Making It Work: The Strategic Workforce Management Model

Making It Work: The Strategic Workforce Management Model

Remember those educational programs with the pretentious narrator whose voice made everything he said sound really important? The only way to convey in print the effect that his hushed, but

Remember those educational programs with the pretentious narrator whose voice made everything he said sound really important? The only way to convey in print the effect that his hushed, but reverentially urgent tone had on his audience is to use bold italics. Bear with me for a moment and imagine we are watching a documentary on the history of online learning. The voiceover might go something like this:

“Sometime in the late 1990s, the dream of building a software application to duplicate the functions of a university became reality and the learning management system was born. Coincidentally, the late 1990s brought us the Internet; now man could learn online. It wasn’t long before forward-thinking organizations, both private and public, looking to reduce training costs and improve productivity, adopted the LMS and online learning as the next big thing. With these pioneers leading the way, the rush to make the LMS the killer training application began.”

Since you are reading this article in a leading online learning publication, you probably know the rest of the history: The LMS has become the central tool of enterprise e-learning. Indeed, the LMS in its current form has evolved well past its original purpose of duplicating on the Internet the functions of a physical university. It has become a human capital applications platform incorporating performance management, competency management, individual development planning and other HC-related functions.

Organizations bought LMSes because they worked, yes, but also because, in the first half of the decade, they were the buzz, the application du jour in training and HR. Sometimes a thoughtful business case accompanied the requisition request as it made its way up the organization’s management chain, but sometimes the LMS acquisition was a “check-the-box” exercise in funds expenditure, driven by hope (and a little bit of hype) as much as anything else. Either way, the question soon became, “I bought an LMS. Now what?”

“Now what?” indeed. LMS vendors — just as they did when an LMS was often little more than a course catalog and registrar’s office on a disk — would have you believe that their application is all you need. And it may be true, in some cases, that the increasing sophistication and functional integration of their all-in-one human capital platform can solve all your organization’s training — oops, I mean human capital — challenges.

The problem is that most organizations implemented their LMS as a stand-alone, stovepipe system, owned by the training department and operated in isolation. In the same way that LMS vendors have expanded their systems from the core online delivery and tracking of training function to incorporate various human capital functions, the training department (often HR’s red-headed stepchild) has become part of their organization’s management of human capital: larger, strategic, but still unable to explain to senior management in terms they can understand why training is so important to the bottom line (even though all of us dedicated trainers know that it is).

Management View

Let’s step back for a second and consider the fact that, for many organizations, once they went through the often painful LMS implementation process, adoption and usage rates for their online training field of dreams peaked, leveled off, and have since stagnated. At the same time, senior management, looking for a higher level of organizational performance, has embraced the idea of a transformed HR department as the human capital strategic partner to the front-line revenue producers. Nice, but as a strategic partner and peer, management expects more than ever before that the HR and training departments will justify their existence and show demonstrable results. Having expended major dollars and resources on the enterprise LMS, senior management asks the question with even greater urgency: “We bought you this LMS. Now what?”

For the most part, there has not been a comprehensive, easy-to-understand model that shows organizations the complete human capital picture: how competency, learning and performance management combine with enterprise financial, HR and other functions to create measurable increases in performance; how to integrate an LMS with the rest of the organization’s enterprise systems in a way that creates demonstrable benefit for that organization’s owners, managers and employees. The Strategic Workforce Management model takes on this challenge.

The Model

The Strategic Workforce Management Model looks different from any other model because it tells a story. Stories can be meaningful, entertaining and memorable; just what trainers need to explain how we fit into the bigger picture. Think of the model as an illustrated story that has a strong underlying organizational structure firmly rooted in the principles of human capital, enterprise architecture and return on investment. People remember an entertaining story. When you can tell the story of how all the human capital functions work together to create value for your organization, senior management will (hopefully) remember and make investment decisions that will move your organization (hopefully) toward the ideal that the SWM model depicts.

We start our story at the big diamond in the upper right center of the accompanying illustration. We start there because making diamonds is the metaphoric purpose of every organization. In a private sector organization, our diamond represents profit for the shareholders; in the public sector, it represents some other kind of measurable benefit, but every organization exists to create value for its stakeholders in one form or another.

There is not much point to a model that does not somehow support and improve the organization’s central purpose of value creation, so let’s state right up front that the Strategic Workforce Management model considers the end at the beginning. It shows how to fit together all the pieces of the human capital puzzle to enhance the organization’s ability to create value (diamonds) over time. It was built specifically to show senior managers how human capital really works, how all the different functions come together to enable an organization to manage its workforce in a way that directly contributes to the achievement of that organization’s strategic goals, the goals by which the executive team is measured.

You will notice that the Strategic Workforce Management model consists of a set of puzzle pieces that fit together to make a whole picture. The illustration you are looking at is actually an interactive Flash presentation that highlights each puzzle piece when it is clicked, so that the presentation adapts to the audience. The model has an underlying matrix, too. It is divided along the horizontal axis into two views: the organizational view and the individual view. It is divided into three vertical columns labeled “Plan,” “Activity” and “Assess.” Each of the key functions located on the horizontal axis inform both the individual and organizational views. The views progress, left to right, from “Planning” to “Doing” to “Measuring” and then back to “Planning.”

