Business Knowledge

• Of the five competencies, it is proposed that we take up this competency in the first phase

• 12% proportion of HR’s total influence on business performance is made up by business knowledge

• Knowledge by itself is not a differentiator of performance

• What matters is not what you know, but rather what you do with that knowledge

Business knowledge

• HR professionals must understand the organization – the BU

• Making a strategic contribution – building a culture linked to external customers and to the business strategy – requires substantial knowledge of customers and strategy

• Success at managing fast change requires knowledge of the business in order to set the direction of change

Business knowledge

• Asking insightful questions about business strategy, raising the level of intellectual rigor in strategy formulation and having a vision of the future of the business

• Connecting the organization to key trends in the marketplace requires knowledge of what information to focus on for business success

Business Knowledge

• Three sub-factors of business knowledge are :

• Value chain knowledge - 56%

• Knowledge of organization’s value proposition – 28%

• Human resource knowledge – 16%

Knowledge of value chain

• Value chain is what links market demand with internal supply

• We need to understand the customers, suppliers and competitors well enough to see how the dynamics and requirements of the competitive environment translate into internal financial and production requirements and how our products/services are distributed to the market place

Knowledge of value chain

• This business knowledge allows us to make a major contribution toward enhancing the value chain – to make the value chain whole greater than the sum of the parts

• Finding ways to build the capabilities and deliver organizational capabilities and to improve the performance of customers can increase the size of the pie that all share

Knowledge of value proposition• Three key categories of wealth creation

determine the context within which value creating activities occur :

• Create wealth by developing a portfolio of business that maximize returns while mitigating risks – we need to play a role in helping the business leaders to decide on this

• In harmony with determining which business to emphasize, orgn to determine which markets to pursue and which marketing activities to use to approach their selected markets

Value proposition

• We must know the basic processes through which products and services will be provided and the quality standards to which these processes will be held accountable

HR knowledge

• Knowledge of all issues essential to HR’s key staffing functions

• How to make use of positive aspects of workforce

• Track employee satisfaction • Legal requirements • How to work within the provisions of various

laws

Examples of business knowledge

• Which businesses will we keep and which will we sell

• How do we identify and respond to requirements from the investment community

• What are our target markets and how do we best serve them

• What core processes will we establish to create value for customers/shareholders

Examples of business knowledge

• How do we identify the quality and ethical standards to which our products/services will be held accountable

• Addressing such complex issues requires a considerable knowledge of the organization, its value chain and its value proposition

Methods of developing

• Reading books on the subject• E-learning• Sessions by seniors a) Internal• b) External• Attending conferences/seminars on the

subject

Suggested books

• Re-engineering the Corporation – Hammer & Champy

• Exploring Corporate Strategy – Johnson & Scholes

• Understanding Organizations – Charles Handy• Influencing with Integrity – Genie Z. Laborde• Seven Habits of highly effective people –

Stephen R. Covey

Suggested books

• The One Minute Manager – Kenneth Blanchard & Spencer Johnson