Decades of psychological research have outlined the various ways in which humans make poor decisions by relying solely on intuition. We tend to favor information that confirms pre-conceived beliefs (confirmation bias). We employ faulty mental shortcuts that rely on the immediate examples that first come to mind (availability heuristic). We also let our overall impression of someone impact our evaluations of that individual’s specific traits (halo effect).
Fortunately, in this era of big data, we can correct for human biases via analytics.
As we discussed here a couple of weeks ago, every M&A deal is loaded with critical workforce integration concerns. Buyers need to know what talent is needed to deliver on the goals of the investment – and there is too much talent data out there to rely on intuition to make this call.
In addition to internal HR data (e.g., performance ratings, compensation, engagement survey scores), there is a wealth of public, external data to be analyzed. We’re at the point now where there is more data about your employees outside the walls of your organization than inside it!
Davis Carlin, People Analytics Leader at McKinsey, refers to it as an obligation – “If information this critical to the investment thesis is knowable, then we have an obligation to know it”.
We are past the point where analytics-based decision-making is a “nice-to-have”. If we’re accountable for delivering the best possible value in an M&A deal, avoiding cognitive biases through talent analytics is not just an opportunity . . . it’s an imperative.
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