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Solving Challenges, Predicting Outcomes

Proper usage of workforce planning tools can lead to a better understanding of the relationship between work teams and the outcomes they commit to achieve.

Thursday, June 13, 2013
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As a former chief human resource officer, I know the workforce-planning activity is a critical focal point within the company and for the HR team. It involves thousands of leaders across the entire company and many hours of evolvement. Traditional WFP provided time for leadership to take a close look at the talent within the organization and identify any gaps and actions required to move the organization to a higher level of capability. It was exhaustive and valuable because of the insights it provided and the actions/accountabilities it drove, but it always seemed like something was missing.

We were an organization that believed in developing our people. However, when I dug deeper, particularly with senior line leaders, they said developing people is important, but getting results was critical. They would describe their responsibilities "like juggling a number of balls that were all white except for one red ball. Dropping a white ball (including most HR initiatives) was not good, but not the end of the world. However, drop the red ball (financial or operational outcomes) and it was 'Game Over.' "

This paradox became crystal clear in between the annual WFP events when an executive came to my organization for help. She had a plan to launch a new division with a game-changing product and had to build a complete organization. The HR function would participate in this launch, armed with a mountain of data (WFP, succession, compensation and talent acquisition). We would provide a list of names for each open box on her organizational chart and corresponding budget implications. She interviewed possible candidates, finalized the organizational structure and submitted a budget with the talent implications incorporated into her overall annual plan.

We met the unusually tight timelines and received positive comments back. Then, on the eve of the new division launch, the executive asked me two questions: How do I know this team will be successful and how do I know they will meet the challenges, particularly the required operational and financial outcomes?

Two conflicting thoughts raced through my mind: First, we hired the best people for the positions and I shared this with the executive. Secondly, we really can't answer her question regarding success potential because we filled the chart with individuals, which don't typically drive complex outcomes, teams do. We didn't have any reliable measures for that variable.

This same variable came up again in yet another variation – acquisitions -- and we did many, of them (more than 50). The challenge always seemed to be the same. After doing exhaustive due diligence, we filled in the boxes on the "new" organizational chart. Then privately, the executive accountable for results of the new entity asked the question: Do we have the team that can get the ball across the line? Of course, the response was always the same: Yes, we have the best people in key roles. However, it's a known fact that less than 50 percent of acquisitions achieve their intended first-year financial results. Again, I felt something was lacking and this missing element could prove to be very costly for the whole organization.

The questions the senior line leaders were asking behind the scenes haunted me for several years. Intellectually, I felt, we in HR, were doing the best we could to add value, yet I knew we were not delivering what line leaders with financial or operational accountably wanted. They wanted a better understanding of the relationship between the teams they built and the outcomes they committed to achieve by the end of the fiscal year.

Understanding the gap, I pressed my organization to find tools that solved these issues. We looked at a variety of automated solutions that came with promises of connecting the dots and while many were good at tracking key data on individuals, none were team-based nor did they address tying the teams to bottom line outcomes with any level of accuracy to enable true business planning. I was basically stuck with spreadsheets that were prepared by data analysts (now known as "big data Scientists") and in some cases, we even used manual processes.

In 2009, the same questions that haunted me earlier in my career resurfaced and became the quest of a 12,000-hour research effort I launched to close the gap. A small team, in conjunction with a major university, worked with 40 high-performance companies and discovered key elements which led to some incredible revelations.

The first was that teams achieve complex results, not individuals. While this seems relatively straightforward, we have all been a part of cross-functional teams where the knowledge and experience of the team members when aligned can yield unbelievable solutions. The bottom line is that teams are at the heart of results, not individuals. Yet many of the commercially available tools, as well as the processes I deployed or developed as an HR executive, were individually focused.

The second discovery was around three dimensions of teams: Team Leadership Competence, Team Goal Alignment and Team Continuity. These dimensions seemed to hold great insight into the missing link, the connection between team-based talent and business outcomes. When we analyzed these measures further and combined them, we began to see the connection between the "white balls" of talent and the "red ball" of future business outcomes. In fact, we could predict them!

Defining the Three Team Dimensions   

So what is Team Leadership Competence?  When 35 percent or more of the leaders within a team scored high against 15 success criteria, the team met or exceeded future financial objectives up to 12 months out.

When we combined TLC with Team Goal Alignment, the ability to focus a narrow set of team-based goals versus many, the predictive nature became more accurate. TGA seems obvious and fairly direct, however how many times have you seen a cross-functional team come together and agree on a narrow set of goals to find out later members on the team are on five different teams each with a competing set of goals? So, in order to achieve TGA, we observed leaders within the research group, focus and drive to limit the number of goals team members carried (particularly when it came to cross-functional teams). They approached goal alignment with a zeal not seen in other companies.

The last team dimension, Team Continuity, can be defined as the probability that the team members will stay with the team for the duration of the goal. How many times have you started with a great team with very clear objectives only to evolve to a rotating set of members? The cross-functional team members were pulled and replaced by the functional leader for what he or she thought was a higher priority. When this occurs, the transfer of knowledge is hampered and limits the outcome of the team.

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Put directly, these teams do not achieve desired outcomes because they lack continuity. Yet another example is when a superstar takes another job. That single defection may have a devastating impact on the team's ability to achieve a future outcome particularly if the team leadership competence is low to begin with.   

We found when looking at any one of the three dimensions of teams, it was indeed insightful. However, when you combine the dimensions it paints a clear, predictive picture of business outcomes.  In fact, we found the picture provided three things: the current state of the team as measured against future outcomes, the gap between the current state (either over or under), and a path to improved outcomes.

This revelation gave us a whole new perspective on a variety of applications within the HR function and beyond. With respect to workforce planning, the potential exists to move to strategic workforce planning with the difference being the connection between what we have been doing for 20 years in workforce planning, and the ability to look at the outcomes of leadership teams. Beyond this capability the real-time nature of strategic WFP enables solutions to business challenges that occur anytime during the course of the year. The WFP comes to life and is dynamic vs. static, team-based vs. individual-based and predictive vs. retrospective.

This new capability seemed to answer the questions executives had when I was in the CHRO role years before. Basically, they wanted to predict their effectiveness when juggling the red ball and understand/measure how teams are intrinsically tied to outcomes. From an HR perspective, it solved the question: How do all these processes: WFP, succession planning, talent management, etc., help in driving measurable bottom-line impacts?

WFP in Action

Frank Kohoutek had just taken on the role of senior vice president of operations at Crossings Automation, a global technology equipment company. He had aggressive business targets he needed to meet 12 months out. He had to quickly understand all the resources he had available to meet the challenge and he needed a real-time predictive WFP tool to determine the strengths and gaps in his own organization and in those he depended on within the broader organization.

Within days of deploying the research-based tool, he began to see the gaps coming into focus. The tool provided a map that showed the capability of his team and the gaps he needed to focus on and fill, if he wanted to exceed the expectations of the CEO. He immediately made changes -- both structurally and organizationally -- all with a focus on raising the Team Competence, Goal Alignment and Continuity tied to the business outcomes. The results were dramatic – a 150-percent increase in shipments and 34 consecutive months of profitability.

When looking at the future of strategic WFP, it is clear: Line executives are in need of greater capability versus filling boxes or rolling up budget numbers. They are looking for ways to see into the future with the teams they have built to measure if they have the right capability to achieve results, and if not, provide a path to exceed  business requirements.

Given this, the HR function has an unprecedented opportunity to help line customers achieve results through new, advanced research based tools which tie talent to the bottom line.

Gene Tange is the CEO and founder of PearlHPS Inc. He can be reached at gtange@pearlHPS.com.

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