Regardless of size or industry, it is a rare organization that hasn’t set broad and aggressive digitalization goals as part of its strategic plan. Whether those goals are to increase revenue growth or customer satisfaction, reduce costs or risk, or address a strategic goal such as carbon neutrality, achieving them depends on continually refreshing digital tools and techniques.
While organizations typically focus significant effort on building and deploying digital technologies, few apply the same diligence to ensuring their workforce is appropriately organized, sized, and equipped with the digital skills to deliver effectively. Failing to do so poses significant risk to realizing expected returns on transformation investment.
Digital advances almost always translate to impacts on structure, workforce role requirements, and skills and capabilities. What’s more, the structure and skills that advance organizations into the future are rarely the same as what brought them to where they are today.
Actively identifying workforce requirements based on new tools and techniques and defining the skills and capabilities required to deliver is the foundation through which organizations effectively align organizational talent to strategic goals, thereby using people as the driver to transformation. And while many companies deploy performance assessment programs, few regularly look forward to identifying gaps in their workforce that prevent them from achieving strategic goals.
Four areas should be considered when identifying the structure, size, role, and skillset requirements of an organization’s workforce:
Align the organizational operating model to the business and digital strategy
Regularly examining whether the organizational operating model is aligned with the company’s purpose and future needs is an integral part of workforce optimization. Aligning highly skilled and capable people to a structure that fails to drive efficiency or empower people to make decisions is the fastest way to negatively impact progress toward achieving the strategy while encouraging attrition of high performers.
It is also worth considering which parts of the model need to stay static and which parts require a more dynamic approach. For example, the organizational structure that supports a fully optimized business process that rarely changes (for example, creating a regulatory report) should be sustained. On the other hand, a structure that supports functions such as product management that are focused on implementing change likely needs to be adjusted more often. Responsibilities also frequently need to be revised as part of any reconfiguration in addition to the organizational structure and model itself.
Sometimes the right thing is to go back to basics, disconnecting reporting lines (and people) from the current structure to enable focus on the target state. Embarking on a potentially matrixed model, in which people are accountable to one leader for a change initiative that has a defined end date and another for their permanent reporting line, can be daunting if not structured correctly and embedded within the existing culture.
Accurately allocate resource requirements
One of the most difficult elements of active workforce planning is accurately predicting the number of resources that will be required in the future. Most organizations allocate hiring to line managers who are reactive and often not aware of the larger strategic, market, and economic trends that drive the required future capacity. If a few midlevel managers add a small number of full-time employees to their organizations, the economic implications to the company may be marginal. But if hundreds of managers do the same thing, abruptly the size of the organization will exceed what is required to be competitive — and what will be required when digital tools and techniques are fully operational.
Traditionally organizations have anticipated the need to reduce costs or other market-driven changes by instituting across-the-board hiring freezes and dismissing low performers based on simplistic criteria. These approaches are broadly ineffective as they can also slow innovation, impact investments that need to be made, and eliminate junior staff who would become the future leaders of the organization. They are brute force actions that may result in short-term spending reductions at the cost of aligning with the future strategy and creating longer-term competitive strength.