The most successful farms use data analysis to maximize milk yields by monitoring diet and other factors across the herd.
There's a certain irony that DeLaval, the Swedish manufacturer whose milking equipment serves millions of dairy animals around the world, has known less about how its employees are doing than many of its customers do about their cows, goats and buffalo. It's not a precise analogy of course — people are not cattle — but Mikael Landberg, DeLaval's senior vice president of HR, finds some parallels:
We say that a happy cow produces, what do we say about employees?
Attracting and retaining staff in such a specialized industry is a challenge because there's a limited pool of the people with the right skills and attributes, Landberg told me.
We look for people that speak cow — but who also have software skills and engineering skills, who prefer to work in the country, and are willing to work 24x7. These people are difficult to find.
After a year and a half I started recognizing the applicants who came to us in the US market. It's a small market that we're looking for.
All the more important therefore to have an effective HR function. But with just 4,500 employees distributed across 42 countries, HR is thinly spread. So much so that, at one point, turnover within HR roles at the company reached fifty percent. It was clear a new approach was needed. Landberg told me:
It was seen as a necessary evil. Now it's started to become fun what we're doing. We've had no turnover the last four years.
Professionalizing HR is what the company needs and we are becoming the model for other functions.
That transformation is being achieved while spending 30 percent less and delivering more, said Landberg. The business case had to be based on cost savings, he added.
I haven't sold on any added value. I've sold it only on cost.
The transformation has been guided by three core principles, Landberg explained:
- Treat HR as a professional function, with harmonized practices and supported by people tools
- Support leaders within the organization to be people leaders
- Foster a data-driven culture
DeLaval is currently rolling out SAP SuccessFactors as its core set of people tools. Landberg had initially looked at a homegrown solution for performance management, but then found the packaged offering came in at a lower cost. Goals and performance, along with compensation, have been in place for almost a year now. December will see the roll-out of Employee Central as the core HR system, along with succession. Once that has been shown to be working, learning and recruitment will follow next year.
SuccessFactors will help track key performance indicators such as HR cost by sales and per employee, said Landberg, as well as feeding into leading indicators across the three ACE parameters — alignment, capabilities and engagement — that go to make up the organization's 'people equity'.
DeLaval, which is part of the multinational Tetra Laval group, needs that inner strength while it helps its customers navigate tumultuous waters. Landberg told me:
It's an industry undergoing a fairly high level of change. In Sweden, five farms a week are closing. Our customer base looks different.
Those farms that survive are turning to automation and data analytics to become more efficient.
Today a fully advanced farm is pretty automated these days.
It's not a stretch to argue that the same is true of the HR function within today's enterprises.
Repeatable practices, automated self-service and data collection and analysis to track and improve KPIs. It's pretty obvious why this all makes sense for getting the best performance out of herds of cattle. Why is it so hard to make the same case for getting the best out of an organization's people?
Of course people are more complex beasts. You don't have to worry about a cow's alignment to your strategic goals as an organization, nor is it such a complex challenge to keep them engaged in their role. But surely the basic principles are unarguable: automate the repetitive tasks that machines can do better and collect the data so you can measure performance and work out where to make improvements.
Image credit: Cows feeding courtesy of DeLaval.
Disclosure: SAP is a diginomica premier partner and paid my travel to attend SuccessConnect in Rome, where this interview took place.