Senior Manager, IP Development, KF Institute
A critical question: what are your critical roles?
People have always faced the challenge of an uncertain future. But globalization, digital advancements and new economics have made the future even more unpredictable. The speed of change is increasing and pushing us out of our comfort zones.
For companies, this means looking at their strategy, their capabilities, and their workforce through a different lens. To keep up, their approach to business must transform just as much as the business itself. But whether they're moving through a major shakeup or preparing for the next fiscal year, organizations can tackle the challenges of a rapidly changing future by taking stock of what their critical roles are today—and will be tomorrow.
By identifying their critical roles, companies can better prioritize their resources and develop strategies that leverage their most important assets as well as fill in skill or talent gaps. It also enables organizations to assess the impact of change on their critical functions and make informed decisions about investments in human capital, technology, research, and development. To ensure organizational effectiveness and competitiveness, knowing their critical roles is a must.
Organizations face two core challenges when determining their critical roles: determining the most important variables that contribute to the criticality of a role, and finding the robust data needed to connect the role, the business strategy, and the market conditions. But today's common approach to identifying critical roles is almost exclusively based on financial metrics, leaving out key factors around strategy and competencies, among others. And this method is often applied inconsistently across different cases or businesses, not allowing for peer benchmarking within industries, across company sizes, and throughout maturity phases.
How companies can identify and optimize their most critical roles
To help companies achieve future readiness, the Korn Ferry Institute has developed the Critical Role Index, a research-based model that provides a clear, quantifiable method to turn future threats into opportunities. The Critical Role Index is based on three pillars:
1. Strategic Value: what extent a role contributes to meeting and surpassing an organization’s strategic challenges ahead. When an organization identifies and selects the strategic challenges it wishes to tackle in the Critical Role Index, they will then instantly see which roles and capabilities are critical to meeting those strategic challenges, based on 450 possible responsibilities mapped to 55 possible strategic scenarios a company can face. They can use these insights to identify which roles or capabilities they currently have, where their strengths are, and which are missing. This can then be used to make decisions around the creation of new roles, attracting new people, and re- or upskilling their current workforce. In this last example, organizations can do a deep dive that shows them what roles that they currently have, require the same competencies, personality traits, and motivational drivers, as the one(s) they are missing. This may lead to insights that the right capabilities are there already, but simply not optimally allocated or leveraged in the organization.
2. Business Value: what a role brings to the current day-to-day output of an organization. When organizations score their value chain elements in the Critical Role Index, they immediately see which roles are critical to “keeping the lights on”. These results can be compared to the roles that score highest on Strategic Value, and result in an overview of the gap between the roles that are critical now, compared to the ones that will be critical in the future. Organizations can use this gap analysis to understand how far they are from their desired workforce to be future-ready, and to then identify where interventions need to be made to close this gap. Furthermore, organizations can use the scoring of the value chain to benchmark themselves to peers in terms of industry, size, and maturity phase. This, in turn, can be used to learn from the most successful companies and to deliberately choose to be a unique organization.
3. Role Value: what are the intrinsic characteristics of a role as well as the market circumstances around a role. Although technically not directly related to criticality, the competencies required for some roles are simply harder to develop than others. At the same time, some roles are scarcer in the market at any given time. Hence, Role Value offers a nuance to the criticality by adding in the current marketplace circumstances and the supply and demand of people capable of carrying out a role successfully. Using the Role Value outcomes, in combination with Strategic Value and Business Value, organizations can make informed decisions on where to focus their hiring, development, reward, engagement, retention, and succession efforts. A role might be critical, but perhaps it is easily developed internally or acquired externally. Alternatively, a role might be very scarce and hard to develop, but that does not necessarily mean it is critical to the organization. Using Role Value, organizations can make decisions based on the real-world circumstances and characteristics of a role.
Using the Critical Role Index to prepare for the future
By applying the Critical Role Index both within and across business units, and comparing outcomes with the overall enterprise, organizations can pool resources in areas that require the same roles and capabilities to meet their strategic challenges. This allows companies to be more efficient, enable more cross-functional collaboration, and give leaders the insights needed into where efforts for the future should be directed—for people, talent, roles, and organizational capabilities. These insights can then be translated from an organizational level to a team and even an individual level.
Rather than going round and round about what criticality means to the organization and how scarcity plays into it, the Critical Role Index offers a proven, consistent language and approach to identifying and leveraging critical roles. This both saves time and delivers the quality that organizations need to thrive in an increasingly rapid and transforming world.
For more information, learn more about Korn Ferry’s People Strategy capabilities.