Operational capacity is the “Goldilocks” of business. Too little operational capacity will cost you opportunity. Too much is a waste. And just the right amount of operational capacity is the ideal to strive for.
Getting this balance “just right” may not be the stuff of fairy tales, but the target is difficult to hit and is constantly moving. To solve this problem, many companies are looking for flexible operational capacity to conduct business efficiently while still offering opportunity for competitive advantage if conditions should change.
Whatever your business, the capability of your workers is key to operational flexibility, and a talent development program that works hand-in-hand with the strategic goals of your organization is the way to increase that capability.
Training employees has long been seen as an important aspect of running a successful business, but it is often viewed as a necessary expense rather than a strategic advantage. That being said, the ability to effectively train employees can provide benefits that help a business increase its operational flexibility and adapt to changing market conditions. We can all acknowledge that people are not employed to be trained — they are employed to do their job. But when organizations dedicate a small yet purposeful portion of employee time toward targeted learning and development, it pays dividends to both the organization and the employees. In order to dive deeper into how those dividends are achieved, let’s take a look at where companies choose to invest in training.
According to the 2022 State of the Industry Report put out by the Association for Talent Development, 29.2 percent of all corporate L&D is directed exclusively toward executive and manager roles. This is a significant percentage of overall training effort, and much of this training is not compulsory for regulatory or legal reasons. This leader-centered training is valuable enough that companies do it voluntarily.
Why is there such a strong focus on training this particular group of employees? One of the most cited reasons for investing in leadership training is that well-developed leaders can have an impact on an entire team of people. As a result, every dollar invested in making better leaders yields a benefit that is shared by many more people than those who actually participated in the training. The logic of this approach makes sense on the surface, and the track record reinforces the benefits. Leaders act as multipliers for the learning they have experienced. This happens in many ways that we do not need to delve into in order to understand that leaders are “levers” for the training function of their company.
The focus on leaders is a proven approach, yet many organizations are missing an opportunity for even higher multipliers of effort by not looking closer at the training function itself. Like leaders, training resources are a lever to increase organizational capability. If flexibility is more important than ever, then the trainers within a company are a tool that can impact more than an entire team, they can impact the entire organization.
The ability to train/retrain business resources has become a critical operational asset. With the cost of acquiring labor consistently on the rise, it is increasingly attractive to retrain an existing workforce of invested employees who already understand much of the unspoken operational and cultural workings of an organization. Developing these known commodities may now be a more practical path to meeting rapidly changing business needs than external recruiting (which still requires a certain amount of training to get the new hires acclimated).
There are three primary benefits that training capacity can bring to operational capacity, and there are three requirements that must be present if this training capacity can be expected to contribute effectively. But first, let’s define what we mean by training capacity. In this case, capacity needs to contain both volume and capability.
| Training Capacity | Support for VOLUME | CAPABILITY to create and deliver | ||
| Key Attributes | There needs to be enough throughput in the learning function to be able to rapidly provide information and instruction to the people who need it, at the moment they need it. | There needs to be a knowledge base capable of identifying core competencies, gaps in knowledge or behavior, root causes for these gaps and discernment in the application of methods to address the gaps. | ||
Training volume and training capability each require their own specific investment and attention,
but this capacity is necessary to provide needed flexibility to the business.
3 ways training capacity can impact operational capacity
An organization’s training capacity is the primary mechanism for developing a skilled and knowledgeable workforce. Training capacity has three primary ways to impact operational capacity: increased flexibility, increased certainty, and lower cost.
Increased flexibility
If a business has a trained and flexible workforce, it can more easily adapt to changes in demand or shifts in the market. New skills bring new capabilities, and new capabilities for employees bring increased flexibility to the organization. The ability to train employees so they can move from one area of the business to another area (that meets a greater need) can provide a rapid reactionary capability that brings additional operational flexibility. Providing L&D opportunities that are built around competencies established to meet the needs of new business opportunities can ensure that employees are equipped with the skills they need to meet new challenges. This can be especially important for businesses that operate in unpredictable environments, as it allows them to respond to changes more quickly than competing firms.
Employees who have a regular habit of making time to learn become more comfortable adopting new concepts. Their minds are being exercised in the same way a muscle gets exercised at the gym. In short, they have a habit of picking up new skills, and with that habit comes an increased proficiency in picking up those skills.
Since human beings naturally get more interested in the things that they are good at doing, the investment in consistently training employees produces employees who are more likely to have a greater interest in continued development. This exposure to regular training activities does more than open employees to reskilling, it makes them more open to new ways of doing many types of things.
An employee who regularly exposes themselves to new concepts is more comfortable with a “beginner’s mindset” and, therefore, more comfortable growing into greater competency through practice and immersion. This is precisely the mindset necessary to generate a willingness to take on greater roles in an organization.
Increased certainty
Flexibility of ability is a valuable asset. However, when that flexibility is tied to an employee who has already proven themselves to the organization, it removes some risk from the talent acquisition process. Any factor that removes risk will increase predictability and efficiency as a result. If upskilling a known employee results in even a slightly higher degree of predictability than acquiring external talent, then the effort poured into upskilling is a safer use of finite resources.
