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Customer driven workforce management*

Customer driven workforce management*


1. Introduction

The competitive pressures brought about by the new economy call for a change in the role of the human resources function. No longer is being a "strategic partner" sufficient. In today's business environment, HR must become a leader in identifying new business opportunities, defining business strategy and corporate priorities, and preparing the organisation for change.

Three priorities are paramount for any HR function aspiring to fulfill this leadership role. The HR function must:

1.1 Become at least as focused on the company's external environment, as is the rest of the company. HR Managers can no longer afford to wait to have change interpreted for them.

1.2 Be prepared and positioned to play an integral role in strategic partnerships. The success of mergers, acquisitions, joint ventures and strategic alliances most often hinges on organisational and workforce-related issues.

1.3 Ensure that the organisation's internal values remain explicit and aligned with the company's value proposition to its external customers.

2. Anticipate the needs of the company’s customers and become a true business partner.

Traditionally, HR has relied solely on line managers for cues regarding workforce planning.

In the February article that dealt with an integrated line management and HR planning process it was pointed out that this approach to workforce planning requires line managers to assume ultimate ownership of workforce management decisions during the business planning process’. However, even this strategic approach to workforce management has its limitations.

A fundamental problem with this approach is that by the time Line Managers can clearly identify and convey new workforce requirements to HR, it is already too late, particularly given decreasing cycle times experienced across many industries.

Companies are seeking a method to decrease the time required to both identify future workforce requirements implied by business strategy and hire and develop the employees needed to fulfill those requirements. What this boils down to is that HR simply no longer has as much time as it used to for identifying future workforce requirements implied by business strategy, and then hiring or developing employees to fulfill those requirements. This ultimate reality will define the implementation pace of many of the AA and EE requirements of both the Employment Equity and Skill Development Acts.

As business or product cycle times decrease, the amount of time that HR has to prepare the organisation for change decreases proportionally. The problem that arises is that HR can only reduce its own cycle times so far, particularly in the case of workforce planning. The real problem here is that HR typically has to rely solely on line managers for cues regarding workforce planning. Usually, by the time line managers can clearly identify and then convey new workforce requirements, HR is already out of time.

In the typical situation, it might be weeks or even months before a change in customers' needs is recognised. It may be even longer before business strategy is modified and associated decisions are made regarding changes in products, services, processes and the organisation generally. Finally, it is at this point that HR gets that (not surprisingly) frantic last-minute phone call from line management regarding the need to source new employees.

Considered in this way, a potential solution becomes clear. HR, alongside line management, can directly monitor the company's customers in order to identify potential changes in workforce requirements as soon as possible. As soon as a change in customers' needs is recognised, line management and HR can work together to modify the company's business strategy while at the same time getting to work on sourcing necessary talent.

Customer-driven workforce management is therefore a means for HR to anticipate future workforce requirements necessary to execute on business strategy. The principal strength of this practice is that HR is able to take cues regarding workforce planning directly from the external customer, rather than awaiting line direction; this practice provides a more effective means of lengthening lead times required for talent sourcing and development than standard approaches. A secondary benefit is that direct external customer contact provides HR with a clear understanding of the business context for workforce planning efforts

As organisations differ substantially in the extent to which customer feedback and satisfaction informs business strategy, the degree that HR uses external customer feedback to direct workforce planning should be closely aligned with the organisation's strategic approach to customer input.

The following three case examples illustrate the various ways that HR is beginning to leverage increased contact with the company’s external customers.


Unisys Corporation is an electronic business solutions company employing approximately 36,000 people and generating $7.5 billion in annual revenue; the company provides outsourcing solutions, computer systems integration and customer support to customers in over 100 countries.

Shift in emphasis to service-oriented business in a highly competitive market focuses the CEO on customer demands for faster decision-making and service delivery. The CEO initiated a reorganisation of the company, culminating in a realignment of the organisation's structure around customer needs in key market sectors in 1999.

As part of company's focus on customer requirements, HR staff within each key business unit developed an integrated approach to workforce planning; in certain cases, HR introduced new demand planning and skills assessment methodology informed by direct interaction with external customers associated with outsourcing contracts.

STEP 1. ENGAGE IN CONTINUOUS EXTERNAL RELATIONSHIP MANAGEMENT: The HR Manager, Client Relationship Manager, and external customers engage in continuous relationship management.

