The Actualisation of SWP

If you have read my last couple of articles, no doubt you will be busily working out how to totally shape and shift your agenda to make sure that SWP is the number one priority on your People/Business roadmap. You will be so convinced that it truly is the only path to organisational effectiveness and transformation, that it is the only way to ensure that your organisation (ie. your workforce) is aligned to what your business must achieve, and that the commercial benefits of SWP (and commercial damage of not doing SWP) really just make it a no-brainer. . . right???

Even if that is true, the next issue may be that you may not quite know where to start. You may now be clear on the “why” and possibly the “what” of SWP, but the “how” still leaves many scratching their heads and mistakenly looking to rostering or org restructuring for a clue – please don’t do that! So, I will start to touch a little on the how – well at least at a high level, this is just a blog after all . . .

The image depicting QHR’s approach to SWP conveys that there are quite a number of moving parts that need to be brought together for efficacy and impact. This is why SWP is recognised as “the most complex analysis effort undertaken by HR functions” [1]. And whilst there are a number of elements, I won’t be detailing them all explicitly. Rather, I want to go into a few of the key concepts that are critical to SWP and that I have found to be differentiators for successful SWP versus SWP going off the rails – and QHR has had to remediate a number of the latter over the years!

So first, super quick overview of the key elements in our approach (skip if you already know the “what”):

• Internal Business Context – business strategy, competitive advantage, value chain, segmentation, activity drivers, BAU (does that still exist?), transformation, digitisation, consolidation, acquisition, growth and so on
• Internal Workforce Context – workforce size and shape, capability mix, employment mix, demographics, mobility, turnover, performance, engagement, productivity, efficiency, learning, and development
• External Environment Context – Future of Work and 4th Industrial Revolution, technology and automation, globalisation, regulation, geo-politics, social responsibility, economic factors, etc.
• External Workforce Context – demographics, changing worker values, gig economy, labour supply chain, education changes, entrepreneurship, and new ways of working
• Integrating the above through predictive and dynamic scenario planning to understand different possible trajectories for the organisation and where there are issues and risks, such as deficits in critical skills
• Creating a pragmatic action plan across the employee lifecycle and beyond (i.e., other business initiatives that have workforce impacts such as technology enablement) to ensure that the organisation will actually have the workforce it needs to execute its key strategic and operating imperatives
•  Rinse and repeat – AKA monitor, measure, adjust and cycle through process again

SWP in a nutshell – tick! Now, let’s take a look at a few of those critical success factors…

 All roads do not lead to “Environment Scanning”

The first thing you may notice from our approach is that it doesn’t start with “Environment Scanning”. Over the years, many frameworks you may have come across (I certainly have) kick off SWP with this. I just don’t think that is right - controversial I know. Let’s face it, the primary raison d’etre for SWP is not to set the business strategy (although it typically ends up being an outcome of SWP – more on that later). The purpose is aligning the organisation (ie. the workforce) to the business’ strategic and operating imperatives, to ensure it can accomplish what it needs and mitigate executional risk.

I have seen SWP processes come unstuck by becoming overly focused on external environmental scanning, which results in a bunch of interesting, but un-contextualised data points about what is going on in the wide world. This is the information age after all, most of us are broadly connected or can readily access the info around what is going on in external trends such as demographics, economic situations or (insert sigh) future of work (FOW) data. However, until we understand what OUR organisation’s vision, value-chain, competitive advantage and critical success factors are – it is all just interesting, not super useful. Once we do understand our own requirements, then we certainly can contextualise that external data through overlaying such impacts onto our business through dynamic scenario planning, but that is its rightful place in the process – not at the beginning.

Let me take an illustrative example of this about (insert sigh) FOW data. So many organisations (every organisation?) has become recently fixated upon the plethora of statistics and hypotheses predicting things such as the impact of technology on roles. As mentioned in my previous article, there are some great data sets out there ranging from online tools to pretty and comprehensive data sets that may or may not cost you 1-5 FTE. The information being put into the hands of individuals and organisations alike is a great awareness builder in, for example, shifting to the skills and capabilities of the future, and ensuring adaptation and relevancy. The thing is that the predictions are directional – every version of the same statistic will be slightly different. For individuals, what this means is that you enter a given role into a variety of data sets and you could either be totally safe and employed forevermore, or putting yourself out to pasture faster than you can say “the robots are coming!”

For organisations, the implications can be destructive. Let’s take a commonly cited example - Commercial Airline Pilots. One data set says there is an 18% chance of automation with the added “will almost certainly not be replaced by robots”, however another data set says 55% chance of robot pilots – big range right? Even if you find a dataset that purports greater accuracy of automation potential, it is still without real context. For example, what about the airlines customer value chain, competitive advantage, the regulatory environment, broader supporting infrastructure, or the risk appetite of the organisation (e.g., is it an early/mid/late adopter of emergent technology?) Plus, what about consumer behaviour and societal readiness – some studies say that the majority of passengers would be “unlikely to fly in a pilotless plane” or even in a plane with just one pilot [2]. Refer to my previous article, where one of our clients had banked on a rapid projected customer transition to technology which just did not happen and subsequently found its whole business trajectory askance. Any organisation looking at environmental data can easily see the conceptual and utopian “coulds”, but without the SWP contextualisation, they get nowhere near the “shoulds” and thus lose the ability to make decisions and plan for the future appropriately.

Quantified Demand is King (and Queen)

Which brings me to demand. To translate business strategy and operating imperatives into workforce implications, working out the internal demand is critical and IMHO is THE most important (and difficult) component of SWP and is the starting point for proper SWP. This gives you the context to know what is meaningful in external “environment scanning” or (insert sigh) FOW data, or any other workforce/business dynamic.

