Taking a statistical approach to managing human resources
Throughout industrial history, managers have tried to use science to analyze, categorize and, occasionally, pulverize the human element in their ventures so they can direct it more easily to their ends.
Charles Dickens memorably satirized this desire in the character of Thomas Gradgrind, the utilitarian educationalist in “Hard Times,” who was determined to “teach these boys and girls nothing but facts” and “to weigh and measure any parcel of human nature, and tell you exactly what it comes to.”
A new book, “Calculating Success: How the New Workplace Analytics Will Revitalize Your Organization,” advocates a similarly fact-based approach to workplace challenges. It makes for a chilly — even slightly chilling — read. Statistics are often “fleshed out” here; human beings rarely so.
The story warms up only when it gives voice to the staff at a company, anonymized as Corp, that is struggling to work out why it is losing customers and market share. Corp analyzes its data on staff turnover, surveys employees and discovers that support from supervisors is a crucial element in meeting staff needs. “People want to do a good job, but are not given the support to do it?....? There is an exclusive focus on the numbers,” one customer service rep says.
Or, as authors Carl Hoffman, Eric Lesser and Tim Ringo put it, in typically mechanical style: “An employee’s commitment to her job derives from her experiences interacting with leaders through the filter of her own motivation and needs.”
The writers, all of whom were at one point in their careers “human capital” consultants for IBM, do point out that to treat people as “widgets” or commodities in a human capital supply chain is to ignore the often unpredictable ways in which their needs, interests, motivation and commitment vary.
But, they say, managers should not be shy about applying mathematical analysis to men and women, as well as machines. The more systematic the approach and the more reliable the data, the easier it is for managers to justify their actions and avoid arbitrary decisions.
This is true. Chief executives love to talk about their data “dashboards.” This book, published by Harvard Business Press, points out that it is easier to persuade such leaders to fund even “soft” programs — to improve training or intra-company networks — if you can cite robust statistical evidence that such initiatives will work. And any attempt to manage complex modern companies on mere gut instinct would, of course, be doomed.
All the more reason, though, to balance modern analytical skills with traditional safeguards against human failings.
Royal Bank of Scotland is cited in the book as a good example of how analytics improved branch managers’ performance. But it is better known as a bank that was led to the brink of disaster by an over-aggressive, under-supervised CEO — the best recent instance of what happens when human foibles are allowed to run amok.
The authors overstate the gospel of good data, and understate the difficulty of getting the workforce to accept and act on fact-based conclusions. They do point out the importance of management discretion in interpreting the staffing implications of analyses of supply and demand. They also stress the need to present statistical findings to stakeholders with sensitivity.
But their answer to most workplace challenges is more facts. Recapping the Corp case, the authors refer to it, tellingly, as a chapter about “the messier problems” of understanding exchanges with workers. This would be a less turgid, more humane book if they devoted more of it to explaining that managers need more than good data to make such problems go away.
Gradgrinds will probably be tempted to adopt the book’s six-step framework as a pure, scientific blueprint for improving productivity and profit. But if they apply the template too rigidly to the maddeningly messy human beings who work for them, they will find its formulas simply do not compute.
Andrew Hill is the management editor of the Financial Times of London, in which this review first appeared.
