Happiness and HR Data - Coming to a delivery truck near you

Sometimes in all the conversation in the HR/talent space about the increased use of data, Big Data, and workforce analytics by HR leaders and organizations that practical, innovative (and possibly somewhat creepy), examples of how all this data coupled with better tools to understand it all are sometimes hard to find. Or hard to understand. Or not really specific enough that they resonate with many HR and Talent pros.

Lots of the articles and analysis about data and analytics for HR end up reading more like, 'This is going to be important', or 'This is going to be extremely important and you are not ready for it', or even 'This is going to be extremely important, you are not ready for it, but I (or my company) is ready to help you sort it out.'

Fortunately for you, this is not one of those kind of articles.

Over the weekend I read a long-ish piece called Unhappy Truckers and Other Algorithmic Problems on the Nautilus site, that provides one of the most interesting and practical examples of how a better understanding of HR data, (among other things), is helping transportation companies plan routes, assign work, and execute managerial interventions, often before they are even needed.

At the core of most transportation and delivery problems is essentially a logistics challenge as the 'Traveling Salesman' problem.  Given a fixed time period, say a day or an 8-Hour shift, and set number of destinations to visit to make sales calls, how then should the traveling salesman plan his route for the maximum efficiency. 

For a salesperson making four or five stops in a day the problem is usually not that hard to solve, but for say a UPS or FedEx delivery truck driver who may have as many as 150 stops in a day - well that problem of math and logistics gets much, much more complex.  And, as the piece from Nautilus describes, the Traveling Salesman problem is not only incredibly important for transportation companies to try and solve, it becomes even more complex when we factor in the the delivery drivers are actual human beings, and not just parts of an equation on a whiteboard.

Check out this excerpt from the piece to see how one (unnamed) delivery company is taking HR and workforce data, couples with the realization that indeed, people are a key element,  and baking it in to the classic math problem of the Traveling Salesman:

People are also emotional, and it turns out an unhappy truck driver can be trouble. Modern routing models incorporate whether a truck driver is happy or not—something he may not know about himself. For example, one major trucking company that declined to be named does “predictive analysis” on when drivers are at greater risk of being involved in a crash. Not only does the company have information on how the truck is being driven—speeding, hard-braking events, rapid lane changes—but on the life of the driver. “We actually have built into the model a number of indicators that could be surrogates for dissatisfaction,” said one employee familiar with the program.

This could be a change in a driver’s take-home pay, a life event like a death in the family or divorce, or something as subtle as a driver whose morning start time has been suddenly changed. The analysis takes into account everything the company’s engineers can think of, and then teases out which factors seem correlated to accident risk. Drivers who appear to be at highest risk are flagged. Then there are programs in place to ensure the driver’s manager will talk to a flagged driver.

In other words, the traveling salesman problem grows considerably more complex when you actually have to think about the happiness of the salesman. And, not only do you have to know when he’s unhappy, you have to know if your model might make him unhappy. Warren Powell, director of the Castle Laboratory at Princeton University’s Department of Operations Research and Financial Engineering, has optimized transportation companies from Netjets to Burlington Northern. He recalls how, at Yellow Freight company, “we were doing things with drivers—they said, you just can’t do that.” There were union rules, there was industry practice. Tractors can be stored anywhere, humans like to go home at night. “I said we’re going to need a file with 2,000 rules. Trucks are simple; drivers are complicated."

Did you catch all the HR/talent/workforce data baked into the model described above?

Payroll, time and attendance, life events that likely would show up in the benefits admin system, scheduling are all mentioned, and I bet digging deeper into the model we'd find even more 'talent' elements like supervisor or location changes, time since a driver's last compensation increase, and maybe even 'softer' items like participation in company events or number of unread emails in their inbox.

The specifics of what bits of talent data aere being incorporated into the process matter less than the fact that in the example the HR data is being mashed up so to speak with the 'hard' data from the truck itself (which is another interesting story as well), and analyzed against past driver experiences to alert managers as to when and where an accident is more likely to occur.

There is even more to the problem than the technical observations from the truck itself, and the alogorithms' assessment of the HR/Talent data - things like Union rules and contracts factor into the equation as well. 

But for me, this example of taking HR data and using it not just to try and 'predict' HR events like involuntary turnover or a better or worse performance review score, and apply it to real business outcomes, (the likelihood of accidents) represents a great example of where 'Big Data for HR' is heading.

