Episode 150: Creating a Future-Proof Company Through Organisational Design and Workforce Planning
In this episode of the Digital HR Leaders podcast, David is joined by Deloitte’s Managing Director of Organisational Design function, Don Miller, and Jesse Jacks, Senior Manager of Organisational Strategies and Design, also at Deloitte.
As experienced consultants with a deep understanding of the current economic climate, Don and Jesse share their insights on building a workforce that aligns with financial and business goals.
This conversation will cover:
Strategies for looking beyond cost and head count to focus on skills, capacity and performance
The common belt-tightening mistakes that they see in the market, using client examples
How businesses should be thinking right now, and the importance of speed in decision-making
How HR teams can take on more responsibility in workforce planning and organisational health
Using data-driven insights such us Organisational Network Analysis (ONA), to build an adaptable and future-proof workforcePractical tips for HR professionals to build their capabilities and deliver value and impact to the business
Click the link below to listen to the full episode. Enjoy.
Support from this podcast comes from Orgvue. You can learn more by visiting: https://www.orgvue.com/
David Green: As HR leaders and professionals, we are all aware of the current skills shortage challenges that businesses are facing today but despite this awareness, we are seeing that amidst the economic uncertainty that is currently driving the business landscape, organisations are still cutting costs and reducing headcount, often without considering the long-term implications on their workforce and their business growth.
To help us tackle these challenges and create more adaptable and future-proof workforces, I am delighted to be joined for this episode by Don Miller, Managing Director at Deloitte's Organisational Design function, and Jesse Jacks, Senior Manager of Organisational Strategies and Design, also at Deloitte's. As leader in Deloitte's Organisational Design Practice, Don and Jesse have a wealth of experience helping companies think more strategically about their workforce to achieve their financial and business goals. That is why I'm excited to learn more about the common mistakes that they see in the market, and also delve into their insights on the role of organisational design and workforce planning in helping companies to achieve strategic goals in an uncertain economic climate.
So without further ado, let's learn how to create a future-proof workforce.
Don, Jesse, welcome to the show, it's great to have you on. Before we dive into the interview, could you please share with our listeners a little bit about yourselves and your roles at Deloitte, and Don, I'll come to you first.
Don Miller: Sure, happy to be here. Thanks, David. As you said, my name is Don Miller, I have the pleasure of leading a few things at Deloitte. I lead a lot of our managed capability as service offerings, and you may ask what that is. That's really around getting out of traditional projects and really helping clients with boutique areas of expertise, like change as a service, org design as a service, actuarial support as a service, programme management as a service. We're finding these niche skills are usually a little bit lumpy at our clients, who we want to be able to help them ongoing. And through that, I have the pleasure of leading our alliance with Orgvue and org design, and that's how I know Jesse.
David Green: And, Jesse, I'll let you introduce yourself as well.
Jesse Jacks: Thanks very much, David, pleasure to be here. My name's Jesse Jacks, I'm a Senior Manager in our Human Capital Organisation, Strategies and Design offering, based here in Los Angeles. I've spent my career in organisation strategies, linking organisational design, workforce transition. I've been partnering closely with Don also as a co-lead with our alliance with Orgvue, so pleasure to be here.
David Green: It's great to have you on and obviously as you highlighted, this series of the podcast is sponsored by Orgvue. We had Oliver Shaw, the CEO, on two episodes ago actually, talking about some of the context in which they're operating. One thing that we did talk about with Oliver was many of the ominous signs and warnings that we've seen around the global economic downturn. Obviously, in your role, speaking to multiple clients, looking to change their organisational health, how do you build a workforce that aligns with both financial and business goals, and Don, I think you're going to take this one?
Don Miller: Yeah, absolutely, and David, you're right; it's an interesting time that we're living in. However, a lot of the signs we're seeing around unpredictability today aren't unusual. What's unusual is just how much of them are happening all at one time: the aftermath of the pandemic; we have war in certain parts of the world; we've got economic downturn or instability, or upturn, depending on who you talk to; you've got the financial institutions under some stress. It's really an interesting time that all of these things are happening at once.
But for organisations, when you step back and think about it, there's a lot of things always moving at once for organisations, right. And when we're talking about value and organisational health, we have to think about five key factors. Number one, we have to think about financial health, and that's what the stock market cares about; however, there's also health in product or service value that you deliver; the distribution value, how fast you can get that to folks; the customer experience; and the value that you put in your organisation around agility. HR leaders in particular need to be part of that strategic conversation with the business and finance.
