Strategic Job Families By Robert S. Kaplan and David P. Norton

Without the guidance of a strategy map, most human resources development programs attempt to
meet the needs of 100% of a company’s employees — thereby underinvesting in the jobs that really
make a difference. How can companies pinpoint the strategically significant jobs and ensure they make
the most of their strategic job families?

All jobs in an organization matter — otherwise, companies wouldn’t hire and pay people to perform them. Many jobs,
however, fulfill only the organization’s basic requirements and capabilities, not the ones that differentiate the company in its marketplace. Truck drivers, computer operators, custodians, receptionists, and call center operators are certainly necessary to their organizations, and their contributions affect organizational performance.

But while organizations see the importance of developing every employee’s potential — and acknowledge that every employee’s contribution can indeed improve organizational performance — some jobs have a much greater impact on the organization’s strategy than others.  It’s the role of  strategic management to identify and focus on those critical few jobs that have the greatest impact on the strategy.  This process, and its output, is what we call Human Capital Readiness.1

To measure Human Capital Readiness, the organization must first identify the critical internal processes in the organization’s strategy map. Within the human capital requirements in the learning and growth perspective, the organization identifies the set of competencies required to perform each critical internal process.

Strategic job families are the categories of jobs in which these competencies can have the biggest impact on enhancing the organization’s critical internal processes. (See Figure 1.)

Next, the organization crafts competency profiles, detailed descriptions of the requirements of these strategic jobs. An assessment gauges the current capabilities of the organization in each of the job families based on these competency profiles. The difference between the requirements and the current capabilities represents a “competency gap,” expressed in terms of the organization’s state of Human Capital Readiness. To close the gap, the organization launches Human Capital
Development Programs.

Step 1: Identify Strategic Job Families
To understand the importance of strategic job families, consider the example of Williams-Sonoma, the kitchenware retailer. John Bronson, vice president of human resources, estimates that a mere five job families determine 80% of his strategic priorities.  The Balanced Scorecard Collaborative’s human resources research, conducted through its Human Capital Working Group, corroborates Bronson’s observation.

Figure 2 shows the strategic job families for Chemico, a hypothetical manufacturer of leading-edge specialty chemicals.  Chemico delivers a customer solutions strategy by having its engineers cultivate personal and technical relationships with the engineers employed by its key customers. Chemico’s engineers generate innovative solutions to customers’ problems by tightly linking engineering and new product development.
Chemico’s Innovation theme consists of two strategic processes: Partnering (joint ventures), to improve the diversity and speed of new product development; and Applied Research, to ensure a steady flow of proprietary new products.

Chemico’s executives identified a strategic job family for each strategic innovation process:
• Partnering in Product Development:  Joint venture program managers — individuals who effectively manage the complexities of multicompany joint ventures.4
• Applied Research: Senior scientists — individuals with a mastery of narrow technical domains who develop new product applications.

Chemico’s Customer Management theme consists of two strategic processes, each with an associated strategic job family.
• Customer Partnering (Create Value-Added Partnerships):  Solutions engineers — engineers who work as consultants, applying Chemico’s products to solve customer needs.
• Order Fulfillment: Call center representatives — specialists who work in partnership with Solutions Engineers to ensure the quality and timeliness of product deliveries.

The Operations Management theme consists of two strategic processes, with a total of three strategic job families.
• Supply Chain Design: Supply chain Management (SCM) design specialists — individuals capable of leading a major reengineering of the supply chain process.
• Supply Chain Planning: Expediters — individuals who work the interface between customer requirements and internal supply chain processes to ensure results.
• Raw Materials Acquisition: Raw materials traders — specialists who operate in a newly established energy trading office to achieve significant cost reductions by working continually in the spot market to secure necessary raw materials.

The Social Responsibility theme has one strategic process and an associated job family.
• Environmental Performance Program: Environmental engineers — a set of specialists who have mastered clean air and clean water requirements, and the procedures required to satisfy these requirements.

Based on Chemico’s strategy map, the executive team identified eight strategic job families that together employ 100, or 7%, of the company’s total workforce of 1,500. Thus, the success of the organization’s strategy would be determined by how well the company developed competencies in less than 10% of its workforce. This is the essence of strategic focus.

Step 2: Define the Competency Profile
After identifying the job families that determine strategic success, the company must next detail the requirements of these jobs, a task often referred to as job profiling or competency profiling. A competency profile describes the knowledge,  skills, and values an employee needs to be successful in a given position. Human resources departments have a variety of
methodologies for creating such profiles, for example, interviewing an individual who best understands the job requirements.

The competency profile provides the reference point that the HR department can use when recruiting, hiring, training, and developing people for that position.

