9 Signs Your HR Manager is Bad

Signs of an Ineffective HR Manager

This morning I came across an article with an unusual angle on HR at bnet – it is called “9 signs your hr manager is terrible” compiled by Suzanne Lucas.

This would be an interesting article to read if it were not for the “clipart photo gallery” style of this piece. Here I have taken some of the key points and raised some of the factors they raise. I’m not sure that many HR managers would disagree with many of these statements, however if we looked closely in the mirror I suspect we may well find one of the guilty contributors…

Nine signs your HR function is not supporting the business:

1. HR Never Says, “We need to ask the lawyers”
2. HR sends you unqualified or inappropriate candidates to interview
3. HR gives you blank stares when you talk about the business
4. HR always seems to agree with you
5. HR never approves an exception
6. HR only fixes messes–that it created
7. HR never approves firing anyone
8. HR never met a number he liked
9. HRs reaction to any problem: Write up a new policy!

What do these things mean?

These are some interesting perceptions on HR and it’s no wonder many are not seen as strategic functions.

1) HR Never Says, “We need to ask the lawyers”

• • Employment law is complex and ever changing. Its beyond most generalists to keep up to date, and any good professionals will regularly seek guidance from an appropriate legal professional.
  • If your HR manager is confident that they know everything they needs to know and never needs to run anything by an employment lawyer, you need a new HR manager

2) HR sends you unqualified or inappropriate candidates to interview

• • No one knows your function and requirements better than you as the line manager, but HR should ensure all screening filters out inappropriate candidates.
  • If the recruiter can’t do a quality phone screen, or review a CV, or understand the difference between “must have” qualities and “nice to have” qualities, it’s time for some new blood down in recruiting

3) HR gives you blank stares when you talk about the business

• • HR are competent at cross business skills, people management etc, but how knowledgeable are we at the functions of the business? Can we talk Finance, marketing, sales & operations? Have we sat in on a sales call or a business pitch?
  • HR needs to know what the people actually do
  • We need to talk the language of our customers – not our peers

4) HR always seems to agree with you

• • A good HR manager stands up to management when need be and explains what the consequences of a policy or action could be

5) HR never approves an exception

• • Yes, rules and policies should all be followed, generally speaking.
  • Meeting legal standards and requirements is one thing, but paying someone outside of band in exceptional cases, letting a diabetic eat at their desk when there is a “no eating at your desk” policy can be critical for the person and good engagement for the organization.

6) HR only fixes messes that it created

• • One of the main functions of HR is to avert problems, which often requires foresight.
  • Is your HR manager the type who refuses to act until the moment of crisis? So they ignore or rejects your request for a raise for an employee-until that employee submits their letter of resignation?
  • If your HR manager only works on fixing the problem when it happens, it’s time for them to go.

7) HR never approves firing anyone

• • An employer can fire anyone-male, female, black, white, old, young, pregnant, sick-providing the reason for the firing doesn’t violate the law. For example, you can’t fire a woman because she’s pregnant, but you can fire her for insubordination during her pregnancy.
  • If your HR manager’s response is to stick it out and hope the poor performer quits, or suggests transferring the employee or punishing the manager rather than deal with the problem, you need a new HR manager.

8) HR never met a number he liked

• • Some HR people don’t like numbers. It’s why they aren’t finance people.  But, if your HR manager can only tell you what he “thinks” about turnover or “feels” about one insurance plan versus another, he’s not doing his job. Hard numbers are available.
  • If HR can’t figure out how to evaluate a program or policy, using hard data, then the HR manager is not capable of doing their job (and not just ROI of training!)

9) HRs reaction to any problem: Write up a new policy!

• • HR people love policies because it helps bring order to the workplace. But does HR use them to avoid confrontation, or worse responsibility?
  • Policies are necessary, but simply issuing policy statements rather than addressing actual behavior lapses means your HR manager isn’t doing their job

Now I am not sure that I agree with all of these points, but as the saying goes, there is no smoke without fire.