Another factor to consider is the reciprocal investment that can often come from investing in employee development. The employee acknowledgment of organizational investment can lead to more than just a higher skilled resource, it can lead to higher reliability and productivity that comes from an engaged employee who understands their role in the organization.
Lower cost
According to the Society for Human Resource Management’s 2022 Benchmarking: Talent Access Report, the average cost per hire was $4,683. The cost per hire skyrockets to $28,329 for executive positions. However, another statistic from the Talent Access Report shows that the true total cost to hire a new employee can be more disruptive than just these hard costs. The report states that the average time to fill an open position is 41 days. During those 41 days, departmental leaders and managers are investing time in supporting the hiring process.
These decision-makers are compelled to participate in at least a portion of the hiring process since they are best equipped to determine if the candidates can positively contribute to their teams. This soft cost of lost productivity is a price of the hiring process even if these “non-HR roles” are not typically factored into the cost of filling positions.
Well-trained employees are also more likely to be motivated and engaged, which can lead to higher levels of retention and lower turnover rates. According to Gallup’s American Upskilling Study: Empowering Workers for the Jobs of Tomorrow, 61 percent of employees say that upskilling opportunities are an important reason to stay at their job.
Increased flexibility, increased certainty and lower costs empower the organization to act
An organization that proactively aligns integrated L&D efforts with future career opportunities creates the ability to respond quickly to changes while creating fully engaged employees who can see their own advancement tied to the success of the business. Training employees in this way can pay off with short-term operational flexibility as well as long-term stability and cost savings.
3 requirements to ensure contribution to operational capacity
If the learning function of a company hopes to contribute to the organization’s operational capacity, it will need three things:
- The talent development effort must be 100 percent aligned with organizational leadership.
- The learning team itself must be flexible — practically, genuinely and vigilantly flexible.
- The capabilities of that team need to constantly evolve in order to remain relevant.
These three things do not happen automatically. In fact, inertia will move the learning function in the opposite direction without conscious and capable focus. The daily pull of urgent, important, and even “required” learning work is a genuine obligation that requires a great deal of resources. It takes a highly effective learning team to meet the immediate learning needs of the organization while simultaneously implementing a broader learning strategy that is nimble enough and capable enough to meet changing operational needs. But this is exactly what it takes to provide learning opportunities that allow employees to move from one area of the business to another area of greater contribution.
100 percent aligned with leadership
It is imperative that any talent development effort be fully aligned with the goals of the organization that it serves. This alignment must include a level of understanding from operational, tactical, strategic, and missional perspectives. Not only do the key performance indicators of the organization need to be known, they need to be fully integrated into learning initiatives. The learning leadership needs in-depth knowledge of the organization’s strategic focus. Additionally, it needs to understand what the organization will be focusing on during the next quarter, the next year and even the next shift in the marketplace. This increases the likelihood that learning leaders will be informed enough to assist in the development of future KPIs. A fully integrated learning function is uniquely positioned to inform decision-makers of the workforce skills needed to meet those KPIs.
Vigilant flexibility
It is not enough for the learning team to merely adapt to changing business needs, L&D must lead the way in developing employees that can adapt quickly and effectively. In order to grow these attributes in others, the talent development effort itself needs to demonstrate flexibility in its own practice.
One way to make flexibility second nature is to embrace a relentless focus on the needs of customers. In the case of an internal talent development team, there are two distinct “customers” for the work: The company itself, and the learners who make up the company. These are two very different audiences who value the learning team for different reasons, but focusing on their distinct needs can be accomplished by gathering direct feedback, creating user personas for each group, and using the collected data to offer value while minimizing pain points. When a learning team is fully invested in the needs of those that they serve, the internal processes used to meet those needs are less “sacred” than the results they deliver. Flexibility comes more naturally when the cause is clear.
Evolving capabilities
Talent development helps to unlock new opportunities by providing employees with the resources to develop new skills. In the same way, the learning function must also be diligent to ensure that it evolves its own capabilities and contributions. This means proactively pursuing evolving trends in learning methodologies and technologies. It also means seeking feedback from stakeholders and continuing to innovate while experimenting with these new approaches. By doing so, the talent development effort can model the culture of continuous learning that is expected from the employees themselves.
It is vital to keep a foot in today’s work while also maintaining a foot in the methods of tomorrow. Learning teams can shift the emphasis from one foot to the other as needed, but the team cannot remove either foot without consequences. Stagnation can be difficult to recognize at a team level, but it is a very real threat. Teams have deadlines, and they often follow the quickest route to results. And why not? It is natural for teams to hold fast to a process that has paid dividends in the past. While this approach is efficient in the short term, it is the path to stagnation.
Almost without exception, the path to innovation is less efficient than the known path. But, even if innovation takes time to pay dividends, it pays off in a grand way. Investing effort in future developments is how things that are impossible today become possible tomorrow.
A powerful lever for action
Operational capacity is crucial for business, and companies need to find the balance between too little and too much of it. A skilled workforce with a desire for continuous learning is vital to operational flexibility, and a talent development program aligned with the organization’s strategic goals is an excellent way to increase that capability. The capacity of L&D is a lever that can impact an entire organization.