Right now, you're seeing a lot of organisations, particularly the tech sector, leading the way around layoffs. At Deloitte, we don't necessarily recommend jumping into abrupt cost-cutting; we've seen that again and again throughout the history of organisations, particularly post-Industrial Age. What we find, and you probably hear this a lot, is it's damaging to employee engagement around reputation. And two decades of profitability studies show that companies that conduct layoffs that are solely focused on cost-cutting don't necessarily see improved profitability, whether measured by return on assets, return on equity, or return on sales, and this was out of the Harvard Business Review.
So, what you need to do is align those goals around optimisation, whether it's efficiency or effectiveness, not just on the business goals, but what value you're after, those five areas of value I talked about; but also, your impact on society, the purpose of the organisation, the culture of the organisation and how you think about corporate responsibility. What's going to be really interesting, both Jesse and I talk about this a lot, is watching to see which organisations have learned from the pandemic, where we really saw a merging of companies' purpose, social purpose, with how they do work and how they pressed through the pandemic, how will that be shown through layoffs or other parts of it. You're already seeing it on LinkedIn or others, that companies are setting up sites for folks to find some of the talent that they couldn't be able to support, but also working to find them other roles.
What's interesting about that is that that is a good example of agile and adaptable organisations that are doing things not only for their own people, but for people that can't be part of their organisation any longer, whether that's economic or growth or other factors.
David Green: So, Jesse, turning to you, what would you say is the secret to looking beyond cost and headcount, and thinking more strategically about skills capacity and performance?
Jesse Jacks: Certainly, so I think if you're planning is purely driven by financials, you really need to be looking at only what impacts the budget, which is typically just your cost and headcount. So, you want to really start with the mission and what is the work that needs to be done in the organisation to deliver on that mission, so you can design your organisation.
So, beyond cost and just headcount, what we work with our clients to look across are five dimensions: what is the product or the service utility, so really understanding what is the value of the product or services in the customer's eyes, so you can build those skills around that? What's that customer exchange look like, so what's the value of that customer exchange from a resource, from money, time, energy look like for them? What's their distribution effectiveness, so what is the value of access to your customers? Then, what's financial performance look like when it turns into the financial value of the organisation's performance?
I always tell my clients, "You might need to show some cost savings right now, but you're not going to cut your wage or growth". So, we know that maybe in this quarter and the next, you might be looking at some labour cost reduction, but to Don's point, some of those skills that might be on the chopping block because they're costing a lot of money, maybe there's another way to access those, so we'll talk about that a little bit later in terms of the skills-based organisation. And then, last but not least, that's what we're getting when we're talking about organisational agility, so what is the value of an organisation's ability to grow and adapt and evolve?
When you look at what's happening in the market right now, specifically in some of these technology firms that you mention, that's where we see a lot about them thinking through organisational agility, so what are the skills required in order to do the work? Capacity isn't just about headcount in a certain team, it's about whether the people with the skills needed to deliver that work are within that organisation; how do you access them; where do they sit; how do you, as an HR professional, have the ability to look across the organisation and truly understand where those pockets of skills or capabilities might exist, because they might not exist where you think they might from a headcount perspective, or on an organisational chart?
There's a lot of benefits in taking this type of approach. You invest in your workers' growth, their development, their mobility. You're also redeploying resources that can potentially alleviate some of the need for further reductions in force. So, I've seen a number of my clients restructure their organisations successfully, at least in part leveraging this approach, to reduce the number of layoffs and taking some of those capabilities and moving them into other areas of the organisation.
We know, for example, at Unilever, there's this internal talent marketplace that enables those skills to fluidly move across projects and tasks within the organisation, either as a permanent employee, or as a U-worker, as they're called, a worker who's guaranteed a minimum retainer along with a core set of benefits, and who contracts with them for a series of short-term projects. So, we're seeing more and more of a move towards that because as you mention, there's this real cost-containment, margin-improvement focus, but there's also this talent shortage and talent crisis. So, how do you split that needle, or thread that needle, when both of those things seem to be opposing at certain times.
David Green: Staying with you, Jesse, so in the current economic climate, how important is speed in making important business decisions, and how would you say business should be thinking about this right now?
Jesse Jacks: Well, clearly speed is important, but we want to make sure that our clients aren't acting in haste. As I mentioned, I've had clients in the past do that. We can help anyone hit a 20% cost reduction, labour cost reduction, but are you taking the time to truly understand whether those are the skills or capabilities that are required in your future growth plan? As I mentioned, nobody's going to cut their way to growth in the next couple of quarters.
