Lean but Agile

Rethink Workforce Planning and Gain a True Competitive Edge

William Rothwell, Jim Graber, Neil McCormick

• Publisher: AMACOM
• Year: 2012
• eBook ISBN: 9780814417782
• Topic: Business
• Subtopic: Bookkeeping & Budgets
• Index: Business

As organizations strive to meet stringent budgets, the mandate to produce greater results with fewer resources is no longer sufficient. Rather than accepting less, managers and executives must strive for better--evaluating every process and every role and doing away with assumptions about how work gets done and who does it in order to streamline processes and maximize efficiency. William Rothwell, who was honored with the ASTD Distinguished Contribution Award in Workplace Learning and Peformance, presents a system for analyzing work and selecting the ideal combination of cost-effective resources--employees, consultants, contractors, temporary workers, and vendors--to accomplish it. Lean but Agile does this by teaching readers to focus on outcomes and work backwards--exploring the introduction, implementation, and management of lean work and agile staffing methods that will produce those outcomes. You'll also learn about advantageous changes in hiring, goal-setting, learning and development, and performance management, and the fundamental role technology can play in transforming your processes. Packed with practical advice, examples, guides, worksheets, diagrams, and metrics, Lean but Agile will help leaders, managers, and human resource professionals optimize their workforces while still achieving superior results.

CHAPTER 1

AN INTRODUCTION TO LEAN BUT AGILE WORK AND WORKFORCE PLANNING

WHAT IS YOUR ORGANIZATION DOING to hold down employment expenses while simultaneously ensuring that work results meet or exceed customer requirements? How is your organization experimenting with new ways of staffing the work to be done while also achieving the best results? How well is your organization planning systematically for the quantity and quality of people needed to achieve work results in line with customer needs? Read the following vignettes and describe how your organization would meet the challenges you find in each. If your organization has ways to solve all of these problems, then perhaps it already has a way to plan comprehensively and systematically for work results and ways for workers to achieve those results. But if your organization cannot solve most of the problems presented here, then your leaders may want to consider a Lean but Agile approach to planning for the work and workforce.

VIGNETTE 1

George Smithers is a top manager in the Acme Corporation. He has just learned that Harold Robbins, one of his most dedicated department managers, will announce his retirement. Smithers is very upset. The reason: He does not believe there is anyone in the company who is qualified to take Robbins’s place. Nor does he believe that anyone with Robbins’s unique qualifications can be recruited from outside without requiring years of grooming to understand the unique corporate culture of Acme or the special idiosyncrasies of Acme’s customers. Smithers has decided to ask the HR department for a succession-planning program before the same problem recurs in other parts of Acme.

VIGNETTE 2

The sales forecast for the Venus Company indicates that sales for company products will drop 40 percent over the next year. At present, staffing expenses—including wages, salary, and benefits—account for 77 percent of company operating expenses. Top managers propose a wholesale, across-the-board 40 percent downsizing to be consistent with the disappointing sales projection. Although the organization is not unionized, top managers feel that the fairest method is to use seniority as the basis for deciding who will be given the axe. That means the last hired will be the first fired.

VIGNETTE 3

A graduate student from a large, well-known university calls the HR department of Vidtronics Corporation and asks to interview the vice president of HR about how the company conducts comprehensive workforce planning. The organization, however, does not conduct comprehensive workforce planning. Instead, decisions are made about whether to fill positions as job vacancies occur. Turnover in the organization has traditionally been quite low, averaging 4 percent or less per year. An analysis of the company’s workforce demographics suggests that nearly 40 percent of the top managers and 30 percent of the middle managers will be eligible to retire within the next three years. No effort has thus far been made, however, to address this challenge. The company’s executives are discussing whether to launch a succession-planning program.

VIGNETTE 4

The CEO of Electronix Corporation returns from a conference and announces to his senior executive team that a “process improvement effort” should be launched to streamline how the work is done. The CEO heard at the conference that such efforts have successfully reduced workflow problems. The company has one year of unfilled product back orders. The CEO is firmly convinced that a process improvement effort will reduce the back orders by streamlining the production process.

VIGNETTE 5

Top managers of the Vedex Company are worried about the future. They have resisted adding full-time workers to the payroll as sales have increased. The reason: They are uncertain if sales will continue to increase or will decrease, considering the vagaries of a dynamic global economic climate. They prefer to use overtime as a way to staff for meeting work requirements. The HR department reports that during the past year, an average hourly worker in the company clocked two thousand hours of overtime, which means essentially that each full-time worker is putting in about two years of work time for each calendar year. Most are eligible for time-and-a-half overtime pay. The question is whether using overtime is the most cost-effective approach to address the staffing challenge.

VIGNETTE 6

Rhoda Smith is appointed the new vice president of HR in the Windowex Company. She has inherited an HR staff that numbers fifteen people in an organization of two thousand workers. She has been transferred to the job from an operating department in which she has made impressive productivity gains in a short time. The CEO tells her that “HR in this company is broken and needs to be fixed.”

