By Jim Matthewman and Irem Yelkenci, Talentspringboard Limited
Word on the street is that Strategic Workforce Planning has had a facelift! What do we mean by this? Well, for starters it’s now referred to as Workforce Transformation, and here are the reasons why. Workforce Planning is incongruous when there is so much political and economic instability. When the UK Government cannot agree on how to leave Europe, if at all, and many organisations across Europe remaining in a “wait-and-see” mode, the notion of forward planning is not getting much attention. Yet, organisations needing to progress with digital change to stay in the market want easy, fast to implement solutions.
- With so much competitive disruption and new digital business models appearing daily, medium sized organisations are eager to adjust fast. The concept of an Agile Organisation is incredibly intoxicating, but, in practice, hard to implement. Management teams are nervous that such major transformation will be extremely difficult to achieve when the wider business ecosystem is in disarray.
- Digital transformation is struggling to deliver. The primary focus has been on re-designing product/service development whilst streamlining delivery processes. However, a lack of accompanying culture change is frustrating execution. Certain people seem to be getting in the way! Energised executives are finding their future visions are not engaging senior managers and employees in a fragile talent market.
- Execution has been patchy. Some pilots (typically 3 to 4 customer-facing functions) have shown the opportunity for great results, but embedding the new philosophy across the whole organisation is not working (see mobileVision’s CDO Survey results) 1.
- This corporate inertia is allowing nimble disruptors to undermine competitors’ failures to optimise costs and erode their existing customer bases with offers of short-term economic savings. Hence, a major driver for large consumer organisations in both the private and public sectors is that customers want more service value whilst researching ‘always-on’ comparator sites.
All of this is demanding workforces to deliver higher productivity and value to retain and grow revenue whilst profit margins are being eroded.
So, it’s all down to the people we hire
The UK has an unprecedented tight labour market with an all-time high employment rate of 76.1% in January 2019. This is true in many countries across the world. But the labour market has changed significantly. By 2020 it is estimated that 40% of the UK labour force will be made up of contingent workers, i.e. freelancers, contractors or out-sourced workers. This change has been one of choice. Workers want to take more control of their destiny by choosing what they do (i.e. strong passion), more choice where and when they work (so they match better lifestyles with work pressures) and, significantly, who they work for (ethical and value-based alignment). It’s getting tricky – organisations want to pursue a hard cost agenda when their dependence on staff has become very fragile. Deloitte identified 80% of the workforce are overwhelmed2; 1 in 7 people are experiencing mental health problems in the workplace. Evidence suggests that about 13% of all sickness absence days in the UK can be attributed to stress3; in addition, robots and AI (artificial intelligence, or better termed Intelligent Automation) are expected to reduce the number of current roles by at least 35%4. If unemployment is not rising, something else is happening.
Organisations are re-defining roles to deliver added value, whilst in the process roles will be absorbed by new technologies, notably blockchain and AI. But we shall need more creative roles, plus highly customer-centric frontline roles, and more judgement-based, decision roles where risk is minimised and future potential is maximised. Future analytical and modelling skills are in high demand.
How to build the Future Workforce?
For decades organisations have tried to balance the books with financial cost, headcount budgeting based on grade cost, likely inflation, and assumptions that senior managers can ensure cost-effective product or service delivery. However, the budgeting process is often flawed, as it is incremental and cost-absorbing.
It fundamentally ignores that the organisation structure, embedded for decades, that might be unable to adapt or change at the speed of the market. Consumer demand has been accelerated by the instant digital world impacting our day-to-day finances, on-line purchasing, immediate entertainment and social networking requirements.
So, Right Size and Right Cost fails to address the need for Right Shape (i.e. Organisational Agility) but most of all Right Skill (i.e. Capability). The first three above could be in order, but if we do not have the future skills, everything will fail. Successful digital transformation requires a mind-set cultural change. Many public sector organisations are now trying to embrace this with the mantra “Digital by Default”.
Digital transformation strategies usually start with organisations reviewing their product portfolios and how to adopt new, integrated technologies to drive cost efficiency, speed and enhanced user interactions through reliable data insights.
Talentspringboard (TSB), with our sister partner firms mobileVision and Reply Living Network, have identified some key hurdles – notably, lack of shared corporate data, weak knowledge transfer and a failure to revise roles and accountabilities. Whilst the systems and processes might have changed, the ways of working and corporate culture have not.
