Management Resource Planning
Management Resource Planning (MRP) is one of the most important general management functions of the management team—managing the talent pool to ensure the sustainability of the organization in the long run. One of the guiding principles behind management resource planning is that an organization’s talent is a resource that must be continuously monitored, assessed and aligned (if necessary) as the organization evolves. To do so requires agreement at the executive leadership level of the organization, a process and toolset designed specifically for this purpose, and support from HR.
The central purpose of MRP is to answer two questions: 1) As the organization evolves along its strategic path, will the current structure continue to align with strategy? And; 2) Are there missing roles or gaps in talent in areas that will affect the organization’s ability to execute on its strategic intentions in the year ahead?
An MRP should provide a consistent process and a set of tools that can be used company-wide to enable managerial leaders in the organization to make plans that will address the answers to these questions in a consistent way.
The management resource planning process and toolset set we use is intended to guide our client organizations in the systematic assessment and development of human capital and capability. As such, the MRP is part of the overall business and strategic planning process. A well calibrated understanding by leaders of the organization’s human capital and their capabilities is foundational to the ability to deliver on strategy.
Since most organizations evolve over time, strategic goals and growth plans set new challenges year after year. To achieve evolving strategic goals, organizations must identify and develop people who will lead the company and contribute to that growth, as well as identify missing roles or gaps in the talent pool that will affect the corporation’s ability to execute the strategy. This work is a core accountability of managerial leaders and requires thoughtful evaluation of the strengths and development needs of both current and potential leaders.
An effective organization capability review examines five integral dimensions of the organization:
- organization design;
- talent acquisition;
- performance management;
- talent management, and;
- leadership development
Looking at an organization in these five dimensions provides a wholistic view of the enterprise—omit one (or more) and your organization’s ability to compete could suffer. A well-designed and executed MRP coupled with a steadfast commitment to evaluating individual and organization capability will enable your organization to better assess its capability and gaps and to proactively grow and deliver on strategy.
The Outcomes of Management Resource Planning
The outcome of the MRP process and its attendant toolset is a documented plan to ensure that the right staff capability is in place to meet the organization’s present and future business needs.
The plan is based on a review of existing and planned business initiatives and the impact they will have on processes, roles, and structure, as well as an assessment and review of human resources’ current capability to meet the present business initiatives. This includes:
• assessment of key individuals regarding results, behaviours, and potential.
• assessment and review of the depth of the talent pool in place to meet future business plans.
• Identification of high performers and promotable talent.
The plan should also address the design of development and movement plans (training, coaching, development assignments, transfers) and staffing plans for key people in order to fill any gaps between present and future business requirements.
Finally, the plan should document organization-wide issues and improvement action plans.
An integrated MRP serves a number of purposes. It will ensure that the organization creates its own future—one in which the organization best utilizes its resources, capabilities, and market opportunities. It also ensures that the executive leaders of the organization take responsibility for the future of the organization, and the future of the people within it.
In addition, an MRP will continuously align structure with strategy and ensure the required skills are made available as context changes over time, and that the skills are used to the best possible advantage for the organization and the individual. It will also allow time to acquire or grow the talent pool that will assume leadership and managerial roles over time.
Finally, it may also shed light on underlying factors, resources, and circumstances (i.e. root cause) contributing to successful actions in the past, as well as the reasons for poor performance or failure, with a focus on continuous improvement.
In order to be most effective, MRP should be run in parallel with and/or as part of the organization’s strategic planning and goal-setting processes. The outputs of the strategic planning process (which set out where the organization will complete, how it will succeed, and how it will get there) provide critical inputs to the MRP (what is the best structure to deliver on this strategy? Are all parts of the organization aligned? Are there important talent gaps that would keep the organization from achieving its goals?).
Ideally, HR is the steward of the MRP system. The functional accountability that rests with the VP of HR is to ensure that the MRP systems and toolset are developed, deployed, and available to the organization’s managerial leaders. This requires collaboration with the BU leaders as well as with the CEO.
Note that it is not HR’s role to “police” the process but rather, to support and enable leaders in fulfilling their accountabilities with respect to MRP. This support and enablement is delivered through the appropriate HR business partners.
Over the years, we have helped numerous clients integrate MRP with their strategic planning process. In the course of doing so, we have created a sharply focused and well-tested set of tools to facilitate the process.
Our guide to MRP
Our guide to implementing and managing a full MRP includes these tools, which are designed to assist in creating an actionable set of documents. The guide includes a set of templates aligned with good organizational design principles, requisite managerial leadership practices, and leading practices in talent management.
This comprehensive “How to” document includes:
1. A detailed review of the Three-Tier Management System
2. A summary of the Elements of the Organizational Review, together with questions designed to engage participants and ensure positive outcomes
3. A guide to Cross-Boundary Relationships and an Assessment Summary template to document any cross-boundary issues and capture remediation plans
4. A Performance Summary template to document individual performance consistently for discussion between Managers and the Manager-once-Removed.
5. A Performance vs. Potential template with instructions to guide discussions about the organization’s talent mix and requirements
6. A Succession Planning template with instructions to facilitate capturing and documenting information about succession plans and readiness for candidates for a role
7. A guide to Capability and Talent Selection to assist with the placement of individuals in roles at the appropriate level
8. An Action Planning template designed to capture specific initiatives being undertaken to remediate any issues identified as part of the MRP process
Implementing management resource planning for your organization does not need to be an excessively complex or time-consuming activity. Properly integrated into the strategic planning process, it can simply be another step in the process, designed to keep talent and structure continuously aligned with strategy.
If you’re interested in having a look at our toolset and discussing what MRP might do for your organization, leave us your information below.
This blog is part of our ongoing series Organizations that Work. To see all of the blogs in the series that have been posted so far, click here.
Every Tuesday over the next few months, we will be posting blogs that take you from the pain of poor organization design, to identifying the root causes, to the benefits of undertaking strategic organization review. We will discuss the steps needed to effectively align your structure and work with your strategy, and we’ll discuss the processes that take out the guess work and help you to get it done. Through it all we will discuss how to lead the change from start to finish.
If you’d like to speak with us about how we can help you on your journey to an organization that works, please follow us on LinkedIn or book a call directly with one of our partners.
This blog was written by Ed McMahon. Ed is the managing partner with Core International, and specializes in creating organization designs structured to deliver strategy and improve performance.
This article draws on the work of Barends, E., Rousseau, D., Cioca, I. and Wrietak, E. (2023) High-performing teams: An evidence review. Scientific Summary. London: Chartered Institute of Personnel and Development.
Our approach draws on several bodies of work including Stratified Systems Theory, the work of Dr. Elliott Jaques. For more on Dr. Jaques and his work visit the Requisite Organization International Institute at ROII Requisite – ROII Requisite.