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Integrated Organizational Assessments: HR's Biggest Strategic Opportunity

Chris Forando, VP, Organizational Development, L'Oréal USA

Chris Forando, VP, Organizational Development, L'Oréal USA

Organizations that lack a centralized enterprise wide assessment strategy often become immersed in a chaotic and endless pursuit of symptomatic issues rather than addressing their root cause origins. Leaders instinctively react to deteriorating sales, decreasing customer satisfaction, or slow execution (missed deadlines, budget overspend) by sounding the alarm for HR to intervene with immediate solutions. HR, quick to prove its business value, hires more sales personnel, implements new customer care training, and restructures teams for better execution.

Yet, three to six months later the problems still exist and have become worse. Why? Decreasing sales, poor customer service and retention rates, and increasing turnover are not problems, they are indicators that problems exist. Developing an organizational assessment strategy is critical to continuously optimizing performance at the individual, team, functional, and organizational levels by isolating root cause issues, determining factor relationships, and surgically executing solutions that are targeted, measurable, and cost effective.

Organizations, much like the human body, are dynamic open systems constantly assessing, rejecting, incorporating, and adapting to a vast array of environmental stimuli. And just as medical professionals utilize a variety of tests to evaluate our health and vitality by detecting and diagnosing potential threats, organizations will increasingly need to develop a technologically integrated ‘assessment ecosystem’ to monitor their own performance and health, to diagnose conditions, and to prescribe ‘treatments’ to ensure vitality, sustainability and a strong competitive posture.

"Development of an organization effectiveness dashboard that is powered by an integrated assessment ecosystem will become of immense strategic value to senior leadership teams and even corporate boards"

Emerging Strategic Capability

Today’s organizations are often designed and managed in ways that promote ‘functional myopicism.’ Functional self-centeredness leads them to only monitor their own data, goals, and priorities, and to communicate within limited networks, often to the detriment of the larger ecosystem in which they operate. Simplistically, Finance looks at revenues and operating costs, Production is concerned with speed and delivery, Customer Care wants to resolve and close tickets, Quality is concerned with product quality, HR with headcount, diversity, and turnover, Marketing with launch excellence and media spend, and Sales with new and existing business and client retention rates.

But who is looking at all of it simultaneously and determining the interdependent relationships between the factors?

HR is at the precipice of realizing its greatest strategic capability yet as system diagnostician and change sentinel, orchestrating an organizational network of networks (ONoN), integrating data sets and streams to (1) inform strategy, (2) influence senior level decision making, and (3) propose offensive and defensive actions quickly and accurately.

So what will this network of assessments consist of from an HR perspective?

Personnel screening: Personality (NEO, Hogan, 16PF)and cognitive ability instruments (WGCTA, Raven’s, PAF, ANRA) used to create role-based ‘success profiles’. Development of these profiles can provide valuable data points in the hiring process and accelerate speed to hire by screening in those individuals who reflect characteristics of highly successful employees.

High performing teams: Using carefully designed measures to evaluate team optimization by assessing decision-making quality and speed, information flow, trust, conflict management, mindset, and other factors associated with high performance. Using instruments like the NEO and Hogan can be effective in developing team profiles exploring collaboration, problem-solving, and execution abilities.

Employee engagement: Measuring the extent to which employees are emotionally and behaviorally invested in their role and their relationships with their manager and organization. To determine if engagement is a critical factor, HR should be correlating engagement levels to turnover, customer satisfaction, and revenue, to name a few.

Employee stress: Author and molecular biologist John Medina suggested in his book, Brain Rules, that our brains were only designed to handle stress for about 45 seconds. Employees are increasingly being asked to do more, do it faster, better, at lower cost, and with fewer resources, fueling chronic stress and work exhaustion. A stress assessment, like the Occupational Stress Inventory (OSI) identifies types of stress (role overload, insufficiency, and ambiguity), strain (vocational, interpersonal, physical), and stress management practices (diet, exercise, socializing) at the individual level.

Organizational network analysis (ONA): Analyzing email and other enterprise communication networks for relational analytics to determine if and where information blockages exist, and how isolated teams are from others.

Deviation analysis: This is a simple practice that teams can use to regularly evaluate when actual performance is ‘deviating’ from forecasted projections and to assess causal factors. Unfortunately, many teams only measure on a quarterly basis and even then take a ‘wait-and-see’ approach, realizing months too late that corrective actions are necessary, and will require far more time and resources than if the issue had been detected and acted upon sooner.

When deciding to construct an ‘assessment ecosystem’ there are some critical factors to consider.

• Identifying the right strategic key performance indicators and measures of effectiveness needed

• Ensuring qualified personnel experienced in the administration, interpretation and integration of assessments and data analytics

• Selecting reliable and valid instruments/assessments, and understanding the legal implications that these instruments may present if used incorrectly

• Controlling data (organization owns rather than 3rd party ownership) is critical for building an internal database for use in evaluating long term patterns and relationships and further refining and validating organizational models, including role success profiles

• Securing the privacy of data

• Ensuring that data is used ethically and responsibly in critical decision making processes

Organizational Effectiveness Dashboard

The assessment categories listed previously are just a few that should begin to populate an evolving network and should be highly integrated with other functional data and key performance indicators. Once an organization effectiveness dashboard becomes operational, it should be used by a senior level cross-functional ‘intelligence team’ under the guidance of Organization Development (OD) to answer critical business questions, simulate business scenarios, formulate predictive outcomes, and advise senior leadership.

• What is the relationship between engagement and customer satisfaction?

• What is the relationship between customer satisfaction (or retention rate) and revenue?

• What is the relationship between headcount and revenue ($$:ee)?

• What is the relationship between product quality, quality team engagement scores, and customer satisfaction?

• What is the average sales per week per sales team member? What is the speed to hire? What is the relationship between revenue and speed to hire?

• What is the relationship between engagement and turnover?

• What is the relationship between turnover and stress, and what impact does that have on execution?

• What is the relationship between execution and customer satisfaction?

• What is the relationship between stress and engagement?

Development of an organization effectiveness dashboard that is powered by an integrated assessment ecosystem will become of immense strategic value to senior leadership teams and even corporate boards. Coupled with a strong OD and data analytics capability, organizations will be empowered to act on robust intelligence and insights to modify and execute strategy faster, more efficiently, and with greater effect. Symptomatic factors and relational vectors will be detected quickly. Optimization will be restored expeditiously through accelerated hiring of qualified candidates, targeted solutions to lower stress and strengthen engagement, and delivery of greater customer experience, all leading to increased sales and revenues, and further strengthening the self-regulating capability necessary for higher and unrivaled performance and success continuity.

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