So, we spoke earlier about the potential damage caused by abrupt cost-cutting, but think back to the purpose and mission of the organisation, which really drives, or should drive, your decision-making. So, we want to make sure that our clients are making decisions quickly, by surrounding themselves with the right data on an ongoing basis, so they can make calculated decisions at the drop of a hat. So, there's a little bit of that pre-work there in terms of, do you have the right data, do you have the right access to it, in order to make those speedier decisions that aren't created in haste, but you know that you have that data to make a decision at the drop of a hat versus running at the last minute to understand the organisation that you could have understood better up-front.
An example that everybody is aware of is when Silicon Valley Bank fell. How did businesses really assess the impact to themselves on the actions that they needed to take? Those that had their workforce data in a platform that would allow them to rapidly model different scenarios, identify where there was opportunity to remove cost rapidly, and ensure that cashflow would cover their cost base, people with that information at their hand were far more able to demonstrate control and stability than those that were having to take drastic actions in the hope that it reduces the risk to cash being tied up in the bank.
We also talked about reviewing your decision hygiene, which is a concept that comes from the book, Noise, by Daniel Kahneman and Olivier Sibony and Cass Sunstein, and these are consistent, preventative measures to put in place to make sure that people are driving to a decision and reducing noise and improving human judgements. So for example, what we do is we work with our clients to make sure that when different people are trying to drive to a decision, instead of signing it to just one person, get everyone to make their judgements independently and then aggregate those.
What this means for HR is that they can then enable the business to make fast, but thoughtful decisions. And this could mean having your workforce data in, as I mentioned, an accessible format available when and where needed, so that you're not running at the last minute, and make sure that if you're making those decisions, that you're not cutting future skills and capabilities that are required.
Don Miller: Yeah, I just want to check, David, really quickly, is that decision hygiene is so critical in this, right; speed is relative, but what we know is that the process of decision-making is usually six times more effective than the information itself, and these are external studies we use. We actually give our clients a quiz when we go into working sessions with them, whether we're doing decision rights or not, to get them to focus and open up their mindset, which is organisations have a much higher rate of success if they're considering four-plus more options. Even if they know what they need to do, put every option on the table.
In the Cuban Missile Crisis, I'll thank my friend, Michael Roberto, who's a PhD, that writes about decision rights and decision bias all the time, he'll remind folks that in the Cuban Missile Crisis, the blockade of ships was the worst idea out of the gate; everybody turned it down. But at the end of the day, when you looked at all of the options, it was the most plausible for the outcomes they were choosing. Equally, you only need about four to six people to actively participate in the decision. Everyone else there is a spectator; know that, and then communicate it through as many channels as you can.
What's interesting about this is that organisations don't often go back and look at the performance around a decision good or bad, they just look at the results that they're trying to track. That's the other thing that we try and do with our clients in these cases, particularly around economic stability, is put a marker out there for them that says, "Hey, let's go back and look at these decisions and whether or not they were good or bad or indifferent in driving the outcome, so that we can get better when these opportunities or challenges start to rise again in the marketplace and we can be more proactive".
David Green: Yeah, it makes a lot of sense. I mean, you use data to inform decisions, but also, use data to evaluate decisions.
Don Miller: That's right, and human beings are designed to have a 50/50 shot in the best circumstance and we like to make quick decisions, so it's important to take our time. I don't want to say "slow to go fast", but being efficient in that so that you're not missing anything and triggering any sort of confirmation bias, leadership bias or others that can factor into those decisions.
David Green: What does this mean for HR? Most of the listeners to this podcast are working in HR, whether an HR leader, working in people analytics, workforce planning, org design areas; what does all this mean for how HR should operate?
Jesse Jacks: In my mind, I think that HR professionals should be thinking proactively, thinking proactively about what is the data that they need, where can that be accessible to them, so that they can be thinking ahead of the game. A lot of business leaders, functional leaders, have come to HR with a request. Well, a lot of my clients, a lot of organisations, then struggle to piece together where's that available, how can I cobble together the information to make a thoughtful, informed decision?
As I mentioned, increasingly in a faster and faster turnaround timeframe, this is obviously less than ideal, and what we'd like to see is make sure they say, "Here are at least the table stakes, data table stakes levers that I have at my disposal". Sure, I might need to go gather additional data to help that business leader make an informed decision, or create a decision that I can help them execute on, but I think that's imperative, and we're seeing more organisations and more HR functions playing a larger role in that, and taking a more proactive approach to building that into their logic.
