Strategic workforce planning and organization design

In my mailbox this week came two similar questions.

The first was about my blog (March 14 2011) Position Management vs. Organization Design. This correspondent asked:

 Could you please clarify how you "Identify manpower flows"
 What is the rationale for suggesting identifying a possible flow for each scenario – will they be different?
 Isn't it an expensive endeavor to identify flows for each possible redesign scenario?
 And, what methods do organizations/consultants typically use to do so?

The second person asked "if you come across any linkage or material regarding OD and Strategic workforce planning, let me know. It's the puzzle I can't figure out right now. OD and then SWP or SWP and then OD…or is it a combined process?

The questions are similar. They are both asking what the relationship is between strategic workforce planning and organization design and in what situations do you need to consider the relationship.

To illustrate the relationship let's take a situation of the merger of two departments – one of fifteen people and one of twenty-five people. Over the last year several staff have left from both departments and because of a headcount freeze have not been replaced. The intended outcome of the merger is to design the new organization to deliver high performance without increasing headcount.

The sponsor of this project has said that people currently in roles may not have the same role in the new organization, that the work flow may be very different in the merged organization, that the drive will be to develop new services without adding to headcount and with the maintenance of employee motivation and engagement.

So assume you have mapped the new workflow, come up with two or three options for the design, tested that the work will flow through the design – how will you know which is the better one to pick?

It's at this point that you need to have a good grasp of what your workforce 'looks like'. This means using HR data of various kinds to identifying the characteristics and flows of people: how many do you have? What are their skills and capabilities? What are their roles? What are their stay/leave intentions? How frequently do they change jobs within the organization? What are their career paths, promotion rates? How engaged are they? etc. In the example of the merger of two departments you need to know of the 40 people who and what you have to draw on.

You need this because your organization design options although each capable of handing the same business process, usually require different work content, roles and accountabilities, decision authority, interfaces and communication, and performance metrics. In their SHRM article How to drive performance in the new economic reality Michael Norman, and J.P. Elliott, of Sibson Consulting discuss this in more detail.

Think about it. A design around a networked structure, for example will need different workforce capability from a design around a customer segment or geography structure. You need to know what people you have in order to use them in the most effective and efficient way. If one of your designs requires a mix of skill/capability that isn't a ready match to what you have available you can make a decision on cost/benefit grounds on whether to pursue it.

The question about whether it is expensive to look at each scenario in relation to the workforce is better framed as 'what are the risks of not doing a high level assessment of talent needed against talent available'?

John Boudreau's book Retooling HR is very helpful in showing the power of HR analytics and strategic workforce planning to inform business strategy, and by implication the design of the organization. It also starts to address how consultants approach the task of collecting, collating, and interpreting workforce data – something that when I work on organization design projects I work with HR analysts to get the picture.

In answer to the second question posed – strategic workforce planning or organization design first? The better question is how does each support the other in order to deliver the business strategy in the most effective and efficient way?