As a Marine intelligence officer, Renny McPherson spent his days analyzing the behavior of clandestine groups. Later, at Rand Corp., he studied how the U.S. military can produce better leaders within its ranks.
Now, as a co-founder of RedOwl Analytics, McPherson and his colleagues are putting that know-how to a different use: Helping companies identify high-potential employees and improve worker performance or morale.
RedOwl, based in Baltimore, has developed software that scans employee communications, including e-mail, text messages and online chats. By looking at the patterns and contents of the information, the software can help pinpoint problems, such as who responds most slowly to the boss’s e-mails or who blabbed about an impending deal before it was publicly announced.
But founders are most excited about its potential to help employers navigate more complex workforce questions, such as which employees might be a flight risk or which ones should be groomed for leadership roles. For instance, the software might identify which workers receive the most communications from fellow staffers. That might be an indication that they are a hidden influencer within the organization who has power to shape morale even if they don’t have a corner office.
Or the software might discern who has extensive message chains with people outside the office. Depending on their role, that could mean different things: They might be your most valuable networker or generator of sales leads, or they might be a distracted slacker.
RedOwl acknowledges that there is only so much an employer can learn from just reading the analytics.
“Recognizing the limits of where this takes you is important,” McPherson said. “Because at a certain level, you would have to do interpretation on the back end.”
And that’s why RedOwl has teamed with Exaqueo, a District-based workforce consultancy headed by Susan LaMotte, a veteran of the human resources divisions at Home Depot, Marriott International and Ritz-Carlton. The companies call their partnership the Workforce Lab.
Exaqueo helps companies figure out what business questions would be most valuable for them to examine using RedOwl, and then they help them make sense of the data. Exaqueo uses interviews, focus groups and its human capital expertise to help figure out what a certain data point really means. For example, maybe a company has four vice presidents and the data shows that decision-making e-mail threads often include just three of those leaders. LaMotte’s team can help figure out why: Is the excluded person checked out from day-to-day operations? Is he or she not thought of as having relevant expertise?
In this way, “the software on its own is terrific, but having the other half from Susan’s team is essential,” McPherson said.
RedOwl and Exaqueo say they are sensitive to the perception that some employees might find this kind of evaluation invasive or might take it as a sign that their employers don’t trust them. But they say workers can and do adjust to it.
“It’s no different than a manager coming to one of your meetings or presentations,” LaMotte said.
Digital communications, the companies say, are just another channel of one’s work and thus can provide valuable insight into why and how certain workers are successful.
“It’s really about getting every angle of performance, to get a view as a leader you wouldn’t have otherwise,” LaMotte said.
The companies say that while it’s possible to use their offerings for punitive purposes, that’s not their primary goal.
“We don’t want this to be used as a tool to play ‘gotcha’ on people,” McPherson said. “We’re entering an era where analytics can be used to do so much, but we just want to be sensitive to a human to interpret it.”
Josh Bersin, principal of the human resources consultancy Bersin by Deloitte, said RedOwl and Exaqueo aren’t the only ones looking to tap into employee communications to improve and understand performance.
“There are a bunch of vendors and internal corporate operations that are starting to look at this data exhaust we produce and figuring out what to do with it,” he said.
In an era in which people have turned over so much of their personal information to e-mail providers, retailers and social networks, Bersin said he doesn’t think employees will find the monitoring particularly intrusive.
“There’s been some sort of shift that’s taken place that people are just more comfortable with it now,” he said.
RedOwl and Exaqueo are in the early stages of pitching their product and services to prospective clients. They expect to initially offer to do one-off projects for employers, with the hope that some of those lead to ongoing relationships. They’re going after businesses of all sizes but say those undergoing major organizational changes, such as a restructuring or expansion, are strong targets.
RedOwl’s software is also used outside of workforce analytics. Compliance and risk professionals in the financial services sector are using it to navigate increased regulations. Some companies have used it for internal investigations and legal cases.
In June, RedOwl announced it had received $4.2 million in fresh funding from investors such as Salesforce.com chief executive Marc Benioff and Under Armour chief executive Kevin Plank. That funding helped RedOwl add workers in technical and sales jobs, bringing its employee count to 32.
LaMotte said the partnership with RedOwl could eventually account for up to a quarter or a third of Exaqueo’s business.
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