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A workforce of one
By David Smith and Susan M. Cantrell
New research shows that when it comes to managing talent, one size no longer fits all. To be competitive as the economy regains its footing and to maximize the performance of a workforce, companies need to understand and respond to the diverse needs of individual employees.
Given the realities of todays complex business environment, it is no longer possible to satisfy a workforce with one broad, standard approach to managing talent. A perfect storm of events and trends is pushing organizations to abandon the traditional employment compact along with the one-size-fits-all approach to human resources. Not only has technology finally advanced enough to make the customization of employment practices possible for the first time. People are now expectingeven demanding an individualized experience at work based on their own encounters with customization as consumers; this is especially true of Millennials (people born from roughly the late1970s to the early 2000s), who have never known anything different. For their part, organizations are facing their most diverse workforce yet not only in terms of age, gender and ethnicity but in terms of life pursuits, cultural norms and key values as well. The same forces are having a similar impact on the makeup of senior management teams. To be sure, standardization has played a critical role in employment in the recent past, enabling companies to achieve some important goalsconsistency, efficiency and fairness, among them. In the last decade especially, as large companies implemented ambitious enterprise systems and globalized at the same time, most organizations standardized their people practices to achieve a global view of their employees and operate consistently as a unified organization. But in an era of growing diversity, more complex knowledge work in which jobs are increasingly difficult to standardize, a shortage
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of qualified workers and talentdriven competitive advantages, todays generic people practices will be quickly rendered obsolete and increasingly detrimental to the bottom line.
Maximum performance
Instead, market leaders like Best Buy, Procter & Gamble, Google, The Container Store and W. L. Gore & Associates are getting maximum performance from their employees by taking an individualized approach to talent management, treating each employee as a workforce of one. Because everyone has different abilities, work styles and preferences, as well as different motivations for working, these companies know that no single way of treating all employees is ever likely to be the best way. As the economy begins to recover, they are achieving improved workforce performance and productivity, higher levels of engagement and lower turnover while recruiting top performers who produce outstanding results (see Three workforce-of-one pioneers, page 6). Most important, by using one or more of four workforce-of-one customization approaches, these organizations are achieving customization in a highly structured, coordinated and scalable way, thereby retaining control of the management of their organizations. Moreover, the hard work organizations have done standardizing people practices remains valid and relevant; it serves as the foundation enabling companies to take the next evolutionary step toward customization.
This article is based on Workforce of One: Revolutionizing Talent Management Through Customization (Harvard Business Press, 2010), by Susan M. Cantrell and David Smith.
Custom made
There are four customized approaches to creating a workforce of one (see story). Each requires a different level of human resources support.
HR-driven customization (more control; less customization)
Customized approach
Segment the workforce
Human resources . . .
Creates a variety of practices customized for specific groups of individuals
Creates a broad and simple rule with clear boundaries that can be interpreted in a variety of ways by each individual
that an organization can customize in a structured, rules-based manner (see chart, above). These four workforce-of-one approaches to customization are built on standards that allow flexibility rather than encourage sameness, which is precisely what makes the approaches controllable and manageable. 1. Segment the workforce. Just as marketers have been deftly dissecting consumer populations for decades they have us pegged as suburban moms, clothes-conscious teens, techno-geeks and the likecompanies can segment a workforce into discrete groups that share similar characteristics. Employees may be grouped by any relevant criteria, such as value to the company, role or workforce, and age or generation. Advances in business intelligence and analytics have spurred a revolution in how companies are segmenting their workforces; companies are now
creatively grouping their employees on such varying dimensions as learning styles, values, personality, wellness profiles, mobility, behavioral patterns, and even networking and communication styles. Accenture, for example, segments employees in part according to their overall well-being (such as how many vacation days they have taken and how much time they have spent on a project) to identify those who might be at risk of leaving or high levels of stress. One high-tech company in our study relied on extensive anthropological-style research to determine the unique behaviors of eight different types of teams based on factors including degree of interdependence and mobility; it then designed corresponding workplaces for each one. Even the extended workforce can be segmented. Many companies today are finding highly talented workers all over the globe by tapping Web-
