People Practice » How organisational analytics can deliver competitive edge

How organisational analytics can deliver competitive edge

A collaboration between Finance and HR is essential to driving change, says Concentra Analytics CEO Rupert Morrison, creator of HR analytics tool OrgVue.

Rupert Morrison is fascinated by organisation design. He describes how Apple’s legendary co-founder Steve Jobs deliberately created complex architecture in the offices of what would become one the world’s most valuable companies.

“By forcing people to take longer routes it would get people talking. By creating social moments and therefore breaking down silos it had the effect of getting people working closer together and creating value,” he says.

Whether its industry disruption or volatile geopolitics, companies are under increasing pressure to create value in an increasingly challenging environment. That means recognising how people contribute to the value creation process an how that contribution can be improved, especially in an age where more mundane tasks can be undertaken by technology.

But Morrison, CEO of Concentra Analytics, believes that workforce analytics have yet to be developed by companies as an effective tool for matching staff competences to operating models and investment strategy.

The New Zealander says Finance and HR failing to collaborate effectively are a major part of the reason. In a recent report by Concentra, which won the Technology Innovation Award in the Sunday Times Tech Track 100 in 2011, only 28% of 400 companies of over 1,000 employees polled said they had joined up reporting systems and tools.

The report called Making People Count said that if organisations are to make headway with workforce analytics, collaboration between Finance and HR is essential. “This doesn’t mean the ad hoc collaboration we see today, but systemic collaboration that is cultural and process-driven with dual lines of reporting,” said the report.

Having identified these shortcomings, Morrison has become an evangelist on the subject of getting companies to achieve organisational edge through developing effective organisational analytics.

Take a look at Orgvue’s latest report on the key questions that finance leaders should be answering to achieve business goals and more.

In 2015 he wrote Data-driven Organisation Design. The book set out to explain how data and analytics can connect to design an environment people to perform in, one that has the right people, in the right place, doing the right things, at the right time.

Much of Morrison’s vision is shaped by the 18 years he spent in consulting at AT Kearney and then Concentra in a wide variety of industries, having initially studied economics at Erasmus University in Rotterdam, Netherlands.

Morrison led the creation of Concentra’s OrgVue product, an integrated software platform with solutions including HR analytics, organisation design, transition management and strategic workforce planning that was selected as one of four Gartner Cool Vendors in human capital management.

To explain the complexity of trying to understand how difficult it is to measure an individual’s role compared to another in an organisation, Morrison references the number of employees divided by number of job titles. “Typically in a company of 10,000 people there are 5,000 different roles, so that’s a ratio of 2, the worst I have seen is 1.3. You think about pay bands- you can’t compare. Even when you have some people with the same job title, they may do totally different things,” he says.

Joined-up approach

Finance and HR are not working in a joined-up way, because they operating very different models, says Morrison. “Finance calls it activity-based costing, but the HR alternative is the RACI model which defines who is responsible, accountable, who needs to be consulted and who needs to be informed on a project. But I want to know who approves a decision and who actually does the work? Organisational design was operating at the high level but never at the detailed level,” says Morrison.

In this context OrgVue was launched. The approach sought to create a detailed profile of how every member of a workforce contributes to an organisation, by analysing their objectives, activities and competences rather than focusing primarily on defined roles and job titles.

Morrison says the approach considers the issue at granular level. “We break down the work into its elements, by defining what processes and activities staff are involved in, as well as the decisions they take and their outputs.

“We ask every employee to explain how they allocate their time, through an interactive survey they fill out on their phone. The result is that we can build a taxonomy of the work across areas such as marketing and sales in an individual activity analysis (IAA), working out how much time they spend on each activity.

“It gives us a much better lens than a traditional finance lens which breaks things down into business units and functions, but doesn’t give the overall picture,” says Morrison. “The speed of change is increasing so therefore you need to know what you’re changing, and you need to communicate to your employees what it means to them,” he adds.

The result is a set of insights into how organisations actually operate that can stimulate change. “Finance can pull the levers and it then becomes an organisational design issue. Then when you think about automation you can pull more levers and say if I want to make a cost saving, what work should we stop, reduce or reallocate?” he says.

The higher up in management you go the greater the issue, says Morrison, “Around 30% of senior people’s time is doing transactional work and not the stuff they should be doing, what they want to be doing or they enjoy doing,” he says.

Ultimately the insights from data enable organisations to calculate the gaps between what people are doing and what they should be doing. But he insists such initiatives work best when it is neither an Finance or HR driven. “The answer is its both,” he says “Where we get the most success is where we get HR and Finance working together,” he adds.

Download Orgvue’s report to discover the key questions that finance leaders should be answering to achieve business goals and more.

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