scenario planning strategic workforce planning axiom consulting partners

HR Execu)ve Webcast | February 9, 2012 | Property of Axiom Consul)ng Partners. All Rights Reserved

What Can We Learn About Workforce Planning From Napoleon?

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Napoleon’s March on Moscow in 1812

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On June 1812, 400,000 troops advance on Russia

100,000 troops begin the return to France

Direc=on the army was traveling, showing where units split off and rejoined Weather temperature at

certain dates in the campaign

In September, troops enter Moscow

27,000 troops cross the Berezina in November

10,000 troops crossed the Nemen

Brutal cold, guerilla aLacks, and lack of food and supplies deplete the

French troops


Scenario Planning Applied to the French Invasion of Russia: The Turning Point – Battle of Polotsk

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Scenario 1 (Best Case): French troops push East unimpded by Russian troops. Scenario 2 (Most Likely): Russian troops slow down the French troops at Polotsk, delaying a march on Saint Petersburg. Scenario 3 (Worst Case): Russian troops stop the French push to Saint Petersburg at Polotsk; the baKle must be decided at Moscow.

What are the range of possible outcomes as we engage the Russian Army in our push to St.

Petersburg?

What are the implica=ons of these outcomes and how must we adapt? What is the likelihood that these

outcomes come to frui=on? What leading indicators or condi=ons

increase the probability of each outcome?


This Webcast Will Discuss…

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The business case for aligning talent supply and business demand

What is scenario planning and how it can improve strategic workforce planning

Three leading prac)ces to maximize workforce planning efforts

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2

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Workforce Strategy Archetypes Over the Last Decade

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…So Why Do We Continue to See Disconnects Between Strategy and How a Company Manages Talent?

1.  Paralysis due to the lack of clarity about the future business environment

2.  Lack of understanding of (and focus on) the rela)onship between strategy and talent

3.  Lack of understanding of the true “cost” of talent

4.  Lack of insight into future talent requirements

5.  Disparate, disconnected, and overly-‐engineered HR management processes developed for technocrats, not business people

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Three Leading Practices to Achieve Optimal Talent Alignment With Strategic Workforce Planning

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Keep a close pulse on business drivers

Keep a close pulse on business drivers to understand how value is created and monitor leading indicators to gain an early read on how condi)ons in the market and economy impact these drivers.

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U=lize Scenario Planning Techniques

U)lize scenario planning techniques to map out the range of likely futures and link the SWP process and discussions about talent to these scenarios.

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Segment and Differen=ate Talent

Differen)ate the workforce by segmen)ng talent along the dis)nct ac)vi)es that correspond to each business driver. 3


Let’s First Get Grounded on a Definition for Strategic Workforce Planning

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Scenario Planning Provides a Methodology for Identifying Alternative Strategic Options

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TODAY

“Best” case (+15%)

“Worst” case (-‐15%)

“Base” case

FUTURE

Tradi=onal Planning Scenario Planning

TODAY

Strategic Op=on A

Appropriate in rela=vely stable environment and/or very short-‐term talent planning.

Appropriate for long-‐term planning and to force “out-‐of-‐the-‐box” thinking.

Strategic Op=on B

Strategic Op=on C


The Strategic Workforce Planning Process…

Determine ac)ons and investments to close the gaps, including )me and money associated with

build, buy, rent decisions

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Translate business

strategy into value drivers

Determine capabilities

needed to win

Identify and segment talent

Determine future headcount demand vs.

supply

Identify gaps

Determine talent strategy to close gaps

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2

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Strategic Workforce Planning

Iden)fy and segment talent (by role) based on rela)onship to organiza)onal capabili)es

Iden)fy the current and future organiza)onal capabili)es associated with the value drivers

Iden)fy the value drivers (e.g., cri)cal ac)vi)es and processes) to achieve the business strategy

Iden)fy apparent and hidden gaps and run mul)ple scenarios, if

needed, to understand poten)al gaps

Determine headcount demand vs. supply in each role, while factoring both internal and external labor market dynamics

Potential application of

scenario planning


Leading Practice 1: Keep A Close Pulse On Business Drivers

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Case: Wireless Telecommunica=ons Co. §  Iden)fying the highest priority business drivers §  Determining the capabili)es that have the

greatest influence on strategy execu)on §  Establishing clear lines of accountability for key results §  Ensuring the key performance measures are known to all §  Communica)ng to employees how performance in their

func)onal area influences company performance §  Determining cri)cal competencies required to deliver against

these drivers §  Deploying the right talent into the right roles


Value Tree Mapping™ Case Example: What are the Key Drivers of Revenue?

