From March Madness to Market Madness: Building Agile Workforce Planning and Analytics Capability

March Madness was a whirlwind experience this year. We rode the early upsets, fallen idols, and breathtaking buzzer beaters. And who can forget the five Kentucky Wildcats freshman starters in the finals, who fell heroically to a more experienced and agile Connecticut Huskies team? And that's just the men's competition.

With March Madness behind us, we've shifted attention from office pools back to another sort of madness--the Market Madness of the business environment. And like the journey to the Final Four, unpredictability, discipline, skill and agility sets the play.

More than 64% of large organizations experienced disruptive change in the past 24 months, according to an upcoming i4cp study on organizational agility. Markets are changing rapidly, often unpredictably, and winners can unexpectedly become losers.

Not surprisingly, high-performance organizations (HPOs) are better at managing disruptive change, often through a major business strategy shift (nearly 40% do this). Less obvious is the fact that an organization's workforce planning and analytics (WPA) capabilities can be at the center of this change and adaptation--and clearly these capabilities are fast becoming a source of competitive advantage for HPOs. This sentiment is echoed by Bob Myers, chief human resources officer of i4cp-member company Black Hills Energy: "When done well, this (workforce planning and analytics) is all about enhancing agility."

i4cp research has consistently shown that HPOs excel in five core areas we call domains: market, strategy, leadership, talent, and culture. As highlighted in i4cp's People-Profit Chain™ report, culture in high-performance organizations is about supporting and enabling an agile, change-ready organization. Following are ten things we've learned about agile practices from our HPO research on workforce planning and analytics and discussions in our Strategic Workforce Planning and Workforce Analytics working groups:

1. At the core of any successful workforce planning and analytics effort are business outcomes. HPOs start with the business need and opportunity front and center. For example, an organization that plans to build operations in another country needs a clear understanding of business growth opportunities and challenges to growth, as well as visibility into talent supply and demand tools and practices. The most successful workforce analytics teams--such as the team at i4cp-member company IBM--have processes that start with a clear framing of the central issue or problem with stakeholders.
2. Stakeholders are a precious resource needed to identify and implement business outcomes. WPA maturity models often focus on technical maturity, process maturity and other acquired capability. But HPOs also focus on stakeholders at all levels--and especially on the role of leaders and operational managers who deliver the solutions. Success is frequently about the collaboration of many groups of stakeholders to apply various technologies, tools and processes to gain insights.
3. HPOs focus on effective data management. Data quality remains at the top of the list of challenges faced by planning and analytics functions. Technologies that do not share data effectively posed the greatest stumbling block, overall, even among HPOs. Companies also struggle with turning data into information and decisions. Because data is typically siloed in organizations, half the battle is meshing the data, often through technology and practices to engage decision-makers to collaborate. Basic definitions, such as headcount, can be a necessary place to start this collaboration.
4. HPOs communicate a clearly defined process. For example, McKesson developed roadmaps, process steps, and branding campaigns early on to communicate specific business outcomes and milestones for their planning and analytics effort. A roadmap can serve as a tool for communicating objectives and the direct tie-in to business strategy. Clear and consistent communications strategies for building stakeholder support for planning and analytics are critical, suggests i4cp's report, Seven Secrets of Effective Workforce Planning Teams. A clearly defined process is important because roles, responsibilities and decisions occur at multiple levels of the organization.
5. Companies must start with basic reporting functions that managers need and build maturity over time. Teams who have successful functions started with the basics of measuring headcount and turnover, and they have clearly agreed upon definitions around their data. They begin with reviewing the business strategy and building a strong bridge to finance and budgeting functions. But HPOs go beyond to build additional capabilities. They are much more likely to conduct business strategy review, demand forecasting, gap analysis, action planning, building of business strategy, scenario planning, and environmental scanning.
6. Developing measurement dashboards and scorecards are a step on the way to maturity. Companies often move from simple efficiency measures such as headcount and turnover to effectiveness measures such as quality of hire, time to fill and time to productivity (tools available for i4cp members). Effectiveness metrics provide more proactive information and insight on activities that are working and those that are not. For example, quality of hire metrics might show insight into pools of candidates and criteria required for success. HPOs have more metrics and those metrics are tied to business outcomes.
7. HPOs use workforce analytics for more complex problem solving. HPOs often introduce a replicable set of steps, using statistical methods to solve clearly identified problems. Tools, ranging from Excel spreadsheets, survey instruments, and enterprise analytics technology may be applied to a business unit or across the organization. Descriptive analytics show simple patterns such as specific competencies that are aligned with successful job performance. Predictive analytics, still relatively rare in HR, are used to assess the probability of outcomes such as hiring decisions.
8. HPOs invest in building the dedicated team and capability. This is often accomplished through a Center of Excellence (COE) and core central staffing with more advanced analytical and technology skills, but it also involves decentralized communities of practice and HR business partners. HPOs are investing in training--building the skills of HR business partners to solve problems in the field and act as performance advisors. They are pulling skilled resources from other functions such as marketing and finance to enhance analytical capability. They also do cross training and provide opportunities for cross-disciplinary work.
9. Leaders are critical to the process and must walk the talk. We've heard it a million times because it's an inescapable truth: active involvement of senior leaders in workforce planning and analytics can be a game-changing element in planning and analytics effectiveness. Greater senior leadership support for planning and analytics functions has the power to drive greater business impact. And leadership behavior has a strong impact on an organization's ability to be adaptive and resilient. Clear and frequent communication is consistently found to correlate with market performance.
10. Workforce planning and analytics is about continuous improvement. In the final analysis, workforce planning and analytics in HPOs is a dynamic capability. While it may involve process, tools, technology and skills, it is also about building an adaptive workforce to compete in the ever changing market environment. Customer orientation and market focus remain at the core of any successful approach.

For information on specific i4cp research or working groups--including the Strategic Workforce Planning Exchange and Workforce Analytics Exchange, contact us.