David Green: And I guess a lot of it is about good consulting skills, frankly. It's knowing the business, it's being able to interact with senior stakeholders, both in HR but actually more so in the business as well, being able to influence, being able to really understand what the question is and the data that you need to answer that particular question. And actually, that leads nicely to the next question, Don. If we look at decision-making through the lens of a consultancy, what are the common mistakes that Deloitte sees in the market?
Don Miller: Oh, wow, do we have enough time? Just kidding, David! I would say that there's a couple, and I'll tack onto what Jesse said. Not only is it important for HR professionals to understand that pragmatism around the process actually outweighs the information; but also being proactive means to have those data platforms, be it Orgvue or Workday, or you name it; to always have information handy and at the ready.
So, when we're thinking about organisations, how they're performing, there are some pretty simple metrics that we can look at to have at the ready to inform clients to be ready for these conversations. Number one, if we're looking at layoffs or restructuring, you always want to know where your folks are from a performance management perspective, however you do that process; where are your low performers, where folks are on performance improvement plans; are those folks that have the critical skills that Jesse talked about, that may be able to be repositioned and improve performance, but also help the organisation grow? That's typically an area that HR can always have a tab on to be thinking about proactively if the business is performing well or not, and how to really push on, "What do we do about these workforce segments?"
The other areas that having a platform can be helpful in understanding, like Orgvue or Workday, is around span of control; span of control around where do we see low spans of control, high spans of control? Is that really where we want to be driving the business? Now, doing that without context is a common mistake that we see clients do all of the time, and Jesse will start to smile here, because the other side of it is also benchmarking. Clients will pay a lot of money to do studies around, "Well, my span of control average in finance is 6:1; tell me what the benchmarks are for other organisations that are finance organisations either of my size or industry?" Well, 6:1 doesn't really do anything. I know in SpaceX, right, a lot of trial and error, Elon Musk has not come out and said, "Wow, that 6.4:1 ratio span of control is why we got the rocket off the pad". So, you really need to understand the context.
One way of doing that, that HR professionals can look at, is supervisory burden. Think of this as the actual human conditions that are creating what it takes to manage that span of individuals, the inner connectivity of the work that's being managed or not, the repetitiveness of that work, the differentiation in skills and capabilities. Some of them may have a span of control 10:1, but the supervisory burden is actually 6:1, which means that individual is under duress. At Deloitte, we actually have algorithms that can work with platforms like Orgvue and others to start to identify that.
If you think about that as a supervisor's blood pressure in managing work, oftentimes I can signal an area where we can start to make some changes in efficiency, because only 9% of organisations create enough capacity proactively to take on growth and innovation. The rest of them work as many of us do; they react to an event happening, they take action on it after consideration, and only if a meeting is cancelled do they get a chance to actually think, "Was that the right thing to do? How do we get prepared for the next go?"
So, those are a lot of things that we think about that are opportunities where not only, I would say, common mistakes in the market from a consultancy perspective, but also for our clients. At Deloitte, we're very much into now helping our clients understand the context of organisations; why did they make decisions; why for a time did Netflix have two CEOs? And, we'll show you that organisation, we'll talk to clients or others that have served in those organisations and paint a picture; because at the end of the day, if you're making decisions around if it's economic solvency or growth, you want to be able to look at the context of why other organisations made a decision to say, "What's best for us?" because anybody can replicate a strategy, but it's very hard for other competitors to replicate your purpose and your culture and your true aspirations for growth.
David Green: Yeah, very good. And, staying with you, Don, what advice would you give listeners to build an adaptable and futureproof workforce; and, how do you use organisational design and workforce planning to do that?
Don Miller: Absolutely. So, the first I would think of is, if I'm an HR professional, I have access to this data and information, always want to be looking for either redundancies or overlaps and opportunities to be more efficient, and that's not just spans and layers. We think about being smart around how to organise and operate and behave in five layers.
So, we're looking for opportunities to be more efficient, or less complicated at the individual level, at the work level, at the team level, at the leader level; and then in the organisation, that could be finance, that could be the organisation at large. And then the last is the ecosystem. So, if you're a function within organisation, that ecosystem could be those functions that you partner with inside your company, as well as the vendors and customers. If you're the organisation on a whole, it's an ecosystem play.