What does demand actually mean? Working out what size and shape of workforce is needed and when - for example we need 5 Data Scientists today, 10 by 2020 and 17 by 2021 (btw we do – can anyone help???) And this is done by breaking down the business imperatives into a value chain, business model, and activities that quantify the requisite workforce.

I am having déjà vu, realising that what I am about to write about demand is familiar:

• This is where pretty much most efforts fall short
• I am yet to see many companies who do this well
• Books, literature and even “Standards” in SWP are relatively vague and conceptual

Because I wrote the same thing nearly 4 years ago, and yet the situation remains largely unchanged (despite QHR’s best efforts). The how of demand still remains unexplained in the lengthy published Standards, and the quantification of demand is still not done in many SWP processes or is just referred to in qualitative concepts. And to be very clear, it absolutely needs to be quantitative, because of all of the many moving elements that need to be brought together – there is no functional way to do this qualitatively. Unfortunately, conceptual discussions stay just that, conceptual, rarely do they incite any call to action. SWP grounded in quantitative demand planning is the only way I have seen companies be able to effectively navigate the fact of vast and accelerating change.

It is like going to the store to cook a week’s worth of meals for 500 guests at your next leadership retreat. Without a defined meal plan and associated recipes, also accounting for variations of need – of course 22% of them are gluten free (guilty!), 14.5% are Paleo and 7 people are Keto – how do you know exactly what you need to buy? How do you know where to get your specific ingredients? How do you know what to adjust when 10% of people drop out to go to the retreat on culture change instead? And how can you make sure that you can actually source that recipe-critical, acai-infused, kale-flavoured, chaga mushroom powder that everyone else is trying to buy too?

Ask most organisations if they know what workforce (size and shape) they need today, and the answer is no. Ask them if they know what workforce they need in three or five years, you are lucky to get a verbal answer – cue chuckles, eye-rolls or blank faces. And yet every single organisation knows they will look different in five years’ time! It is truly baffling that they all know change is coming, is inevitable, is here already – but don’t have any way to understand what this means for their organisation/workforce, not really. Working out what workforce is needed in the face of shifting core business drivers plus integrating the myriad of any step-changes such as transformation, mergers, digitisation, new markets, divestment, or cost-reduction is essential. And without this, SWP is meaningless.

It’s all about Coherence

You should be seeing that there are many factors that need to be integrated for SWP; that it needs to be done quantitatively, and that it must be contextualised into your organisations own dynamics through demand. But where is it actually getting us? In my view, one of the most powerful outcomes of SWP is organisational coherence, being:

• Alignment on where the business is heading and what it takes to get there. Leaders are often left to interpret what any given strategy really means for their part of the business. Further, they often set strategy with an assumption that the requisite workforce will just materialise and appear right as needed. I have said it many times now because the impact cannot be under-estimated: we have been in rooms in large listed companies where the dialogue and scenario planning of SWP has uncovered serious misalignment in business direction between CEO, COO and CFO and then brought them back together again. The scenario planning process of SWP is critical in creating alignment amongst leadership, which then flows on to the broader organisation and requisite workforce.
• Cohesive action plan for the organisation/workforce across the employee lifecycle and all workforce-related initiatives. How else can you be sure everyone is rowing the boat in the same direction amongst the oceanic volume of initiatives? How else do you know that your HR agenda items are really aligned to business objectives? SWP is not just another item in the HR toolkit and to-do list – it defines what that list should be in the first place. There is an increasing “realisation that HR is doing too much, and that the list of HR initiatives is far too long…employees and senior management are looking for more impact, with less effort” and that HR should limit their focus to the “most urgent business issues” [3]. SWP enables this targeted and impactful prioritisation.
• Holistic View of the organisation in its entirety. This breaks down silos to look at skills across the organisation regardless of where they are sitting in the org structure, to enable better alignment, optimise business execution and enhance social responsibility. Having a clear view on demand vs supply across the organisation drives better decisions around mix (build/buy/borrow), makes re-skilling pathways meaningful, and avoids knee-jerk, jarring reactions, such as blanket hiring freezes, or firing-and-rehiring. Refer to my previous article for case-in-point of how myopic org views and poor planning can wipe out culture, engagement, productivity and all premises of being a decent employer.

And the way to accelerate this coherence and achieve the above is through the dynamic scenario planning element of SWP. The scenario planning process of SWP is absolutely critical in creating alignment amongst leadership and driving superior decisions for business success - and often actually ends up actually informing business strategy! Scenario planning takes organisations out of the past and present and gets them looking to the future - really shifts them from being reactive to proactive. This brings insight, focus and alignment to management teams, who are usually perceiving issues differently - Operations needs resources to deliver, Finance with its cost focus and HR with its drive to increase capability, development and drive culture. SWP brings together an informed view of business strategy versus the workforce, integrating of the all elements in a dynamic and predictive construct to deliver the path to organisational effectiveness and transformation that we are all looking for.

So whilst we have only just scratched the surface of the “how” of SWP, with a few key concepts (and a pretty framework) to guide the journey, I will still say that SWP has come a (long-ish?) way. Going back 5+ years or so, the focus really was on building understanding into the “why” and “what” of SWP which is much less of the case now. But as we look for the “how”, we also really need to be looking at the “now” – organisations must start actually doing this stuff. It is the key to being able to change, adapt and be agile, survive, thrive. The rate and pace of change, the complexity, the breadth and depth of what we are facing is only increasing, and technology is coming at us faster than ever . . . although I am still waiting for those hoverboards that were predicted to be mainstream by 2015 . . .