Mission Critical

Outlook Journal, January 2002

Anyone can cut costs. The question is, can you cut costs and create value at the same time?

It’s an urgent question today, particularly when it comes to an organization’s workforce. A lot of cost pressure these days is relieved through headcount reductions. However, unless companies balance these reductions with new kinds of employee enabling programs, they are likely to have workforces that are not only smaller but also dispirited and less motivated, which will make hitting financial targets all the more difficult.

How can companies achieve necessary workforce reductions yet maintain, or even improve, productivity levels? In unsettled times, how can they keep their people focused and engaged? How can they put together the right mix of tools, rewards, training and career opportunities to provide the job satisfaction necessary to retain their top talent? Most important, how can they do all this right now?

Today the pressure to effect critical change quickly is more relentless than ever. The trouble is, techniques and approaches for improving workforce performance and linking it to bottom-line value, like many initiatives that go right to the heart of an organization, often seem to play out at a glacial pace. As one executive put it, reacting recently to a proposal for performance improvement: “I like what you’re telling me. But here’s the deal: I’ve got to turn my sales figures around in six months. That’s my window. If you’ve got something that can help me do that, I’m all ears. If not, then let’s both move on to our next appointments.”

Focus
It’s a challenge that can, in fact, be met. Remember the early days of just-in-time manufacturing? Recall how experts in the field could simply walk around a shop floor making observations and, in a matter of days, identify areas where improvements resulted in millions of dollars in savings? How did they do that?

First, they had a deep and broad understanding of the environment. They were like medical doctors with a genius for diagnosis. Second, they didn’t look at everything. They knew where the critical influence points were, and that’s where they focused most of their attention.

Similarly, certain workforces are particularly vital to overall business performance; we call these mission-critical workforces. Once those workforces are identified, then a deep understanding of the influence points for a workforce can lead to the rapid diagnosis of performance issues and quick implementation of a plan for improving employee performance.

Just what are these mission-critical workforces? Think of the distinct workforces in your company. Then imagine which of them are responsible for significant revenue or costs. For instance, during a new drug launch, a pharmaceutical company's sales force is mission critical. Or think about insurance adjusters, whose job it is to settle policy claims worth millions of dollars. Increasing their ability to render fair and accurate settlements has a measurable impact on the financial performance of the company. Field-service workers are a mission-critical workforce for many companies, because they depend on this workforce to represent their brands to their customers and to distinguish their companies from competitors based on the services they provide. Improving the performance of this workforce can have a major impact on customer satisfaction and retention, and it can ultimately lead to increased revenue and profitability. Generally speaking, look for a workforce segment for which incremental improvements in job performance translate into discernible differences in financial results.

For example, Ryder System, an international provider of supply chain and transportation management services, recently focused attention on areas of its workforce that are instrumental not only in driving sales but also in designing and implementing these services.

Ryder realized that to achieve and maintain strategic competitiveness in the 21st century, its employees need the tools necessary to share best practices and innovative ideas more easily and dynamically. The solution: a state-of-the-art knowledge management center that enabled the exchange of the company's best new thinking, facilitated quick access to experts within Ryder, supplied customized news feeds on key market trends and provided collaborative work areas for project teams. But what lies beneath a workforce solution is just as important as the solution itself. To meet the performance needs of a particular mission-critical workforce, a comprehensive, holistic view of the performance environment is needed. This view is encapsulated in what Accenture calls the Workforce Performance Framework (see sidebar).

To achieve optimal levels, workforce performance must be supported by a comprehensive context of services. Ryder's implementation of its knowledge management center program included communications, training, policies and procedures, knowledge proficiencies, incentives, a comprehensive measurement system and the creation of an organizational team to lead the knowledge management effort. This solution provided Ryder employees with the tools and information needed to perform at more efficient levels, as well as the motivation to succeed. According to Gene Tyndall, Ryder's executive vice president of global markets and solutions, “Ryder employees have embraced these changes to make them more competitive and better suited to deliver value-based services to its customers."

Good Behavior
Now that you’ve identified your most important workforces, you’re ready to plot a course for performance improvement. But what exactly are you trying to change? What do you want to improve? If you answered “workforce behaviors,” go to the head of the class: Ultimately, you’re trying to change the workforce’s actions.

As it turns out, persuading executives to focus on the performance objectives of their mission-critical workforces is one of the most important service a human performance professional can provide. Whittle down a broad list of performance goals to a half-dozen key performance objectives. Any fewer than that means you’re not being specific enough. More than that means you’re losing your focus. How do you know if you have an effective set of key performance objectives? First, you’ll know because the objectives are measurable: Remember, what gets measured gets done. Second, you’ll know because they represent clear business imperatives. That only makes sense. If you’re trying to have a quick impact on business performance, you’ll want workforce performance goals that are easily linked to financial outcomes (see sidebar).

Here’s an example of how identifying key performance objectives can help a workforce meet a real business need. A major insurance company faced a number of challenges related to its call center. Market conditions had led to overcapacity and under-utilization of the center’s representatives. The company wanted to increase the overall capability of these representatives to generate revenue through sales and to realize full benefits from the CRM technology infrastructure it had recently installed.

