Lean but Agile
Rethink Workforce Planning and Gain a True Competitive Edge
Authors: William J. Rothwell, Jim Graber, Ph.D., Neil McCormick
Pub Date: January 2012
Print Edition: $45.00
Print ISBN: 9780814417775
Page Count: 240
e-Book ISBN: 9780814417782
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AN INTRODUCTION TO LEAN BUT AGILE WORK AND WORKFORCE PLANNING
What is your organization doing to hold down employment expenses
while simultaneously ensuring that work results meet or exceed customer
requirements? How is your organization experimenting with new
ways of staffing the work to be done while also achieving the best results?
How well is your organization planning systematically for the quantity and
quality of people needed to achieve work results in line with customer
needs? Read the following vignettes and describe how your organization
would meet the challenges you find in each. If your organization has ways to
solve all of these problems, then perhaps it already has a way to plan com-
prehensively and systematically for work results and ways for workers to
achieve those results. But if your organization cannot solve most of the
problems presented here, then your leaders may want to consider a Lean
but Agile approach to planning for the work and workforce.
* * *
Traditional Views of Work Planning and Workforce Planning
As the preceding vignettes illustrate, employers globally are struggling with
how to achieve the best work results. Driven by a need to lower costs while
increasing productivity, they are not always following traditional ways of
planning the work and the workforce. But what are these traditional ap-
proaches? What is traditional work planning? What is traditional workforce
Traditional Work Planning
Traditional ways of thinking about planning for work have their roots in the
industrial age. An organizational structure (organization chart) is estab-
lished to allocate responsibilities for various work activities. These activities,
in turn, are then broken down further into departments, work groups, jobs,
Traditional thinking about work planning emphasizes the work process,
that is, how the work is done. Little or no attention is devoted to clarifying in
detail the measurable work outcomes desired by customers or other stake-
holders who care about the work. In some circles, work planning is actually
confused with project planning, which is just one way to organize the work
to be accomplished. The important point to understand, however, is that the
workforce needed to achieve desired work results depends on how the work
is done and the desired outcomes. Employers are already experimenting
with new ways to get work done. Those experiments affect the workforce
needed to achieve work results.
Traditional Workforce Planning
Much has been written about workforce planning in recent years. Indeed,
workforce planning has garnered far more attention than has work planning.
One reason is that many employers are keenly aware that labor costs
are a major expense in doing business. Modern accounting methods treat
labor as a cost of doing business while ignoring the critical importance of
human creative talent as the only active ingredient that can serve as a cat-
alyst to add value to land, finances, technology, or other assets.
Traditional workforce planning follows the logic of economics. As demand
for products or services increases, it creates a demand for labor to make
the products or deliver the services. Labor demand refers to the quantity
and quality of people needed to meet production or service delivery re-
quirements. Labor supply refers to the quantity and quality of people cur-
rently employed by the organization. As labor demand increases as a func-
tion of production or service demand, more people are needed to meet the
demand. In short, a larger supply of people is needed.
But this relationship is not precise. Sometimes the number of workers
affects productivity directly. In other cases, such as managerial work, man-
agers can oversee increasing employees until a tipping point is reached.
To complicate matters, sometimes the quality of workers affects productivity.
A few talented people may outperform an army.
The traditional approach to workforce planning, based in economics,
has some distinct disadvantages. The first disadvantage is that future labor
demand is forecasted based on past experience. In short, economists tend
to assume that the same quantity and quality of people will be needed to
achieve future results as were needed to achieve past results. Unfortunate-
ly, technology and other productivity breakthroughs can actually
change the quantity and quality of people needed in the future. The second
disadvantage is that economists struggle with the notion of differences
in individual talent. Not all people are equally productive, or even
equally productive in the same ways. Some people are simply more produc-
tive than others, and talents—understood to mean personal strengths
in this context—differ on an individual basis. Some research suggests that
the difference between the average and the most productive worker can be
as high as eleven times.
Many methods are available to conduct workforce planning. They are
drawn from quantitatively focused approaches from statistics, econometrics,
or operations research and from qualitatively focused approaches to
problem solving. Few organizations undertake any form of systematic,
comprehensive workforce planning. In fact, one study found that as many
as two-thirds of U.S. employers do no comprehensive workforce planning.1
Instead, jobs are typically approved in many organizations on a case-bycase
basis as vacancies become available or as work demand increases. The
result: The collective competencies and talents of the entire organization’s
workforce is never assessed against the requirements needed to achieve the
organization’s strategic goals. The result is that the labor force of many
organizations can drift away over time from the best fit to achieve desired
A New Approach to Workforce Planning
A review of changing conditions in business over the past sixty years provides
an important backdrop for understanding the need for change in
many business practices. The years from 1950 to 1970 were a golden age of
business stability for industrialized nations. Human resources practices
were designed to be responsive to those conditions. Building a stable work-
force was the priority. As detailed by Peter Cappelli,2 the following conditions
* Business demand and the talent needed to deliver it could be
accurately predicted into the future.
* Government regulations restricted competition, which helped
companies confidently make long-term investments. Foreign
competition was often almost nonexistent or held very low
* Competitors operated in unison. When GM announced its
price increases, Chrysler and Ford were sure to follow.
* Union contracts across industries resulted in similar labor
expenses and in large part removed the variable of price
* Talent was in short supply and could not be easily found or
lured away from the competition.
* The economy grew steadily, at 5 to 6 percent per year.
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