things that are based in theory and then things that are emergent properties, and there’s different ways of studying.

Max: That’s why you’re a great salesperson. You just said what I said in a very complicated way in English. Scott does say you’re very good at that.

Cole: Well, English is my native tongue, you know. Well, so I want to come back to processes. And this is something I don’t think you and I have chatted about before, but early in my career, I used to think the pinnacle of doing a great job at work was that I would do this really great project, and then I would present the results of the project, and then hopefully somebody would take action on the project. And as I progressed in my career, I realised that there was a fundamental flaw in my methodology, which is what I should have been doing instead of projects, was creating processes, and there’s a new word for it that has kind of gained steam in the people analytics space, which is called productizing. So taking what you’re doing and productizing it, so I’m wondering when you talk about processes, are you talking about productizing or are you talking about something else? I want to make sure that we’re using the same definitions here.

Max: So when I talk about processes, what I mean is that things are done in a standardised/in the same way in your organisation, and not that you’ve brought the process in from outside, by the way. In the same spirit as culture, you have designed the process for your organisation, and by the way, it’s for a moment in time that process. If it was right in 1990 to be recruiting people who were really extroverted and flamboyant and wild and lots of lunches, by 2000, you were recruiting the wrong person. So your recruitment process needs to change a lot between 1990 and 2020/22. So by process, all I mean is that if you are an enormous–HSBC is always the example because they are so global, but it applies to Nestlé and everybody. If you’ve got a whole bunch of business units all around the world, and everybody is recruiting their own way, I fully acknowledge that Fiji needs to recruit differently to Switzerland, differently to South America. But it’s really expensive to maintain completely different processes. What you want to do is create a kind of an ideal template process, which Steve Langhorne is the expert of this, by the way. And then you have little slots where you slot out “here is the Fiji bit” or you pull up “there is the Switzerland,” but for the rest of it, the process is fairly similar. Now people can go in to say, “Well, where’s autonomy? This is hyper-centralised and blah blah blah.” Even the degree of autonomy and centralisation, which is back to your OD in people analytics, needs to be measured, and people analytics could be saying, “Here is the ideal degree of autonomy versus centralisation that we need to be working on.” So that’s what I mean by processes, is ensuring that there is consistency in the way you deliver around all of your business units regionally and across time where necessary.

Cole: That makes a lot of sense, Max. We have covered so much ground. We’ve gone deep technical, we’ve gone qualitative, we’ve gone background, we’ve gone gossip in the news. We have covered quite a bit of territory. But I want to come back to something we actually sort of started with, which is career advice, and even let’s go a layer deeper and say meaning. Maybe you can leave us with this as we close up. Max. I want to understand the importance of finding meaning in a people analytics career and what that means to you and any techniques you have for achieving this.

Max: Well, finding meaning at the best of times is not easy in any part of your life. In people analytics, I think you’re most likely to find meaning if you like people, if you like business–so back to the skill set that we spoke about early on–and if you like reasoning and logic, not necessarily statistics, because statistics, as you said earlier, is going to be automated. But you need to have logic. You need to have a love of people, and you need to have a love of business. If you don’t have those three things, you will not find people analytics very meaningful. But one thing I can guarantee you is that if you want to make it big in people analytics, whatever big means to you, which could be a lot of money starting your own consultancy, being the big boss or whatever. If you’re not experiencing discomfort on the way to creating that meaning, you’re probably not finding meaning. If you’re really comfortable in what you do, you’re doing it wrong. Go and get uncomfortable.

Cole: Be uncomfortably comfortable. That’s Max’s advice. Well, Max, this has been delightful. I’ve enjoyed the heck out of this. I hope you have as well. I’ll leave you with the final word. Anything you’d like to share with the audience?

Max: Yeah, I’m very pleased with the way a lot of people are starting to come round to people analytics, and I would be delighted if anybody wants to get hold of me. I’m happy to throw out a reasonable number of psychometric tests and to go through them. I may ask people to jump over a bar and to justify why I should do their psychometric testing. No charge, free of charge. And I’m happy to throw that out and help a few people with that.

Cole: Well, Max, you’re a delightful guy. And I want to thank People Analytics World so much for having us on today. So thank you for joining us, Max.

Max: Such a pleasure, Cole. You really know how to do a good conversation.

Cole: Thank you. I appreciate it.