I definitely recommend taking a few minutes this week to read the entire piece on the Nautilus site, and then think about some the next time the FedEx driver turns up with a package.

Have a great week!

The bumpy road from HR to the CEO chair

If you are an HR leader that aspires to move up and potentially out of HR one day to sit in the CEO, COO, or some other 'C' chair that doesn't end with 'HRO', then you really should take a few minutes to read this piece on Bloomberg BusinessWeek titled - "Mary Barra, the Contender: GM's Next CEO May Not Be a 'Car Guy'", about current General Motors Chief Product Officer, (and potential future CEO), Mary Barra.

Ms. Barra has come up through the ranks in a long (33 year) career at the auto manufacturer to hold an incredibly powerful and high-profile position - as the GM leader of the $15B vehicle development operations group, she sits in a position where the success or failure of the entire company rests pretty squarely on her and her team's ability to deliver. This is the kind of role that is the logical 'last step' before assuming the CEO chair, where if she were to make it there would be distinctive for a few reasons. One, Ms. Barra would be the first female CEO at any of the US-based auto makers, and two; she would be one of the highest profile CEOs that had a prior stop as the Head of HR along the way.

That is fantastic, right? The former CHRO becoming the head of Product, then CEO? What could be a better path. Well, it may not be that simple.

More on Ms. Barra's time in HR and what it may mean to her prospects as future GM CEO from the BW piece:

Barra’s most high-profile moment came in 2009 after then-CEO Fritz Henderson put her in the HR role to help groom a new generation of leaders as the company worked to come out of bankruptcy. She allowed employees to wear jeans. “Our dress code policy is ‘dress appropriately,’ ” she announced in a memo. Barra had been attacking GM’s bureaucracy, slashing the number of required HR reports by 90 percent and shrinking the company’s employee policy manual by 80 percent. But loosening the dress code drew a flood of calls and e-mails from employees asking if they could, in fact, wear jeans. One manager was upset about the image this might send to company visitors. “So you’re telling me I can trust you to give you a company car and to have you responsible for tens of millions of dollars,” Barra responded, “but I can’t trust you to dress appropriately?”

The anecdote reveals quite a lot I think about Ms. Barra and the lingering perceptions of HR as a corporate function. It seems like she was doing 'good' HR - slashing rules, working to empower employees and managers, and encouraging people to think and act independently. But even that kind of 'good' HR (along with all her other accomplishments as an engineer and product leader), might not be enough to elevate her over and past the typical 'car guy' model that GM and the like have always had for their highest execs.

One more shot from BW:

When (current CEO Daniel) Akerson appointed Barra senior vice president of global product development in 2011, though, she had just spent a year and a half as GM’s head of HR, which did not sit well with the car guys in the company and around Detroit.

“She had a difficult time getting credibility because she was in HR before, even though she is an engineer,” says Rebecca Lindland, an industry consultant. “It’s sexism, and I think it’s the HR title.” Her vanilla style probably didn’t help, either. Bob Lutz, the swashbuckling former Marine pilot and legendary car executive, used to fly his own helicopter to work.

The path to the CEO chair at a massive company like GM is a tricky one, but there are a few rules of thumb that are typically followed. The person would have deep industry experience. Would have a demonstrated career progression and documented success. They would have lots of contacts and allies. And they would have served in leadership roles in more that one discipline - some operations, some sales, some finance, maybe marketing - you get the idea.

On the surface, it seems Ms. Barra possesses all these qualities, and indeed, one day she may well become the CEO of GM. But if she does not, I wonder if she and others will look back on the (fairly brief) stint as the Head of HR as a mistake. 

I wonder if she will think that having to spend more than five minutes talking about the gosh darn DRESS CODE as something that tainted her just a little, and reinforced the traditional thinking of HR as the 'rules police' and any head of HR, no matter how enlightened and progressive, as not really a true business leader.

It will be interesting to see how this plays out and whether a former 'HR lady' can become one of world's most powerful 'Car guys'.

Have a great week!

Past performance is not indicative of...

Quick shot for a Wednesday that feels like a Tuesday in the middle of what I promise you will feel like a really long week instead of a short one come Friday.

