February 19, 2019
February 19, 2019
In my work with the C-suites of leading global companies, we are shaping an exciting workforce-related transformation that can significantly impact the bottom line. A wealth of companies are sitting upon information and insights that—if unlocked—can lead to immense value, sizably impacting future revenue growth.
It’s what I call “decoding your organizational DNA.” Accenture’s new research on the topic —presented at the 2019 World Economic Forum—shows that organizational DNA impacts the C-suite and board.
Workforce data itself does not move the needle. Rather, it’s the insights companies can glean from the data, using artificial intelligence (AI) and advanced analytics, that are pure gold. The difference between using workforce data responsibly and failing to do so impacts revenue growth by as much as 12 percent, which makes it a sizeable balance-sheet factor. Collecting and using workforce data can be a goldmine or a minefield, depending on how it’s handled.
It’s a business performance issue
In NACD’s 2019 projections on emerging board matters, 70 percent of directors reported their boards need to strengthen their understanding of risks and opportunities affecting company performance. Workforce data is just such a risk and an opportunity, rolled into one. Chief human resources officers should lead on this issue, but they need to actively partner with their C-suite peers and seek the wisdom of their board to navigate these uncharted waters.
Companies mine consumer data to provide better, more personalized value to their customers. Some of those same companies are just beginning to do the same with data on their workforce. From using wearable technology to gauge an employee’s workday stress levels, to determining the informal worker networks that produce breakthrough innovation, workforce data shows great potential for improving business performance. But only if it’s mined correctly and responsibly for truly useful insights.
Measures of responsibility
At Accenture, we call identifying and analyzing this data “decoding your organizational DNA.” This decoding brims with positive possibilities, but also comes with great responsibility to employees’ privacy and security.
Accenture’s research shows that while 62 percent of businesses are now using workplace data to a large or significant extent, only 30 percent of C-suite leaders feel very confident they are using it responsibly. In fact, roughly half of C-suite executives (49%) say that, in the absence of sufficient legislation, they would continue using workforce data without additional measures of responsibility.
Given the regulatory activity in the consumer data area (the Global Data Protection Regulation being the most prevalent), we can expect to see similar policies stated in the employee area. Company leaders must act now to identify and mitigate privacy and regulatory risks for employees’ data just as they do in the consumer data sector of their business.
As the World Bank’s Tina George, co-lead on delivery systems for the Social Protection and Jobs practice globally, put it in the Accenture report: “Technology and trust are not sufficient to protect people and their data. We need to develop systems and guarantees allowing people to make reasoned, consensual choices about how their personal data is used, while also ensuring that advantage is not taken of the digital footprints they leave behind inside or outside of work.”
Putting employees first: A matter of trust
The responsible use of workforce data can engender employee trust. Beyond that, it contributes to more innovative, productive, and satisfying workplaces, creating workforces that are more agile and resilient even in uncertain, volatile times. Nearly 60 percent of employees Accenture surveyed think workplace data will improve their lives and performance. Although a similar proportion have concerns that their data could be misused, nine out of 10 are open to the collection of data on them and their work—if it improves their performance or well-being, or provides other personal benefits.
Benefits already playing out for leaders
Companies that are able to get the trusted collection and use of employee data right stand to gain significantly. Their employees benefit also, not just from the shared effects of growth but from an individual perspective. Hitachi is a great example of this win/win. Its manufacturing employees wear special glasses and armbands to track their eye and hand movements. AI uses this data to improve operations—making employees safer and more efficient while also improving quality. Many Hitachi employees also now wear smart badges loaded with sensors that collect behavioral data on them 50 times a second. AI then uses this data to suggest ways to improve their happiness (e.g. how to best structure their day). In one test, sales divisions that strongly adopted the technology not only showed improved levels of happiness, but generated 27 percent more order volume than those divisions that used the technology far less.
The Accenture Decoding Organizational DNA report put it well: “On one hand, value as far as the eye can see: employees who are more motivated, engaged, and highly productive. On the other, the potential for misuse of data: individual rights ignored . . . and employees’ skills underutilized.” A board that proactively navigates this issue with its C-suite is far more likely to tip the scales toward the goldmine of improved revenue, rather than toward a minefield of unmitigated risks.