The balanced scorecard, a strategic planning and management system originally developed by Drs. Robert Kaplan (Harvard Business School) and David Norton, structures non-financial performance measures with traditional financial metrics to provide a more holistic, or balanced, view of an organization. As one would expect, an organization’s talent management becomes a critical foundation for these four primary components of talent analytics:
- Learn and Grow
- Business Process
Many articles have been written discussing how to translate this process to HR and Talent Management, but the one component that is typically missing is how to use talent analytics tools as support. In recent years, talent analytics has evolved to provide the critical data needed to tie a Talent Balanced Scorecard to the Organizational Balanced Scorecard.
Below is a review of the four primary components and an example showing how talent analytics can be effectively used within each category:
Learn and Grow: Research from Bersin & Associates shows that “learning organizations” are 92% more likely to innovate and they produce 37% higher employee productivity. The question then is how to become a “learning organization?” Over the last 10 years many companies have focused on Learning Management Systems. While these systems are beneficial, they often don’t provide a clear behavior and competency review of the employee in relation to the job.
Measuring for the proper soft skills during the acquisition process and using ongoing behavioral competency development tools is what really sets the foundation for success in this area. A quality assessment tool will provide insight to many key job behaviors. “Learning” is just one such area that can be measured; these soft skills will help ensure you have the right talent in the right roles.
Customer: We all know the customer needs to be every organization’s number one focus, and it’s clear that having customer-centric front line workers makes a direct impact. But customer focus needs to go deeper than just the front line. Using talent analytics to measure an organization’s culture from a competence and behavioral point of view is critical. A business can quickly analyze a department or total employee population for competencies such as Customer Service Orientation, which further breaks down into behaviors like communication, influence, listening, empathy, etc. These objective data points allow leadership to identify areas of opportunity on which to build.
Business Process: The Business Process component focuses on the efficiency and metrics to measure critical processes that support the very core of the company’s mission. Having the right talent and leadership to identify the processes and measurements is as key as the measurement itself. Strong succession planning is an absolute requirement. Talent Analytics can support the succession process by reviewing successful individuals against a leadership profile. Additionally, the high potential individuals can then be reviewed against the makeup of the future team to ensure that total team balance is maintained.
Financial: This fourth component encompasses the financial outcome of the previous three, and takes into account how it measures into the company’s standard financial data. Human Resource processes have a significant impact on a company’s top and bottom lines through increased production with the right talent and an engaged workforce. Couple that with reduced costs from a decrease in turnover and recruiting, and you’ve got a financial home run.
The balanced scorecard has been in place for nearly twenty years, but tying that strategy to objective talent analytic data is still a new process for many companies. When done correctly, the impact is significant and takes far less effort than you may think. It’s definitely time for all organizations to challenge themselves and to capitalize on talent analytics tools and processes.