For us and our relationship with Orgvue, we have some solutions that we've created around network analysis and others, and how people collaborate, but that's because we don't see a lot of folks using it and we believe that that's an area where if more organisations and clients had access to network analysis, they can actually understand how teams collaborate, make decisions, how they team together. But for us in our ecosystem, we don't want to be doing scenario-modelling products. So, we partner with Orgvue in a strategic alliance that helps us do that, so we're being efficient. We're also helping and amplifying the impact we can provide to clients.
The next is around thinking about those five dimensions of value that we talked about earlier and the data that we just walked through, and always be looking out for how to be hyper-responsive to market needs. So, looking at those networks of teams, looking at the barriers or the supervisory burden that can be identified through the flow of work, to use design thinking to enable the workers themselves from various parts of the organisation to self-identify, "Hey, there's a little bit of an issue here on how we can work faster together".
It's always important to balance how adaptable we can be, with also how efficient we need to be. Some organisations aren't necessarily set up for being able to work in a network-based team concept; they work better in traditional spans and layers and hierarchy, and that's fine. But we can model multi-hierarchical structures with people mapped to different teams, right. Clients can show different data sets showing, "This is our org structure", but if I was to map folks to a value stream of how we do work, using tools like Orgvue or others, you can start to see how teams are working together and how's that workforce mix looking. Does that meet the financial planning goals of finance, or our perspective on workforce mix, being both inside the organisation, or as my colleagues talk about, on balance sheet or off?
We know that some organisations adopt an agile scale model, looking at their operating models across and starting to do network-based teams at the enterprise level. Now, for those, particularly foundations do a great job in this, because their missions are around things like reducing truancy at school, finding jobs for parents, and then also just making kids' lives better as they raise them, right. These are multifaceted, but also highly connected issues. When they're working and organising at scale in an agile-based concept, they can see things like 50% reduction in delivery cost, which is really important for foundations, or multiple increases in delivery time around supporting those events.
Those are some of the things that I would think about, right, and whether it's a time of economic uncertainty like we're living through now, or a time of growth, it's about thinking how do we organise, operate and behave at the individual, team, leader, org, and ecosystem level; and, what are we really after? Are we after the financial value, the product or service value that we're delivering, that customer experience, the supply chain nature of it, or agility? Because, it can't be everything all at once and as much as I loved the movie Spinal Tap and turning to 11, we can't be chasing everything.
Giving our clients that focus and giving their employees that focus helps them make better decisions to reduce the impact of an economic downturn and the layoffs that could ensue.
David Green: One thing you mentioned, Don, I'd love to explore a bit further, is you talk about some of the companies that you're working around doing more network analysis and understanding how people collaborate within teams, but between teams as well. And if we think about the context of hybrid work, is that something you're seeing more companies that you're working with really starting to embrace now?
Don Miller: Yes, absolutely, and I think it's increasing quite a bit with the availability of the information, David, that folks have, whether it's through Microsoft Teams that collects a lot of that information, a lot of folks around those platforms, but also those that have seen it through different interactions. We've done hybrid work analysis using network analysis at the early outset of the pandemic for large fruit agriculture companies that work globally, but these are folks out in fields growing crops at the same time, both in the US or in Europe and others and how they work together and how they find the effective blend of working together, not only in those disparate locations, but also when do they need to come together and when don't they.
The other critical part about this network analysis, and this comes to good effect of decision-making, is workforce risk. So, we may have identified populations that may not be able to continue with us in an organisation; however, looking at a network analysis, we might be identifying someone who's a critical knowledge broker for a third of the organisation, and if we remove that, we need to be fully prepared for what sort of implications that could mean, or does that mean we need to revisit the decision.
Equally, we can identify areas of supervisory burden, which may mean we don't actually need to make a hierarchical shift, but we do need to be shifting the decision rights such that the organisation can move more quickly in how they perform to mitigate future economic impacts to the team.
David Green: Yeah, really interesting and we could probably do a whole episode on that alone, to be honest with you.
Don Miller: We could.
David Green: And actually, one of the reasons why you mention more people are looking at network analysis now is the availability of the data, and also the technology that supports it. And, Jesse, turning to you, what part does data-driven insight play; and where does technology help, or even hinder?
Jesse Jacks: Yeah, so obviously as we discussed, technology accelerates decision-making immensely. Organisations today have more access to more data and it's critical that they have these powerful technologies that let them harness both the data's full potential but also to your point, using it in a strategic and a measured manner. So, there's several tools on the market that enable you to visualise, analyse a model, organisational and workforce data. As you know, we partner with Orgvue, which helps our clients and teams by being able to see across their entire organisation, model through multiple lenses, think about activities, skillsets, the availability of talent, where that talent is located, as well as headcount and cost. And then model and remodel at a pace that allows you to get immediate feedback on how that might impact key design drivers, like cost and the talent availability.
