The Importance of Strategic Alignment in Workforce Planning

Effective organisations are clear on why they exist and can connect their ‘why’ to the way that work is done; this is called strategic alignment.

Strategic Framework

To understand how this alignment takes place, we utilise a strategic framework of six-levels:

strategic alignment 

Why: The phrase ‘start with why’ was coined by organisational consultant Simon Sinek and popularised by his book of the same name. Ask yourself, why did your organisation come into existence; why does it continue to exist? The ‘why’ is most often framed as one of two things: vision or purpose. Vision is an imagined future state of what the organisation, the marketplace or the world will look like. Purpose is the enduring objective to be achieved, which is inextricably linked to the vision.

Mission: This is the ‘what’ to the ‘why’: what do we do? Also known as ‘economic mission’ it concerns the kind of business the organisation should be in; this might be manufacturing cars or conducting workforce planning.

Goals: These are the broad aims to be achieved. Goals may be the first instance where a broader consideration is given to timeframes. Fundamentally, a goal is something that can be achieved by the ‘mission’.

Objectives: These are the goals framed in specific metrics to measure achievement within a timeline. A goal might be to increase profits, whereas the objectives may be a 20% profit growth within 3 years.

Strategy: This is the ‘way’, the principles and broad approach to achieve those objectives. If a ‘goal’, by itself, does not contribute to the ‘why’, then the ‘strategy’ is what makes that connection. It defines the ‘the right product-market-sales approach combination’ to achieve the objectives (ibid). Successful strategy hinges on creating difference; it means ‘deliberately choosing a different set of activities to deliver a unique mix of value’ (Porter, 1996). A company, with a vision around a stronger local community, may well have a goal of profit growth and their strategy may stipulate that there should be no layoffs to achieve that growth, as doing so would damage the local community. Strategies are often framed around timeframes (eg a strategy around cost reduction would not be enduring) and longer-term strategies are often framed as policy.

Execution: These are the specific plans to achieve the objectives. Plans are always framed in timeframes (eg short-term operational plans and long-term strategic plans) and are either business as usual (BAU) or ad-hoc, sometimes referred to as run and change. The execution of BAU activity is often framed as processes, whereas the execution of ad-hoc activity is typically within a programme or project.

4D Alignment

The strategic framework is just the first dimension of alignment. For organisations to be successful, strategic framework must align across three different dimensions: hierarchical, lateral and chronological.

Levels of the Organisation

The hierarchical and lateral dimensions are related to the three levels of the organisation:

strategic alignment 
  • Macro - This is the level of the organization as a whole; for example, the fictional Acme Corporation, as featured in Warner Bros.’ Loony Tunes, is the macro level.
  • Meso - These are the component levels within an organization. For example, the Acme Corporation may be subdivided by its central product departments, including explosives and vehicles. Those departments may be divided further into lines of specific products: the Acme ‘Little Giant’ Firecracker and Acme Self-Guided Aerial Bomb production lines within the explosives department, and the Acme Rocket Sled and Acme Spring-Powered Shoes production lines within vehicles department. Each of these departments and lines can be considered the meso level.
  • Micro - This is the level of the individual teams, for example, the team on a product line who box-up the Acme Birdseed.

The hierarchical dimension means that strategy needs to align from the macro level, through the meso level and down to the micro level. A department at the meso level may have a different set of objectives than the organisation has at the macro level. However, those objectives must still align. For example, a macro-level objective for Acme Corporation may be a 20 percent revenue growth by 2025. The objective for the meso-level vehicles department might be to increase production by 30 percent by 2025, as Acme wishes to change the leverage of its products in the marketplace.

The lateral dimension means that the strategy needs to align across the meso and micro levels. If the vehicles department is working to an objective of increased production by 30 percent by 2025 in order to enable 20 percent revenue growth, the sales function needs to have a matching sales objective. If the sales function is working towards a 15 percent increase, then inventory levels will quickly grow unmanageable.

Understanding these dimensions is vital when it comes to setting a workforce strategy. For the purposes of a function with the mandate for the workforce (eg HR), the workforce strategy is a blueprint or design for our people to accomplish our organisational strategy. It is about who we want our people to be, focusing on ambitions (eg greater diversity) and broad concepts (eg flexibility) and sets the framework for a workforce planning. ‘The employment or workforce strategy is not always articulated in one or more written documents, but covers the dimensions, sources and supply and any changes required to the size, shape and nature of the workforce and its contractual and psychological relationship with the organisation’[i]. One of the common issues I encounter when advising struggling businesses is a workforce strategy that either does not align to the business strategy or does not recognise the way that work is done at the execution level.

Planning Horizons

The final dimension of alignment to be achieved is chronological.

strategic alignment 

When we plan the workforce, we do so over three clear time horizons:

 

  • Resource Planning. This is the first planning horizon focused on the current financial year. The aim is to manage the workforce against the fluctuations of demand and the natural evolution of employees (eg absence and turnover). At the most basic level, this is what line managers do on a daily basis: they ensure they have sufficient staff to meet the need, they manage their workforce and work accordingly when additional work arrives or an employee is sick. In many organizations, this planning translates into a rota or schedule detailing when employees are expected to work.
  • Operational Workforce Planning. The second planning horizon focuses on the period of the next financial year. The aim is to plan a workforce that will achieve the business objectives for the coming year. Operational workforce planning is often run by finance functions as part of a budgetary planning process and, as a result, is the most common approach to workforce planning. This approach tends to result in a focus more around workforce costs at macro and meso levels and less on how that workforce will be achieved.
  • Strategic Workforce Planning. The third planning horizon focuses beyond the next budgetary cycle and across multiple years. It incorporates multiple scenarios for the future.

As a result, we need to ensure strategic alignment across each of these planning horizons, connecting the short-term to the long-term. A strategy of product development to achieve a long-term goal of launching new products will likely create disconnect if there is a short-term goal of reducing costs in research and development.

The role of leaders in organisations is to set the strategic framework and ensure alignment over each of these four dimensions and ensure a healthy tension does not snap.

Written by Adam Gibson

Chartered FCIPD FCMI, Strategic Workforce Planning Leader

Click here and use the discount code AHR20 to get 20% off the purchase of Adam Gibson's new book - ‘Agile Workforce Planning.’

References

  1. Sinek, S (2011) Start With Why: How great leaders inspire everyone to take action, Penguin
  2. Gilmore, F F & Brandenburg, R G (1962) Anatomy of corporate planning, in Ansoff, H I (ed) (1969) Business Strategy, Penguin
  3. Brown, D, Hirsh, W & Reilly, P (2019) Strategic Human Resource Management in Practice: Case Studies and Conclusions: From HRM Strategy to Strategic People Management, IES

Receive more articles like this one

We share lots of topical articles which you may be interested in. Fill in the form below to receive future articles straight to your inbox.



Please view our privacy policy notice to understand how Blue Arrow uses the personal data from this form. 

Keep Reading

Share location?

Do you want to share your location for a better user experience?