There have been a few recurring themes to my recent conversations about B2B Work Tech. For one thing, we’re between business cycles. The old cycle is functionally dead, having been smothered into a coma by a combination of the promise of AI, pandemic-fueled over-investment by VCs, fundamental shifts in the nature of work, a spike in interest rates, and stubborn global supply chain disruptions, while the new cycle hasn’t been born yet. Until it coalesces, businesses are stuck in a transitory state where the best many of them can do is shed expenses, retrench, and pray that their cuts position them to capitalize on—rather than leave them vulnerable to—whatever the market does next.
For another, everyone feels a sense of risk. A steady drip of layoffs (hello!), extended sales cycles, a lack of strategic clarity, and an undercurrent of deal making (as all the over-invested VC's and PE firms clean up their books) seem to be exacting an emotional toll, even if the reality isn't that bad.
Nothing feelssafe; the transformation seems to loom just ahead, teasing us but not landing.
Yet.
So, to the extent that sharing what I'm hearing and thinking helps anyone move just a little faster into a sense of clarity and security, here are the transformation-related topics I've been talking to folks about... I’d love hear what you’re experiencing, and whether your experiences are similar or different.
(I don’t think the headlines will be a surprise, but I have a hunch that my take on the headlines might raise an eyebrow, if not wrinkle a nose. Rest assured, I wrap it up with something hopeful at the end, in the analytics section.)
AI
I recently did a LinkedIn Live with AI ethicist Reid Blackman, Ph.D. about what it takes for a company to make the shift to AI. You can listen to our conversation here. I’ve also been on a number of calls with business leaders, heads of Talent Acquisition, industry analysts, and innovation consultants to discuss the adoption of AI and intelligent automation.
The upshot: AI-powered Work Tech is not—repeat, not—a rebrand of HR Tech or TA Tech. In fact, it doesn't feel much like HR Tech or TA Tech at all. Despite the massive impact AI will have on people, the outside world is not looking to HR to drive.
And I think I understand why.
Consider the following: when I talked with Reid, he shared that when companies engage his firm to implement AI guidelines, the work is usually led by IT with championship from & participation by the C-Suite. In a different conversation, Sean Sheppard, Managing Partner of the innovation firm U+, showed me how AI’s ability to parse data makes it easier to find and launch new business concepts by orders of magnitude. Charlie Connor, Product Manager at Relativity, shared with me how AI is changing the discovery process for litigation. All of these conversations were highly strategic in nature, looking at the AI trend from a top-down perspective.
Then I had a conversation with a TA leader, who shared earnestly about encouraging recruiters to write better prompts so they could improve sourcing and job ads.
These perspectives aren’t even close.
And it's not that the TA leader was wrong, it's just that prompt-writing shouldn't be the lede in a 30-minute conversation about transformation. On a related note: I was asked today by Meg Smiley Wheaton, a Principal at a Big 4 firm who focuses on Transformation, about my thoughts on AI in TA. I said I thought the promise was fantastic—some of the new tools out there solve a lot of problems and actually (ironically) humanize the process (Contact Felix Wetzelto see what that looks like)—but that overall, the current state of AI in TA is pretty awful.
Heads of Talent & TA are caught in the middle of a massive gap, and have a very short window to close it and get this right before AI starts happening to them rather than forthem.
Hold that thought.
Skills-based hiring / Skills-based talent management
Stick with TA for a moment. Strategically speaking, hiring is a mess: from a C-Suite perspective, there are people infiltrating your company from all over: Recruiting brings in full- and part-time employees based on résumés, Procurement hires contingent workers ("consultants") based on RFP responses—often without any input from HR or recruiting—and department heads make decisions that are sometimes aligned with recruiting, sometimes aligned with procurement, and sometimes sometimes independent of either and aligned only with their gut.
Moving on to performance management: also a mess. And I'm not talking about annual performance reviews, I'm talking about how an operating executive is supposed to create predictable workflows and performance cadences when her team is made up of people who have different contractual relationships with the company, different skill levels, different expectations, different incentives, different time perspectives, and different avenues for recourse.
To illustrate how these differences complicate performance management, consider a friend of mine with a consulting contract at an enterprise based here in the Midwest. He tracks hours, he is highly efficient, and he knows that if he doesn’t produce, his contract gets cancelled. He collaborates daily with full time employees, and they sometimes get chafed by his unyielding sense of urgency. He also works with other consultants who (might, maybe, according to him) occasionally disappear into work streams that look good on their résumés, irrespective of whether those are the most pressing work streams for the client at that moment.
His poor manager.
In conversations with business leaders and analysts, we're quick to discuss how improvements to assessment tools, language processing, and analytics packages are making it possible to get in front of these issues by allowing managers focus on skills, abilities, and tasks rather than people.
I had a series of conversations with the extremely brilliant Andrew Gadomski about how skills can be used to not just standardize performance management, but simplify, accelerate, and de-risk people-related decisions.
But when I brought up skills-based hiring with several TA leaders, they went straight to removing bias. Which I agree is a huge thing in and of itself, but still a fraction of the story. Again, as with AI, my concern for Talent and TA leaders is that part of the reason transformation is going slowly is that they're not engaging with the big picture.
(As an aside, I first experienced skills-based talent management 20 years ago, while I was doing mostly executive assessment work. At the time, it was so labor intensive that the juice wasn't worth the squeeze, unless you were Coca-Cola. But today it is. Which is why I'm not surprised that of all my colleagues in the industry, some of the busiest are those at “skills-based talent management” providers. I’m looking at you, Jason Putnam.)
“The Nature of Work”
Equitability & DEI. Pay transparency. Candidate experience. Remote work. Return to Office. Globalization & asynchronous work. Unionization. And their respective backlashes.
