What is HR's most essential skill in 2013? Craig Mason writes that recognising the customer needs of each business and developing the internal capability required to meet those needs is a first order priority for HR leaders.
In 2013, understanding organisational business drivers will be more important than ever for career success in HR. In a softened economy and a highly competitive marketplace, recognising the customer needs of each business and developing the internal capability required to meet those needs is a first order priority for HR leaders.
So the trick is working out what are the key business drivers impacting an organisation and then what to do about them.
Changing business drivers
This month, we are taking a case study approach to understand the approach that one experienced HR leader has adopted to build organisational capability in response to a change in business drivers.
The Consumer Goods sector is, like most marketplaces, under increased cost pressures. The public are demanding more for less and retailers need to respond. This is resulting in wholesale change through all levels of the supply chain in retail, particularly in the grocery categories. Retailers are changing their models.
This change in retailers’ behaviour is fundamentally altering the business drivers of their suppliers. To help untangle this complex picture, we talk with Tony Martin, Regional Human Resources Director, Asia Pacific for Energizer. Tony has responsibility circa 7,000 employees in commercial and manufacturing operations in both developed and emerging markets in Asia-Pacifi c, including China.
In looking at his remit across Asia-Pacific, Tony indicates that the business drivers of Energizer’s various businesses were all being impacted. He indicates that retailers across all geographies are all changing “at pace”.
Retailers across Asia in both developed as well as emerging markets are adopting similar models to those being adopted in Australia and originally emanated out of the UK. This has a tremendous impact on the business drivers of FMCG companies in all categories as they keep pace with this change.
There is a need to obtain the balance between value and quality. As Tony says, “it’s not just sales anymore but it is now about business management. Companies can’t just get stuff shoved on the shelf anymore to maintain the numbers.”
So by understanding this business driver, Tony and the team at Energizer are assisting their organisation to move from an Account Management mindset to true Business Management and partnering with customers. Energizer needs to understand the customers’ business plans and help them to differentiate their offering. That’s a very different capability to that of the past.
HR’s role in this change
By understanding this change in business drivers, HR at Energizer is navigating the change process to shift internal capabilities. They are doing this by driving cultural change strategies with a focus on building commerciality. (This cultural shift has been partnered with a program to ensure internal processes are improved in which HR has also played a major role.)
As well as driving the capability shift, HR has also facilitated a project with 40 people from across the region to get to the heart of growth opportunities and to deliver productivity savings.
Clearly, Tony’s HR team at Energizer needs to understand the business and its drivers to be involved in this deep commercial intervention. In Tony’ view, this isn’t just about knowing impacts and pressures on the top line but also impacts that affect cash flow and working capital requirements, forecasting, margin management sources of productivity leakages and the like.
As Tony indicates, at the end of the day, these are the things that are driving the business. The business leaders are looking for cold hard outcomes from HR in a continually challenging commercial marketplace.
These activities are also being employed to help the business grow in emerging markets and, where opportunity provides, to acquire businesses. For Tony, it’s about HR delivering outcomes and better HR service delivery, ensuring stronger alignment to business needs and a more consistent and professional customer experience.
Opportunities for a different role in HR
Tony agrees that there is an exciting role for HR professionals to help build business capability to meet changing business drivers.
But he says that this will require a different tool kit for HR Business Partners. They will need to be able to:
Know the business through the numbers but also be able to quote customer trends and comment on competitor data
Develop core change management techniques and marry these with facilitation skills
Develop a strong, confident approach with business leaders based on fact and logic
Cultivate a capability to understand unintended consequences and help business leaders see linkages
Focus on improving the balance between innovation and governance requirements
The final word
A key aspect of Tony’s role is facilitating and developing business strategy. Clearly, to do this successfully he has needed to understand the business drivers of the Energizer business.
In a constantly changing marketplace, the development of commercial skills and the agility to deploy them as required will be essential for HR professionals who want to be taken seriously.
About the author
Craig Mason is the Managing Director of The Next Step, a specialist consulting practice in the human resources market. For more information call (02) 8256 2500 or email firstname.lastname@example.org. Website: www.thenextstep.com.au.