The head of organizational development (OD) presents to the CEO some great feedback he received on the company’s last management training:
Head of OD: “As you see, the program was very effective.” CEO: “How do you know that the program was effective?” Head of OD: “The managers’ feedback show that.” CEO: “No. The feedback shows that they are satisfied. It is nice, but I don’t have any data that justified a $200K yearly investment. Especially now, in times of uncertainty.”
Shifting Challenges in Organizational Development
Human resources (HR) departments in organizations across the world have experienced an unexpected shift since the COVID-19 outbreak became a pandemic last year. With high uncertainty around how the office space will even look like in the coming years, one thing is certain: We are facing many complex organizational challenges, and HR departments will be taking on a more critical role — perhaps more than ever before.
These challenges present a tremendous opportunity for a complete transformation in the workplace, both in the way things are being done and the organizational branding of HR.
To make some preliminary assumptions about what this revolution will look like, let’s examine how the sales and marketing industries have been transformed in previous decades:
Twenty years ago sales was considered art. Good salespeople knew how to say the right things to get people to act, which was commonly known in the industry as the “wine and dine” technique. Then Salesforce and other sales platforms emerged and transformed the sales industry from art to science. The science is rapidly evolving, as data is constantly being collected and analyzed.
Today you can find personalized analytics tools of every step along the sales funnel. Gong.io, for example, provides analyses on calls that are so in depth and this technology didn’t exist until now. The world of sales is significantly more developed than ever — it’s in depth, personalized and data driven. Sales representatives, for example, are now often evaluated on their performance and contribution to relevant key performance indicators (KPIs) reflecting growth metrics.
The most popular marketing strategy at the beginning of the 21st century was “spray and pray.” Marketing professionals would “spray” their ads everywhere including via TV commercials, billboards and website banners. Then they would pray for a positive outcome. They crafted the perfect copy to evoke the perfect response from the average consumer, and big bucks were spent on marketing activities. The problem is they couldn’t track their actual impact on sales.
Again technology emerged, and digital marketing platforms like Hubspot transformed the marketing world and made it measurable. Each campaign has KPIs and are personalized and data driven. The world of marketing began to shift, and new marketing roles such as digital marketing experts began to emerge.
In these two examples we see three major trends:
- Personalization of processes
- Data-based decision making
- Metrics based on business KPI impact
Personalization of Process
The most relevant trend in our current COVID-19 climate is personalization. It’s making a process tailored to a specific employee instead of a department or role. We need to understand every employee is unique, every type of sale is unique and every potential customer needs to be targeted with a unique marketing campaign.
The “one size fits all” trend is essentially dead. The new personalization trend stems from the millennial need for individualism, and it’s definitely predominant during COVID-19. Plus the primary workforce now is at home. Needs and challenges are different, and expectations from employers are changing in a way that justifies considering a transformation of old paradigms involving face time with employees and company meetings.
Data-Driven Decision Making
The second trend is based on the buzz word “data”. Companies often have departments that monitor activities going on in the organization to gather a deeper operational insight. CEOs always review internal data and external benchmarks before every decision they now make. They will also try to project according to the available data how a decision will affect the company’s goals. No organization today will act without reviewing solid data points.
Metrics Based on Business KPI Impact
The third trend is related to KPIs, or goals. Every action a company makes should achieve a specific goal. Examples include increasing sales by X% and reducing negative customer feedback by Y%. When we approach a task we need to identify the primary KPI we’re trying to improve.
So how is all this related to HR?
Well the next department headed for transformation is organizational development. The conditions are right so Human Resources 2.0, here we go!
HR analytics is gaining traction by connecting HR professionals with the world of data. Recruitment is shifting to data and KPI metrics, and companies need to target employees in a very personalized way. Engagement needs to change according to individual needs, and compensation and benefits should be based on data and benchmarks.
The field of organizational development and HR is still lagging behind, however, despite its key role and influence in employee engagement. According to a recent LinkedIn survey, 94% of employees said they’re more likely to stay at an organization if it invests more into their career development and continuing education. A 2019 survey by HBR, however, showed that only 12% of employees implemented skills learned in these types of programs.
If we connect the three principles above with the organizational development space, HR departments will create a more significant impact on employees and be perceived in a whole new way.
How can we make sure we’re not lagging behind?
- Invest in more personalized organizational development programs. “One size fits all” should never be the answer. We need to re-examine the current training methods in place and consider replacing them with more tailored training and development programs.
- Use data whenever you can. You can do A/B tests to learn what works and what doesn’t. Ask yourself: “What data do we collect? What is the industry benchmark? What is the correlation between what we do and the performance of our employees? And how do we know what program or which employee is doing best?” Once we collect the data, we can use it to tailor which programs are appropriate for each type of individual.
- Focus on strong business KPIs. Soft KPIs include participation, satisfaction or engagement. A measurable KPI involves improvement of the individual’s understanding of it. What will happen if every process they launch aimed to achieve this goal? The whole process would become more focused, with more long-term impact. Imagine a management meeting where the HR director informs the CEO that the $2 million invested in organizational development yielded in a $5 million improvement in sales and cost reduction. This is the reality we predict.
The organizational development space will transform from the ground up and become more personalized, data driven and measured according to business KPIs. This change will position HR professionals in a whole new way within the organization.
COVID-19 provides us with a precious opportunity to re-examine what we do and align our industry with the other departments in our organizations to a state where our value is crystal clear. Since everything is measurable, we now have the advantage of developing a higher accuracy in our timelines, budgets and more.
So who’s joining the revolution?
Dan Valach is an HR executive with over a decade of experience leading global HR and working with fast-growth companies, including SimilarWeb, Healthy.io, AppsFlyer and AOL. Dan holds a BSc in Computer Science and an MBA from Tel Aviv University.
He’s an #expert in coaching executive teams and CEOs to lead and grow, while working with mid-management and identifying the company’s DNA
Dan is also a member of the advisory board at GrowthSpace, a startup offering an innovative solution in the employee development space that’s personalized, data driven and connected to business KPIs — with one-on-one online coaching and mentorship tailored to each individual using data and measuring the impact of each program on business KPIs. GrowthSpace supports Fortune 500 clients like Intel and Applied Materials and tech unicorns like Gain Sight, Check Point and Taboola.