Analytics and Strategic Workforce Planning Increase Leadership Success at Bayer

Historically, companies approach the journey in either “top-down” or “bottom-up.” At Bayer, the organization took a bottom-up approach and until recently, had not fully achieved  an organization-wide people strategy or workforce plan. The people strategies originated from our diverse geographies, as well as our different functional teams. By taking this approach, there was capacity for action and accountability at the local level, while insights were gathered at the global level. One element was consistent in the people strategies—leadership was a key role, enabler, and segment. 

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Key Data about Bayer Group

The first stage of leadership buy-in was the ownership of the people strategy. Often one of the reasons for failure is this very basic ownership question. People strategies, such as SWP, cannot be owned by HR. This is a recipe for disaster. When HR owns the strategic workforce plan, it becomes another HR project vs. a way of doing business or the steering guide for a leader. Leaders must own their plans just as they own the accountability for their sales plans or their research pipelines. To demonstrate this, every people strategy was presented to the human resources leadership teams by their respective business leader, and not by their HR leader.

Leadership may be the largest role in the organization. During this time, there were over 4,000 official leaders at the company (not managers) in the system. The organization could review and look at all the traditional metrics such as attrition, retirement, engagement, span of control, etc. The people analytics team had created forecasting models that accurately demonstrated projected headcount, hiring, and attrition. These were important, but they did not show the whole picture. 

One of the biggest derailers in SWP is the focus on the number. How many times have workforce planning practitioners or people analytics professionals heard, “Your headcount is off by six, so all your data is wrong”? This is the wrong approach. When leadership came up as a critical talent segment and a key role, the first question wasn’t, “What is the number of leaders we need to run our organization?” The question was, “How do we actually know we have good leaders, and do we have the leaders today to run the organization of the future?”

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​ Get executive buy-in at all stages. Leverage data management and data privacy. Often, they can help you integrate data in new and fun ways. Realize it is an iterative process. People are the ultimate open system.  Trust your HR partners. Realize your own corporate culture. Be mindful of the change journey.	​ Forget to embed in standard processes. It can’t be a standalone project.  Over-rely on model outputs. People still need to be told the story of the data. Focus on quantity not quality. You will almost always be wrong. Feel like it’s us against the world. We are all in this together. Let others create the future you need to predict. Criticize late adopters; sometimes late is better than never.

This journey of understanding leadership in the organization as a fundamental workforce planning and people strategy issue has been at the forefront of studies by leading organizations. Most notably, Google’s Project Oxygen had looked at this, starting in 2008 (https://rework.withgoogle.com/blog/the-evolution-of-project-oxygen/). 

One of our insights is that not only is every company unique, the number of micro-cultures across the organization also carry pieces of uniqueness. How leadership interacts at a global, functional, and regional level is critically important to the success of the organization. For this project, the approach was to pull together all our leaders into a global data set.

Teams can’t analyze data if teams don’t collect data. The organization had over time collected demographic data on leaders such as tenure, the span of control, and education. From our talent management system, we were able to pull key deliverables, competencies, nine-box information, and retention profiles. Using our survey tools, we were able to compile direct feedback on managers (if they had at least five responses). When the dataset was complete, the team had been able to amass over 200 separate variables on leaders across the organization over three years of history. Out of these variables, we discovered 19 individual variables that formed three factors: managerial acumen, developing people and teams, and inclusion. These factors predicted “success” in their leaders.

Another key challenge for the team was to understand what defines success. For some organizations such as sales, this can be easier to quantify, but how does one define the success of an HR or finance or IT leader? For Bayer, we determined to use the funding factor of bonus payouts. We were able to do this because the organization paid bonuses to every employee regardless of level, and all of these went through a performance calibration. With the level of calibration that went into the decisions around bonuses, this metric allowed the team to feel confident that over years of data, individuals that received larger bonuses over time were truly creating greater value to the organization. The team also realizes that for many organizations, this may not be possible, or that there may be implicit bias in rewarding higher performers over time.

The other weakness in a study such as this is that correlation does not equal causation. Although we may have many strong correlations, we cannot distinctly say that this element was solely due to one or two things. Luckily, we have been able to review this study now across multiple functions, regions, and globally, many times with exceptionally similar results each time. 

Another caution in a study like this is the creation of new biases. For example, we found over time that results orientation is the competency that is the most predictive of success in our organization. Does this mean that we should only hire and develop the most results-oriented individuals? For an organization, this exercise can reinforce negative behaviors or overwhelmingly cause you to focus on strengths. 

The results forced the organization to think differently about many HR practices. The most predictive measure of success for a leader was his or her ability to build trust amongst their employees. Now, just like in Project Oxygen for Google, Stephen M.R. Covey wrote The Speed of Trust in 2006. This concept was not entirely new for the organization, and from an outcome’s perspective, it made sense. The team found that internally, leaders build trust through three factors: managerial acumen, developing people and teams, and inclusion. The team determined how each factor predicted a leader’s bonus at the end of the year. From a business case perspective and building change, this was critical. No longer did we only have the ability to discuss about what the return on investment was to the organization, the team could demonstrate the personal return and financial impact for the leader.

By focusing now on the capability, and not the quantity, we could focus on those elements that enable the development of each of the three areas as well as the day-to-day actions of human resources to help influence and drive behavior change. In each area, executive leadership had to drive a change across the organization to enable new ways of thinking and new ways of doing.

