Pete Weddle on Metrics
Courage Under Hire
Metrics aren't about numbers, according to Pete Weddle. They're about commitment and courage.
Pete Weddle is a tough guy. He's a West-Point graduate, an ex-Ranger, and the leader of a successful ascent on the Matterhorn. But ask Weddle what's really tough, and he'll tell you it's getting Human Resources professionals to understand metrics.
Not that metrics are hard to understand. In fact, Weddle, one of the country's most influential HR consultants, thinks anyone can master them. The hard nut is what surrounds the metrics movement: the need for corporate courage.
Why courage? According to Weddle, companies wrongly think metrics will highlight the importance of human capital--and thus HR--when it's actually the other way around. Companies first need to value the contribution of talent before embarking on any successful metrics campaign. And to get talent on the agenda, HR needs the courage to find its voice and craft its agenda.
We spoke with Weddle by phone from his office in Stamford, Connecticut.
Q: Why is metrics such a big deal now?
A. On the one hand, it is increasingly important in today's tight budgetary environment to be able to make a business case for investments in human resources, generally, and staffing, in particular. Metrics provide the kind of quantitative data necessary to justify investments.
It's also important for managers to continuously improve their operations. Metrics provide a way to peer into an organization and identify areas that are under-performing and evaluate alternatives for improvement.
Q. But what pushed it up into the limelight? The recession?
A. There have been cycles of interest in metrics for years, like social accounting in the late 1980s. Metrics is simply a continuation of the long-term search for a language that will enable HR to communicate the value of what they do.
Q. Are CFOs listening? I mean, does HR equate metrics with credibility?
A. Some believe it is, and there's nothing wrong with improving the rigor of one's argument by having quantitative data. But HR metrics don't have the validity or rigor of financial metrics. So, it is illusory for HR to believe that they're going to gain sudden credibility with finance because they use metrics.
Rather, HR will gain credibility when they do something valuable with those metrics. When they improve a unit's operations, and it makes a significant contribution to the organization--then I think you'll have finance sit up and take notice.
Q. You make a distinction between “metrics” and “practical metrics”.
A. Metrics is often seen as an auditing function. Call in consultants, buy “metrics in a box”, and slap some cost-per-hire and time-to-fill initiatives in place. In this respect, metrics are seen as something that you can bolt onto the organization as an afterthought or add-on.
Practical metrics, though, are not about audit. They are about excellence. This fundamentally involves a cultural change in HR, because not only do you have to install the systems to collect data (that's step one); you also have to analyze the information to determine what's working and what's not (that's step two). Then you have to act on your analysis (that's step three); and then go through a series of continuous improvements in order to have metrics be worth the effort (that's step four).
Rather than isolated numbers residing within HR, practical metrics is something that is top down, bottom up and spread throughout the whole culture of the organization. It involves your customers, hiring managers, candidates, and internal members of the staffing organization. It is not a trivial initiative.
So, when I say “practical”, I mean using metrics to help you get better and achieve actual results. Practical results.
Q. Practical, then, should not be mistaken for easy to implement.
A. Exactly. It's damn hard to do metrics right, and unless you've got a lot of stamina, a lot of support from the chain of command, and a fair amount of money and time--don't even bother. You'll do it poorly and squander your already low reserves of credibility.
Q. So, I'm a staffing director who wants to embark on a metrics program. What are the signs that tell me my organization will tolerate the associated volatility and commitment?
A. Metrics only flourish when they are planted in the rich soil of a measurement culture.
Now, what does that mean? It means you have at least one champion above you who believes passionately in the importance of metrics and will give you political cover. It means the organization believes that human capital is indeed a scarce and precious resource that needs to be not only measured, but also developed as any other asset. And it means that the organization is willing to put money on the table.
You have to gauge the reality of the organization and where your function is in the enterprise. If it's more talk than walk--it's probably not a good time to implement metrics. Instead, try to find ways to nurture that soil, that acceptance of the importance of human capital, first.
The irony is that people think metrics can lead to that understanding, and it's really the other way around. You have to have the fundamental belief in the importance of human capital before you can invest in metrics successfully.
Q. Let's get tactical--I embark on a metrics program. Give me the details about the four steps.
A. Step one is to assess your productivity, utilization and contribution. Productivity is how well you use your resources: cost-per-hire, time-to-fill, etc. Utilization is how well you use your assets, the two most important of which are your talent database and your recruitment website. Contribution is the value you provide to the organization, measured by customer satisfaction scores, performance appraisal scores for new hires, and so forth.
Step two is strategy, a “what-if” analysis. “If we do this, what might be the outcome? If we do that, what might be the outcome?” You identify potential solutions to the problems and prioritize the solutions based on the available money, time, management attention and political support that you have in the organization.
Step three is to implement the solutions that seem most destined to make an impact and bring a return on your investment. Naturally, you implement them according to whatever you can afford.
Step four is where you measure the results. Some of the initiatives will work. Others will not. You want to invest in those that are working and get rid of those that aren't. Keep going. It's a cycle.
Q. Who gets involved in the process?
A. If you can, engage the CFO, some hiring managers, and some employees. This gives you visibility, buy-in and commitment. It can also protect you, too. Inevitably, something will go wrong. It is far better to be working within a group, rather than alone and as a target.
Q. The CFO is the ringleader. How does HR become buddies with her?
A. To some extent, it's personality driven. You're talking about two senior people; egos come in to play. But if HR makes an attempt to be relatively scientific about the management of a scarce resource--talented people--and shows some passion and some commitment, then I think it's the rare CFO who won't respond in turn.
Q. But don't a lot of HR departments do this? I mean, this doesn't sound particularly difficult.
A. I think it's incredibly difficult, because we have deep ruts of habit and experience.
Q. So, is this a self-esteem thing, or is HR just inexperienced with coalitions and the executive team?
A. The charge is often leveled at HR that they don't know the business; that often gets translated into HR reading income statements and balance sheets. And while there's nothing wrong with that, respect is going to come not because you know the algorithms for some financial metric, but rather because you go about your day-to-day activities based on careful analysis of data--not feelings or emotions.
Q. Why not outsource the numbers to an accountant from finance?
A. That's the easy way out. If the kind of management I'm talking about is not a core competency of HR, HR will never be credible. If HR uses an internal finance person to oversee metrics, measurement will never be viewed as being owned by HR. No. It's clear that HR must own metrics--or else metrics will be seen as another fad.
Q. So, what happens when you want to own it? You can see the benefits, but there is no political will above you, no appetite for metrics?
A. First, if you believe passionately that metrics can communicate your value to the enterprise, then become a metrics expert. Read, attend seminars, go to college. Do whatever you have to do so that your knowledge of metrics is more developed than anybody's in the organization, including the CFO. And I'm talking about operational metrics here, not financial.
Ultimately, though, you shift from management to leadership and muster up the courage to lead the change. But look deep inside, because this kind of change is hard and, ultimately, dangerous. Once you throw your weight behind it, there's no backing out. If they don't want metrics, they don't want you either. Will you be prepared to leave?
Peter Weddle is a recruiter, HR consultant and business CEO-turned-author and commentator. Described by The Washington Post as "a man filled with ingenious ideas," he has earned an international reputation for pioneering such concepts as human capital, career fitness, and using the Internet as a resource for recruiting and HR management. He is a West-Point graduate, and alum of Harvard University and Middlebury College.
