HR Management, HR News & Trends

How Google Is Using People Analytics to Completely Reinvent HR

From the HR blog at TLNT.

First of two parts

If you haven’t seen it in the news, after its stock price broke the $800 barrier last month, Google moved into the No. 3 position among the most valuable firms in the world.

Google is clearly the youngest firm among the leaders; it has surprisingly been less than a decade since Google’s IPO.

Most companies on the top 20 market cap list could be accurately described as “old school,” because most can attribute their success to being nearly half a century old, having a long established product brand, or through great acquisitions. Google’s market success can instead be attributed to what can only be labeled as extraordinary people management practices that result from its use of “people analytics.”

A new kind of people management

The extraordinary marketplace success of Google (and Apple, which is No. 1 on the list) is beginning to force many business leaders to take notice and to come to the realization that there is now a new path to corporate greatness.

“New path” firms dominate by producing continuous innovation. And executives are beginning to learn that continuous innovation cannot occur until a firm makes a strategic shift toward a focus on great people management.

A strategic focus on people management is necessary because innovations come from people, and you simply can’t maximize innovations unless you are capable of recruiting and retaining innovators. And even then, you must provide them with great managers and an environment that supports innovation.

Unfortunately, making that transition to an innovative firm is problematic because almost every current HR function operates under 20th century principles of past practices, efficiency, risk avoidance, legal compliance, and hunch-based people management decisions. If you want serial innovation, you will need to reinvent traditional HR and the processes that drive innovation.

Shifting to data-based people management

The basic premise of the “people analytics” approach is that accurate people management decisions are the most important and impactful decisions that a firm can make. You simply can’t produce superior business results unless your managers are making accurate people management decisions.

Many do argue that product R&D, marketing, or resource allocation decisions are instead the most impactful decisions. However, each one of those business decisions is made by an employee. If you hire and retain mostly mediocre people and you provide them with little data, you can only assume that they will make mediocre decisions in each of these important business areas, as well as in people management decisions.

Google co-counder and CEO Larry Page

Google co-counder and CEO Larry Page

No one in finance, supply chain, marketing, etc. would ever propose a solution in their area without a plethora of charts, graphs, and data to support it, but HR is known to all too frequently rely instead on trust and relationships. People costs often approach 60 percent of corporate variable costs, so it makes sense to manage such a large cost item analytically.

Another major problem in HR is its traditional reliance on relationships. Relationships are the antithesis of analytical decision-making. The decision-making “currency” for most business decisions has long been data, but up until now, HR has relied on a different currency: that of building relationships.

In direct contrast, Google’s success has to be attributed in large part to the fact that it is the world’s only data-driven HR function. Google’s business success should convince executives at any firm that wants to grow dramatically that they must at least consider adopting the data and analytically based model used by Google. Its approach has resulted in Google producing amazing workforce productivity results that few can match (on average, each employee generates nearly $1 million in revenue and $200,000 in profit each year).

How does the Google approach reinvent HR?

HR at Google is dramatically different from the hundreds of other HR functions that I have researched and worked with. To start with, at Google it’s not called human resources; instead, the function is called “people operations.” The VP and HR leader Laszlo Bock has justifiably learned to demand data-based decisions everywhere.

People management decisions at Google are guided by the powerful “people analytics team.” Two key quotes from the team highlight their goals:

  • “All people decisions at Google are based on data and analytics.”
  • The goal is to … “bring the same level of rigor to people-decisions that we do to engineering decisions.”

Google is replacing the 20th century subjective decision-making approach in HR. Although it calls its approach “people analytics,” it can alternatively be called “data-based decision-making,” “algorithm based decision-making,” or “fact or evidence-based decision-making.”

Top 10 reasons for Google’s people analytics approach

The people analytics team reports directly to the VP and it has a representative in each major HR function. It produces many products, including employee surveys that are not anonymous, and dashboards. It also attempts to identify insightful correlations and to provide recommended actions. The goal is to substitute data and metrics for the use of opinions.

Almost everyone has by now heard about Google’s free food, 20% time, and wide range of fun activities but realize that each of these was implemented and are maintained based on data. Many of Google’s people analytics approaches are so unusual and powerful, I can only describe them as “breathtaking.”