A competency profile  typically has three components:
• Knowledge — the general background knowledge required to perform the job. This would encompass jobspecific
knowledge (e.g., subject matter expertise), as well as surrounding knowledge (e.g., knowing the customer) that enables an
employee to tailor his or her general knowledge to the job context and working environment.
• Skills — the skills required to supplement the general knowledge base, such as negotiating skills, consulting skills, or  project management skills.
• Values — the set of characteristics or behaviors that produce outstanding performance in a given job. Some jobs, for  instance, require teamwork, while others are built around a customer focus. Matching values to the job is essential.

Figure 2 shows a simplified competency profile for seven of Chemico’s strategic job families. For example, solutions engineers function as consultants in their direct work with customers. They apply their know-how of Chemico’s products to solve customers’ problems. The general knowledge requirements for their job include a sound understanding of a customer’s industry and business model, and a corresponding understanding of Chemico’s products and how they could best serve the customer. The solutions engineer position requires consulting skills such as problem solving, project  management, and change management, as well as relationship management skills. The solutions engineer’s dominant value is to create trusting, enduring customer partnerships.

Step 3: Assess Human Capital (Strategic) Readiness
Next, organizations must assess the current capabilities and competencies of the employees in strategic job families.
Assessors can draw from a broad range of approaches to evaluate each individual’s performance and potential.
For example, an employee might perform a self-assessment against the job requirements, which he or she could
then discuss with a mentor or career manager. Alternatively, an assessor could solicit 360˚ feedback from several
individuals on various aspects of the employee’s performance. Again, the feedback would serve as the basis for a career-development dialogue.

Both types of assessment give individuals a clear understanding of their objectives, substantive feedback on their current
competencies and performance, and a game plan for future professional development. Because of its importance,
assessing human capital readiness — the strategic readiness of employees in strategic job families — should be treated differently from the routine performance management used elsewhere in the organization.

For many organizations, articulating their strategy through the structured discipline of a strategy map is a new experience. The organization’s strategy, focusing on major areas of internal change and development, often reveals an
absence of several essential strategic job families. At Chemico, for example, four of the eight strategic job families were
actually new to the organization. The joint venture managers and environmental engineers had been introduced only in the past year, and the company had just begun to hire individuals for the supply chain and raw materials acquisition  processes.

Chemico’s HR executive appointed a manager to lead an initiative to fill positions for these two strategic job families. The manager created job profiles based on the competencies the new processes required. The manager, along with the HR executive, assessed the current staff’s readiness to fill these newly defined roles.

As illustrated in the lower portion of Figure 2, strategic  readiness in these jobs (senior scientists, solutions engineers, and call center representatives) was between 50% and 75%. (The three key numbers shown — number of individuals required, and the number and percentage currently  qualified — are the heart of the Human Capital Readiness Report.)

The manager launched a human capital  development program to close the gap. She linked this program to the performance management program, making the new competency profiles part of the personal objectives and development plans of the scientists, solution engineers, and call center representatives.

Step 4: Institute a Human Capital Development Program
The strategy map provides focus to an organization’s human resources programs — the recruiting, training, and career planning — that develop its human capital. Without the guidance of a strategy map, most HR development programs attempt to meet the needs of 100% of the workforce, and therefore underinvest in the jobs that really make a difference. By focusing human capital investments and development programs on the relatively small number of employees
(often less than 10%) in “strategic” jobs, organizations can achieve breakthrough performance faster and less expensively.

The Strategic Job Family Model allows the organization to do just this. (See Figure 3.) Focusing HR programs on the  critical few jobs that are pivotal to the organization’s strategy helps accelerate action and enhances efficiency in spending. But this approach implies that 95% of a company’s employees are “nonstrategic” and that the company could ignore their
legitimate development needs. A second development approach, the Strategic Values Model, begins with the premise
that strategy is everyone’s job — that strategy involves a set of values and priorities that should be incorporated into
every employee’s objectives and actions.

Clearly, both of these models are legitimate. Both fit our definition of focus and have been used successfully in practice. And both, we believe, are necessary for success. In our experience, they cannot be run as one integrated program. The programs to develop the competencies of individuals in strategic job families should be segregated and funded separately, just as capital investments are funded and managed separately from annual operational spending programs. The progress a company makes in closing the competency gaps in its strategic job families is the basis for reporting on strategic human capital readiness.

Road Map to Strategic Readiness
Human capital must be aligned to strategy if the organization is to gain value from its employee competencies.
The strategy map identifies the few internal processes that are critical to the strategy. These critical processes
determine the focused set of strategic job families that provide organization its strategic differentiation. By developing competency profiles for the strategic job families, HR executives can then apply standard assessment
approaches to measure human capital readiness and strategic competency gaps. The gaps, in turn, set the agenda
for human capital development programs that will increase the organization’s strategic human capital readiness.