A key point in understanding the Strategic Workforce Management model is that you can’t talk about human capital and Strategic Workforce Management without talking about both the organization and the individuals that make up that organization. The individual employee’s journey on the road to improved performance directly influences the organization’s progression to better performance. The organization’s ability to view and use its workforce (a collection of individuals) as a strategic tool directly influences its individual employees’ ability to improve their performance. As the old Sinatra song, “Love and Marriage” says, “You can’t have one without the other.” That’s why the model has both organizational and individual views of the same functions.

So, let’s get back to our diamond. In organizations, teams of people undertake the process of value creation (diamond making). The Strategic Workforce Management model represents value creation as a hammer chiseling a diamond out of a lump of rock. The people on the hammer represent the team of individuals that work together in the diamond-making process to create something of value for the organization. Management wants to minimize the risk of failure by picking the best, most competent team for the job. To choose the right people, with the right mix of skills and experience, they need to understand both the competencies required for the job and the competencies of the individuals in their workforce. The model represents sets of competencies as a letter (A, B, C…) above each little person’s head. You will see these letters any place in the model where competencies come into play.

To solve the problem of choosing the right people, with the right competencies, to form the team to do the job, with its competency requirements, of creating diamonds, management has three choices:

1) use existing personnel (and train them if they don’t have the right competencies at the start of the project);

2) hire new personnel from outside the company, or

3) rent workers with the necessary competencies on a temporary basis (outsourcing).

The model represents this critical choice as a signpost pointing in three directions, and we will deal with each in turn. But what information do decision-makers need to determine which way to go? Costs can be a factor, as can speed, but the biggest single factor will be a clear understanding of the workforce’s competencies.

The model shows the current workforce competencies as a jigsaw puzzle with some pieces missing. The completed puzzle next to it represents the organization’s ideal set of workforce competencies that it needs to accomplish its strategic goals. Management addresses the gap between what the workforce can do now and what it needs to do to make diamonds by acquiring the missing competencies. If you don’t know what you need, it becomes much more difficult to make intelligent choices when making the decision to hire, train or rent.

Start With Competencies 

To fully understand the organization’s workforce competencies requires a competency management function, represented as a large circle on the centerline of the model. In the circle, competencies are represented as doors, a kind of filter that only people with the right competencies can go through. You will see these doors in other parts of the model as well. The arrows from the competency function to and from the little competency jigsaw puzzles show how competency management gives the organization the ability to understand, manage and develop its workforce to put together the teams to successfully complete the tasks of value creation.

Notice that I said competency management function, not system. That is because each of the three circles on the centerline of the model represents essential functions. A large organization may invest in a software application to help it manage these functions, while a small organization may rely on a web app or even surveys and spreadsheets. What the understanding of a workforce’s competencies does for an organization is more important than how it actually gets accomplished.

The Cycle: Plan-Act-Assess

We have been working backwards through the Strategic Workforce Management Model’s organizational view in order to emphasize that the central focus of the model is creating value in the form of measurable results. Now we can go from left to right, all the way through the cycle of plan, action and assessment.

Every organization has a mission, and in order to fulfill that mission, management makes a plan. The plan has strategic goals and specific organizational goals for a definite time frame. This planning process determines the “to-be” competencies of the completed jigsaw puzzle located above the competency function. Management, with the help of human capital professionals, says, in effect, “in order to achieve these goals, our organization needs this number of these kinds of skill sets to form the teams that will work together to create the value that makes our organization successful.”

But how does management know that its plan is working? Results are only meaningful if they are measurable. Are the diamonds being made fast enough? How’s the quality? What about the cost? The model shows organizational measures at the far right of the organizational view, with an arrow connecting these measurements back to the planning process. In the same way, measurements that are critical to an organization provide feedback to the managers, who then modify their plans to take into account the changing environment, goals and current results. The model lists a couple of measurement systems (Kirkpatrick, Bersin) that provide meaningful data to learning organizations, but the key is not the specific measurement, but that the model requires measurements that are meaningful to the management team in order to complete the cycle of the organizational view.

Summing Up

To sum up the Strategic Workforce Management organizational view:

>> Management plans for the organization based on its mission, strategic and organizational goals.

>> The planning process determines the ideal competencies of the workforce best equipped to achieve those goals as efficiently as possible.

>> An organization that has a strong competency management function can accurately define the gap between the ideal workforce required by the plan and the actual workforce of the organization.

>> Knowing the competency gap enables the organization to make the best hire/train/rent (or some combination of these) decision to form the teams.

>> The right people with the right competencies will create the most value for the organization when doing the work that achieves its strategic goals.

>> The process must be measurable, and the measurements must inform the planning process going forward.

NEXT ISSUE: The second half of this article will describe the Strategic Workforce Management model’s individual view; show how it ties together with the organizational view; provide a different, more IT systems-oriented view of the model; and make a couple of suggestions on how you might start to implement the model in your organization.

—Contact Spence Burton if former manager of the GoLearn program at Office of Personnel Management, US Government.  He is currently program manager at the US Agency for International Development and can be reached via e-mail at Spence.Burton@gmail.com or via telephone at (703) 639-7122.

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