Below I have listed my “Top 10” of Google’s past and current people management practices to highlight its data-driven approach:

  1. Leadership characteristics and the role of managers –ts “project oxygen” research analyzed reams of internal data and determined that great managers are essential for top performance and retention. It further identified the eight characteristics of great leaders. The data proved that rather than superior technical knowledge, periodic one-on-one coaching which included expressing interest in the employee and frequent personalized feedback ranked as the No. 1 key to being a successful leader. Managers are rated twice a year by their employees on their performance on the eight factors.
  2. The PiLab — Google’s PiLab is a unique subgroup that no other firm has. It conducts applied experiments within Google to determine the most effective approaches for managing people and maintaining a productive environment (including the type of reward that makes employees the happiest). The lab even improved employee health by reducing the calorie intake of its employees at their eating facilities by relying on scientific data and experiments (by simply reducing the size of the plates).
  3. A retention algorithm — Google developed a mathematical algorithm to proactively and successfully predict which employees are most likely to become a retention problem. This approach allows management to act before it’s too late and it further allows retention solutions to be personalized.
  4. Predictive modeling – People management is forward looking at Google. As a result, it develops predictive models and use “what if” analysis to continually improve their forecasts of upcoming people management problems and opportunities. It also uses analytics to produce more effective workforce planning, which is essential in a rapidly growing and changing firm.
  5. Improving diversity – Unlike most firms, analytics are used at Google to solve diversity problems. As a result, the people analytics team conducted analysis to identify the root causes of weak diversity recruiting, retention, and promotions (especially among women engineers). The results that it produced in hiring, retention, and promotion were dramatic and measurable.
  6. An effective hiring algorithm – One of the few firms to approach recruiting scientifically, Google developed an algorithm for predicting which candidates had the highest probability of succeeding after they are hired. Its research also determined that little value was added beyond four interviews, dramatically shortening time to hire. Google is also unique in its strategic approach to hiring because its hiring decisions are made by a group in order to prevent individual hiring managers from hiring people for their own short-term needs. Under “Project Janus,” it developed an algorithm for each large job family that analyzed rejected resumes to identify any top candidates who they might have missed. They found that they had only a 1.5% miss rate, and as a result they hired some of the revisited candidates.
  7. Calculating the value of top performers – Google executives have calculated the performance differential between an exceptional technologist and an average one (as much as 300 times higher). Proving the value of top performers convinces executives to provide the resources necessary to hire, retain, and develop extraordinary talent. Google’s best-kept secret is that people operations professionals make the best “business case” of any firm in any industry, which is the primary reason why they receive such extraordinary executive support.
  8. Workplace design drives collaboration – Google has an extraordinary focus on increasing collaboration between employees from different functions. It has found that increased innovation comes from a combination of three factors: discovery (i.e. learning), collaboration, and fun. It consciously designs its workplaces to maximize learning, fun, and collaboration (it even tracks the time spent by employees in the café lines to maximize collaboration). Managing “fun” may seem superfluous to some, but the data indicates that it is a major factor in attraction, retention, and collaboration.
  9. Increasing discovery and learning  Rather than focusing on traditional classroom learning, the emphasis is on hands-on learning (the vast majority of people learn through on the job learning). Google has increased discovery and learning through project rotations, learning from failures, and even through inviting people like Al Gore and Lady Gaga to speak to their employees. Clearly self-directed continuous learning and the ability to adapt are key employee competencies at Google.
  10. It doesn’t dictate; it convinces with data — The final key to Google’s people analytics team’s success occurs not during the analysis phase, but instead when it present its final proposals to executives and managers. Rather than demanding or forcing managers to accept its approach, it instead acts as internal consultants and influences people to change based on the powerful data and the action recommendations that they present. Because its  audiences are highly analytical (as most executives are), it uses data to change preset opinions and to influence.

Tomorrow: How Google is a talent competitor to your organization

Dr John Sullivan is an internationally known HR thought-leader who specializes in bold and high business impact and strategic Talent Management solutions for large corporations. A prolific author with over 900 articles and 10 books covering all areas of Talent Management, he has written over a dozen white papers, conducted over 50 webinars, dozens of workshops and he has been featured in over 35 videos. In addition, Dr. Sullivan is an engaging corporate speaker who has excited audiences at over 300 organizations in 30 countries. His ideas have appeared in every major business source including The Wall Street Journal, Fortune, BusinessWeek, Fast Company, and others. Fast Company called him the "Michael Jordan of Hiring,” Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industries most respected strategists.” He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked #8 among the top 25 online influencers in Talent Management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and was CEO of the Business Development Center, a minority business consulting firm in Bakersfield, CA. Since 1982, he has also been a Professor of Management at San Francisco State University. His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net.
  • chawchee

    So when did Google become a cult exactly?

  • Tracey H

    Personally I love Google – I admire it’s innovation and success – but when I read articles (written by admiring third parties) which deride the practices of companies, in comparison to Google, I get annoyed. Here’s one that posits HR practices in (non-Google) organisations are built around relationships whereas Google, and possibly only Google, build their HR practices around rational data. Sigh!

  • http://ericbrooke.wordpress.com/ Eric Brooke

    Disturbing.. Takes the Human out of human resource

    • http://twitter.com/TalentAnalytics Talent Analytics

      Comments like this are absurd. How? Do employees suddenly transform into numbers and stop being people? Ridiculous, unless of course you don’t have a height, a weight, a social security number, etc.

    • Neil Martinez

      Eric,

      Your comment sounds like the comments made by the Oakland scouts when confronted by “Moneyball” recruiting tactics. Data is a reliable tool but we should all remember that a tool is only as effective as the naked ape holding it.