I've had a lot of clients in the past where they haven't taken a skills-based organisation approach, and they were actually quite surprised to find out that the skills and capabilities they needed resided in another business unit in another location, and then come up with a model of how can they tap into that to deliver on some of their future state growth objectives.
The other thing we leverage of course is really tracking how you're progressing against your plan. So, Don mentioned this too; it's not just about making those moves or understanding that, but over a period of time how are you progressing against those goals, and then how do you reiterate or revisit the plan if circumstances change? We know that we don't set a plan in motion, then everything in the next 12, 24, 36 months goes to plan; I think we've all learned that in the last three years! So, how do you leverage technology to make sure that this is not something that is done and dusted, we've come up with a great plan, 12 months later you don't have a way to measure against those objectives.
Another way that we leveraged that in technology to drive greater insights for our clients is through, as Don mentioned, network analysis. So, what I like about network analysis and leverage with our clients is that, sure, we have our HRS data, we can pull down the roles, the capabilities, the skillsets that reside in certain organisations or functions. However, network analysis allows us to really understand how is work actually being done today, who is actually collaborating. You might have an organisation chart sticks and boxes of roles, but are you only going to be doing 50% of that in your role today; 50% of it is being that knowledge broker that Don mentioned in another area, where you have these informal ties where groups of individuals, or even whole functions, are going to certain areas for a capability, even though it's not built to actually deliver that capability?
So, network analysis uses this richer portion of how the organisation's actually operating today. It allows us to drive future state decisions that could include, "Okay, maybe we actually do need to build this organisation differently in the future and create a new role for that type of work, for that capability; or, a new operating model that's allowed more people to access that institutional knowledge, capability or skillset that is vital to our growth app".
The other thing that I just want to say is obviously, with data comes great responsibility, so data-driven insights are critical, but we need to really be careful about what data is being collected and how that's being used. Increasingly, what's being shared with workers, and with the era of rising agency for talent of workers, workers are pushing for a higher degree of control over their data and how it's being used. The good news is that according to a recent study published in Harvard Business Review, around 90% of employees are willing to let their employers collect and use data about demand of work, but only if it benefits them in some way.
So, going back to what I mentioned about organisational network analysis, you can actually take some of those insights and formalise what's currently being done informally within the organisation, and I think for HR professionals, that is a really, real leg up when they're looking about being those proactive sorts of consultants or thought leaders to the business or functional leaders in the organisation.
David Green: That's a really good point. I mean, I saw an example a couple of years ago, where a company had done network analysis. They were trying to understand the networking behaviours of high-performing sales people and sales leaders, and they were able to use those findings and build that training in then for other sales professionals within the organisation, and ultimately to help them be more successful, which is great for sales, but it was also great for the company as well, if you've got successful sales people.
Don Miller: And you nailed it right there, David. Performance management is a massive opportunity for network analysis. What we find is that in traditional restructuring, it's more of a helpful guide around identifying areas of risk and reconfirming the moves you're making. But in performance management, diversity, equity and inclusion, and many other areas around how the experience is actually happening around how people get their work done, or who they're interacting with, that is where network is exponentially impactful.
David Green: We're seeing it in some of the work we're doing at Insight222 with people analytics teams, and you're probably seeing this too with the companies you're working with at Deloitte, that more HR teams are looking to take on more responsibility in the areas around workforce planning, org design, and everything, but looking for help in building these capabilities. What guidance can you give to HR professionals, or maybe HR CHROs that are looking to build their capabilities in this area?
Jesse Jacks: Yeah, certainly as Don mentioned, I think we're seeing this shift due to the pandemic and everything that's disrupted work over the last couple of years, that companies are trying to be more proactive, less reactive. Organisational change is inevitable for most companies and it's becoming increasingly important to build at least some in-house organisation design or strategy capabilities, and we believe that HR should be actively engaged in those strategy discussions with the business to do so, not only because they have the access to HRS data, understand their functional areas, so they'll be used to the areas that they support, but really because this is an area that I think is right for transformation in terms of thinking about change as just an event that occurs versus a series of transformations, whether that be a pandemic, whether that be market conditions, or whether that be the skills gap, or the battle for talent that we see out there in certain industries.
