ADVANCED EFFORT  MANAGEMENT 

Advanced Effort Management (AEM) analysis gives organisations all the actionable insights they needs to optimise all their workforces. 

It does this by leveraging the Effort Management Theorem (EMT) to provide: 

A – Performance Forecasts

B – Report and analyse at all levels

C – Recommends Interventions.

Identification of workforce waste, shortfall, excess and stretch  – drive powerful insights and interventions that will optimise your workforce.

A key principle of AEM is its ability forecast both Potential and Intent for each Forecast Outcome of ABILITY, EFFICIENCY, INTENSITY.  Potential is what could happen. Intent is what is planned.  Potential and Intent are often not the same.  When different, they highlight the inevitable misalignment between Workforce Planning and Workforce Allocation processes.

 

A – Forecast Performance

There are three ways to forecast performance.  EMT provides Forecasts Outcomes (A1), as previously described.   AEM goes on to predict Opportunities (A2) and Cost Impacts(A3).

A2 Opportunities

AEM expands EMT forecasts by predicting inefficiencies and five associated Opportunities to optimise your workforce.  These Opportunities are Shortfall and Excess,  Under- Allocation and Over-Allocation, and Stretch.  These opportunities can be predicted for each of the three Forecast Outcomes.

When a Potential Outcome is less than 1, then the Outcomes will fall short of what is needed.  For example, if we have 100 people and need only 75, then Efficiency Potential will be 0.75, and so SHORTFALL will be 0.25.  This Shortfall could be fixed by getting more work, or reducing the number of people.

When a Potential Outcome is greater than 1, then the Outcomes will exceed of what is needed.  For example, if we have 100 people and need 120, then Efficiency Potential will be 1.20, and so EXCESS will be 0.20, then Shortfall will be 0.20.  This Excess could be fixed by getting more people, or reducing the amount if work.

The difference between Potential and Intent is a workforce inefficiency caused by poor workforce allocation practises.  UNDER-ALLOCATION occurs when organisations do not allocate all their people to work (usually because they are unaware of people’s availability). This is common when there is poor visibility across teams or business units.

Equally, OVER-ALLOCATION occurs when multiple tasks are assigned to people and the total amount of intended Allocation exceed Capacity (usually when there’s no consideration of when the work will take place and what the total required effort in a given period.)  As a

Both Over-Allocation and Under-Allocation are avoidable types of workforce Waste.  For example, if Ability Potential is 0.9 and Ability Intent is 0.6, then 0.3 of what should be delivered cannot and so is wasted because it is avoidable Under-Allocation.   Alternatively, if Ability Intent is 1.1, then there is a 0.2 over-estimation of what can be delivered due to Over-Allocation.

 

Forecast Workforce Opportunities

FIGURE 1: Forecast Workforce Opportunities  

People often increase their Intensity to complete their workload.  People STRETCH their contribution in hours worked and the pace they work.  This STRETCH increases Forecast Outcomes and reduce Shortfall.   For example, people that are required to work 40 hours a week might be prepared to work 8 hours over time, which is 20% more. Furthermore, they might reduce this 8 hours of over-time work at a faster pace.

Organisations thrive when their people STRETCH their contribution. This may/or may not be compensated.

A3 Cost Impact

AEM exposes the COST IMPACT of unrealised opportunities.  It can do this because for each opportunity there are interventions that either increase revenue or reduce cost. Ultimately there is an increase in operating margin and profit. (or value for money if a ‘not for profit’ .

Every day that these Opportunities are not realised, cost impacts cannot be recovered. Organisations with inefficiency costs that are larger than their operating margin, could double their margin – if they fully realise their Opportunities).

Forecast Workforce Opportunities

FIGURE 2: Cost Impact of Unrealised Opportunities

Organisations can now justify and prioritise  workforce decisions based on Cost Impact

B – Report + Analyse Every Level

AEM communicates workforce Outcomes and Opportunities in three ways.  Lowest Level (B4), Comparisons (B5) and Aggregation (B6).

B4  – Lowest Level

All Effort Management analyse and reports start at the smallest workforce Pool level. For example it might forecast each Role, in each office.  For each Forecast Outcome, a period by period bar chart presents Outcome Potential and Intent, and every combination of Opportunities. This would include the impact Stretch would have on the workforce.  In a pool, either Shortfall or Excess can exist at the same time.  Similarly, in pool only Under or Over Allocation can be present, not both.

