As HR professionals we should know our organisation's business. If we do not, then we are most likely designing HR strategies for "HR's sake" and not adding any real value. HR processes and strategies should be designed to help the overall organisational goals and to give a competitive advantage. The only way to do this is to get to know the organisation - inside and out. So how do we do this?
- Read your organisation's strategic plan and other strategic documents. If it doesn't have one, ask why not. Suggest that HR be part of the planning process
- If you do not have strong financial skills build a relationship with the finance people and have them explain the financial side of the business to you. You could also use this relationship to enable you to have some costings done on recruitment, attrition, absenteeism, OH&S, etc.
- Build your knowledge on the internal and external environmental factors so you are able to detect potential opportunities or problems
- Talk to managers, employees, customers, investors and anyone you think might have something to contribute
A model I use when conducting an environmental analysis is from Human Resource Management: Transforming Theory into Innovative Practice [1]:
When analysing the internal environment you should consider the:
- ownership of the organisation, i.e. is it public, private or something else?
- organisation's size
- organisation's strategy (theres that strategy word again!)
- oganisation's structure (bureaucratic, centralised etc)
- organisational culture (not only what the organisation espouses its culture to be, but also the unwritten culture
- organisational history
- resources available
When analysing the external environment you should consider the:
- environmental factors
- technological factors
- economic factors
- labour market
- international factors
- industrial relations
- political factors
- legal factors
- social factors (i.e corporate social responsibility)
- demographic factors
- industry trends
- cultural factors
For the external environment you could use the information provided by the Australian Bureau of Statistics. The Department of Defence has released the Defence Personnel Environment Scan 2025 which has a whole chapter on Australia and the global context, see part 3. The Committee for Economic Development of Australia (CEDA) would also be a good resource.
So what are you waiting for, go out and learn your business!
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- Hartel, C., Fujimoto, Y., Strybosch, V., Fitzpatrick, K. (2007) Human Resource Management: Transforming Theory into Innovative Practice, Pearson Education Australia, NSW.
In my previous post, Magia3e asks:
How do you think HR managers need to drive change in their organisations to get the things done that you’ve suggested here?
For HR managers to help organisations drive change they need to be there from the beginning of the planning process and not brought in at the end. For this to happen HR managers need to understand:
- the business and where it wants to go
- what is happening internally and externally that may impact on the business and its business strategy
- what HR practices and strategies are required that will help deliver the business strategy (in other words The HR Value Proposition which is written by David Ulrich who is my HR GURU)
To be able to "get a seat at the table" - HR professionals have been talking about this for so long - there are a few things we need to do:
- Get credibility
- Understand the business and speak the language of the business
- Align HR practices to the overall business strategy
- Build and maintain relationships with the business (you can gain some intelligence about what is happening in the business which could help inform some of the HR strategies)
- Bring ideas to the business
- Develop and deliver HR practices that are going to help the business deliver its business outcomes
- Continually build knowledge
I plan to build on these thoughts in other posts.
Mercer Human Resource Consulting recently released their report on the 2006 Global HR Transformation Study. The study includes responses from 1400 organisations in Asia, Australia, Europe, Latin America, New Zealand and North America. Eighty eight HR executives from Australian organisations were surveyed.
The executive summary highlighted Australian HR executives considered that:
- the critical human capital challenges they are facing in organisations are building leadership capability, acquiring and retaining key talent and driving cultural change
- not all HR functions or executives are skilled enough to help organisations in meeting these challenges; particularly with respect to business improvement, cultural change and business strategy
- one of the reasons they are not seen as a strategic partner is because they are spending more time on transactional and compliance activities than on strategic interventions.
I could not agree more, but this is not a new problem. HR practitioners should be taking responsibility for their own development. This is sometimes hard when they stuck in high-pressured, reactive transactional roles and do not have the time to build skills. The thing is, that if HR does not start building the skills required to be a strategic partner then they will be stuck in the reactive transactional rut.
So what can you do as a HR professional? Start educating yourself! Read everything you can including publications, online journals and blogs such as Human Resources Magazine, Human Capital Magazine-Australia, CIO and Corporate Leadership Council, keep coming back to Shifted HR, share what you find (that is why I started).
