Identify Critical Roles to Improve Performance

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Leaders like to show that they value employees. They proclaim that everyone on the team is critical to the organization’s success. As uplifting as that sentiment is, it simply isn’t true. Talent can be a source of competitive advantage only if great people are in the most critical roles. Having stars in jobs that aren’t critical is just a waste of talent.

It’s accepted wisdom in strategy execution that focused application of concentrated strength — identifying, developing, and leveraging critical capabilities — is required for success. Yet until these capabilities are translated into specific roles, with systems in place to ensure that high-quality employees occupy such positions, a strategy is just an intention. Unfortunately, too many organizations build strategy around the people they have at the time and current skill sets — when they should instead be devising the most promising strategy, developing a better understanding of the roles that will be most critical in executing it, and then staffing those roles with the best available talent. As we’ll demonstrate, applying data and analytics to that problem can help you determine exactly where your top talent needs to be placed.

There are two ways to figure out which roles have the most influence on key results: using data to deduce this from the bottom up and inferring it from the top down. Where the context is appropriate and the data available, taking the bottom-up approach can yield answers that may be surprising. In such cases, leaders must be prepared to let the insights guide their decisions.

Data Reveals the Difference Makers

Data can be used to help tease out both who your current stars are and what positions have the greatest influence on organizational outcomes. It can help identify hidden talent in situations where performance is a team effort and point out roles that may be much more important to success than leadership has realized.

Take soccer: There is much debate around which positions on the field are the most valuable. Forwards, including strikers, are the primary scorers — they capture the limelight as well as the largest salaries by producing goals. The top 50 highest-paid athletes worldwide include six soccer players — and they are all forwards — according to a 2023 Forbes report.

Since soccer is a low-scoring game, every goal matters — so preventing an opponent’s goal is an equally crucial contribution. Thus, some argue that defenders are the most valuable players. Central defenders play a critical role in coordinating the counteroffensive, as failure to stop the ball at key moments can create big opportunities for the opponent to score. It’s no surprise that central defenders have been team captains more often than other position players.

Data can be used to help tease out both who your current stars are and what positions are most influential to organizational outcomes.

Of course, goalkeepers are the last defenders on the line: Their judgment and skills in the face of extreme pressure can mean the difference between victory and defeat. Still others contend that midfielders drive the tempo of the game. Just as controlling the center of the board is critical to winning chess matches, midfielders can magnify the impact of everyone’s contributions by shutting down opponent passing lanes or by initiating drives through well-timed distributions from the defensive players to the offensive strikers. Finally, the grandmaster might be the coach, who makes decisions on rosters, positions, and general strategy.

To determine each role’s relative contribution, we collected and analyzed five years’ worth of data from the Bundesliga, Germany’s top soccer league, and evaluated the importance of individual positions on the soccer field between 2014 and 2019.

By analyzing the changes in outcomes as players moved among different roles and teams, we isolated contributions by position while observing how fortunes rose and fell following such switches. Building a model of how each position contributes to the outcome, we weighted the importance of positions by measuring how much the model’s win prediction deteriorated when we omitted each role from the model in turn.

Our analysis indicated that defenders and goalkeepers are the most critical for winning matches; they occupy the top three slots in two different models we developed. Four positions are always present among the top five: left fullback, right fullback, goalkeeper, and offensive left midfielder. Although defenders may not get as much fan adoration, the numbers indicate that they are the biggest difference makers for winning.

This kind of analysis works regardless of industry. Every organization or function is similarly likely to have its own underappreciated roles. While the sales team may land the account, it could be the service department that keeps that account renewing each year.

Talent scarcity matters, too. Comparing the left versus right positions for fullback, midfielder, and center defender, the roles on the left side contribute disproportionately more. Why? While left-footed soccer players are naturally advantaged for these roles, the number of world-class left-footed players is considerably smaller than right-footed players. In critical roles where exceptional talent is scarce, having performers in such roles is doubly important.

Organizational leadership and structure also matter. When included in the models, coaches are the third-most-important factor, behind only the fullback positions. Team organization, systems of play, and staffing govern how critical roles are deployed. In the Bundesliga, the 4-5-1 team formation — four defenders, five midfielders, and one striker — is the most successful configuration. It favors the strategy of prioritizing defense positions and is a good example of congruence between strategy and how organizations configure themselves around critical roles.

Use Data to Fill Critical Roles

A similar analytical approach can be applied to businesses by combining performance and HR data. For companies with multiunit structures (such as multiple stores, distribution centers, or service teams), the good news is that you don’t need a soccer league’s worth of data — you can do this yourself. Multiunit organizations with common roles offer the opportunity to capture data across the units and isolate difference-making roles.

First, gather the data that identifies your workers by location, role, and timing. Second, be sure to gain an understanding of contextual factors that influence outcomes but are unrelated to staffing (for example, stores may perform differently due to location, age, format, or season). This allows you to separate an individual’s impact on outcomes from circumstantial factors. Third, collect performance outcome data for the unit; it’s best to obtain multiple types of metrics, since outcomes are multidimensional.

In work we did with a national retailer, we gathered such data from hundreds of stores over five years. We measured monthly store performance by revenue, profit, growth, employee turnover, and breakage. We found that store managers matter a great deal: Twenty-one percent of revenue performance could be attributed to store managers — over three times more significant than store attributes — and they had an outsize impact on margins. Regional and district managers also produced measurable effects, but they were less influential than store managers. As expected, the impact of district and regional managers differed depending on the metric. While store managers had the strongest influence on revenues, margin performance was more strongly influenced by district and regional managers, who had significant input into purchasing decisions.