Part of this is a lack of integrated, strategic alignment – the need for a single Corporate Agenda (the so called “North Star” approach), rather than a mass of functional digital initiatives, similar to speedboats hurtling around the bay without a clear destination. Most obvious is that whilst there may be an agreement on the Digital Journey, management expectations about time-frames are often very different, so the implementation can be patchy and messages to consumers, both internal and external, lack focus, integration and clarity.
TSB has seen existing functional or geographical structures unable to combine, re-shape or re-focus on new digital services. Agile organisations should be designed around customer touch-point analysis to provide greater centricity, adaptability and acting as living organisms. Talentspringboard promotes this concept through our TSB Amoeba Network Structure™, which establishes and enables team/project based structures to encourage flexible resourcing. Our TSB Future of Work™ methodologies, see figure 2 below, focus on identification of critical and added-value roles; key talents and future leaders.
Organisations need to take radical action to break down traditional hierarchical silos and build cross-functional, multi-layered, multi-skilled teams which can be formed quickly, yet equally re-morph into new formats to meet fast changing customer requirements in key business critical functions. One analogy of this flexibility is the concept of a “Rubik’s cube model” of workforce deployment to create network based structures.
Learning labs help empowered network project teams ensure go-to-market product development is both rapid and iterative. Whilst failure tolerant, they use design thinking to prototype and test innovation quickly so the process can learn and move on, rather than get bogged down in indecision, stubborn intransigent dogma without regular feedback – you might say this feels a bit like U.K. Brexit politics!
The tip here is to switch the narrative away from headcount numbers to focus on future capability in the next 6 to 18 months to build the platform for digital transformation. This requires functional understanding of which roles will be business critical and which will add value in the future. It is important to have an updated digital skills framework as a management guide to review future role requirements. Most importantly, remember many existing staff will have some of the necessary skills, but may not have them all. This analysis quickly identifies areas for redeployment, upskilling and new skilling. But there will be some roles where the organisation has neither the requisite skills or the time to develop these internally (e.g. cyber security roles are a good example). These will be clear hiring recommendations.
The use of contingents is also useful for fast tracking process or product/service development. It can also be cost-effective if used selectively. Again, this requires a business mindset change to stop and consider contractors or advisers as a support for inadequate resourcing.
How does Talent Management and Culture fit into all of this?
Corporate culture is about shared values and defined behaviours - how we work and interact together as employees or external contributors (contractors, advisors, consultants or out-sourced partners). It is a framework to guide our workforce participants to deliver the corporate strategy, goals and specific targets. Our service delivery expects one image and one seamless customer experience, irrespective of the various interactions taking place. In the public sector many organisations are using the mantra “Digital by Default” to communicate the required mindset.
Who owns culture? This is part of the problem. Is it the CEO, is it Communications, or HR? It should be the CEO and the Leadership Team, but usually the custodian is HR - but this role needs to be more explicit. At Talentspringboard, we advocate a Head of Organisational Effectiveness to encompass Organisation Design and Development, Organisational Performance and Employee Engagement/Communications, Diversity and Inclusion. A great role which arguably sums up the custodian of corporate culture.
A recent BCG Paper highlighted that Digital Transformation needs a Digital Culture to succeed because it empowers people to deliver results faster; it helps attract new talent; and in turn, this helps organisations deliver sustainable high performance.5
Where are the quick wins?
Given that speed is of the essence, how can organisations transform their workforces quickly? Over the past 12 months, Jim Matthewman, our Managing Director, has met over 300 major organisations in the UK, Ireland, the Middle East and the Far East to discuss digitalization, workforce planning and agile organisational design (OD).
Four priorities have emerged from 10 workforce priority choices*:
- Leadership and Management Capability 65% #1 Priority
- Organisational Agility / New Ways of Working 45% #2 Priority
- Digital Capability 75% #3 Priority
- Employee Engagement/Diversity & Inclusion/Well-being 53% #4 Priority
*Based on 600 plus Business Leader/HR Director responses from international conferences/workshops Nov 2018-Apr 2019
Talentspringboard will be launching its latest global survey on Workforce Transformation in July 2019. It is free, anonymous and confidential with participants receiving a copy of the published insights. To participate please contact email@example.com.
1. mobileVision “CDO Agenda Survey 2018” www.mobilevision-group.com
2. Deloitte “The Overwhelmed Employee” October 2014
4. Anthony Goldbloom TED Talk February 2016 “The jobs we’ll lose to machines”
5. BCG “It’s Not a Digital Transformation without a Digital Culture” 13 April 2018
© Talentspringboard Limited 2019.
Written by Jim Matthewman and Irem Yelkenci, Senior Partners at Talentspringboard.
For further information contact firstname.lastname@example.org