Managerial acumen refers specifically to the technical acumen of the manager as well as their day-to-day actions. Many of these items came directly from our engagement survey, and not our L-180 survey. Since our L-180 measured only competencies, this combination of data became increasingly important. Questions such as, “My manager is competent at running his/her own area,” or “I have confidence in my manager to make the right decisions for the company,” were critical predictors of that leader’s success in the organization. 

In many cases, the employees’ feedback on their leader was more predictive than general competency ratings given to them by their supervisor. Understanding and experimenting with questions is critical in continuing to develop the specificities needed to drive action. This area is also the most dangerous and risky because, without assessment or knowledge of non-managerial talent, this skillset (combined with technical acumen) is all we rely on when making selection decisions. This is why the old trope about great individual contributors becoming horrible leaders is so poignantly true.

Developing people and teams had already been a competency at Bayer and had degrees of measurement across three instruments. It was measured specifically by employees as a set of questions in our L-180 survey. There was a subset of questions in our engagement survey, and it was also a competency the leaders measured other leaders against in our development and performance rating cycle. As such, it was a rich field of information with multiple views across multiple measurement tools.

In every tool, developing people and teams had an impact on the success of the leader. From our engagement surveys, the ability of a leader to give opportunities to employees was paramount. Steve Jobs said, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people, so they can tell us what to do.” From our L-180, it was very much about how often we give feedback and how we give our time. Taking the time to have coaching conversations, give development feedback, and act as a role model when given feedback was critical. Also notable was how effective the leader was in handling difficult situations within the team. 

Within your own culture, these questions, or these items may be uniquely different, but by measuring and collecting data, it allows you to generate insights and drive actions based on them. For example, in our organization, developing people and teams was our lowest scored item in our L-180 survey. So not only was it an item that was one of the most important, it was one of those where we were least successful.

Knowing this information about developing people and teams created a tight focus on the area as an HR priority. Every leader in the organization was required to have a developing others’ goal in his or her annual objectives. This goal was sponsored by the COO of the organization and was used to measure end-of-year performance. In our quarterly pulse surveys (part of our engagement strategy), we implemented three questions that measured the organization’s and leaders’ effort at developing others. This pulse enabled us to check where we were getting better or worse anywhere in the organization, and focus on those areas for interventions. By creating feedback and an accountability mechanism, the organization was able to statistically significantly increase its scores to their highest levels by the time Bayer acquired Monsanto in 2018. 

The last factor and the most influential, was inclusion. For many years, our organization focused on diversity and inclusion. Bayer created a legacy of being a great place to work with a proud tradition of employee resource groups, inclusive hiring practices, and fairness and equality. Often, inclusion and diversity migrate together, and for many those concepts end up becoming similar words. This is a mistake: inclusion and diversity are very different and are measured by different survey items and different metrics. Leaders cannot be successful without both.

Inclusion Metrics ­— Definitions*​

Inclusion Index is built of eight items from our L-180 survey of people leaders by their team members. Demonstrates authenticity and is genuine in interactions with others. Demonstrates ethical and honest behaviors. Treats his/her people with respect. Truly values and leverages the diverse viewpoints and backgrounds of team. Avoids acting or speaking in ways that suggest arrogance. Treats employees fairly as individuals. Shows a sincere interest in his/her people as people, not just employees. Conveys confidence in others’ abilities.

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Inclusion in our survey all originated from our L-180 survey. The items are very different from typical diversity engagement questions. The items revolve around such beliefs as respect, authenticity, fairness, confidence, showing sincerity, and leveraging all diversity. It is far different than just measuring representation at a global level. 

With this factor, the organization created its first inclusion index that could measure leaders in any organization across the globe and look at scores by both leader and respondent demographics. By organizing the data in such a structure, the company could truly see how different demographics responded to leaders. One of the most interesting findings was that our highest inclusion scores came from sales teams in places such as South Dakota. It was because those groups all looked the same. It was a living example of our earlier point that many times, we must look beyond the numbers to understand the full picture.

To operationalize these factors, they must be embedded in regular HR activities. By leveraging these tools, we could not only forecast the quantity of leaders that the business would need, but we could also assess their quality. We could also identify biases in the organizations and shift the conversation to creating the desired culture. Pipeline and inclusion conversations were shared with the board of directors regularly. Many people reviews also began with analytics packages centered around both inclusion and developing people and teams. Teams had visibility into talent that may have otherwise been overlooked or undervalued. By leveraging our standard HR practices in new ways, we can reshape strategic workforce planning to solve the most significant issues our companies face.

From a workforce planning question as part of a people strategy, “Do we have the leaders today to run the organization of the future?” to an HR strategy that spans talent acquisition, talent management, and total rewards takes effort, time, and iterations to succeed or fail. Persistence enables change to take hold. For the company that used to be Monsanto, this was incredibly critical as many of these changes occurred during a very tumultuous period for the company. From 2014 to 2018, Monsanto restructured over 17 percent of its workforce and was acquired by Bayer. During that time, engagement rose by 3 points, attrition dropped by 15 percent, and at the time of the acquisition, all the historical L-180 scores were at their highest. 

Understanding that the organization of the future is fluid in today’s world, being prepared ultimately helped leaders navigate a considerable amount of change and prepare a new organization for the challenges of feeding the world.  

Thank you to a number of people that contributed and whose thought leadership enabled this, specifically, Steve Mizell, Ray Kleeman, Rodney Sanders, and Bethany Dohleman.

Buddy Benge is HR Digital and Analytics Leader at Bayer AG. He can be reached at buddy.benge@bayer.com.