In the UK over the last few years there has been an increasing trend for graduates to go straight into HR. Some 20-30 years ago many HR people were second career professionals having had line management responsibility, and so business understanding.

I have seen a move by many large private firms to promote operational manager to be “Head of HR”, and employ HR professionals as “advisers”. Certainly the movement to have “business partner” based HR was aimed at moving HR closer to the needs of the business, but how many HRP’s have their office next to the unit manager or shop floor?

 

How to Write a SWOT analysis

A SWOT is a planning tool used to understand the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business. It involves specifying the objective of the business or project and identifying the internal and external factors that are supportive or unfavourable to achieving that objective.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats.

There are several ways of graphically representing the SWOT analysis matrix or grid. Several versions are shown on this article – use the one which is best suited to your application. (More templates can be seen on our website SWOT analysis templates )

While at first glance the SWOT looks like a simple model and easy to apply, I can say from experience, that to do a SWOT analysis that is both effective and meaningful, requires time and a significant resource. This cannot be done effectively by just one person. It requires a team effort. The SWOT methodology has the advantage of being used as a ‘quick and dirty’ tool or a comprehensive management too, and that one can lead to the other. This flexibility is one of the factors that has contributed to its success.

The term “SWOT analysis” is in itself an interesting term. To my understanding, the SWOT is not an analysis. It is a summary of a set of previous analyses – even if those were not more than 15 minutes of mini-brainstorming with yourself in front of your computer. The analysis or more correctly interpretation comes after the SWOT summary has been produced.

The SWOT Model

Positive	Internal		Negative or potential to be negative
	Strengths	Weaknesses
	Opportunities	Threats
	External

 

	Strengths	Weaknesses
Opportunities	Offensive – make the most of these	Defensive – watch competition closely
Threats	Adjust – restore strengths	Survive - turn around

Definition of SWOT

A SWOT analysis process generates information that is helpful in matching an organization or group’s goals, programs, and capacities to the social environment in which it operates. Note the SWOT itself is only a data capture – the analysis follows.

Strengths

• Positive tangible and intangible attributes, internal to an organization.
• They are within the organization’s control.
  

Weakness

• Factors that are within an organization’s control that detract from its ability to attain the desired goal.
• Which areas mightthe organization improve? 

Opportunities

• External attractive factors that represent the reason for an organization to exist and develop.
• What opportunities exist in the environment, which will propel the organization?
  Identify them by their “time frames”

Threats

• External factors, beyond an organization’s control, which could place the organization mission or operation at risk.
• The organization may benefit by having contingency plans to address them if they should occur.
• Classify them by their “seriousness” and “probability of occurrence”.

Background to the SWOT Analysis

The SWOT analysis technique is credited by Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from top companies.

The goal was to identify why corporate planning failed. The resulting research identified a number of key areas and the tool used to explore each of the critical areas was called SOFT. Humphrey and the original research team used the categories “What is good in the present is Satisfactory, good in the future is an Opportunity; bad in the present is a Fault and bad in the future is a Threat.” This was called the SOFT analysis.

In 1964 Urick and Orr at a conference changed the F to a W, and it has stuck as that, soFt to sWot

On its own a SWOT analysis is meaningless It works best when part of an overall strategy or in a given context or situation. This strategy may be as simple as:

1. Goal or objective
2. SWOT / SOFT
3. Evaluation or measures of success
4. Action

 

Introduction to SWOT

The SWOT analysis tool is great for developing an understanding of an organization or situation and decision-making for all sorts of situations in business, organizations and for individuals.

The SWOT analysis headings provide a good framework for reviewing strategy, position and direction of a company, product, project or person (career).

Doing a SWOT analysis can be very simple, however its strengths lie in its flexibility and experienced application. Remember the capture is only part of the picture.