So, in addition to helping clients with a specific organisation design initiative, we at Deloitte, we're starting to help more and more clients create and scale their own org design capabilities. So, what we advise HR professionals to do in this space, and where we think is a prime place for them to play, is upskilling to better understand the areas where HR might be best suited to act as a thought partner to the business, so be that through those data-driven insights or best practices and organisational design; getting equipped with those right tools that we've talked about here, to form those insights and deliver on outcomes; and then lastly, taking this proactive and non-event based approach to conducting periodic, what we call health scans of the organisation, to pre-emptively adjust the talent, skills or organisational layers, based on the needs of the business at that given moment.
Again, we think about organisations in terms of obviously living, breathing. People are going to be exiting and entering the organisation for different reasons throughout the course of business, but how do you get ahead of, if we're looking at my functional, or my growth objectives over the next two or three years, how can I start to map out where I'm going to need skills or capabilities; what do I have today; what's my strategy to go after those in the future? That's not something that needs to be done once the board, or once a CEO comes and says, "Okay, now's the time to do it". You should already be thinking about what you have at your disposal, where do you have your gaps, working with those leaders to do that. It's going to position HR professionals, I think, as a much stronger thought partner to the organisation, and really transform the ways that they're thinking about supporting the business.
David Green: Yeah, couldn't agree more. Don, what advice can you give our listeners, and it's probably linked to some of the stuff that Jesse's just talked about there, on how they can deliver value and impact to the business in the current climate?
Don Miller: Number one, they don't have to do it alone. One of the reasons I'm in my position now around managed capabilities is a personal passion I have where, we talked about niche skills still being an issue. A lot of these things we're talking about, David, are event-based: org design, restructuring, event-based, but they can always be on if these HR organisations and their business colleagues have ongoing capabilities internally. But they don't just have to do that themselves. So, I would ask those HR leaders to say, "Look, there are organisations like Deloitte, like others, that provide on-demand, or always on managed capabilities, that can ramp up and ramp down so that you're not churning as well through those events, whether that's change or org design or ramping up or workforce planning.
So, a lot of the work that Jesse and I are focused on right now is doing org and workforce planning as a service to supplement HR leaders and teams, and we've done this in the Australian market, in Europe and in the US as well, and all sorts of different areas, so that the organisation itself can have that core, fundamental understanding of org and workforce planning, or org design. But then they also have that niche skill power that they pay, just like a streaming service, that can often be at the same cost, or just a little bit of premium, to move quickly and always have that there, because that type of investment that organisations can make then reduces the rollercoaster ride.
Now, I like rollercoasters, but here we want boring rollercoasters, we want these to be speed hops. Investing in those capabilities as part of your workforce ecosystem is something we recommend clients to consider, not just in org design, but in other areas, so they always have those capabilities on, so they can signal that demand to their business partners.
The other questions, or advice that I think I can give to our listeners is, are you challenging your leaders on their North Star, their aspirations for the business, and making sure that those things are communicated broadly; but also communicated saying, "What does that mean for our future organisation; how can you help?" By putting it in the frame of the individual or the team or the leader, right, you'll start to see more organisations and teams take a design-thinking approach to, "Hey, we can actually make these changes to follow our North Star", and then when they get stuck, it's not that they're bringing every decision to the top of the house, they're bringing really tough things that need to be unpacked, depending on that North Star or conflict around certain initiatives.
Also, as HR professionals, I always recommend to make sure that we and our business counterparts have a full understanding of how our resources are aligned across different value streams of our organisation. I always point out HP that does an annual org and operations reconciliation every year, which looks at what are the cost centres of the organisation, how are those performing, but what was the organic growth of the workforce; and then, reallocating that based on what actually happened, and then redesigning the organisation and matching that up with supply and demand. If we look at if resources are too far from the delivery or the front of the house on core products, how are they driving value and are they deployed correctly?
The third thing would be, do we have the right information, whether it's org and workforce planning analytics solutions, or the right data in place, that can inform running the organisation today and prepare us to get future ready. One of the other reasons that Jesse and I are doing a lot of work in that managed capability space around org design is, we find a lot of clients in analysis paralysis, "Our data's not perfect yet, we can't do it".
Well, you only need 20% of the information to go to the next step and then dig in deeper, so let's not let perfect be the enemy of good, "Do you have anything, do you have an ecosystem?"; and by working with folks that provide those managed services, we can do some of that for you, so you're acting on the insights and the opportunities, and then we can figure out how you build out that ecosystem of technology. Because, let's be honest, technology purchases can be relatively straightforward. Vendors can give you a quote, you're off to the races, but it's how you need to organise around that. So, make sure that you're thinking about that.