Recently Business Insider ran a piece on the retirement and parting thoughts of Gerard Minack, formerly at Morgan Stanley. In Minack's last investment note, the long time investment pro offered his take on why professional investors and advisers usually do better at 'beating the market' than do amateur, or retail investors - also kind of unusual when careful investing in broad market index funds offer the amateurs among us a pretty decent alternative that will generally at least match market returns.Triangles

Here's Minack on why the pros possess an advantage over the amateurs:

The good news for the professionals is that many amateurs persist in trying to beat the market and, in aggregate, they seem to do a significantly worse job than the professionals.

The biggest problem appears to be that – despite all the disclaimers – retail flows assume that past performance is a good guide to future outcomes. Consequently money tends to flow to investments that have done well, rather than investments that will do well. The net result is that the actual returns to investors fall well short not just of benchmark returns, but the returns generated by professional investors.

In the investing context that's was of interest to Minack, amateurs tend to overweight funds and stocks that have been doing well, and underweight, (or even miss entirely), those funds and stocks that are poised to do well in the future. And to him, the mantra of past performance being a good indicator of future performance, (or even the best indicator), was the main reason.

It makes sense in this context. Just because Apple stock kept going up and up and up seemed to indicate it couldn't go down. Until it did. And took a lot of investors with it on the way down, (admittedly many of the same ones who rode it up as well).

But outside of finance and investments, I wonder too, if lots of us fall victim to the 'past performance --> future outcomes' bias too often as well. It's easy to feel that way I suppose. It feels safe. It's hard to argue against usually. When you don't know what will happen next, or know what a person will do next the easiest thing, (and sometimes the only information you have), is too examine what just happened and assume it will continue.

I once wrote something about being a true visionary or innovator means imagining the future as something wildly and incredibly different and not just an incremental shift of the past. But that is really hard to do, as Minack's observations about investing remind us.

Differential advantage via technology? It's hard to find that on a shelf

One of the most widespread and influential technologies of the last 40 years that has not only improved business but actually helped create entirely new businesses is the seemingly mundane shipment tracking number.

That crazy-long string of 15 or 20 letters and numbers that somehow, as if by magic, allows you to determine the location and stage in the shipment process of all the crap essential items you order from Zappos, Amazon, or Warby Parker. If you are old enough to remember what ordering goods from catalogs or mail-order was really like before the days of tracking numbers then I think you'll agree how dramatic an improvement it is, and how it enables businesses to make commitments and consumers to make plans.

FedEx who recently celebrated their 40th anniversary, created the tracking number and invented scores of related technologies and processes that surround the tracking number which remains the core of their shipment process today. It is a fascinating story of innovation that you can read about in this recent piece on Wired.com, Tracking 40 Years of FedEx Technology.

The tracking number, and the associated network, communications, applications, and database technologies that make the number accessible and intelligent to the shipper, retailer, and consumer alike truly represents an amazing story of technological innovation. But it is a kind of innovation that sometimes we lose sight of, particularly those of us who talk about things like 'enterprise' software - systems like ERP or Supply-chain, or even HCM solutions. 

The vast majority of these enterprise systems, and the ones that people (mostly) spent time talking about, are commercial off the shelf solutions. A software company has built these solutions, usually with the insights of customers, partners, and their own internal teams of experts, and then attempts to sell what normally is the same exact system to as many customers as they can.  That's the software business, essentially, and it makes tons of sense for both the customer and the vendor. 

For the vendor, developing, marketing, maintaining, and updating one main version of the solution is simpler, more efficient, and over time, allows them to spend more time and R&D on building new features and capabilities, which potentially benefit all customers. And for the customer, having to not be in the business of creating their own custom solutions for things like Payroll, Accounts Payable, collecting job applications, and asset tracking is a huge boon as well. For only a very few specialized companies, none of these things are fundamental to their core business models.

But having these types of enterprise off the shelf systems in place, configured, and deployed can only do so much for an organization when you factor in the these two elements - that the same solutions are available to everyone in the market, including their competitors, and mostly the processes they support are not core to their differentiating value proposition. Or said differently, a dozen of your competitors probably run the same ATS as you, that looks and feels kind of the same, and candidates hate theirs as much as they hate yours. No advantage gained, (or ceded, admittedly). Yes you can do a 'better' implementation of generally available solutions, and that might make you a little faster to process an applications or more efficient at taking payment discounts than the other guys, but these kinds of advantages are mostly tangential to whatever your 'real' business is about.