# Regular meeting between Unisys and external customers associated with outsourcing contracts

# External customer describes anticipated needs for next contract cycle period

# External customer provides feedback regarding satisfaction with services

(and skills) provided by Unisys

STEP 2. DTERMIINE WORKFORCE REQUIREMENTS OF THE BUSINESS PLAN: The HR Manager, Client Relationship Manager, and external customers identify workforce skills and proficiency levels implied by the customer’s future needs.

# HR teams with line management to develop skill profiles for new roles implied by the customer's new needs

# Line and HR compare skills required by future customer needs against

profile of current workforce

STEP 3. MODIFY BUSINESS UNIT'S OPERATING PLAN: The HR Resource Manager and the Client Relationship Manager identify the changes in workforce planning strategy that will be necessary to close any workforce gaps.

# Line plans service delivery in conjunction with customer needs

# Analysis is used to integrate workforce demand plan with business unit’s operating plan

# Line and HR translate external customer feedback into service improvements

# Rigorous analysis occurs to determine optimal strategy for fulfilling workforce requirements


Ericsson Private Radio (now Com-Net Ericsson Critical Radio Systems) is a telecommunications company generating approximately $300 million in annual revenue and employing more than 600 people. The company recognises that lack of coordination between customers and company project managers is resulting in implementation delays and dissatisfied customers.

HR designed and administered a project-planning workshop that teams external customers with Ericsson’s project participants to develop project and contingency plans. The workshop is now offered to Ericsson customers as an additional product; HR development and facilitation of the process resulted in HR acquiring a better understanding of the business for its workforce management activities and improved anticipation of marketplace shifts affecting workforce planning.

THE MISSING LINK: "The problem with our project process was that we were only working with one segment of our customer base. Elected officials defined the initial technical requirements of the system, but the end-users (police, firefighters, etc.) weren't part of that process. Our development and implementation left little room for input from these end-users, leading to miscommunication, project delays and customer dissatisfaction." VP, HR Ericsson Private Radio



# HR examines past project failures, delays, etc, and gathers external customer feedback on Ericsson's project process to determine root cause of customer dissatisfaction

# Analysis reveals that project communication and planning exclude end-users, leading to unrealistic expectations, conflict and dissatisfaction with the final product for the company, key decision makers {e.g. elected officials) and customer end-users {e.g. policemen or firefighters)


# HR designs a project planning workshop for both Ericsson employees and external customers; workshop uses HR expertise in training, team building and conflict resolution to take external customers and Ericsson employees through a rigorous, two-day session focused on aligning project objectives, establishing communication protocols and contingency planning


# HR facilitated workshop planning with key customers, encouraging buy-in to the process by asking external customers to serve as co-facilitators of the workshop

# HR leads Ericsson employees and external customers through workshop

# Success of the initial training offering {in terms of customer satisfaction and reduced project delays) leads company to offer workshop as a product to all large-project customers

# Growing number of customers now purchase the workshop as part of their product package, thanks to strong endorsements by customers who have used the workshop


Medtronic is a $5+ billion medical technology company employing more than 23,000 people. Feedback from the external customer is at the center of the company's mission; information regarding needs of external customers becomes increasingly important as the company expands its business into new markets. HR, like all key Medtronic functions, is required to interact with external customers in a variety of venues; insight gathered from these interactions used to inform and direct workforce planning, recruiting, retention and performance management


# On-site customer Interaction: The annual company party brings external customers (doctors and patients) on-site to speak about how Medtronic devices have affected their lives; All business units periodically bring in external customers to give input and comments on current and future products.

# Field customer interaction: HR representatives observe installation and use of Medtronic devices in the operating room; HR accompanies technical sales staff to meetings with external customers.

# Customer-oriented Performance Reviews: HR staff evaluated on alignment of their activities with the needs of external customers.

# Customer joint ventures: HR staff attends new product development meetings that include external customers (physicians).

* This article is an adaptation and précis of case studies presented in ‘A Higher Calling’ published by Corporate Executive Board 2000.

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Gary Watkins

Gary Watkins

Managing Director


C: +27 (0)82 416 7712

T: +27 (0)10 035 4185 (Office)

F: +27 (0)86 689 7862

Website: www.workinfo.com
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