The importance of strategy in building people analytics excellence

Building a high-performing people analytics practice depends on capability in six essential components. While data, skills, technology, and processes may be the bedrock, the guiding light for these is strategy and governance. In this article, we look at whether having a clear strategy can enhance your overall people analytics maturity.

However your people analytics practice is organized, it doesn’t necessarily follow you’ll have a good strategy in place. It’s easy to overlook while you’re building technical capability, but in the long run a weak strategy will naturally impose limitations on your success.

What makes a good people analytics strategy?

From experience and through our work with customers, we’ve found there are four core elements that define people analytics strategy in practical terms. These are vision, planning, building a business case, and having an executive sponsor.

1. Vision. A good people analytics vision will help you explain to colleagues what you’re trying to achieve and to be specific about the support you need. It can help you identify areas where cross-functional collaboration is needed for building capability.
2. Planning. Whether companies develop a vision before they plan or whether they plan short-term before finding their vision, our experience shows that the longer you delay in planning your people analytics goals and deliverables, the slower your progress will be. This may seem like an obvious statement but it’s a surprisingly common situation.
3. Business case. For those just starting out in people analytics, you may not have the data and analysis to build a strong business case. But not having a business case is likely to affect investment and make it harder to gain traction within the business. Importantly, having a well-formed vision can help with building a business case, because it’s clear what you’re building it for.
4. Sponsor. Having an influential sponsor will help you to secure investment for big tickets items, such as people (skills) and technology, and will help gain buy-in from the senior leadership, which is vital to the success of your plans.

Benchmark insights into people analytics maturity

Earlier this year, we surveyed 300 HR practitioners in the UK and US on the six components of people analytics excellence and compiled the findings into industry benchmarks in people analytics capability on a maturity scale.

Here’s how the industry stacks up for strategy:

From the research, we found that many companies start building their people analytics practice without having a clear vision. Similarly, many begin work without having a plan in place, despite the fact planning has a stronger correlation with maturity in strategic capability than having a vision.

Along with planning, building a business case has a strong correlation with people analytics maturity, while having an executive sponsor emerged as a poor predictor of overall maturity in strategy. Our research also indicates that while some companies start their journey with a sponsor, many don’t enlist executive support until quite late on.

Can strategy accelerate people analytics excellence?

Following on from this, our research suggests that strategy is relatively low in priority for many organizations when they start to build capability in people analytics. We can speculate that being strong on strategy accelerates building capability in people analytics, because you know what you’re trying to do up front. Yet it’s evident from the data that, while you can make good progress without a fully formed strategy, it will only get you so far.

Read next

The next article in this series looks at the second of the six measures of people analytics capability, your ‘People’ and uncovers insights relating to bringing skills in-house, when to use consultants, and other resources you’ll need to build a world-class people analytics practice.