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based talent profiles of pre-screened people available for work, using test scores, experience, ratings and referrals from other usersthink of Amazon.com and Facebookto help them make a strong match for a particular need. Because executives specify standard practices at a detailed level for each given segment, control is maintained. 2. Offer modular choices. Just as Dell customizes computers by offering customers a menu of mixand-match options, companies can offer a predetermined list of organizationally defined options that enable employees to customize their work experience. At Capital One and Microsoft, for example, employees choose from a variety of mix-and-match work environment options based on their individual needs and changing work tasks. Other organizations have unbundled standard job descriptions and broken them down into smaller tasks that can then be reconfigured in numerous ways by the individual, based on interest and skill. And at Skyline Construction, a San Franciscobased builder, eligible employees can pick their own salaries (within a certain range), choosing between lower salaries and a shot at a larger bonus, and higher salaries and the possibility of a smaller bonus. By limiting employees options to a list of organizationally defined and sanctioned standard alternatives, offering choices becomes manageable, affordable and controllable. 3. Define broad and simple rules. Alternatively, an organization can create standard organizational rules so broad and simple that they can be interpreted in many different ways by workers or managers.
Just as contestants on the reality TV show The Amazing Race can take different routes to the same destination, so, too, can companies simply define the end, letting individuals and their managers customize the means based on the employees unique strengths, preferences and needs. The organization maintains control because the rules always have clear boundaries; as long as employees stay within them, they can act in a way that suits them best. Boundaries may be constrained by strategy, values, time, money, results or organizational scope, among others. Consider how broad and simple rules can be used to customize jobs. At W. L. Gore, the Delaware-based maker of Gor-Tex and other fluoropolymer products, boundaries are constrained by organizational scope; employees determine their roles and tasks on each project, working within the loose limits of general functional or broad work areas only. Time may also be used as a constraining boundary. At Google, for example, engineers need spend only 80 percent of their time on core duties; the remaining 20 percent may be customized by working on projects that have the greatest potential to create value for their organizations. Best Buy, on the other hand, customizes jobs by using the broad and simple rule of obtaining results. Take Moira Hardek, a member of Best Buys Geek Squad. After discovering that customers responded positively to her personal style, Hardek developed a passion for getting more females interested in technology careers, including jobs on the Geek Squad. Because Best Buy broadly defined Hardeks job as delivering superior customer service, she was able to match her job to her strengths by creating a technology summer camp with
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unique hands-on experiences designed to demystify technology for a younger generationspecifically young women. Data analysis done jointly by Best Buy and Gallup reveals that helping people play to their strengths effectively doubles the rate of increase of employee engagement. This makes a dramatic difference in Best Buys financials, since each 0.10 increase in engagement (on a five-point scale) is worth an estimated $100,000 in incremental profit per store, per year. 4. Foster employee-defined personalization. In the same way that todays consumers can define and create their own content using the video-sharing site YouTube or the volunteer-written reference site Wikipedia, employees can now define and create their own people practices without any centrally defined limits, choices or policies designed to serve particular employee segments. Individuals can create customized learning experiences, for example, by participating in wikis, blogs, YouTube- or Facebook-like applications, or virtual, simulated job experiences. They can also set their own schedules, as they do at Tesco and JetBlue Airways, by brokering schedule changes with fellow employees through shifttrading markets. Compensation can be employeedefined too. In the US Navy, sailors not HRset compensation levels in hard-to-fill jobs through an online job auction website. This marketbased system differs from a modularchoice approach to talent (like the Skyline Construction example cited above). Rather than having a few predefined schedule or compensation options determined by HR to choose from, this system gives people a practically unlimited ability to define their own schedules
or salaries based on what the internal employee market can bear. Even competencies, job descriptions and career paths can be defined not from on high but rather in a bottomup fashion by employees themselves. By scanning rsums, email and other electronic communications, human capital analytics software can organically tell the organization what skills, experience and knowledge each employee has to create common, dynamic and ever-evolving workergenerated profiles. Companies can use analytic technology, like that developed by talent management software company Taleo, to analyze promotion and transfer histories to identify common customized career paths taken by their employees. They can then use social networking technology to help those employees identify and network with people who have taken paths similar to the ones they want to take. This process will help provide some degree of structure and guidance for employees who work in complex organizations but have no clear career paths. Its true that the employee-defined personalization approach grants the organization the least amount of control. But the organization still decides which employee-defined personalization practices it will support and how through incentives, technology and cultural change enabling it to maintain some degree of control, consistency and alignment with business needs.
