Your Managing Director has called an emergency board meeting brought on by a sudden contract withdrawal. She is deeply concerned in how this will affect the business but she has been engaging with this customer for some time and so it was not entirely unsuspected.
Your Finance Director has been planning for this eventuality. She realised a while back that the contract was at risk and so she has ensured that the correct reserves were in place to cope with every eventuality.
Your Sales Director is ok about this. He had heard the customer was shopping around and so he was looking for a replacement customer which he is confident he already has lined up.
Your Ops Director is also ok about this. He realised the customer had been slowly reducing the volume of their orders and so spent down time ensuring the workforce received training to be better suited to create new products for when a new customer was on board.
You’re the Head of HR, and this is all news to you.
OK, i’m being facetious but this does happen and often shows up, in my opinion, a specific area in which HR can often fall short – awareness of the outside world and the PESTLE factors which affect the businesses in which we operate.
It’s been mentioned a lot in recent years that HR must become intrinsic in understanding other business areas, with finance and the business ‘numbers’ being particularly important. I get that, and I agree with that, but we must also become more externally aware.
Throughout my career thus far, I have realised how easy it can become to focus on the challenges within the boundaries of the company that employs us. Sometimes this can be even more isolated, where we become focussed on only our set of ‘customers’, which could be one department out of a number of departments within the same company, which is unhealthy. If we don’t know whats going on in other departments, other sites, other divisions, then how can we possibly know whats facing the business as a whole.
“It’s vital to be externally aware”
It’s vital to be externally aware. For a start, almost all of our business partners and heads of other departments live the external environment every day and without doing so they would probably be ineffective in their roles, so why should HR be any different?
The people agenda has always been shaped by external factors but this has arguably accelerated due to recent political changes. The Brexit is having a demonstrable impact on employee relations and recruitment, the UK economy generally in recent times has posed various sets of challenges, and the effect of newly introduced environmental regulations caused huge question marks over the confidence that Tata has in its UK operations, all of which are external factors requiring HR to be a critical leader in response.
So it is my view that we must make the ability to look broader, beyond the usual emerging HR practices and employment law and the usual external engagement for recruitment etc, a basic element of how we operate.
I’d like to share with you at this stage a model that i’ve been playing around with which I aim to use as a benchmark for developing future HR talent, as has been a key task for me in my last few positions. It’s pretty basic, but outlines my point above about looking externally, along with being financially aware, utilising appropriate and trusted organisational psychology and underpinning our work with an evidence-based approach.
I’d be interested to hear any feedback on this so please do drop me an email firstname.lastname@example.org with any thoughts.