      No where in the article did I see that a group of DBAs were feeding data into a CPU, running a few algorithms, and determining who to hire and who to fire. I read that Google uses data as a tool within the context of it’s hiring process — which appears to involve groups of people. No doubt the opinions of the interviewers are hugely important in the final determination made on a potential employee.

      I left DoubleClick the week before Google acquired it. Frankly, I was afraid. I don’t have a college degree and I know that one of the first wave of people to be fired would be those without degrees. I know I would have been a valuable employee but I wanted to control my future. Do I agree with broad hiring policies driving decisions between one individual and another? No. Absolutely not. But I do believe there is a place for analytics in HR.

      • http://ericbrooke.wordpress.com/ Eric Brooke

        I thoughtful comment deserves a thoughtful comment. My response was related to this “propaganda piece”.

        Data is not always reliable.. Humans choose what to measure and how to measure it..

        I agree that analytics have a part in all forms of decision making. My worry is humans like to categorize and label and once a person is labelled, it is hard to change that label. Probably why most people leave a job to get a promotion. For example you are either an A player or B Player, really how limited is this understanding of human beings…

        Most analytical systems do not take into account context e.g. the leader, the impact of each team members personal life, the political situ, etc. All of these factors will be taken into account by the leader, but in a heavy analytical culture they will tend to be ignored by the leaders above.

        Most analytic systems will enforce pattern matching sometimes conscious sometimes not, ironically from this is they may end up limiting their organization innovation, i.e. core similar types of people may not bounce off each other enough to develop revolutionary innovation just evolution innovation.

        HR/Leadership is so complex and good people are able to understand the complexity even if they do always have language for it. Your recent journey saddens me, as I believe that any good take over company will have already reached out and talked to you, and from each other you will have developed an understanding. Maybe if they have being a bit more human, perhaps?

        I wish you well in your next steps.

  • http://www.facebook.com/people/Randy-Martinez/100000162320157 Randy Martinez

    I simply never understood the allure that anyone had for Google. All it shows is that a catchy name will get you somewhere. Their search engine doesn’t do anything different than others. Its tools and word processing software is boring and lame. If Google was so great, how are they NOT able to monetize any of their so-called proprietary software, like Google Docs? No one uses them…
    I agree with Tracey’s comment regarding articles deriding practices of other companies as compared to Google. The author is a professor. It seemed to me that they basically just gave him the information and probably wrote the article for him. I know that I would never want to work at a company like Google….sorry.

    • John Adamante

      I’m not a fan of any particular company, and there are many Google products that I don’t use because I believe that are better options. This said… its search engine DOES many things different than others. Also, I USE Google Docs, so it’s not true that “No one uses them…”. I don’t understand the concept of “boring” word processing software, much less “lame”. And I don’t believe they have money problems, you don’t need to worry.

      I agree with the main idea: what applies to Google doesn’t necessarily apply to others. And it might not even be the best for Google itself. But with your “arguments” I really think you would lose any discussion. Extremes are always dangerous, and you fell in one of them.

  • http://wmougayar.com/ William Mougayar

    I’m confused about the take-aways of this. This sounds a bit like Google propaganda.

    What Google does isn’t always applicable to, or even feasible in other companies.

    Managing people is not an HR function. It’s a people/management thing.

    These practices have been around for a long time. We used to call them rating, ranking, succession management, development plans, performance metrics, etc… I’m failing to see the innovation, and further it’s a stretch to directly correlate this to the $1mil/200K rev/profit ratios. Google’s products are a big factor in this, even if they didn’t have all these people sub-optimizations. They are doing what any other well managed company of their size does.

    • DK

      It is for people like you that the attrition remains so high in other companies as compared to Google. Results speak large and loud. Chuck it, you will never understand it

      • http://wmougayar.com/ William Mougayar

        The joke is on you. Argue the point instead of attacking the commenter, if you can.

        What do you know about me.

      • Stephen Portanova

        Puff piece – just wanted to see how many times he could say “Analytics”, “data”, and “algorithm”

      • pritchardhall

        Don’t just drink the Kool-Aid DK. That’s how you will find yourself wondering why you alone in a room when the science stops working because other HR tools are let go. I am a user of behavioral metrics – for many years – but people have lives, family deaths, drug problems, spouses, sick children, health problems, depression; and do not respond with the consistency of an algorithm.

    • http://wmougayar.com/ William Mougayar

      There are nuances in evangelism :)

      • Randy Patton

        And self-righteousness in most nay-sayers.

  • Jenn

    It makes sense that Google utilizes their own data to improve all facets of the company. That message is obvious. Evidently it has been a successful approach.

  • Peter Gruben

    Measuring results is not what improves an athlete’s
    performance –it just confirms it or good measure shows where is space for
    improvement –but this does not improve performance either –it provides a base
    line. The approach, the way how an athlete feels, eats, sleeps, runs, breathes and
    the surface, the shoes and track suit material can improve performance.
    Monitoring and making statements is not an actual performance changer but a
    great tool to identify what and where it needs to be changed.