Rhoda starts her new job by examining the work records of all the people she has inherited. After doing that, she tells the CEO that her predecessor “must have been drinking when these people were chosen for their jobs, since not one of them has qualifications to match what they have been tasked to do.” Most were recruited from within and have never even had one college course or one training program in HR. Rhoda considers how to replace her legacy staff with more qualified people. But she is worried about the need to go through progressive discipline to eliminate the poor performers, which she thinks include most of the staff members she has inherited. She wonders how best to deploy workers, matching individuals appropriately to the work to be done.

Traditional Views of Work Planning and Workforce Planning

As the preceding vignettes illustrate, employers globally are struggling with how to achieve the best work results. Driven by a need to lower costs while increasing productivity, they are not always following traditional ways of planning the work and the workforce. But what are these traditional approaches? What is traditional work planning? What is traditional workforce planning?

Traditional Work Planning

Traditional ways of thinking about planning for work have their roots in the industrial age. An organizational structure (organization chart) is established to allocate responsibilities for various work activities. These activities, in turn, are then broken down further into departments, work groups, jobs, and tasks.

Traditional thinking about work planning emphasizes the work process, that is, how the work is done. Little or no attention is devoted to clarifying in detail the measurable work outcomes desired by customers or other stakeholders who care about the work. In some circles, work planning is actually confused with project planning, which is just one way to organize the work to be accomplished. The important point to understand, however, is that the workforce needed to achieve desired work results depends on how the work is done and the desired outcomes. Employers are already experimenting with new ways to get work done. Those experiments affect the workforce needed to achieve work results.

Traditional Workforce Planning

Much has been written about workforce planning in recent years. Indeed, workforce planning has garnered far more attention than has work planning. One reason is that many employers are keenly aware that labor costs are a major expense in doing business. Modern accounting methods treat labor as a cost of doing business while ignoring the critical importance of human creative talent as the only active ingredient that can serve as a catalyst to add value to land, finances, technology, or other assets.

Traditional workforce planning follows the logic of economics. As demand for products or services increases, it creates a demand for labor to make the products or deliver the services. Labor demand refers to the quantity and quality of people needed to meet production or service delivery requirements. Labor supply refers to the quantity and quality of people currently employed by the organization. As labor demand increases as a function of production or service demand, more people are needed to meet the demand. In short, a larger supply of people is needed.

But this relationship is not precise. Sometimes the number of workers affects productivity directly. In other cases, such as managerial work, managers can oversee increasing employees until a tipping point is reached. To complicate matters, sometimes the quality of workers affects productivity. A few talented people may outperform an army.

The traditional approach to workforce planning, based in economics, has some distinct disadvantages. The first disadvantage is that future labor demand is forecasted based on past experience. In short, economists tend to assume that the same quantity and quality of people will be needed to achieve future results as were needed to achieve past results. Unfortunately, technology and other productivity breakthroughs can actually change the quantity and quality of people needed in the future. The second disadvantage is that economists struggle with the notion of differences in individual talent. Not all people are equally productive, or even equally productive in the same ways. Some people are simply more productive than others, and talents—understood to mean personal strengths in this context—differ on an individual basis. Some research suggests that the difference between the average and the most productive worker can be as high as eleven times.

Many methods are available to conduct workforce planning. They are drawn from quantitatively focused approaches from statistics, econometrics, or operations research and from qualitatively focused approaches to problem solving. Few organizations undertake any form of systematic, comprehensive workforce planning. In fact, one study found that as many as two-thirds of U.S. employers do no comprehensive workforce planning.¹ Instead, jobs are typically approved in many organizations on a case-by-case basis as vacancies become available or as work demand increases. The result: The collective competencies and talents of the entire organization’s workforce is never assessed against the requirements needed to achieve the organization’s strategic goals. The result is that the labor force of many organizations can drift away over time from the best fit to achieve desired work results.

A New Approach to Workforce Planning

A review of changing conditions in business over the past sixty years provides an important backdrop for understanding the need for change in many business practices. The years from 1950 to 1970 were a golden age of business stability for industrialized nations. Human resources practices were designed to be responsive to those conditions. Building a stable workforce was the priority. As detailed by Peter Cappelli,² the following conditions prevailed:

Business demand and the talent needed to deliver it could be accurately predicted into the future.

Government regulations restricted competition, which helped companies confidently make long-term investments. Foreign competition was often almost nonexistent or held very low market share.

Competitors operated in unison. When GM announced it...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• Preface
• Acknowledgments
• Chapter 1 An Introduction to Lean but Agile Work and Workforce Planning
• Chapter 2 Optimize the Work
• Chapter 3 Create a Talent Pool for a Lean but Agile Workforce
• Chapter 4 Optimize the Workforce
• Chapter 5 Optimize the Future Work and Workforce
• Chapter 6 Manage and Maintain a Lean but Agile Workforce
• Chapter 7 Bring Lean but Agile Work and Workforce Planning into Your Organization
• Chapter 8 The Future of Lean but Agile Work and Workforce Planning
• Appendix Talent2 Human Resources Performance Audit Process Framework
• Notes
• Index
• About the Authors