Will Predictive Analytics Impact the Future Of Talent Management?

Here is an excerpt from an article written by John Boudreau for Talent Management magazine. He suggests that, for talent managers, “creating learning and change is as much about changing habits as it is about imparting skills or providing great experiences.” To check out all the resources and sign up for a free subscription to the TM and/or Chief Learning Officer magazines published by MedfiaTec, please click here.

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Charles Duhigg’s book, The Power of Habit, describes tantalizing evidence on how much retail marketers and others can learn from data on customers’ purchasing habits.

In Retooling HR, I suggested marketing frameworks could apply to talent, including talent segmentation, to target employment features to pivotal employee groups, just as marketers use consumer segmentation to target product features to pivotal consumer groups.

More lessons are emerging from marketing, this time from research on habits. Duhigg’s Feb. 19 article in The New York Times Magazine describes a predictive analytics scientist at a major retailer who discovered that shoppers’ purchasing habits are remarkably hard to break. Big-box retailers have lots of customers who shop for large quantities of staple items like paper towels, but do not purchase electronics, groceries or specialty foods, even though they are cheaper than at other stores. This happens because habits become unconscious.

Neuroscience research at MIT and other universities suggests the brain shuts down once the habit is formed to preserve conscious brain space. If you already know where to shop for electronics, why reconsider it?

It’s the same with habits like overeating, with complicated patterns of cues and rewards that may have little to do with hunger. Duhigg describes his habit of visiting the company cafeteria to buy a cookie at 3:30 p.m. each day. Upon analysis, it was a combination of mid-afternoon boredom, getting away from his desk and gossiping. The cookie was incidental to the actual reward, but it was no less a culprit in weight gain.

For talent managers, creating learning and change is as much about changing habits as it is about imparting skills. Like retailers trying to lure customers with low prices, traditional efforts to create organizational learning may be thwarted if employees are not aware of the habits they must first unlearn.

Retail analytics show that there are certain life moments when people open up their habits and are ready to change. The birth of a child is such a moment, but not if you wait until after the baby is born. The second trimester is a key moment when purchasing habits change. Retailers found existing customer data that could reveal with great accuracy when a woman was entering her second trimester, and they could target baby-related advertisements and coupons to her family.

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To read the complete article, please click here.

John Boudreau is professor and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations, and author of Retooling HR. He can be reached at jboudreau@marshall.usc.edu.


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