We’ve all heard the rhetoric that good people make good companies, and most organizations follow this philosophy, spending a lot of time and energy to make sure they recruit and retain top talent. But it’s not enough to just populate the workplace with outstanding employees—companies must also utilize them effectively through good organizational design. One increasingly popular way to do so is by creating strategic job families.

Strategic job families are a new way to address workforce management. With this approach, leaders focus on the strategy and direction of the organization, and then they define which positions have the most direct (and therefore the greatest) impact on executing the strategy. These strategic positions are key to differentiating the organization and help create a sustainable competitive advantage.

Because organizational success depends largely on how well employees in strategic positions execute, expectations for those employees are high. Managers must not settle for anything less than top performance. They must address problems quickly and be ready to release employees who don’t rise to the challenge. On the other hand, companies must be committed to rewarding success. They should consider compensating those in strategic positions at a rate above the market midpoint, funneling more performance-based rewards (such as higher bonus percentages) to them, and providing them with a disproportionate amount of training and development.

Developing strategic job families is not without challenges. Those who work in positions not deemed strategic may feel slighted. It’s essential to help these employees understand that even though their positions haven’t been designated as strategic, it doesn’t mean that they’re not important or don’t contribute to the strategy (if they weren’t important, after all, they wouldn’t exist). These employees must also understand that strategic positions don’t have anything to do with how hard an employee works or where the position falls in the organizational hierarchy—in fact, depending on the organization and its goals, an entry-level position could fall into the strategic category (for example, a cashier who works for a company with a strategy of improving customer satisfaction).

Strategic job families also require a great amount of flexibility from managers and employees. Organizational strategy is fluid—as the environment changes, companies must adjust goals and approaches—and therefore strategic positions will change. A person’s job may be deemed strategic one year and not so the next. If expectations and rewards are indeed influenced by strategic designation, this will likely have an impact on performance management and compensation. Managers should communicate with employees up front (and on a regular basis) so the employees understand and are prepared for expectations and rewards that potentially fluctuate.

Determining which positions are strategic requires careful consideration. One way to do this is to analyze organizational strategy, develop a list of selection criteria, and then rank and score each position based on the criteria. A rule of thumb is that no more than 20 percent of positions should be designated strategic. FlashPoint recently helped a client develop strategic job families; as part of our work we facilitated a rigorous selection process using a scorecard we built. To learn more about our methods and lessons learned, contact us.

Meanwhile, if you’re interested in reading more about strategic job families and how your organization can benefit from them, we recommend the following articles:

• Groysberg, Boris, Ashish Nanda, and Nitin Nohria. “The Risky Business of Hiring Stars.” Harvard Business Review 82, no. 5 (May 2004).
• Huselid, Mark A., Richard W. Beatty, and Brian E. Becker.
  “‘A Players’ or ‘A Positions’? The Strategic Logic of Workforce Management.” Harvard Business Review 83, no. 12 (December 2005).
• Kaplan, Robert S., and David P. Norton. “Strategic Job Families.” Balanced Scorecard Report 5, no. 6 (November–December 2003).
• Simons, Robert. “Designing High-Performance Jobs.” Harvard Business Review 83, nos. 7/8 (July–August 2005).