Creating a Nimble and Flexible Organization

Creating a Nimble and Flexible Organization
How Human Resources can help mold an adaptive workforce
by Stephen Coco, Associate Principal, Intellilink Solutions, Inc.

Abstract-Organizations need strategic support as they maneuver to meet the peaks and valleys in their business cycle with right-sized workforces. Today’s savvy HR departments are gearing up to provide the kind of help that will make companies nimble and flexible.

In this day of mergers and reorganizations, global competition, and fierce bottom-line pressure, companies are challenged to make strategic decisions about staffing, contracting, and outsourcing. An organization needs to maintain the right-sized staff with the right skills and competencies in balance. The goal is to create and manage an adaptive workforce, capable of adjusting quickly to changing business needs.

Many Human Resource (HR) departments have long been relegated to formulating staff policies and administering benefits, but there is much HR can do to help an organization adapt to its changing overall business needs. To play this role, HR must have the right resources in place and be conversant with industry best practices.

Why “nimble and flexible�?

Several realities are fueling the need for an adaptive workforce strategy: Mergers necessitate rational choices about combining business units. Internal reorganizations shift responsibilities among business units in ways that obviously affect staffing. Regulatory compliance requires external transparency about how companies function. The shift toward optimization compels more stringent cost management, and a large part of the calculus is creating greater efficiencies in the workforce.

Defining an adaptive workforce structure

Structuring a workforce to meet the types of challenges outlined above raises issues of internal multi-skilling, external mobility, and alignment of skills and competencies to business imperatives.

Internal multi-skilling.
Innovative companies are finding creative approaches to internal resource sharing. For example, an employee hired for one skillset may in fact play a larger cross functional role based on her competencies. That person might be looked at not just as a whole FTE, but as a resource that can be divided to meet project based needs. Multi-skilled employees are valuable assets in an adaptive workforce because they can be shifted to deploy their skills as they are most needed.

External mobility (“owning� vs. “renting�).
The balance between permanent vs. contingency staff might be seen in terms of “owning� versus “renting� resources. What portion of its workforce should an organization “own� as permanent staff, and what parts should it “rent� as consultants or contractors? Becoming a nimble and flexible organization means defining core skills and competencies, and making sure that hiring practices are geared strictly to those needs. It makes sense to rent resources for projects with defined datelines, particularly when the skills required do not fit the organization’s core set. That means contingent hiring or outsourcing for skills that are specific to finite projects but not widely needed for the organization’s full range of business interests.

It is important to distinguish between skills and competencies. Skills can be learned; competencies are attributes. HR should define the types of competencies that fit the organization’s core needs —intellectual property the organization would benefit from owning — and recruit permanent staff accordingly. Skills — especially those that are not core skills — define areas for renting, i.e., contingency hiring or outsourcing.

Aligning skills and competencies to business imperatives.
Today’s savvy HR departments work with the business units to understand what the resource needs are and shape policies for hiring and outsourcing. Because these definitions change over time, HR should be involved in structured quarterly or semiannual business discussions to stay abreast of the business direction.

HR’s evolving role

HR’s ideal role involves more than translating business imperatives into workforce strategies. If the trend is toward more and more outsourcing, HR must make sure vendor management skills are deployed internally. For example, if Web site development is outsourced, the IT or marketing division is still accountable for the effectiveness of the organization’s Web presence and must, therefore, be actively involved in managing the outsourced work.

Then there are the larger issues of sourcing strategy: How should contingency workers be used — as a complement to permanent staff? To meet peaks in demand? HR should be involved in decisions about these matters.

As the workforce shifts to meet business needs, HR has a role in managing the transformation. Changes will be needed in the recruiting structure. There must be clear onboarding and sunsetting procedures — particularly for contingency staff, because they need to become immediately productive as they come on board and released when their skills are no longer required.

Change management within the permanent workforce is another focus. Any shift toward increased outsourcing or contingency hiring is bound to cause strains within business units as employees worry about their jobs and their futures. HR should help the business units in managing the changes.

Finally, HR needs to be involved in performance management. HR has an obvious stake in knowing who the top performers are, and why — information that can be carried forward into future staffing practices.

Key building blocks for HR success.
The model for a nimble and flexible organization suggested here presents a set of challenging tasks for HR. To play its role effectively, HR must set in place a few key building blocks by:

•Developing a close working relationship with business units. HR staff should be readily available to the business units, present in business discussions, and (if possible) co-located with their assigned business partners, at least part-time.

•Manifesting the value of HR’s contribution. HR needs to demonstrate its worth to the organization by providing data about its performance and showing that its contribution has financial value.

•Taking ownership of skill and competency definitions. Ideally, HR should own the definitions of skills and competencies required of both permanent and contingency staff. To do this credibly, HR must have the right people, with the right skills and competencies, as well as a clear understanding of their own strategic direction.

•Adding rigor to performance management processes. Performance reviews need to be based on a consistent methodology, including up-front goals and metrics driven by business objectives. Trend analysis should be used to understand what the data means.

•Rewarding and recognizing good performance. Organization-wide, good performance must be rewarded, and substandard performance used as an indicator of where to topgrade the organization. People whose contributions are especially valuable should be made to feel genuinely recognized. It is HR’s job to help the business understand the value employee recognition provides.

In assuming the HR model proposed here, HR departments will face some challenges. Here are a few:

•HR lacks the right resources. Today’s HR staffs need skills beyond their traditional administrative capabilities. They must be capable of providing a strategic value to business units by helping plan for future resource needs.

•Defining communication channels. HR staff must have the skills to communicate with business units and throughout the organization.

•Managing change, managing strains. HR departments must be prepared to deal with the behavioral and tactical consequences of change throughout the organization.

•Lack of clear business processes. HR needs to make sure its internal processes are strong and systematic. If HR does not run itself effectively, it cannot assume an upgraded set of dealings with its business partners.

•Creating effective business partner relationships. To take on its expanded role within the larger organization, HR will have some image marketing to do. Convincing HR’s partners that it is equipped to be a strategic enabler of business has to occur from the top down.

Companies need strategic support as they maneuver to meet the peaks and valleys in their business cycle with right-sized, competent workforces. HR can provide this support by playing a vital role in shaping the organizations’ workforce and contributing to effective change management across the enterprise.

Stephen Coco is an Associate Principal at Intellilink Solutions, Inc. – a boutique consulting firm specializing in automating knowledge worker organizations. His areas of focus include; talent management, workforce optimization, systems implementation and human resource management. He can be reached at