Management is concerned about the quality of resources because it has a real impact on performance – better sales people win better customers, faster, better products drive stronger customer growth and sales, better equipment causes fewer faults, and so on.
Read on as we further build on the simple example of skills amongst call-center staff from Briefing 26…
Since the skills in this case concern customer support, the quality of that support is vulnerable to any shortfall in either the number of staff or their skills. If there are too few staff, calls are not answered, and if skill levels are too low some of the calls that are answered may not be responded to adequately. Either outcome will disappoint customers and a fraction of those who are disappointed will be lost. In the following example, customer numbers are rising, and the call-center is struggling to add enough staff to cope with the extra demand.This first figure shows two scenarios for what could happen to staff numbers and skill levels. In both cases, hiring is enough to both replace staff who leave and to increase total numbers as fast as needed. In the first case (dashed lines) training of 7.5 days per month would be enough to sustain skill levels for the initial 80 staff, but is not enough to provide the additional skills needed by the fast arrival of unskilled recruits. Average skills therefore fall (right-most chart). To sustain average skill levels (solid lines) training inputs must actually rise at a faster rate than staff numbers, because of the disproportionate impact of the many new recruits.
What difference does this make to service performance? Well, in this next figure, the business starts with a stock of 200 000 customers, who on average make one call per month to the call center. The 80 staff are enough to answer all incoming calls, and their skill level is high enough to ensure that virtually no customer calls are badly handled. About 5000 new customers are being won each month, which increases the rate of calls received. The call center hires an additional two staff per month, which raises capacity in line with growth of customers and call volume – so there continues to be enough staff to pick up the phone for every caller.
In the first case (dashed lines) even the small number of additional new staff progressively dilutes the center’s skill level. Although all calls continue to be answered, an increasing proportion of customers’ enquiries are not dealt with properly. Even assuming that only a fraction of disappointed customers leave each month (20 % in this illustration) the loss rate rises until, by month 24, the business is losing as many customers as it wins. This is in spite of the fact that it has plenty of capacity to actually answer calls: 320,000/month versus a call rate of 270,000. If this example is carried forward beyond month 24, the loss rate continues to escalate, leading to a real decline in customers.
In the second case (solid lines, and bold text figures for the month 24 situation), the center manager raises the training time at a rate sufficient to ensure that the additional new staff are also trained. Average skill levels are maintained, customer enquiries are handled well, and virtually no customers are lost – at least not because of poor service by the call center!
Until next time…
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Skills and Competencies
This numerical approach to estimating how skills develop may seem rather mechanistic for an issue that is somewhat intangible and hard to define. However, specifying skill requirements and auditing organizations’ skills or competencies is now a common practice, and many consultancy organizations offer support for such assessments.Furthermore, such audits are not limited to the routine task skills of operating-level staff, but are also applied to middle and senior management roles. A typical management competency matrix would list the competencies required – for example, commercial understanding, leadership, communications, delivering performance – and individuals’ competency on each measure would be assessed according to specified levels on each measure. 
Summed across a whole population of staff at different levels, this assessment can indicate the overall health of the management group and highlight opportunities for their development.
It is important not to take this approach too far, of course. There is more to management capability than a list of criteria, and it can be important to leverage the widely differing strengths of individuals, rather than insist everyone fills in weaknesses. Nevertheless, such information can be valuable if used well.
This briefing summarises material from chapter 5 of Strategic Management Dynamics, pages 254-256.
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