Applications

A SWOT analysis can be used for:

• Workshop sessions
• Brainstorm meetings
• Problem solving
• Planning
• Product evaluation
• Competitor evaluation
• Personal Development Planning
• Decision Making (with force field analysis)

The SWOT is a great tool that can be used in association with PESTLE

Overview of SWOT

	POSITIVE/ HELPFUL to achieving the goal	NEGATIVE/ HARMFUL to achieving the goal
INTERNAL Origin facts/ factors of the organization	Strengths Things that are good now, maintain them, build on them and use as leverage	Weaknesses Things that are bad now, remedy, change or stop them.
EXTERNAL Origin facts/ factors of the environment in which it operates	Opportunities Things that are good for the future, prioritize them, capture them, build on them and optimize	Threats Things that are bad for the future, put in plans to manage them or counter them

 

Aim of a SWOT Analysis

• Reveal your competitive advantages
• Analyze your prospects for sales, profitability and product development
• Prepare your company for problems
• Allow for the development of contingency plans

A SWOT analysis is a process to identify where you are strong and vulnerable — where you should defend and attack. The result of the process is a ‘plan of action’, or ‘action plan’.

The analysis can be performed on a product, on a service, a company or even on an individual.

Done properly, SWOT will give you the BIG PICTURE of the MOST IMPORTANT FACTORS that influence SURVIVAL and PROSPERITY. As well as a PLAN to ACT ON.

How to do a SWOT

Irrespective of whether you or your team are future planning for specific products, work, personal or any other area, the SWOT analysis process is the same.

• Step 1 – Information collection – In the here and now…
  List all strengths that exist now. Then in turn, list all weaknesses that exist now. Be realistic but avoid modesty!

• You can conduct one-on-one interviews. Or get a group together to brainstorm. A bit of both is frequently best
• You’ll first want to prepare questions that relate to the specific company or product that you are analyzing. You’ll find some questions and issues below to get you going.
• When facilitating a SWOT – search for insight through intelligent questioning and probing

Step 2 – What might be…
List all opportunities that exist in the future. Opportunities are potential future strengths. Then in turn, list all threats that exist in the future. Threats are potential future weaknesses.

Step 3 – Plan of action…
Review your SWOT matrix with a view to creating an action plan to address each of the four areas.

In summary:

• Strengths need to be maintained, built upon or leveraged.
• Weaknesses need to be remedied, changed or stopped.
• Opportunities need to be prioritized, captured, built on and optimized.
• Threats need to be countered or minimized and managed.

A SWOT analysis can be very subjective, and two people rarely come-up with the same final version of SWOT. It is an excellent tool however, for looking at the negative factors first in order to turn them into positive factors. Use SWOT as guide and not a prescription.

For more detailed examples, templates etc visit http://www.rapidbi.com/created/SWOTanalysis/

Mike Morrison

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Mike Morrison is director of RapidBI, an organisational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com © This article is copyright RapidBI 2006, 2008 – it may be copied providing the authors are credited, and direct links maintained

 

© RapidBI.com 2008

http://www.rapidbi.com

This material may be put on your Blog or website – however please keep this copyright statement

Strategic Organizational Development

OD professionals are the CEOs allies in creating a top performance culture for the organization.

Organizational Development professionals are specialists in Change Management and Culture Development. However many find themselves in positions that make it difficult to get a straight line of communication to the CEO. Mainly because of the Organizational structure and the fact that OD-Organization Development is located under HR. Ideally the OD Head would have a position on the same level as the HR Head according to Dr. William Rothwell from Pennstate University who is an authority in HR. However reality is that most OD professionals still work under the more traditional structure.

Some years ago I held an OD role that reported directly into the CEO – HR did not!! – so to some extent this is down to the CEO and their experience of what an OD professional can and cannot deliver in relation to their needs and vision for the organization.