Forecast Outcomes + Opportunities. Waste, Shortfall, Excess, Under Over Allocation, Waste, Stretch
FIGURE 3: Forecast Outcomes and Opportunities for Pool (e.g. A Role in an Office)

B4  – Comparisons

AEM allows us to compare workforce Pools at a glance.  It allows us to see their differences, and know which are weaker and which are stronger.  For each Forecast Outcome, a single chart will immediate convey Potential, Intent and every Opportunity for each workforce pool.   These chart might for example show Roles that have a Shortfall and others that have Excess.  At the same time it will show those that have that have an Under-Allocation and those with Over-Allocation.  For example,  there are people with Role X, In San Francisco, Los Angeles and New York.  When plotted we can instantly see which offices have shortfall, which have excess and which are under-allocated.   Ways to mitigate appear intuitively.

Compare workforces by Roles, Team, or Units to visualise the weak and strong
FIGURE 4: Comparing Workforces (e.g. Role X across offices)

B5 – Aggregated Insights

AEM aggregates forecast Outcomes and Opportunities of workforce Pools (e.g. Roles) up into teams, business units and for the whole organisation.  This is because every layer of management is accountable for their workforce. This is why they need to be able to balance their workforce with actionable insights.

Aggregate Outcomes and Opportunities into Teams, Units, the entire organisation

FIGURE 5: Aggregate Outcomes and Opportunities into Teams, Units, the entire organisation

Unlike workforce Pools,  aggregated workforces are likely to a mix of Shortfall and Excess, and a mix of Under-Allocation and Over-Allocation.

The way organisations manage their workforces varies greatly and this effects aggregated forecasts.  Without interventions, each workforce Pool starts off as being ‘insoluble’ with others. For example, Roles with very different capabilities and skills cannot share work or people, so their aggregated forecasts will predict certain results.  Alternatively, people in one Role could be retrained and transitioned into an existing Role and so forecasts will predict different results (that are hopefully better due to the optimisation).   This means that numerical aggregation of Opportunities and Outcomes must incorporate the organisation’s structure and workforce constraints.

Aggregation is not simple weighted averaging!

There are several factors that have prevented conventional forecasts from simply being added, or perhaps averaged, or even weighted averaged, because these would be incorrect.  For example – the aggregated Efficiency (utilisation) of  Role A and Role B with 0.8 and 1.6 respective Efficiency each – cannot be 1.2.   What is the aggregated Efficiency? The answer lies in the way the organisation perceives its workforce, the interventions it is prepared to undertake and the way AEM treats these considerations.

Only AEM has the framework to provide meaningful forecasts that represent an organisation’s nuances.

Aggregate Outcomes + Opportunities.  See the mix of Shortfall  + Excess,  Under + Over Allocation.

FIGURE 6:  Aggregated Outcomes and Opportunities for the whole organisation

An executive board can now see a forecast of its workforces Outcomes, Opportunities and Cost Impacts – summarised for the entire workforce – on a single chart.  Now, for the first time, executives understand their workforces better than they understand their finances.  

C7 Recommend Interventions

AEM can recommend 9 different interventions that will optimise your workforce.  For example, it can recommend the number of people, or amount of work, to transfer between offices or departments.  AEM will also recommend the interventions in a preferred sequence.  This allows more preferable Interventions to be prioritised and residual Opportunities to be mitigated with less preferable Opportunities.  For example,  an organisation might prefer to transfer people or work before recruit,  or even downsizing.

Here are 9 ways to optimise your workforce, that AEM can recommend.

1. Split work between people
2. Stretch effort with reasonable overtime.
5. Transfer – surplus to deficit of people or work
4. Horizontal Agility – use other capabilities
5. Vertical Agility – Junior roles done by senior people

6. Transition – reskill people into new roles
7. Onboard – recruit or contingent labour
8. Increase or reduce work
9. Downsize – reduce people numbers, only if necessary

Get 7 different recommended interventions that
FIGURE 7: Recommended Interventions  e.g TRANSFER

How To Harness Effort Management

RESRODEL is the ‘resource role model’  that leverages the power

of the Effort Management Theorem (EMT)  + Advanced Effort Management (AEM) analysis

Resro.OPT analysis  uses AEM

for optimising 

all your workforces

Learn more about Resro.OPT

Resro.ACT software  uses EMT

for balancing people + work

in activity based enterprises

Learn more about Resro.ACT