It is often forgotten that one of the key aims of HR functions is to help create successful organisations. It is incumbent on all of us in the people profession to understand clearly what success looks like to the business that we are supporting.
That definition of success can be found within the strategic framework:
- Why. The vision or purpose that defines why the organisation exists.
- Mission. What the organisation does that enables it to progress towards its why.
- Goals. What the organisation wants to achieve.
- Objectives. The specific metrics of the organisational goals.
- Strategy. The outline approach that, given the mission, will achieve the goals and objectives.
- Execution. The specific plan to achieve all the above.
The challenge for organisations and for HR is ensuring that these are aligned throughout the organisation. There are three main causes of strategic misalignment: decay, fragmentation and overtension.
- Decay. Where the strategic framework has not evolved to keep place with either the marketplace or the nature of business operations. The collapse of many major brands, such as BlackBerry, Blockbuster video, Kodak and Woolworths, can chart their failure back to strategic decay.
- Fragmentation. One of the most common business challenges, fragmentation is where components of the strategic framework do not connect across the organisation. This might be that a range of business leaders have interpreted the strategy in different ways. It might be that execution has not been refreshed to align to changes in the strategy. Worse, goals and objectives in one function or business area may conflict with those in another area.
- Overtension. Even when a strategic framework is well defined and understood, tensions within the organisation can make it undeliverable. A range of competing priorities often exists, such as profitability versus growth, short term versus long term and the whole organization versus the parts. However, an aim of healthy tension tends to result in failure to achieve objectives.
In order that workforce planning can achieve its aim of creating the right workforce to deliver the desired business outcomes, then practitioners must do two things: achieve alignment and call out misalignment.
If there is a business goal to improve customer outcomes, then a business strategy of reducing costs and delivering better services can contribute towards that. Better services will create a better experience for customers and reduced costs, if passed through, will improve the outcome for the customer. In this example, the workforce strategy is similarly aligned:
- Increasing retention can lead to a direct reduction in the turnover costs.
- Reducing contractor use can reduce in costs as contingent labour typically incurs a higher rate of operating expense than a permanent workforce.
- Improving diversity can provide improvements to customer outcomes by ensuring services are aligned to a diverse customer base.
In the same way, each of the components of the workforce plan all connect upwards.
- Process improvement not only increases retention as fewer people leave through frustration with poor processes, but this same improvement enables automation.
- Automation allows an organisation to reduce its workforce supply, potentially in its use of contractors. Using automation to reduce repetitive and lower value work within a role can increase retention. Augmenting roles with automation enables a different mix of capabilities to be utilised, which can be provided by a more diverse workforce.
- By aligning the organisational estate to the available workforce, we can build critical capability, and both buy and subsequently build specialist capability.
- By building criticals we can not only make the vital step of reducing contractor usage in our critical roles, but we can also increase retention within this segment of the workforce.
- If we start to buy and build our own specialists, we can tap into a more diverse talent pool rather than relying on the existing talent pools. This not only increases retention in this workforce segment, but it also means we can reduce contractor usage in that segment as well.
Just five initiatives align into the workforce and business strategies to contribute directly to the CEO’s priority objective to improve customer outcomes.
As a result, it is essential that misalignment is escalated and resolved. By utilising a workforce planning approach, it becomes ones of the view disciplines that can provide an evidence to senior leaders and the C-suite to demonstrate why a current strategic approach is unlikely to be successful and demonstrate clearly how it can be.