May 22nd, 2009
The Science, Art and Heart of People Management
Little by little, we are figuring out how best to run companies for sustainable success.
That may sound like a Pollyanna-ish claim to make amid a recession full of bankruptcies and millions of job cuts.
But signs of growing smarts about management are there, and it seems to me they add up to a formula that’s part science, part art and part heart.
Among the science pieces, New York Times columnist David Brooks recently cited intriguing evidence that CEOs who perform highest have a certain personality type.
“The CEOs that are most likely to succeed are humble, diffident, relentless and a bit unidimensional,” Brooks writes. “They are often not the most exciting people to be around.”
More than ever, it’s possible for such efficiency hounds to chew on human resource data in their quest. I recently met with Brian Kelly, president of HR analytics specialist Infohrm. Kelly’s firm is at the leading edge of the push to scrutinize people management information in the same rigorous way finance professionals assess corporate money matters and marketing experts analyze sales.
Here’s a peek into the kind of HR science Infohrm can bring to an organization. Say an insurance firm wants to trim its staff of $100,000-per-year underwriters to save costs, without threatening future growth. By examining data on the performance and career paths of existing underwriters, Kelly says, an organization might learn that its best, most loyal underwriters tend to come up from the ranks of its own call center managers, who make $50,000. Such internal promotions also save tens of thousands of dollars per underwriter in recruiting fees.
An optimal choice, then, might be to cut underwriters now but load up on call center managers and actively shepherd them into the underwriting role over time.
But Kelly isn’t only about numbers. As important, he says, is the art of helping HR departments and corporate leaders develop new evidence-based habits. Infohrm typically begins work with clients with an emphasis on getting basic metrics straight.
“They do need to focus on some quick wins like headcount, turnover, etc. to build credibility and trust before moving on to more sophisticated stuff,” Kelly says.
So we’re learning the science (the best CEO are relentless and anal, people data ought to be crunched) and the art (we must deal with the human side of change). But I suspect they’re not enough if we’re talking about long-term success in an era of increased transparency and growing concern about corporate citizenship. That’s where the heart part fits in. Maybe the CEO is a grind, but he or she needs values like caring about employees and the environment.
Need evidence for this? Check out the above-average performance and the longevity of firms on the Fortune Best Companies to Work For list.
So it may be gloomy. But rays of insight are around us. If we’re wise, we’ll emerge from the recession ready to build better, lasting companies.
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