Revenue

Price / Value

ARPU

Number of Customers

Plan Type

Prepaid

Postpaid

Base Level of Plan Sold

Ability to Sell Data/Addi)onal Services

Selling Effec)veness

Ability to Understand

Customer Needs

Plan Compe))veness

Ability to Acquire Customers

Ability to Retain Customers

Customer Loss Rate

Customer Sa)sfac)on

Marke)ng Effec)veness

Adver)sing Effec)veness

= High Priority Value Drivers


Equipment Quality

Capital Expenditure Network Reliability

Network Coverage

Availability of New Products

&Technologies

Flexibility of Payment Op)ons

Customer Support Effec)veness

Price / Value

Service Reliability

Billing Clarity

Role Defini)on

Training Effec)veness

Hiring Effec)veness

Clarity of Performance

Metrics

Alignment + Compensa)on &

Mo)va)on

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Value Tree Mapping™ Case Example: What are the Drivers of Customer Satisfaction and Retention?

Customer Sa=sfac=on & Reten=on

Ease of Access to Support

Ability to Diagnose & Resolve Issues

Effec)veness of Service Reps

Call Center

Web

Systems Quality


Lens to Examine Talent Implications of Critical Business Drivers

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Key Business Drivers

Industry Economics

Compe==ve Landscape

Customer Dynamics

Financial Constraints

Emerging Technologies

§  Demand and growth forecasts §  Poli)cal and regulatory change §  Labor and material costs §  Global markets

§  Emerging compe))on §  Pricing §  Brand posi)on

§  Changing buying paKerns §  Customer demographics §  Brand loyalty §  Customer/market access

§  Disrup)ve technologies

§  Technology trends

§  Product life-‐cycles

§  Cash flow §  Access to capital §  Debt to capital ra)o


Leading Practice 2: Utilize Scenario Planning Techniques

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Case: An Electronic Systems and Controls Business Expands Into China

§  The business develops and applies advanced technologies that enable energy-‐genera)ng facili)es to operate safely and in an energy-‐efficient manner across the globe

§  To meet a projected 8 percent increase in electricity consump)on, China says it will add about 235 gigawaKs of hydroelectric, nuclear, wind and solar power capacity by 2015

§  China wants 11.4 percent of its energy to come from non-‐fossil-‐fuel energy sources by 2015 and has a goal of 15 percent by decade's end

§  One strategic op)on calls for significant growth in the nuclear controls and opera)on management businesses, but leaders are concerned that expansion in China will be difficult to execute

§  Difficultly acquiring, developing, and deploying the necessary systems engineering talent to support the business has been iden)fied as a key constraint


Scenario-based Workforce Planning Enables Organizations to…

§  Focus on those strategic decisions that will drive performance §  Model and plan for changing workforce assump)ons §  Build consensus among the senior management team around

the most “robust” strategic op)ons §  Iden)fy “leading indicators” with which to monitor ongoing

change of cri)cal business drivers §  Quickly adapt short-‐term ac)ons and long-‐term strategy as

business condi)ons change

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HR Execu)ve Webcast | February 9, 2012 | Property of Axiom Consul)ng Partners. All Rights Reserved 17

Four Basic Steps to Scenario-based Workforce Planning

1. Iden=fy the “most likely” business scenario

2. Determine baseline business scenario

3. Iden=fy alterna=ve business scenarios

4. Validate with key stakeholders


Case Example: Scenario Planning for China Expansion

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Leading Practice 3: Segment and Differentiate Talent

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Case: Defense and Civil Contractor to the US Government

§  The business provides professional services to various government agencies with a broad range of capabili)es and areas of exper)se including cyberwarfare and security

§  Defense Department has been called on to find $259 billion in cuts in the next five years — and $487 billion over the decade

§  PaneKa has repeatedly said that he would preserve financing for Special Opera)ons forces, cyberwarfare and intelligence, surveillance and reconnaissance systems

§  An up)ck in government contracts and task orders related to cyber security projects suggest a significant change in the type of work the firm will be doing over the next five year and the type of talent it needs