Crafting a strategy
Just as employees are different with unique needs, values and aspirationsso, too, are companies, which vary in their unique strategies, histories, types of employees, values and cultures. Each company may thus decide to pursue customization
(Continued on page 7)
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Capital One: A pioneer in using analytics to support segmentation and modular choice
Uses data analysis to segment intended hires based on criteria that distinguish
top-performing employees
Uses employee database (SAT scores, college GPAs, number of children, etc.) to match
for learning
Recognized by Fortune as a top company for developing leaders and a top company
career paths
Applies broad and simple rules across six dimensions, including hiring practices Uses 10 different employee-defined personalization practices Uses technology to support many employee-defined personalization practices (informal
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in its own unique way. Although most organizations use at least a few practices from each customization approach, they tend to favor one or more approaches over others based on their unique business conditions. Here are some factors you might want to consider when crafting your own unique customization strategy.
Degree of customization versus
view this approach as less egalitarian. Broad and simple rules and employee-defined personalization approaches fall somewhere in the middleeveryone is given the same opportunity to interpret or define their own people practices, but because HR doesnt centrally define the details, these practices can vary significantly from one person to another.
Amount and type of resources
degree of control. Whereas segmentation and modular choice allow for more controlbecause the specifics of the people practices are defined by HRbroad and simple rules and employeedefined personalization allow for less control, since the specifics of the people practices are defined more by employees with enabling guidelines and structure provided by HR. But less control means more customizationemployees can create a greater variety of people practices that fit them using broad and simple rules and employee-defined personalization than with the other two approaches.
Amount of change. Broad and
required. More HR resources may be called on when favoring segmentation or modular choice approaches, which require HR executives to define, implement and administer not just one set of detailed talent practices for the organization but multiple ones. However, fewer resources may be required when favoring more employee-driven approaches, since these dont require a company to track and administer multiple detailed variations. Rather, the burdenor privilegeof defining the specifics of a people practice shifts to employees. Organizations using these approaches may shift their resource allocation to change and education, for example, or they may provide fewer HR resources altogether. If your organization operates in a low-margin business and cant afford to support things like a vast data warehouse and the analytics capability that are commonly used with the segmentation and modular choice approaches, youll want to weigh this factor when choosing a customization approach.
simple rules and employeedefined personalization can be adapted more easily to change. For example, instead of waiting months for the company to centrally define new learning courses based on new needs, peer-to-peer learning through wikis, blogs and other means can help employees quickly adapt to changed conditions.
Fairness. The modular choice
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approach to customization is perceived as being the fairest, since it clearly provides the same set of detailed options to everyone. Since segmentation creates different practices for different groups, some employees might
Although some employers are introducing choice and variation in such areas as employee benefits and job assignments in an effort to recognize the differing needs of individuals, most companies have not yet begun to tap into the depth of this opportunity. Managing your companys talent as a workforce of one involves creatively customizing your people practices and applying this principle to your entire workforce in a strategic, thoughtful, proactive way. Customization will transform your workforceand the human resources teaminto a strategic powerhouse and position your organization to win.
Outlook is published by Accenture. 2010 Accenture. All rights reserved. The views and opinions in this article should not be viewed as professional advice with respect to your business. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. The use herein of trademarks that may be owned by others is not an assertion of ownership of such trademarks by Accenture nor intended to imply an association between Accenture and the lawful owners of such trademarks.
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