  • Lance Douglas

    Off the cuff, it reminds me of “Formula” development for babies by scientists… many babies died. Acquiring and retaining people doesn’t take science or math, it simply takes the most base of positive human traits permeating the organization: trust, consistency, respect, reward. Google is not simply going too far, it is simply far too dehumanized.

  • Alisha Rose Merlo

    As a consultant to physician practices, I always stress the value of employee engagement and creating a culture that supports the level of patient and employee service they desire. This is not just a “Big Business” concept but is essential for smaller businesses, trying to differentiate themselves in the eyes of customers and employees.

  • http://twitter.com/LouA LouA

    I’m dumbfounded that there are not more overwhelmingly positive comments about this post. I’ve known John for well over 10 years, and more times than not find reasons for disagreement. In this case, John is right on in every aspect. What’s applicable at Google is applicable at every company, you just have to step back and understand the implications. In most companies HR has only been able to maintain the status quo regarding quality of hire. Google has figured out what drives quality of hire and performance and has implemented it successfully. HR has known most of this stuff for 30+ years, but rarely has it been able to implement it properly. While the implementation will be different at each company, the foundational principles John has laid out are spot on. Now it’s up to HR to take this insight and apply it properly, rather than making up a bunch of silly excuses of why it can’t be done.

    • Denver

      I agree, this is good information for companies and HR professionals. Most companies do not invest adequate resources into people Analytics. HR is usually caught trying to get by with less and Analytics as a priority is lower on the list than other essential functions. It’s a chicken and egg proposition, if we had dedicated staff to measure and analyze then we might be able to justify programs and resources, but we often barely have the resources to keep the lights on.

      • http://twitter.com/TalentAnalytics Talent Analytics

        That’s a great point Denver. But as William points out in his comment above, “Managing people is not an HR function. It’s a people/management thing.” Since people have arguably the greatest impact on business performance, why not send people data to other areas of the business (ie finance, etc) that already analyze performance data? No need to silo it away in HR.

      • ococoob

        Maybe these companies have the “wrong” people in HR to begin with.

    • guest

      I think the problem is the assumption that all of this is new. I haven’t seen a predictive algorithm for retention before but I’ve seen systematic processes that involve senior leaders rating people for flight risk based on their knowledge of the person. I agree an algorithm might be added value. The rest of the points? I’m astonished anyone thinks any of it is new. 1/10

    • J Mark Franklin

      Lou, sounds like John has been influenced by performanced-based versus behavioral-based HR. In God we trust, everyone else bring data. How about the stark differentiation bewteen public and private administration entities concerning your “applicable at every company” broad brush statement?

    • ococoob

      Have you sir, ever been at the receiving end being told that you “failed” this so-called application 10x when applying for jobs? Well I have and it stinks! You can have the strongest work ethic, the knowledge, the experience and yet, they don’t tell you why you’re not “company” material or why they can’t “mold” you they way they want to in their eyes.
      I also know of a friend who is in management of a big company and he found this algorithms/applications that DON’T work because numerious times HR presents him with the newly hired and they turn out to be DUDS!

  • Roberto

    All this is good, if always towards building relationships and helping the poor.

  • http://www.facebook.com/rc.pittman RC Pittman

    This article brings out a lot of points that I believe, have resulted in a great deal of employee dissatisfaction in companies everywhere, However, a lot of the underlying principles are leadership principles that have been around for years. What is innovative is the model they have developed in order to put these principles to practice. A lot of this simply just makes sense…. and you dont have to be Google to create this environment. In fact, if you are smaller I would think it would be easier…

    To me the critical part here, the foundation of it all being how they use their metrics…This model forces them to be honest with their data. I like how they are using it appropriately to leverage and cultivate their assets (people) instead of gambling with them…if that makes sense. Data is only as good as it is honest. I have heard stories of people fudging attrition data, which are missed opportunities. This model forces integrity and accountability in order to make it work.. Another aspect is they are letting their employees know they are valued by communicating it to their people, creating an enviroment of innovation and new ideas. Who doesnt like to know they are valued…..? This shouldnt be an issue but unfortunately a biggy in the world today. This really points to the leadership of the company and also its management. I never like those words associated together. In my opinion (disclaimer), these are 2 very different words with very different meanings I think many people get them confused.

    I heard a senior manager once say, “Management would be great if I didnt have to work with people.” If a manager doesnt like working with people, then why are they managing them? This model would take care of this….

    A lot can be said about this article and as the author stated its worth highlighting. Personally it makes sense and it provides a great example.

  • Sharon Reher

    Great to see an article as open as this about what really needs to change. I would suggest both HR & business managers need to see this as their reason for being employed – what would be interesting to me is how they choose to reward those exhibiting these attributes & making change happen. I am sure that cash is not the main lever in this world.