Just as in soccer, structure and systems matter. Our research found that stores that were closer to headquarters performed better, motivating the further exploration of how stores farther afield could be supported. There is also valuable insight to be gained from employee mobility. When people stay in their roles and locations, it is impossible to use data to disentangle the impact of people from their surrounding circumstances. Moving people through different settings not only gives them a chance to develop and grow, it also enhances the data, allowing more precise measurements of the impact of roles and the people performing them.

For the retailer we worked with, these insights changed the talent strategy. Originally, the leaders were moving toward creating a training academy program for district and regional managers, having assumed that higher-status managers with a broader scope of responsibilities would matter more to performance. After considering the results of our analysis, they pivoted to explore what behaviors and practices mattered in the critical role of the store manager. They launched a companywide effort to find out, modeling their approach on Google’s internal research called Project Oxygen, to distill the attributes of managers who positively influenced company performance. Once they had identified the details of this critical role, they were able to apply focused investment in developing and replicating capabilities for the job at scale.

Talent Insights and Sustainable Competitive Advantage

Billy Beane of the Oakland Athletics used data to build a high-performing team at a surprisingly low cost. His strategy as a general manager was to use different performance metrics to find undervalued players who contributed more to winning games than players who performed well on traditional measures. The success of this approach was quickly copied throughout the league, dissipating the A’s strategic advantage. Could an advantage from data-driven talent decisions on crucial roles also be so short-lived?

There is a key difference to note. The Athletics studied measures that identified great players — but these players could be great on any team. The hallmark of a good strategy is one where the sources of competitive advantage are interlocked with other strategic commitments, making it difficult to copy. Finding key roles and building an organization around those roles may be more defensible than finding hidden stars, since the strategic advantage is tied to how organizations support these roles and develop pipelines to fill them.

The Bundesliga is known not only for its defense game but also for how it sources talent. It lacks the financial muscle of leagues such as the Premier League, with its billionaire owners. However, the German soccer system’s commitment to developing young talent over relying on high-priced transfers of proven stars makes it an attractive option for young players who need to prove themselves with time on the field — including young players from outside Germany. Because other leagues that have paid dearly for high-priced transfers are obligated to play such talent for more minutes, they have diminished value propositions for younger, emerging talent. Like Beane’s winning Athletics team, there is an advantage in arbitraging on the undervalued, be it defensive players or younger players. However, unlike this Major League Baseball case, imitating the Bundesliga advantage will require a substantial adjustment to strategy — one that many teams and even leagues are not prepared to make.

Execute Based on Differentiating Capabilities

Strategy is about defining how to win — it requires committing to capabilities that are unambiguously the best in class. But no company can be the best at everything; a winning strategy requires focus and a keen awareness of what roles are disproportionately critical — and investing appropriately. Failing to acknowledge this puts the entire strategy at risk. By translating abstract capabilities into concrete jobs, organizations are much better positioned to make their strategies a reality.

Leaders can take a page from the soccer playbook and consider the following lessons for their own organizations:

Know your critical roles and where you need to invest. Despite being a less visible role, defenders matter more than other positions for winning soccer games. Insight into where difference-making roles exist should guide attention and investment when it comes to recruiting, developing, and retaining talent. While it is important to know your key contributors, it is just as important to know where you have deficits in critical roles.

Additionally, critical roles may change over time. As the competitive landscape evolves, difference-making positions can also change. Winning consistently requires monitoring not only what the critical roles are but how they might be shifting.

While it is important to know your key contributors, it is just as important to know where you have deficits in critical roles.

Investing in critical roles is not just about finding amazing talent — it is also about creating the required systems and practices that focus on positions first, and the people who fill them second. It’s tempting to be blinded by the brightness of stars and give in to eagerly absorbing them regardless of what position they take. Building a system around such stars makes organizations fragile: They become overdependent on them and distracted from the goal of aligning strategy with talent deployment.

Use data where you can, and invest in making it informative. When you have multiunit structures in your organization, you can exploit that to study roles systematically. Many companies have invested in systems that measure the performance of business units, products, regions, or stores. It takes additional investment to connect this information to personnel data, since most organizations do not explicitly link organizational performance and human resource information. Additionally, it’s common to opt for the ease of keeping people in fixed locations instead of rotating them through different settings. But the practice of introducing some variance in how and where people work can create incredible insights into what roles drive performance. Such insights can highlight the contributions of unsung heroes and highlight where investments in training and recruiting can yield the most substantial gains in performance.

Hire for and develop based on key skills. Today, seniority and pedigree are too influential in talent markets; moreover, they have the effect of entrenching common wisdom about what matters within a role. Just as leaders can be misguided about what roles matter most, they can also be led astray about what skills and behaviors within those roles make the difference. By identifying critical capabilities within critical roles, organizations can both reward what matters and develop the blueprint for hiring, retaining, and developing employees with such skills in mind.

Align systems and structure. Talented employees in critical roles need to be supported with systems and structures that play to their strengths. Similar to the way Bundesliga teams have found that prioritizing the defense roles in field positioning increases the odds of success, organizations need to think creatively about what structure frees those in critical jobs to do their best work. These investments both enable more contributions from your critical roles and make your strategy less vulnerable to replication.

Recognize leadership’s critical role. On soccer teams, coaches are the third-most-important factor to winning games. Leaders set strategy and then build and motivate the team that supports it. Because alignment across the organization is so critical, any meaningful step to identify, invest in, and develop critical roles needs support from the top. This is especially important when a change in strategy requires building up talent in a critical role that has historically been weak. Leaders need to reinforce their commitment to supporting new key roles with their teams and with potential hires.

In soccer, winning can hinge on very small differences. While good teamwork is critical, the highly integrated nature of the sport obscures what the critical roles are. The thoughtful use of data can shed light on the critical roles within your team and uncover surprising results that challenge conventional wisdom. Having insight on critical roles may not only inform your strategy — it may be a source of competitive advantage in itself.