1. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. Competing on Talent Analytics Jeremy Shapiro Executive Director, HR Morgan Stanley

2. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. 2 What are Talent Analytics? Talent Analytics makes use of data about your employees to find new insights that links people decisions to organizational performance.

3. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. 3 Caesars Entertainment Example Caesars links talent decisions to customer satisfaction. Customer satisfaction scores are a leading indicator of the number of visits it can expect from regular customers. Scores are linked to talent management practices: –Measuring “Smile Frequency” of client facing teams –Forecasting staffing needs using analytics –Optimizing HR practices that lift performance –Increase Wellness  Increase Attendance & Engagement  Increase Customer Sat & Revenue 3

4. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. JetBlue Example The Problem with HR Facts –Not focused on assisting a manager in making a decision. –Frequently a subjective evaluation (i.e. “Our turnover is too high.”) JetBlue’s Solution –Net Promoter Score. –Would you recommend working at JetBlue to a friend? –A meaningful “fact” for their managers to monitor team health. –Value chain: Employee Engagement  Customer Satisfaction  Financial Performance 4

5. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. Applying Talent Analytics 5 Human Capital Facts Analytical HR HC Investment Analysis Talent Value Model Talent Supply Chain Workforce Forecasts How should my workforce needs adapt to changes in the business environment? Why do employees choose to stay with or leave my company? Which actions have the greatest impact on my business? What are key indicators of my organization’s overall health? Data in Order Key Targets/Segments Differentiated Action Institutional Action Real - Time Optimization Predictive Action Which units, departments or individuals need attention? How do I know when to staff up or cut back?

6. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. Applying Talent Analytics 6 Human Capital Facts Analytical HR HC Investment Analysis Talent Value Model Talent Supply Chain Workforce Forecasts Data in Order Key Targets/Segments Differentiated Action Institutional Action Real - Time Optimization Predictive Action

7. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. Ketchum / Kodak Example Knowing and utilizing the network’s center Leveraging the network’s edge Bridging silos where collaboration matters © 2011 The Network Roundtable LLC Source: Rob Cross, University of Virginia, Driving Results through Social Networks

8. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. 8 Google Example Employee performance data used to determine interventions for high and low performers –Hypothesis: Google hires talented people so low performers may be misplaced or poorly managed –Outcome: Detailed analysis confirmed their hypothesis and a number of difficult situations were subsequently addressed Managers have the option of exposing their own performance to other managers

9. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. 9 The DELTA Model and Talent Analytics DELTA ModelOrganizationTalent Analytics Data Right HR Metrics Augment existing with new Smile frequency among customer—facing staff Enterprise Broad access to employee data Important statistical relationship between employee satisfaction and company performance Quarterly employee engagement surveys Leadership Belief that human-capital insights should be used to solve business problems Manager adoption crucial – analytics in company language Targets Based on priority talent challenges combined with business priorities Initial priority – hire the right people. Shifted to gaining insight into employee attrition over a two year period Analysts Combination HR and statistical analysis expertise Established HR analytics groups to gain deeper insights into people practices

10. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. Learn Wisely – Mistakes to Avoid 1. Treating people like interchangeable widgets 2. Waiting for 100% accurate data 3. Ignoring factors that can’t easily be translated into measures 4. Working in silos – getting cross functional help 5. Failure to monitor organizational priorities; creating irrelevant analyses 10

11. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. 11 Final Thought: Talent Data vs. Performance SOURCE: Bassi, et al., Good Company: Business Success in the Worthiness Era (Berrett-Koehler, 2011). Each bar represents a pair of companies in the same industry with Good Company score differences of 3 points or more. The bar represents the stock performance of the company with the higher Good Company score, minus the stock performance of the company with the lower score.

12. Copyright © 2010 Accenture, Thomas H. Davenport, and Jeremy Shapiro. All Rights Reserved. 12 To Learn More... Competing on Talent Analytics, Harvard Business Review, October 2010 Competing on Analytics: The New Science of Winning (HBP, 2007) Analytics at Work: Smarter Decisions, Better Results (HBP, 2010) Good Company: Business Success in the Worthiness Era (BK, 2011) Counting on Analytical Talent, Accenture Institute for High Performance, Mar 2010