OD as a discipline is getting is only recently starting to grow an a standalone profession. More so with the pangs of growth that many of the new organizations are now facing. Talent acquisition, retention, organizational culture and people development are now starting to hinge more on the OD professional more than the HR. Recognizing this aspect, many organizations are allocating independent structures for the OD function. However, in cases where the OD has to work under HR, whether he/she can connect to the CEO solely depends on what he/she is capable of taking to the table. If a OD professional can sparkle with out-of-the-box ideas which can directly contribute to the growth of organization, the CEO cannot turn a blind eye.

Back in the 60′s and 70′s OD focused on people, behaviours and their actions and interactions with each other, in those days the majority of organizations did not know how to look after or engage with their people –

Things have now changed, much is different

CEO’s are having their valuable time ever squeezed and as such will only be able to have people reporting directly in that can add directly and measurably to their primary objectives. They have to focus on the big picture or strategic matters.

Unfortunately it is not very often that OD practitioner can demonstrate primary change. If we want to be engaged at this level we need to re-evaluate what we do and what is classed as OD activity. For example, traditionally when undertaking diagnostic processes we seem to focus on people and behaviours, or on the culture, now we need to be more integrated and holistic. This means starting to look at factors which traditionally have not been the domain of OD practitioner. If we are to truly facilitate change then our diagnostic process need to map the PRIMO-F model – that is to cover:

• People,
• Resources,
• Innovation,
• Marketing,
• Operations and
• Finance elements,

For it is how these factors interact that provide the organization with either an advantage or disadvantage in the market place. When undertaking a SWOT analysis for your organization do you cover all of these elements appropriately? Sure we may not be in a position to solve any issues raised here but as OD facilitators our role is to identify any blocks in the organization, then help to facilitate a solution.

So if we really want to get noticed we need to really get strategic and start looking at interactions with people and systems in all elements of our respective organizations.

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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/

© This article is copyright RapidBI 2006, 2008 – it may be copied providing the authors are credited, and direct links maintained

© RapidBI.com 2008

http://www.rapidbi.com

This material may be put on your Blog or website – however please keep this copyright statement

Strategy and Tools in Business

Strategy and tools in business

Over the years a lot of good and bad stuff has been said about SWOT. Sure it is not the most robust of tools but when used in the way it was originally developed – it is a powerful tool.
Some people have argued that it is time to move on from SWOT to other things – in this piece we explore SOAR an appreciative Inquiry tool.

An interesting article on this topic was published in Ai Practitioner magazine ( http://preview.tinyurl.com/2bvobg ) (it is available here http://preview.tinyurl.com/26wk4v )for those that are not subscribers).

Having read the article, the SOAR approach to my mind makes the same mistake that many using the SWOT analysis do – and that is they miss the context. When the (highly researched) SOFT was changed to SWOT the new authors missed the point which is why the tool is often miss-understood. It was never designed to stand on its own, nor was it ever to be part of the direct action phase – it was a diagnosis and data capture tool.

The authors of this article to my mind make 2 fundamental mistakes:
1) they assume that all applications of SWOT are in the way they describe
2) they appear to ignore weaknesses and threads – apparently believing that their solution will soar (pardon the pun) over any difficulties.
Would the shareholders of Enron be in the position they are now in (extinct) if they had faced up to their threats and weaknesses, rather than focus on what they thought were their strengths?

The article clearly states in its summary
“This article has attempted to address the strategy-to-execution gap. In doing so, we have discussed SOAR, a strengths-based framework that builds on the best points of SWOT (strengths and opportunities) in order to move beyond the “as-is” state of the organization’s environment to the “to-be”.“

Yes this as a framework can be used as the authors state to take SWOT data and apply it – but SOAR in itself is not a diagnostic or orientation tool. Anyone using this as a diagnostic tool is going to make the same errors as 1000′s of people have done with inappropriate use of SWOT.
This thread has been started to help CIPD students (and others) complete their studies – and for that they must use SWOT and PESTLE – if they chose to use other tools they will need references – I cannot see any on the article .