  • Paul Kearns

    Let’s cut through the Google hype – there is no actual evdience presented in this article to support its thesis that “Google’s market success can instead be attributed to what can only be labeled as extraordinary people management practices that result from
    its use of “people analytics.”” – nice ideas are 10 a penny – although based on this purely anecdotal account I’m not so sure Google’s idea of people management is nice at all – isn’t their motto ‘Don’t be evil’?

  • David Newport

    Firstly thanks John for the article and to everyone for the comments.

    It seems on the surface that there are a couple of threads going on here – one about Google [which is just a location for the story and like other brands you can take that or leave it] and the other about how to manage/lead a group of people.

    If the story were re-written using a fictional company ‘Blabbery’ woould the insights be any different? No. So it’s possible to let go of personal feelings toward Google and concentrate on the principles which is surely what John, the author, would wish us to do.

    However, I’d agree with the comments that actually these practices are age old in principle, and in practice. There are, however, two points to note that make this different:

    The use of computer modelling: something one suspects an IT firm focusing on algorithms may be familiar with and have ready access to relevant talent. Such talent will make the issues easier to model, and certainly to iterate the models to move toward greater refinement and value. In having these models it makes the relevance of data collection much higher as the data not only has purpose, it is used.

    How many companies have shed loads of data and no models, or no integrated structure of models, or even chuck out the data as it’s not appropriate or doesn’t fit expectations? From my humble experience, this is the case in most organisations, though I agree that’s only my experience.

    So the second, and more important point, to which John alas only alludes, is the context that has allowed and encouraged the development of such an approach and the positive implementation of it. This is about the culture of the organisation. The advantage of new organisations [Google, Apple] is that they do not have history and they been started by young people who also have little history in older corporate practice, ie: the culture is not already deeply ingrained. Just as in the parableof the sower, the seeds [people management practices] are the same, it is the ground that is different.

    Matthew 13:3-8
    Then he told them many things in parables, saying: “A farmer went out to sow his seed. As he was scattering the seed, some fell along the path, and the birds came and ate it up. Some fell on rocky places, where it did not have much soil. It sprang up quickly, because the soil was shallow. But when the sun came up, the plants were scorched, and they withered because they had no root. Other seed fell among thorns, which grew up and choked the plants. Still other seed fell on good soil, where it produced a crop—a hundred, sixty or thirty times what was sown.’

    It turns out that, given the story in the article is true [ie: these practices are key contributors to profitability as opposed to market dominance and product offering] then it illustrates that Google happens to be ‘good soil’ for these seeds. The deeper question is what makes Google, unlike many companies, ‘good soil’? And that’s a different story altogether!

    PS: There is an answer ref. fertile cultures, though they are relatively rare to find, and many people will never have, and may never in their lives, experience them.

    • Tyger

      I think they do this in the NFL & NBA – what do you think?

      • Chris U.

        Back where we were before!

  • Joe X

    I interviewed w/ the people analytics group. I found them bitchy and totally inflexible. I’d give details, but it’s small enough that they would know who I am. Their hiring process is also extremely arrogant. I once got a call for them out of the blue asking me if I wanted to relocate 1000s of miles away, about a week after I submitted an application specifying one specific office (where the position was listed). Apparently, I was supposed to give them my decision despite not having any information beyond the very basics of the job description (certainly, no salary info was provided – and living near their HQ is extremely expensive). When I didn’t reply within 12 hours, I got a follow up call, which suddenly turned into a non-consensual phone interview (that I obviously was not prepared for – I only answered the phone because I assumed the person called to answer my questions in the email). Then, a few days later, I got a rejection letter for that job (that I never even applied for). So, although they are the only company with a messy recruiting process, they are not upholding their image of consummate professionalism and perfection they
    seems to be how people view them.

    • http://twitter.com/RAFraudwha Rage Against Fraudy

      Google is so arrogant it is bound for a fall. It’s inevitable.

      • mims

        yeah, and you’ll use bing instead? which by the way support’s on Google’s data

  • http://twitter.com/terrymurraypt Terry Murray

    I sense a lot of anxiety in the comments, but this is reflective of the direction that business is moving. The use of predictive analytics and advanced algorithms to spot subtle talent issues, not easily detected by the human eye, will empower HR with the statistical evidence to support their perspective. HR is no longer a cost center (it never was or should have been viewed as such, in my humble opinion) in the Ideas Age, its place is at the strategic core of the firm.

    Human beings, and their creative, collaborative talents, are now the raw material of value creation. Gaining insights into what I call “the granularity of the human continuum” is no different than the level of scientific detail we garnered regarding chemicals, biologics, metallurgy or myriad other raw materials that fueled the industrial age.

    This statistical approach will help HR gain its rightful place at the leadership table long dominated by sales and marketing.

    • Randy Patton

      It certainly would have been nice to work for someone with your philosophy, Mr. Murray. In most of the jobs that I have held, working overtime, and being an innovator never got me anywhere. I was regularly passed over by those who could “sell themselves” more effectively, or the “squeaky wheel” that needed more grease.

