The CEO View on Strategic Workforce Planning
October 1, 2019
Strategic workforce planning (SWP) is not a phrase that brings a warm glow to many executives’ hearts. In many organizations, it was often, historically, viewed as a necessary administrative evil. Executive Roundtable Editor, David Reimer, and column regular, Sonja Meighan, sat down with two chief executives whose industries offer indicators on SWP at the intersection of shifting markets, shifting strategies, and shifting talent pools. In this discussion, these leaders discussed the role of HR, CEOs, and the gauges of effectiveness when it comes to winning at SWP.
Chris Weil, CEO and Chairman, Momentum Worldwide
Jody Miller, Co-Founder, Co-CEO, and Chairman, Business Talent Group
People + Strategy: How do shifts in talent pools get integrated into your thinking about pricing, financial performance, etc.?
Chris: My perspective comes from a look at the advertising industry as a whole. This business started as commissioned-based. We basically gave away our thinking in order to get commercials bought, media paid for, and commissions taken. It was a huge margin business. That party eventually had to come to an end. As it did and as pricing changed, we went to a time and materials model, and media and creative was separated. [Now], we have moved more towards a more human capital business and selling human capital and time and materials. It has never been harder to reach the consumer than it is today. The complexity and the change of the people in the organization has been the hardest part for the industry as a whole and for us as an organization. To overcome it, we have built a data engine as our spine for the future of the agency. What that will allow us to do is run more efficiently. If I can go to a client and say you spend $100 million in this advertising space, here is what you will get in return for incremental sales. If you spend $120M, here is what you would get. Let’s make a decision on how much you want to spend and how much revenue you want to get to, and I will tie my contract back to those results. That is when our business changes. We are not there yet.
Jody: When we started BTG, we built it going directly to the end user. We would avoid procurement and HR because we saw that executives were not calling them or reaching out to them because they didn’t think they could help with fast turn-around, high-level, complex projects. About two years ago, we realized we needed to start partnering with HR, procurement, and C-suite leaders in order to bring BTG’s capabilities into the organization in a more effective and systematic way. It started with talking to over 300 executives in HR, procurement, and at the C level to understand the obstacles they were facing in broadening their use of independent talent. What we came away with was a view that we really needed to help these organizations understand how to make their companies better fit for purpose in order to take advantage of the new ways of getting work done.
P+S: How else does that contrast between legacy vs. future inform your thinking about the talent pool(s)?
Jody: Getting the best talent into organizations sometimes requires looking outside of the organization for an independent worker. What we are finding is that organizations often struggle to integrate on-demand talent into their company culture. Those that figure it out will have a huge competitive advantage. The conventional wisdom today is that “the war for talent is over and talent has won.” It’s actually more serious than that. As talent becomes independent, they are picky about where they work, what they work on, and who they work with. If you are an organization that has figured out how to make independent talent comfortable, effective, and part of your team, you will have a huge advantage over someone who has not focused on this and doesn’t know how to make it work.
Chris: Our number one priority is winning the talent wars. We have to get the best talent. In order to do that, we have to build an agency that has a reputation and a culture where creative people want to work. If I can win the talent war through our reputation, and build that on a backbone of data analytics, it allows us to use data to inform creativity and improve productivity. If we can do that, and it is as successful as we are now, we are positioning ourselves for the next five years.
P+S: Are there implications for leaders about what it means to lead and manage in your organization today that are different from the past requirements? At the executive level, what are the top differences? What about at the manager/supervisory level?
Jody: Honestly, everything starts with management having to be much more precise about project work in the first place. As a manager what you need to do is be very clear about what you need done and the skills required. Ask yourself, what do I already have on staff? What do I need to bring in from the outside? It requires defining the work differently and more precisely and makes it a different role than managers are typically used to. If you start doing that and combine it with an understanding of what kind of resources are available, you end up in a different place as you think about work.
Chris: Today’s world is much more collaborative and much more informed. If you look on the agency side in the past, the great agencies created a culture of creative conflict and creative directors. There was a culture of “sell a great idea and rely on the creative team to come up with a great solution.” Today, it is a scrum. We have a five-legged stool that includes the business leadership, the technology leadership, the creative leadership, the strategic leadership, and the production leadership. Together all five of these people are solving problems together. You have to have an environment where great ideas are supported, and collaborative iteration leads to better outcomes. There is no way that machine learning or AI will ever be able to do that. They can inform it and they can prove it, but that human spark is still the part of the business that is the buzz.
P+S: With fundamental changes to business models, we’re seeing SWP starting to re-emerge as an actual conversation about strategy. What is it that you believe HR could do more of, less of, or start doing to help the management team ensure it has the workforce needed to deliver on the strategy?