Segmentation Enables Workforce Differentiation and Focuses the Talent Strategy and HR Service Delivery Priorities

Role/Segment Typical Porlolio Gap Required HR Alignment Efforts Talent Management and HR Service Priori=es

Strategic Talent §  Key to compe))ve

advantage

§  Normally a “hot skill” in high demand

§  Talent shortage §  Atrophy in strategic

organiza)onal capability

§  Build capacity through rapid infusion of external talent and accelerated development of select internal talent

§  Tailor the employee value proposi)on (EVP) to aKract top talent

§  Talent pipelining §  EVP/Branding §  Reten)on §  Accelerated development

Core Talent §  Possesses proprietary

knowledge and skills

§  Hard to replace – “tribal knowledge”

§  Talent shortage (current or an)cipated due to aKri)on)

§  Atrophy in organiza)onal capability

§  Protect and strengthen capabili)es through ongoing development of current bench and talent pipeline and strong EVP

§  Strengthen the EVP

§  Selec)on §  AKrac)on and reten)on §  Development

§  Performance management

Requisite Talent §  Performs work that is

necessary but could be handled through alterna)ve staffing/ delivery strategies

§  Talent overage §  Low ROI on talent

investment

§  Streamline and/or outsource segment or consider re-‐tooling around core capabili)es

§  Development/rota)on §  Performance management §  Exi)ng (aKri)on, outsourcing,

downsizing)

Non-‐Core (Misfit) Talent §  Possesses skill sets no

longer needed §  Talent overage

§  Divest en)re talent §  Iden)fy opportuni)es to move “A”

players into other roles

§  Exi)ng (aKri)on, outsourcing, downsizing)

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Case Example: Differentiating Talent to Penetrate Cyber Security Market

Role/Segment Example Roles

Strategic Talent §  Key to compe))ve advantage §  Normally a “hot skill” in high demand

§  Malware Analyst §  Digital Forensics Analyst §  Cloud Compu)ng Engineer §  Cyber Intelligence Analyst

Core Talent §  Possesses proprietary knowledge and skills §  Hard to replace – “tribal knowledge”

§  Penetra)on Tester §  Network Security Analyst §  Network Intelligence Analyst

Requisite Talent Performs work that is necessary but could be handled through alterna)ve staffing/ delivery strategies

§  Systems Administrator §  Systems Integrator §  Help Desk Professional

Non-‐Core (Misfit) Talent Possesses skill sets no longer needed

§  Not Applicable

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A Segmented Workforce Strategy Enables Optimal Alignment

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Time

Dem

and

for G

oods

/Ser

vice

s

Demand Talent Portfolio

Shed Support roles whose work can be delivered at a lower cost with the same quality

Shed Surplus roles that are no longer relevant to the business

If current or future ROI can be measured, add Strategic and Core roles that are directly related to the critical business drivers


How to Get Started…

1.  Look for opportuni)es to surface fact-‐based insights about the workforce capabili)es and capacity that may impact the ability to achieve the business strategy

2.  Know the business inside and out and be able ar)culate the talent implica)ons of changes in the business environment

3.  Apply the leading prac)ces to a hot-‐buKon issue of your leadership team

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Aaron Sorensen, Ph.D.

Dr. Aaron Sorensen is a Principal with Axiom Consul)ng Partners, a management consul)ng firm that helps businesses align strategy, organiza)on, and talent to achieve superior results. A psychologist with a background in advanced analy)cs, Aaron brings unique insight to organiza)on, leadership, and workforce issues that impact profitability and constrain growth. He has worked with numerous organiza)ons on their talent management challenges including 3M, Corning, Booz Allen Hamilton, and Novar)s. He frequently publishes and speaks on the topics of strategic workforce planning, succession planning and talent management and is an author to The Talent Management Handbook chapter on strategic workforce planning.

Aaron has a Masters and PhD in Industrial/Organiza)onal Psychology with a concentra)on in Applied Sta)s)cs and Business from DePaul University, and a Bachelors of Science with honors in Psychology from the University of Iowa. Aaron is a member of the Society of Industrial Organiza)onal Psychologists (SIOP) and the American Psychological Associa)on (APA).

Aaron is based in Axiom’s Chicago office and can be reached at 312.343.4644 or [email protected].

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scenario planning strategic workforce planning axiom consulting partners

Business

tree mapping

strategic

strategic

critical business

strategic

french troops

accelerated

leading prac