So if true technological competitive advantage is hard to come by simply from commercial off the shelf software, then where can it come from?

Let's go back to the FedEx example. Here's some idea of where from the Wired.com piece:

FedEx’s 40-year history is about far more than an unimaginable number of overnight deliveries. It’s a case study in creating a service, then pushing technology forward to ensure that service actually works on a large scale. When it absolutely, positively has to be there overnight, you need powerful technology. And sometimes you have to create it.

In its relentless pursuit of efficiency, FedEx has pioneered and developed technologies later embraced by everything from cellular industry to online retailing and distributed computing.

“On a day to day basis, shipping 10 million packages, you have to have technology,” (FedEx CIO) Carter said. Even if that means creating it yourself.

The advantage comes from technology that surrounds the essence of the business model - the fast, reliable delivery of customer shipments. The technology that enables that mission, that others can't easily duplicate, is where and how technology helps lead to real success. And all of it had to be created from nothing.

The FedEx technology story really is quite amazing and a great reminder that many of the real innovations in technology, and the differential competitive advantage that can be derived from them, usually starts from a blank sheet of paper, and almost never can be found on any vendor's shelf.

Spring Break Rewind #4 - I'm not really properly motivated

Note: It is Spring Break week here in Western New York, (for the school-age kids anyway), and while I will still be working and traveling to New York City to present at a conference, this week will be busier than most. So this week on the blog I'll be re-running some pieces from the last 12 months or so. Yes, I am being lazy. Cut me some slack. Anyway, if you are on Spring Break this week, I hope you have a great little vacation!

This piece - 'I'm not really properly motivated', originally ran in August 2012.

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Most readers who are parents would likely agree with me when I say that of all the challenges we face in various parts of our lives, that convincing a stubborn kid to do something, (or more likely, to continue to do something so as it becomes a habit), is probably right up these on the frustrating and maddening scale.

When the kids are really young, say less than 5, logic and reasoning are (mostly) useless as negotiating tactics, and once they get a little bit older they develop a pesky ability to apply their own forms of logic and let's say unique world views to bat back most of your well-reasoned and completely reasonable demands. Never mind that as parents we almost always give up really fast trying to actually see the problem from the kid's perspective, after all, it is the one time in our lives when we have (pretty much) absolute power in the negotiation. And breaking out 'Because I said so' or 'Because I am the parent and you are the kid' might both be fully valid, accurate, and successful ways to put an end to any discussion around behavior modification, they also feel kind of hollow and depressing to have to rely upon, at least too frequently.  Dilbert.com

Whether it's a reluctant kid who can't see the inherent wisdom in simply doing whatever it is you want him/her to do, or a pesky colleague, manager, or subordinate at work that for some reason is having trouble seeing the brilliance (or at least the logic) in whatever fool idea you are pushing, it seems to me it is getting more important all the time to appreciate the absolute value of being able to have your ideas, if not adopted wholly, at least understood and maybe, maybe even supported by collections of folks that have their own ideas about how things should go. Like the kid who does not seem enthused about mundane activities like 'room cleaning', the truth is most folks won't naturally or willingly see the value to them of listening to you, making the 'I'm the boss/parent/teacher/coach' your all-too-frequently uses fall back position, and discussion-ender.

I know all contentious debates do need to come to an end for any progress to be made. The kid's room has to be cleaned, homework has to get done, the TPS reports have to go out, and on and on and on.

But how the debate ends I think is important, and how the accumulation of these endings over time begin to impact the ability of any type of leader, be it a parent, manager, or coach, to get people around them working towards mutually beneficial ends matters.

As a parent, if you keep pulling the 'Because I'm the Dad' line, it is probably a sign of some other kind of problem, perhaps a little bit of a lack of seeing their point of view. As my 11 year old explained to me recently, 'It's not that I don't want to, it's just that I'm not really properly motivated'.

Sure, I could have trotted out the 'Tough luck kid, I am the Dad', (I actually think I did), but there certainly was the feeling that I should not have had to go there. That the kid should have intuitively understood the wisdom/logic/importance of whatever it was I wanted him to do. And the fact that he did not, well, that was completely and totally his problem or failing, not mine.

That's how it works when you are the boss, right?