Then the last is, do we have that org or workforce planning capability, and at what maturity level do we have it so that we can support the organisation for design and restructuring or in the flow of business; and if we don't have it, how do we want to go about using that? Do we want to work with companies that can provide on-demand benchmarking and periodic health checks, as Jesse stated, so that we can have folks do the analysis for us and we can go and take action? And HR organisations, and some of the best ones I've ever worked with, they are excellent at putting plans into action and driving the organisation to the timelines.
But sometimes it's hard, as we talked about, that 9% being able to focus on extra things and innovation or growth, to actually have that information and constantly looking at it and stewarding it; that's where we and others can come in to help there.
David Green: Yeah, makes a lot of sense, Don. Finally, I can't believe we've already got to the end of the conversation, but this is a question that we're asking everyone in this series, Don, and again it will probably allow you to maybe summarise some of the points that you've already made. What do you think HR leaders need to be thinking about most in the next 12 to 24 months; and what do you see as maybe the biggest concern that you're seeing when you're talking with clients, and what do you see as the biggest opportunity?
Don Miller: I think my biggest concern is that in the face of uncertainty, we're going to see a lot of organisations be tempted to make the reactive cuts to reduce costs that we've seen again and again. So, it's really about advocating and communicating to refocus on the mission and purpose, and the economic decisions that you need to make, to make sure that you're taking a balanced view. We may see in less than 24 months we're on the rise in growth again, and it would be really detrimental in a world where your employer brand can be negatively impacted just by how organisations are reducing its workforce, and I say specifically "how". Those things may have more lasting impacts.
I think the biggest opportunity is refocusing on helping the organisation understand its mission and purpose at the leader, team and individual level, around the work and skills in creating that organisational resilience and flexibility, and really instilling that in them. And I think HR is perfectly positioned to be able to do that. Jesse, what thoughts do you have?
Jesse Jacks: Yeah, I think that's spot on. I know we've covered a lot of ground here over the last hour or so, but I'm really excited about helping our clients and HR professionals specifically think about how they can be those strategic thought partners. As Don said, always being very acute in executing, building together the plan. I think some of the ways and technology, and some of the things we're delivering in the market with our clients today, helping them be a little bit more proactive, less reactive, which I think is where technology has really helped limit the time to do that.
Everyone always says, "It's great to be proactive, not reactive, but my constraints are time, resources, all the other things I have on my plate". If you can set up a manner, whether it's to do its organisational health checks, whether it's using technology in order to always have that data that you know is there and accessible to you and your teams, I think that's key. So, laying that foundation, having a plan to do that, makes you able to make those, as we said at the top of the hour, those strategic decisions with speed, versus just a decision at speed, which I think we both know which of those you'd prefer if you're a business going through a transformational event.
Don Miller: Yeah, because at the end of the day, if our HR professionals can at least challenge us on what value are we chasing, David, are we after the financial, the product or service, the customer experience, the ease of distribution agility; and, "Can you explain to me, leader or leaders, what that means for our individuals, our teams, for us as leaders in the org and ecosystem?" I don't want to say this but I'll say it; you'll be surprised how many of them can answer that clearly, but that's okay, that's your role to draw those out, because those gaps need to be defined and communicated, because at the end of the day folks need to show up and understand what it means for them.
When you do that, then it makes the design decisions much more clear, not maybe where to design, but probably where not to design, and that's really important.
David Green: Great way to end what I found an absorbing conversation, so hopefully listeners will as well. Don, Jesse, thank you both for being guests on the Digital HR Leaders podcast. Can you let listeners know how they can get in touch, follow you on social media if you do that, and find out more about your work at Deloitte; Don, I'll come to you first?
Don Miller: Sure. Well, you can easily find us on deloitte.com by searching for our practice, which is the Organisational Strategy, Design and Transition practice at Deloitte. I'll make sure, David, you have the link. But in lieu of that, you can find Jesse and us being very active on LinkedIn, where we drive and engage with our clients daily.
David Green: Brilliant. Well, thank you both very much for being on the show, and hopefully look forward to meeting you in person one day, maybe at a conference coming near you soon.
Don Miller: Well, yeah, Jesse's part of the Commonwealth, he's Canadian, and I've got cousins that live in the UK, so maybe sooner than you think, David.
David Green: Fantastic. Okay, well thanks both of you for being on the show.
Jesse Jacks: Thank you very much, David, pleasure. Cheers.