  • neil_lewis

    What data does google use to decide who to recruit to assess the data?

    • ococoob

      I like to know the answer to that one!

  • Peter Lanc @HRMexplorer

    WOW this is 2013 and we just figured it out????? Is this how far HR is of base!!! Come on is this really the best of top HR people can think of… 50 years behind times

    • Gues

      No, it’s simply what the author is saying. HR has been doing almost all this stuff for years. The only item that’s genuinely new in my experience is the predictive algorithm for retention. Although there’s a consultancy called Talent Q in the UK (I have no connection) that specialises in personality questionnaires and retention strategy so for all I know their customers do something similar/better.

  • Warren Franks, CPP

    From the “Top 10″ look at this #1 reason: “periodic one-on-one coaching which included expressing interest in the employee and frequent personalized feedback ranked as the No. 1 key to being a successful leader.” Sounds like “old fashioned” H.R. human relationships dependent management to me.

    • pritchardhall

      Ditto!

  • http://www.facebook.com/koshy.samuel Koshy Samuel

    great value is created by reinventing the way we think. Break the traditional ways of thinking and trash them to find more innovative methods.. The World and its business practices need a through re-think and change.. Change is Imminent..

  • Alicia Wagoner

    google is obviously very successful and this recruiting strategy appears to work for them. Should this very formulaic method be solely relied on? Probably not. A previous comment said “it takes the human out of human resource.” I personally agree. The data analytics is very obviously an efficient approach but there needs to be some degree of subjectivity!

  • http://www.5toolgroup.com/ Jay Oza

    Google is doing well because it has an advertising business where they face very little competition. As far as I know Google does not do well in other parts of business where they face stiff competition. In fact it allows Google to pick off other businesses the way Microsoft used to do. Surprised that government has not looked into this more closely.

    Google reminds me of the old Bell Labs. They had lots of smart people doing all kinds of great stuff. AT&T could support them since they had a monopoly in telephony. When their monopoly died, their culture of innovation died with it. What has AT&T come up with recently that is significant?

    • Hugo

      ¨As far as I know Google does not do well in other parts of business where they face stiff competition¨

      Really?

      Google is at the TOP in many categories, products or business: Search, Mobile(Android), Video(Youtube), Cloud Apps, Web Browser(Chrome), Advertising, Maps, Android, AI, Local Commerce, etc.

      • Jay Oza

        Do you have revenue numbers to back that up? They make about 90% of their revenue from search business. We are talking dollars not users.

  • Penny B

    I agree with Guest when ‘he’ refers to the benefit of Google and Apple as being a new business in a new field that has only just emerged in the last 20 years and which in itself has revolutionised the way of doing business. Those that first entered these markets 20 years ago led I think by Yahoo made the mistakes and triggered the business interest in using the internet and web systems that others who have since followed and entered the market have gained from. This is a fast moving business and therefore needs innovation both in product and business model to stay ahead. So, yes I can see that Google have developed some of their business models beyond their previous use, in particular I like the time out for new ideas, but they should not state as the article suggests that other businesses small, medium & large, around the world do not also have innovative and forward thinking ways of hiring and engaging staff to benefit business and their own individual development. I have been in HR 30 years and worked in large organisations such as NHS and Government Organisations as well as small manufacture, health & engineering business and they have all had their differences in their culture but their underlying requirement is to provide a service or product which meets customer needs, of the highest possible quality, efficiently, timely and within prescribed costs or budget. HR & Management have always strived to achieve that with differing success.

    Not all problems fall at HR’s door, although I do believe that it is important to recruit as experienced HR practitioners as possible with some room for junior and mid level staff to grow and develop in their careers. Being innovative and supporting staff requires good management as well as good HR. The culture of an organisation is critical especially in its understanding and support in investing in their employees.Many organisations do not do that or understand that staff are the most costly and important resource in their business and therefore they need nurturing and feeding like flowers if they are to bloom and give back to the employer. Google are doing some good things, their decision to be ‘slaves to metrics’ is maybe understandable given the business they are in but it wouldn’t work in a service based business, in my opinion, as the only driver in determining all aspects of people management. Yes data is important and is used by HR in many decisions affecting the hiring, development and firing of staff, but there are so many other behaviours which are less open to measure, engagement, committment, loyalty, integrity, supporting others, trust etc that have to exist for an organisation to be successful. I found myself interested in the Google model but not drawn to wanting to work there or experience that way of delivering the people side of their business. One size I am afraid does not fit all, but good for Google that they have found the model that fits them for the moment at least.

  • Jonathan Reuman

    This is an important wake-up call to HR. If we/HR cannot develop competencies in analytics and extracting human capital wisdom from our HRMS systems and Big Data, we may increasingly find that people from our IT department or Finance department are making the most persuasive arguments to our senior management teams. It is time to revisit the HR competencies that will be required of the next generation of HR professionals. Google and other companies are game-changers in every arena they enter, and there is no reason to assume that HR will be any different. Put on your seatbelts HR folks!

