Tuesday, May 8, 2012

Strategic Planning: Staying Ahead of the Curve

In the 1980’s, when the words “Talent Management” were mostly heard in the offices of Hollywood agents, very few people could have predicted that Talent Management solutions would become the basis of a multi-billion dollar industry with around a dozen publicly traded companies.

The Talent Management domain itself has now evolved from largely disconnected “strategic HR” processes into well-recognized best practices for achieving Integrated Talent Management. Coinciding with that evolution, we’ve also seen increasing levels of sophistication propel the process called Workforce Planning into the realm of Strategic Workforce Planning.

Ten years ago, Workforce Planning was generally viewed as a cyclical or “as needed” exercise many large companies went through to figure out what type of skills were needed where in the organization, and how many people with necessary skill sets were required. This set of activities was rarely viewed as a core HR business process for two reasons: the lack of formalization and sophistication around the activities; and the absence of what best—or even common—industry practices looked like.

Even as recently as five years ago, only the most forward-thinking organizations were identifying a process owner for whatever ‘Workforce Planning’ was deemed to entail. Fast forward to today, and there are at least four networking groups on LinkedIn that connect workforce planning professionals with a total of 8,000 members between them.

Despite this emergence of Workforce Planning as a core HR or Talent Management business process, and the universal recognition of its associated business benefits, effectiveness at Workforce Planning continues to elude many organizations.  This should be no surprise. After all, forecasting anything that has many moving parts, unknowns and factors outside one’s control is a very arduous task. Moreover, HR departments, where ownership of Workforce Planning commonly resides, are taxed with just keeping up with current business. Further compounding the challenge, highly engaging and sophisticated tools for enabling Workforce Planning and modeling have only recently become available.

There is perhaps another interesting dynamic operating here that makes Workforce Planning success fairly elusive. It seems modern day Workforce Planning or Strategic Workforce Planning is now rich enough in complexity and depth to now be appropriately “unpacked” into separate sub-processes—each of which may have more relevance to the organization than the traditionally defined ‘Workforce Planning’ which tends to focus on very long term plans.

An example of one of those sub-processes that is earning more attention in Talent Management circles is Organizational Planning, largely because Organizational Planning aims to translate business strategy into near-term structural plans; and long-term workforce plans into specific actions. The Organizational Planning process is an important and necessary complement to the long term forecasting process, and has a higher impact on near term results.

According to the newly-released HCI report “Creating a Better Plan: Connecting Business Strategy, Structure and Talent,” strategic planners were 31% more prepared for the recent economic recession than those organizations that did not have an effective organizational plan (what the study calls “Reluctant Planners”). It also found large gaps between organizations that were strategic planners vs. reluctant planners when it came to employee engagement, profitability, and the agility needed to pursue new business opportunities. The HCI study concluded that “Organizations that master these disciplines are simply more agile, and thus more able to quickly transform and adapt when faced with any major change.”

As the Talent Management landscape and business climate overall continue to forge ahead amid lots of uncertainty, an organizations’ ability to adapt to change quickly and efficiently is not an option. Having a strategic plan in place – including a corresponding strategic workforce plan—enables organizations to not only weather upcoming storms, but also prepare for organizational growth while providing increasingly demanded transparency.

Steve Goldberg
May 2012