There were no shortage of trends already swirling about when these other ones hit the scene, and they remain front-and-center priorities at many organizations even as the headlines of our industry publications turn over. That said, the energy I’ve been picking up around them seems to be shifting. Companies are doing the work, but it's quieter, more integrated with standard operating procedures. None of these seem to have burned out, but I do get the sense they've made a quick leap from "early adopter" to "early majority."
I could really use outside perspective on this. There's a lot here, and I'm excited to have two upcoming LinkedIn Lives, with Anessa Fike (on 2/21) & Liane Bilicki (on 3/6), to where we'll be going deeper in areas where I don't have as much line of sight. Join us, and in the meantime, please share your thoughts!
Analytics
I promised optimism. Fair warning: it comes. wrapped in math. (I may be known as a storyteller and strategist in the Human Capital space, but I’m also the guy who took Calc BC as a junior in high school and concentrated in finance at Kellogg. I once built a spreadsheet to figure out winning Yahtzee! strategies... for fun. I'm a nerd. And my message of hope comes from that side of me.)
If you want to bring AI into your organization (or skills-based hiring/performance management or anything else) I think you may want to frame the conversation around people analytics.
Showing the return on human capital would not only change the Talent game, it would also pull all your other initiatives into alignment. And it's more possible today than it ever has been.
Let's look at what happens when you frame a desire to use AI in the context of people analytics with your CEO:
You / your boss: "Let's talk about people data. I want to understand the return we get on our human capital investment so I can make recommendations about AI & skills-based talent management."
CEO: "Great, me too."
You / your boss: "We've got a lot of the raw ingredients in place already. But our processes are underpowered, we're not using all our tools the right way. I'd like to make a small investment to get this over the line ASAP. I can keep the costs ridiculously low if we include a bit of AI, and of course I'd coordinate with IT to ensure proper governance. We could actually use the project as a trial run for using AI internally, too."
CEO: "Sounds perfect, go do it."
Whereas if you make AI, skills-based talent, or anything else your top priority, you risk walking smack into this conversation:
You / your boss: "I'd like to talk about the business case for [insert initiative]."
CEO: "Me too. But I know that if I don't have the data to make a smart decision in that area, neither do you. Once we have the data, let's have that conversation."
Oops.
Focusing on analytics has other benefits, too. It gives you a straightforward, true story to tell your team, for one thing. We're going to show our value. We want leadership to be transparent with us, so we're going to be transparent with leadership. And going through this is going to make each of you better businesspeople.
That's a clear cut conversation. A trueconversation. One that lets you engage your team directly, with no BS, and solicit feedback that doesn't need to be interpreted to be understood.
A focus on analytics also lets you shift how people measure themselves, making future changes easier. I had an old boss who liked to say, "People do what you inspect, not what you expect." I've seen transformations fail because the dashboards didn't keep pace—a clear violation of the inspect/expect principle. Maybe flipping things, and starting with the dashboards, would accelerate things? (Hint: it does.)
Getting started
Still, there are challenges standing between many Talent/TA leaders and their ability to use their data to take the driver’s seat to lead transformative change. (If there weren't, every Talent & TA leader would already be doing this.) To start chipping away at those challenges:
1. Think bigger. If you’re measuring, say, learning impact based on post-session smile-sheets rather than the 6- or 12-month post-training performance of attendees, you’re missing a step. Dare to ask the harder questions.
2. Break your own heart. Embrace the “capital” part of human capital. That may feel wrong, like you’re commodifying your people, but I think you’ll find that you’re actually treating people with more respect when you’re honest about how they contribute to what matters most to the business. All the stuff Talent loves to do—improve the candidate and employee experiences, for instance—is there to improve results. Honesty about that ensures a solid foundation between the company and employee, which amplifies the positive impact of everything you do.
3. Elevate data issues to the executive suite. Your Director of Workforce Planning & Strategy might generate an incredibly insightful report about the impact of change on your organization, but they're not going to lead change based on it... that requires C-level air cover. Take your case for people data to the top and ask to drive it, or to at least be part of the process. Or don't... again, no one's expecting you to lead, anyway.
4. Start integrating initiatives. Too often, I hear Talent leaders talk about their initiatives as if they’re all discrete items. They’re not! They're ingredients, and you’ve got to start seeing—and talking about, and promoting, and aligning people around—the meal they make when you put them together. That's what business leaders do—they communicate about the meal to keep everyone focused on the big picture first, and then go into tactics.
So blend your budgets. Give people cross-functional responsibility. Talk to your people talk to your people talk to your people so you know what their hopes and expectations and fears are, and so you earn their trust—you'll need that to get them working together. (Don't worry, they'll still up level their prompt-writing abilities... they'll just do so much more this way!)
5. Get over it. My guess is, if you're in Talent or TA, there's a good chance you picked your career was to avoid math. I'm so sorry, but math just caught up to you. The good news is, your company very well may already have the tools and processes to be able to measure human capital in a way that can be mapped back to earnings. To figure out their ROI on people. To de-risk their investment in people. It's just not activated.
--
Stuart Frankel, former CEO of Narrative Science (turns out, there was generative AI before OpenAI), told me he thinks we’re in the “3rd inning” when it comes to our ability to measure human capital. That feels right.
It also feels like the key to activating this next Work Tech/AI/skills-based transformation that we all sense is coming.
Human Capital leaders, I want you to win. To maintain control of your own destiny. But I have to tell you, based on the conversations I've been having lately, I see work to be done.
If you're ahead of the curve, great—keep running.
But if you see yourself in what I'm sharing, then maybe consider building a transformation story centered around data and analytics, and letting everything else follow that.
Just an idea.
Ready for what's next?
Let’s go.
#worktech #humancapitalmanagement #HR #talentacquisition #AIinTA #morejoy #thebrilliancewithin