Capability is the extent of an ability to achieve a particular outcome and both combines and transcends the traditional categorizations of right people and right skills. It is traditionally explored as a construct of five components1:
- Knowledge: is the internally memorised information required to complete a task. It is derived from a learning experience, either active in the form of training or passive through having direct exposure. Knowledge
is distinct from having access to knowledge, which is an element of the environment. Indeed, the growing ease of access to information and the increasing use of intuitive systems has corresponded with a reduction in the requirement for knowledge to complete tasks.
Skills: are practised techniques that enable the achievement of an outcome. These skills can be viewed as considering ideas (cognitive), doing things
(technical) or relating to people (interpersonal).
- Mindset: comprises the mental aspect that both enable skills and knowledge to be achieved and for them to become action. It can be said to comprise three distinct elements: emotional, how we feel about something; cognitive, how we think about something; and behavioural, how we react to something.
Physiology: refers to those characteristics required to both achieve knowledge, skills, and mindset, but also the ability to translate that into action in a particular circumstance. It comprises mental (such as intelligence) and physical (such as appearance and strength); health and wellbeing, both mental and physical, are key elements. Physiology can also be said to relate to natural ability that can enable knowledge and skills to be attained quicker or executed to a higher degree of performance. Throughout time, technology has continued to bridge physiological limitations, both enabling competency attainment and execution for the first time in some and pushing the boundaries
of human possibility for others.
- Environment: relates to the factors independent
of a worker that promote, enable, restrict or prevent a competency from translating into the desired outcome. This can include hygiene factors (such as noise, temperature and comfort), hard factors (such as technology, processes and resources) and soft factors (such as culture and leadership). Environment is
a critical factor that both impacts mindset (positive and negative) and can overcome limitations of physiology.
To these five components I add a sixth2:
- Accreditation: At a basic level, most workers are subject to some form of screening or basic background check.
Roles in government, defence and law enforcement typically require varying degrees of security clearance. Regulated professions necessitate accreditations either based on a single qualification, such as barristers passing the bar, or a time-limited certification, as is the case with gas engineers. Those regulated professions with exacting standards around safety require declarations around personal health and intoxication, or logbooks confirming hours worked in advance.
For both these professions and many workers, accreditation will take the form of a license or pass that must be carried. Indeed, even basic capabilities
in the modern workplace are inextricably linked to
the completion of mandatory training, regardless
of whether that training translates into knowledge.
Size is simply about the numbers: is there enough capability within an organization to achieve an outcome?
Is a capability in the right location to achieve an outcome? It can be considered within two specific dimensions:
- Geographic: Depending on the meso level of the organization,
the geographic element could be viewed as an economic region level (e.g. EMEA - Europe, Middle East and Africa), at a national level, an intra-national level (e.g. states, counties or cities) or at a locale-level (e.g. offices or plants).
The structural location relates to the business hierarchy in which a capability exists, usually a team. In simple terms, if a finance team requires a finance capability, it is of limited value if that capability is otherwise employed within the marketing team. Whilst it is not unusual for some capabilities to be dispersed within a structure,
it requires some form of business structure to bring
it together at scale, even only on a temporary basis.
The right time is considered across two dimensions:
- Firstly, is a capability available at the point it is needed? A capability too early may result in wasted value,
a capability too late may delay an outcome and waste value in related capabilities. Consider the wasted value of an aircraft, of groundcrew and aircrew,
just through the delay of a pilot.
- Secondly, is a capability available for the duration it is needed? Every task takes time and even the shortest of tasks have a duration where a capability is needed. A capability that cannot be provided for the duration can result in delay and wasted value. Consider both
a capability required for three days, but only provided for one, and a capability provided for three days but borrowed elsewhere for the second day. In addition, after the duration of a task a capability is surplus and, unless reassigned, again results in wasted value.
Are we paying the right cost for the capability?
This goes beyond the concept of a budget and if an organisation can afford a cost but is more importantly seen as a question of value for money. The cost can be considered in three different ways:
- The accounting cost is the actual funds spent on
an activity. Typically understood as fixed costs that do not vary with output (such as factories) and variable costs that do change with output (such raw materials). At a macro level, human capabilities are semi-variable as a workforce is always needed to keep the lights on. At a meso level, however, the cost of human capabilities can be distinguished as either fixed or variable.
- The opportunity cost is the cost of employing
a capability in one activity rather than another and captures imputed costs where factors of production are already owned by an organization. For example, whilst employing a team would be considered as an accounting cost, reassigning them from one activity
to another would be considered an opportunity cost. In addition to the accounting and opportunity cost, usually grouped together as the economic cost,
is the external cost.
- The external costs are those imposed on a third party; the commonly cited example is the external cost of passive smoking that results from the tobacco industry. In relation to the workforce, this cost is typically associated with decisions around offshoring to satisfy an economic cost. The resulting layoffs can devastate local communities and must be recognized as an organization may wish to take a different choice
once the true cost is established.
Risk is concerned with two things: the potential impact of a negative event and the likelihood of that event taking place. The workplace has myriad risks that will need to be accepted or mitigated. Mitigations come at cost, such as:
- Capability Deficit: The risk that at a future point in time there will be insufficient levels of capability to deliver an output, this might result in lost revenue for an organization, and
- Capability Surplus: Having more capability than is needed.
If size is about the numbers of a capability, then shape is the mix of those capabilities within a workforce: is there the right shape of capabilities to achieve an outcome? This is where we will consider if we have the right ratio of managers to direct reports, if we have the right range of experiences to maintain internal progression and whether we have the right level of diversity within the business.
Workforce planning therefore starts with understanding the organisational demand for workers to create the desired business outcomes. That is then framed across these seven rights. Together, they define the ‘right workforce’ for your organisation.
Written by Adam Gibson
Chartered FCIPD FCMI,
Strategic Workforce Planning Leader
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