  • http://www.facebook.com/harald.ackerschott Harald Ackerschott

    Great article, than you John! Only one remark, concerning the very first part of the HR value chain, hiring: think about the base rate! Today, profiting from the public image they have, Google couldn’t do anything wrong. And hiring is the most powerful value driver of all HR functions.

  • Scafford G. Simmonds Jr

    Mr. Excellent perspective. Well stated

  • Doug

    Interesting article:

    It seems all is fair in war and business efficiencies…

    It’s all very impressive if you like to work in a petri dish. Study your every move. Takes the guess work out of behavior manipulation.
    Pavlov would be proud.

    I guess this is progress?

    • ococoob

      It’s not progress, it’s dangerous. It’s like searching for the “pure Aryan” race to weed out all the undesireables! It’s another tactic getting around discrimation laws.

  • Chazm

    All these analytics are great if used as tools in the hands of wise and visionary managers but as seems to be the case more and more, tools can soon become crutches. There is no place more evident of this than today’s very broken automated recruiting and hiring processes (applicant churn & burn). No one wants to talk to anyone now (job applicants) or actually bothers to read anyone’s resume to study their true credentials and assets (the 6 second resume scan…what can you possibly learn about anyone in 6 seconds?).

    Tools and tecnology are wonderful when used properly but if left unchecked in the wrong hands they can be misused/abused to enable weak, lazy and incompentent management, those that manage soley by reports and let the tools make the decisions for them while crying about how they are too busy. True visionary and inspirational leadership in a manager who truly cares about their people as people like Google seems to support (if the data supports it) is in very short supply in many US companies today. When you do happen to find it, the team members love it and thrive very well, but it’s not always valued, appreciated or barely even noticed in some cases by the manager’s senior management (the results are just taken for granted).
    A good people-oriented leader and manager balanced with good analytic tools is the ideal combination but the tools alone won’t make a good manager…

  • Shanthiruban

    Better not discourage the blokes who come out with some thing new. After all what is innovation? What is the amount of old principles in each of our innovations?
    We are playing with our own lively hood.

  • kcowan

    I was kind of inspired by this article. I know I once practiced all the advanced techniques preached by HR and did find amazing results. The problem was that the senior executives did not subscribe to it. If these Google executives do walk the talk, that is all that is needed. The analytics is just added value. I knew how to keep the key players motivated. It did not require much money but lots of challenge and recognition.

  • pritchardhall

    The good doctor seems smitten with Google’s “new science”, however behavioral metrics have been in play for many years. I have used technology (OMS) since 2001 for some amazing results (retention, satisfaction, etc.) – and within a not-so-big budget. And, yes this does sound like Google propaganda, but it is good to see good tools – and management skills – be a priority.

  • Peter Gruben

    This is an excellent approach supported by technology. I would love to know if this
    analytical approach would allow for talents like Larry Page and Sergey Brin
    when selecting. Take their CV’s and check it out :).

  • Ruby Sodhi

    Dr. Sullivan makes a relevant point in how forward-thinking organizations such as Google are redefining the use and purpose of human resource management and advancement. I find it interesting that there aren’t more positive comments about how Google is setting the pace for a new global workforce that is flexible and reactive to change. Using data-driven decisions is an excellent strategy when numbers matter. However, as someone once said–not everything that counts can be counted, and not eveything can be counted counts. I think Google’s focus on learning, fun, and collboration is a refreshing new way for running effective organizations.

  • HomeFires

    “Beware of Geeks bearing formulas” — Warren Buffett

  • Mike

    If an algorithm can do a better job of recruiting candidates, which seems plausible to me, wouldn’t you just need one person in HR to simply welcome the new recruits?

  • Ruben Benmergui

    I couldn’t agree more with William Mougayar. This is a regurgitation of the hackneyed debate about whether HR management is an Art or a Science. After a 40 year perspective as a Certified Human Resources Professional, I’ve come to my own personal conclusion that it is indeed a hybrid, and the proportionality of Art v Science is specific to the enterprise. For those “it’s a Science” believers, see my HR Audit Toolkit Online for Carswell in Canada. This is my approach to the Science element in the hybrid model.

    Google’s approach is in keeping with their perspective of the world (arguably buttressed by its success) as a statistical vortex with minimal human engagement. If this sterile approach had applicability in the management of human capital (an algorithm to predict retention?) we would not have the plethora of workplace conflict or employment issues that we as Human Resource Management Professionals. We would simply apply the appropriate algorithm and prevent any problem.

