by Konstantin Tskhay​

August 7th

Scale versus Value:
What should you focus on?

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Hi, Friends,

It has been a hectic couple of weeks. During my Palm Springs vacation, I saw beautiful Joshua Tree Park. I then returned home to move a client from their old office to a new one and joined the DataDriven advisory team at the invitation of the great Lydia Wu. Sign up to get our updates!

And all that in just 2 weeks, while the market crashed into panic and fear.

And so goes the summer.

Anyways... Today, I wanted to discuss something I became interested in when speaking with Kinsey Li from EY, who hosts The Great Debate Series, where the best minds in people analytics come to debate various important topics.

This one interested me because we do not discuss scale versus value often.

Should we provide analytics to the frontline managers to impact the scale, or should we focus on upper management and centralization to drive consistent impact?

In today's issue, we will discuss each in light of risk and benefits and then decide on what is better, scale or value.

Let's dive in.

Value in People Analytics

Let's start with value, as most people in HR and analytics focus on value first.

Why?

Well, that's because it is much easier to run analyses in aggregate and create programs that impact most of the organization's people.

This also allows you to create consistency whether you are just starting your people analytics journey in a small-to-mid-sized company or are a people analytics leader.

Pros:

• Strategic Focus: Centralizing analytics for upper management ensures data is fully aligned with organizational goals, with all insights informing actions necessary to the entire enterprise, not only its parts.
• Consistency and Control: A centralized approach maintains consistency in data interpretation and decision-making processes, ensuring alignment with the company’s objectives and across the various people divisions and layers.

Cons:

• Limited Reach: Focusing analytics only at the top can create a disconnect between strategic goals and operational realities. Frontline managers may lack the insights needed to implement strategies effectively or question whether these changes are the ones that should be prioritized over others.
• Potential Bottlenecks: Centralized analytics can slow decision-making processes as data must pass through fewer, higher-level decision-makers.

Scale in People Analytics

Scale in people analytics is when you give valuable information directly to managers' fingertips. This means they have the data and information they can use immediately on the micro scale to impact change.

Pros:

• Widespread Impact: Providing analytics to frontline managers ensures decisions permeate the organization, impacting day-to-day operations and immediate actions. Your marketing might need a different approach than your engineers.
• Empowerment: Equipping frontline managers with data empowers them to make informed decisions, fostering a culture of accountability and proactive management. Verus simple execution of what has been passed through by upper management.

Cons:

• Resource: Distributing analytics at scale requires significant resources, both in terms of technology, analytics resources, and training. You need the right people working with the correct data and sharing it concerning people's privacy.
• Consistency Issues: With multiple managers interpreting and using data, there’s a risk of inconsistent application and varied decision quality. While some managers may be pretty mature in how they approach people data, others may need a bit more training and education.

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Finding the Right Balance

The debate between scale and value isn’t about choosing one. You have to do both. It is about finding a balance that aligns with your organization’s capabilities. Here are some strategies to achieve this balance:

1. Focus on Value throughout: It's a bit of a misnomer to say that value only applies to highest-level, centralized functions. Indeed, analytics at all levels provide value. Combining centralized analytics for strategic decisions with distributed analytics for operational insights is the way to go. This ensures alignment across all levels of the organization.
2. Data Literacy Programs: Invest in training programs to enhance data literacy at all levels, ensuring that frontline managers and upper management can effectively use data to improve organizational outcomes.
3. Technology Integration: Data sharing and interpretation are always a challenge. Use systems that will allow you to identify the right insights, communicate them quickly and consistently, and act on your findings quickly.

All in all, like my great mentor Bob Rosenthal, always said, do both.

K

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Whenever you’re ready, there are 2 ways I can help you:

#1

If you’re still looking to get started in People Analytics, I recommend starting with my affordable course:

​Practical People Analytics: Build data-driven HR programs to 10x your professional effectiveness, business impact, and career. This comprehensive course will teach you everything from building an HR dashboard for business results to driving growth through more advanced analytics (i.e., regression). Join your peers today! ​
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#2

If you are looking for support in your human capital programs, such as engagement, retention, and compensation & benefits, and want to take a more data-driven approach, contact me at Tskhay & Associates for consulting services. Or simply reply to this email!