Thinking Out Loud By Tom Vol. 4

Last week I described five types of analytical organization structures. This week I will describe some research on which ones seem to function best.

Last year, my co-author Jeanne Harris and her colleagues performed a survey of quantitative analysts within large organizations. This was the first of its kind, to my knowledge. The survey sheds some interesting light on which organizational models for analysts are the best. Of course, organizational structure can be a complex topic. There are strengths and weaknesses of almost every model. However, the survey data suggest that the more centralized approaches have some strong advantages.

The data suggest that if you care about having your analysts being engaged with their jobs, and likely to remain in your employ, the two most successful organizational models in that regard are the center of excellence (29% engaged, 41% likely to stay) and centralized (35% engaged, 33% likely to stay) models (see previous post for descriptions of these). Although the percentages for the more decentralized models aren’t horrible, they are clearly worse on both measures. The decentralized model had only 18% of analysts engaged, and 27% likely to stay.

The data don’t tell us why the central and CoE models are more successful on engagement and intention to stick around. But I have some hypotheses. People in central analytical groups are, according to my research, more likely to work for organizations that really care about analytics. They’re more likely to work closely with other analytical colleagues. They can have more varied work assignments because they’re part of a large pool. All of those explanations seem plausible, right?

One interesting question is why the “internal consulting” model ranks so low, even though it is relatively centralized. Its analysts were 23% engaged, and 24% likely to stay. The burden of billability, perhaps?

One somewhat scary finding is that even the best models are somewhat low in engagement and intent to stay. These analysts are incredibly valuable to any company pursuing a data and analysis-based strategy. Companies need to find ways to make their analyst jobs happier and stickier. This will become even more important as the general labor market picks up, which I believe is happening. There is already a lot of demand for good quantitative analysts.

How about you? What’s your organization’s model, and how does it relate to your personal levels of engagement and employer stickiness?