    Finally, another 40 year perspective. This is in line with much of the HR Management commentary, education, and edu-tainment de rigueur today. I am tired of being constantly characterized as a failure and amateur in the provision of HRM advisory services to management. Especially so, by those who objectify us as marketing targets by questioning our knowledge, wisdom, and practices. These armies of hidden-agenda marketers (including Consultants, Lawyers, Accountants..etc..) really do not have any respect for our professional standing. We play into their psyche by our silence when we encounter another “here’s where you’ve gone wrong” tirade and “seek our services for salvation”

    Ruben Benmergui BA, MIR, LLM, CHRP
    HRM Professional, Consultant, Author, Educator.

  • Fine Ahiwe

    Its good to know! It seems like people love this strategy of Google!!

  • ococoob

    How does this identify a simply hard, conscientious worker? A worker with a strong work ethic?

  • Srini

    Google’s approach is the real essence of Level 5 of the famed People Capability Maturity Model. Wish the firms truly emulate the best of such people practices as applicable in the cultural and organizational context

  • http://twitter.com/hammer_stream Gilbert B Hammer

    Cross-functional collaboration, Predictive modeling, Increasing discovery and learning all strike chords. Having been both at an Internet brand name as well as in financial services, there is no doubt from my perspective Google’s initiatives are worth study over time to determine there effectiveness. It is not enough to use dated 360′s and online training courses – all with fixed results “baked in” and gamed from the start.

    A commentator said “Measuring results is not what improves an athlete’s performance” Very true however, if you can spot potential issues before they require putting someone on a performance improvement program, or better yet identifying candidates who are more or less likely to fit into the corporate culture before they are hired you will reduce a lot of pain a suffering.

  • Moe Carrick

    I think this is good stuff, and at the same time I can’t help but wonder where the foundation of what we know matters in organizational life is if this is the singular emphasis. Yes to measurement, and data. But at the end of the day, people are not, actually machines, and we must simultaneous to measurement pay attention to the hearts and minds and spirits and lives of those who work in our companies, for it is in their humanity that we find their essential contribution.

  • John

    It would be interesting to learn more about their algorithms. How do they quantify people when they hire for example? At that time they don’t have any internal track record to use as data. The number of variables is vast. I’m curious which they use and to what extent.

  • Dane Miller

    Unless all of you work at a company that values HR above any other function, I don’t think there is any possible way to “sell” a new program or initiate a major project in HR without analytics and data. The nature of business is financial therefore working on quantifying the value of people into the business equation is what will help HR professionals get management’s attention. As to Google, with a stock price over $800, I think they can afford to show arrogance. Something has happened correctly.

  • http://twitter.com/RAFraudwha Rage Against Fraudy

    “New path” firms dominate by producing continuous innovation.

    Oh like Android which Google ripped off from Apple? Innovation like that?

  • http://www.facebook.com/profile.php?id=1124213358 Amr Azim

    Yes, but I wonder if Google would hire a person like me who is over 50 years of age?

    • ran

      Vint Cerf was hired at 62.

    • Ordeith

      It depends on how long their algorithms will claim you are useful, and whether your projected usefulness will outlast their ROI on training, benefits, and other compensation Google would need to provide.
      and if there isn’t anyone else with a better cost / benefit ratio available to fill the position.

  • Paci102

    Gee, I wonder why other companies haven’t implemented these analytical-based solutions… probably because most companies in the US don’t have the resources to do it!

  • Rula

    Note to self, remove Google from “places I’d like to work”.

  • Jonny

    Is this reliant on the person having JavaScript enabled? Does the code snippet go in their head or feet?

  • http://www.facebook.com/profile.php?id=42418483 Andrew Lugavere

    I wish everyday I could work for Google!

  • http://twitter.com/knakao Kevin Nakao

    This is an excellent write-up. Another helpful resource is this video from a Google HR executive presenting at a Strata Conference: http://blog.meritshare.com/making-people-decisions-with-data/

  • http://twitter.com/hrmtoday HRM Today

    A data-driven approach can only be good. Data provides information to Companies, who can then use that data to make well-informed decisions. The human side is still part of this process, as it is individuals who decide on what to do with the results.

  • engineer

    To Dr. Sullivan,

    We read your article for our organisational psychology class in LSE to show how management today can still be obsessed with “scientifically” measuring, predicting and controlling human behavior at work in a supposedly post-industrial revolution age.

    Personally, I am not surprised about what Google is doing. Years of working with many hard-core engineers who love to program a piece of code that can run again and again for EVERY situation possible – even when the situation has changed – I can see this happening first in Google or probably MicroSoft.

  • Mek Karpeles

    People costs often approach 60 percent of corporate variable costs — Source?

  • Esin Akay

    With a hope that more companies replace subjective HR decisions and implement Google style of Talent Management…It “might sound a bit like Google propaganda”, yet there are good lessons to learn and best practices to implement. Big Data, HR Analytics or call it “predictive analytics and advanced algorithms” it does not matter. It is time to explore, develop and value human talent and creativity…

  • Oliver

    Great inspiration, John!
    Thank you for putting this together in a very well digetible formate.
    Kind regards
    Oliver

    http://www.oliverviel.com