Chris: We do four things for a living—acquisition and retention of clients and acquisition and retention of people. That is the only reason we are in business. Several years ago, I redirected my HR group and said I need you to be focused on the acquisition and retention of people. We were spending 90 percent of our time on clients and 10 percent of our time on people. Without people, we can’t serve our clients. I tasked HR with developing comprehensive lists of the top players we had in the different fields of business. I wanted to ensure I was meeting with them regularly and that they were constantly on our radar. If we lose an A player, I want HR to feel like we lost a major client.
Jody: For BTG, we really need HR to understand what is possible today and to enable a different way of getting things done. The value proposition of BTG is about agility, getting access to hard to find talent faster, thinking about work differently, and acknowledging that not all work has to be done by traditional permanent employees. Many procurement leaders were ahead of the curve compared to HR in recognizing the value of on-demand talent due to their interest in reducing consulting spend, which is another benefit of the high- end independent talent market. HR is starting to recognize they are behind procurement and are working hard to catch up. HR has to move beyond their current frameworks and enable different ways of working and of bringing talent into the organization.
Chris: HR is responsible for taking care of our people. They do this through customized learning, agency simulations, social events, etc. The net of all of this is I want HR to approach the acquisition and retention of our people in the same way we approach the acquisition and retention of our clients. HR is responsible for ensuring we execute against our people strategy.
Jody: Creating an ideal work environment is just as critical to retaining top independent talent as it is to retaining top permanent talent. I don’t think a central HR function is always the best place to make the decision regarding whether permanent or an on-demand talent is the right decision. HR needs to enable managers to have access to both and make the decisions that make sense for the particular work at hand.
P+S: Let’s say you’re in a roomful of first-time CEOs. What are the top things you would tell them to keep in mind when it comes to thinking about their workforce of the future?
Jody: You have to forget the notion that there are not good people outside of your organization who could be in the independent market. As a CEO, you have to have an open mind and understand the demographics and desires of the talent in the market. You also have to think differently about how you are going to capitalize on this talent in a way that is beneficial to the talent and for the business. This often means getting things done in a different way than they have been in the past. Consider the questions of: what needs to get done inside the organization, and what can be done outside? What are the key things you must own and control, and what can you do in a different way?
Chris: Never in the history of my business has great talent at whatever price not paid themselves out. As a CEO, I am constantly putting pressure on my CFO and CHRO to ask why we don’t have certain caliber talent in the candidate pool for positions we need to fill. If it means paying candidates a little more, I am confident we will gain out of that investment. The only place we can really make a mistake is with mediocre talent.
Jody: CEOs also need to think about the decreasing average job tenure of full-time employees. In today’s environment, what is the difference between a 2-year project and a 2.5-year stint as a permanent employee? These lines are blurring. Some of the best talent out there will only work in the independent market. We are seeing this in the technology world—a lot of top tech talent is not on the market to be hired. Part of the reason for this is they want to start their own companies, but they are willing to do project-based work in the interim. For the companies that hire them on a project basis, they get access to top talent they could not otherwise hire. And the talent is happy because they get experience on projects while they are working toward other goals. New CEOs have to understand what is available and they have to actively work to create organizations that can become attractive and effective at utilizing talent in new ways.
Chris: Setting the tone of the company becomes critical to that last point. You make it to CEO because of what you did. If you keep doing just what you did then you will not be successful as a CEO. You have to do the job differently. One of the great pieces of advice that I got when I took over as CEO was to remember that the pace of the game is set by the pace of the boss. Set it how you want it to be. The pace is the one thing you are in charge of and you can translate that into setting the culture you want for the organization. Once I realized that these two things were 100 percent my doing, I decided to create an agency where I would want to work—a place where employees are taken care of, people run hard but are treated fairly, and we invest in their training and development. Once you realize this is 100 percent your doing as a CEO, you have a chance of succeeding.
P+S: Now you’re in front of a room of newly minted CHROs. What is the one metric you’d tell them you as a leader will use to determine whether your HR organization is helping the company deliver on its strategic promise?
Chris: I tell my HR department that their clients are the people of this organization. If the people refer to HR as difficult to work with, then HR has failed as a function. So many times, HR departments are viewed as bureaucratic or something that stands in the way. I look at HR as a value-add and critical business partner. As I look across the advertising agency as a whole, having a bad HR partner affects not only the HR department, it impacts the entire agency. I want HR to be the first person I call when I’m working on a problem because I know they are my strategic partner and will help me come up with a solution.
Jody: I think it is critical that we evolve what it means to contribute to the organization from an HR standpoint. Based on the studies I have looked at and my own research, HR is often measured on how well they fill permanent positions. If they are actively accessing the gig economy, the time to fill positions would drop significantly. You have to change some of the metrics that HR is focused on if they are still focused solely on a permanent framework. HR also needs to have the confidence to move from a world where they are in control to a world where they are enabling solutions, because they can’t be a gatekeeper on specific fast-moving work, and they can’t always be the middleman—pace prohibits this from working in today’s environment. HR can set up the programs and then monitor the progress. They can and should perform the oversight function, but they have to get out of the middle. Paradoxically, only then will they become deeper partners with the rest of the organization.