Working with the call-center management, Accenture identified an overall set of key performance objectives, including reducing the time it took to train workers, increasing the value of each customer contact, retaining the best call-center talent and increasing the rate of first- contact resolution for customers. Each of these general key performance objectives for the center was then translated into specific target behaviors for call-center workers.

For example, the general objective to reduce training time for workers involved the following specific behaviors on the part of the representatives: Quickly learn how to perform in new situations; translate training to real situations; apply general principles to guide decisions in specific situations; and actively use support mechanisms to improve performance. These specific objectives and behavior targets provided the company with the critical input to identify where its spending would have the maximum effect on the exact behaviors that most quickly translate either into cost savings or increased revenue.

Building the Business Case
That leads to the next step: identify business benefits derived from particular workforce improvements. Staying with our insurance company example, the value proposition from workforce improvement in the company’s call center focused on three potential benefits: an increase in the number of desirable customers; an increase in profits from each customer—partly through deeper relationships and higher value, and partly through enhanced efficiency and thus lower costs; and a longer overall relationship with the customer—that is, an enhanced “lifetime value” of the customer relationship.

After examining the current conditions at the call center and projecting the results of improved performance, the company set its sights on these potential benefits.

• Potential revenue growth of 5 percent to 15 percent through the increased retention of the best customers, the improved capacity for up-selling and cross-selling, and an increased customer-acquisition rate.

• Potential cost savings of 10 percent to 20 percent through improved employee productivity, improved channel efficiency and streamlined customer call handling.

• Potential increased margins of 2 percent to 7 percent through an improved growth rate, reduced operating cost and improved customer profitability. Once the key performance objectives and business benefits pieces are in place, you need to assess the current performance of your workforce. In other words, you can’t know where you’re going until you know where you are.

It may be an obvious point, but the assessment of workforce performance is often given either too little attention or too much. The too-little part is probably obvious—people may have a tendency to jump at a solution without a clear sense of what the problem is. But the too-much assessment is just as bad: Analysis paralysis in the diagnostic stage can mean missing a key window of opportunity.

Assessment may certainly include some of the traditional, well-known survey instruments and diagnostics. But here is another, simpler assessment tactic: observe your people at work. Not exactly revolutionary, but it’s an approach that is so obvious, it is often missed.

This takes us back to the JIT analogy. Just as those experts made improvements through direct observation, so does a human performance professional. Observation and analysis of current workforce behaviors can lead to quicker identification of problem areas—areas in which improvement may lead to quicker payback. Just as JIT experts had their tools—process run charts, spaghetti diagrams and swim-lane diagrams—human performance specialists have their tools—behavior architectures, key performance objective work packets and motivation assessments.

If you are trying, for example, to improve the performance of your mission-critical field-service workers, it is essential to have experts ride along with them. Monitoring the calls made by call-center representatives is another example, provided that this direct observation is done unobtrusively.

The Appropriate Package
There are many options available for raising workforce performance, including process improvement, performance feedback, eLearning, knowledge management and mobile applications. Although the number of options is not infinite, it may appear that way to harried executives looking for help. The question at this stage is how to configure a solutions package for the particular performance needs of your mission-critical workforces.

You can use a short assessment phase to identify gaps in the performance of the workforce according to the categories of the Workforce Performance Framework. Analyze the human performance elements and the resulting business performance to identify areas to improve. Then tailor a human performance strategy to address specific gaps in the categories of ability, motivation and context. These strategies may involve innovative new approaches in such areas as collaboration and knowledge management, HR process and technology, performance management, workspace portals, eLearning and performance simulation.

Workspace portals are a new and important enabler for mission-critical workforces. They integrate, in a single interface and with personalized context, the information, best practices and knowledge that employees need to do their best work. Unlike the traditional business-to-employee portal, the workspace portal enables a specific workforce to have a tailored portal with relevant eLearning, collaboration tools and content-specific applications. Employees can not only view information but also act on it in a way that makes their jobs easier and their efforts more productive.

You may ask, “Where’s the catch?” If there is one, it goes back to the point about needing a deep understanding of what makes these workforces tick. Close observation and experience go hand in hand. Without the experience, it’s hard to know what to look for. And without the ongoing and effective observation of real behaviors, experience quickly becomes out of date.

Call the desired state “hands-on knowledge”—with such expertise, one can more quickly diagnose a problem, more quickly design and implement a specific solution for a mission-critical workforce, and more quickly have a measurable impact on financial results. This is the new workforce opportunity today: to treat human performance not as overhead to manage but as a source of value to develop. Call the desired state “hands-on knowledge”—with such expertise, one can more quickly diagnose a problem, more quickly design and implement a specific solution for a mission-critical workforce, and more quickly have a measurable impact on financial results. This is the new workforce opportunity today: to treat human performance not as overhead to manage but as a source of value to develop.

Sidebar: Establishing Key Performance Objectives. [PDF, 625K]
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About the Authors

Dorothy VonDette, a partner in the Accenture Human Performance service line, leads the company’s Mission Critical Workforce market offering. Ms. VonDette has more than 20 years’ experience leading organizational transformation projects. Based in Reston, Virginia, she is the location lead partner for the Washington, D.C. office.

Patrick Mosher is an Accenture associate partner in Communications, Media & Entertainment. With experience in industries including telecommunications, publishing and advertising, Mr. Mosher leads initiatives for large-scale organization change in large enterprises. He is based in Minneapolis, Minnesota.

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