Appreciative Enquiry has its place.
Appreciative Inquiry is a particular way of asking questions and envisioning the future that fosters positive relationships and builds on the basic goodness in a person, a situation, or an organization. In so doing, it enhances a system’s capacity for collaboration and change. Appreciative Inquiry utilizes a 4-stage process focusing on:

• DISCOVER: The identification of organizational processes that work well.
• DREAM: The envisioning of processes that would work well in the future.
• DESIGN: Planning and prioritizing processes that would work well.
• DESTINY (or DELIVER): The implementation (execution) of the proposed design.
  
  

The basic idea is to build organizations around what works, rather than trying to fix what doesn’t. It is the opposite of problem solving. AI focuses on how to create more of what’s already working.
This method is more positive in nature than many others, however it is as a strategy naive in that it assumes success breeds success – many organizations are in fact where they are now because they did solve problems and did not just focus on what works.

Would a company that currently makes plastic carrier bags be advised to use SOAR – or look at the external factors which may bring about the end of the need for their product?

Equally any diagnostic process needs to look holistically at the people and the processes – not just one or the other.

Is SWOT redundant?…..

No but it is sure made more reliable with additions of other models in the transition to application.

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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/

© This article is copyright RapidBI 2008 – it may be copied providing the authors are credited, and direct links maintained

© RapidBI.com 2008

http://www.rapidbi.com

This material may be put on your Blog or website – however please keep this copyright statement

Strategic development: Are we missing the point?

We often talk about strategic programmes and actions, but are we taking the appropriate first steps?

This article looks at the steps we take and explores if we can be more strategic and add more value.

Introduction

Often we know where we want to get to, or at least have a good idea, but often as the old saying goes: “If I was going there, I would not start from here.”

That is a very logical reply, even if it is not advice that is of much immediate practical value to the questioner. If you don’t know where you are going, you are not likely to get there.

It is sound advice to know where you are and where you want to end up before starting the journey. Is this why many of the tourist maps have a ‘you are here’ marker?

Where are we now? Where do we want to be?

This is a simple yet basic step in any intervention, at any level within our respective organisations. Yet what is the extent to which we really do it? Where is the ‘you are here’ marker in our organisations? Sure, some of us have tools like customer satisfaction and staff engagement data (as well as the basic business financial measures), but holistic, strategic data?

In the 2007 survey, Develop the Developers (by Morrison & Ritchie), responders to the survey provided the following answers in response to development activities:

• Use of diagnostic approaches:
  Always (8%); usually (33%); sometimes (46%); rarely (10%); never (4%).




• Use of evaluation approaches:
  Always (37%); usually (43%); sometimes (15%); rarely (2%); never (2%).

This highlights why much of what we do in organisational development (OD) and human resource development (HRD) fails, on a regular basis, to make the desired (and recognised) strategic impact.

“How can we ever hope to evaluate any intervention effectively if we do not know where we started from?”

We have read many threads on community forums such as HRZone.co.uk and TrainingZone.co.uk about the difficulties of evaluating activity. How to calculate a return on investment (ROI) or show value for money is a commonly recurring theme.

How can we ever hope to evaluate any intervention effectively if we do not know where we started from? We will only know this by having the same measures at the beginning of an intervention as we want to use for measuring success after the event.

In business we do it – we look at the financial position (profit, turnover etc), we set a plan to achieve it and then we measure after an agreed period of time. In medicine, before a person starts treatment we have some measures – pulse, respiration, blood pressure and so on – we measure before and after (often on going) treatment. Why, in HR and HRD, do we not do the same? Often we do for things like retention, sickness and attendance – but not for the more strategic elements.

What is a diagnostic process?

It is often simpler than it sounds. It is a tool that identifies ‘where you are now’, the dot or arrow on the map if you like. Tools like SWOT and PESTLE are OK to start with, but often these tools are not used as effectively (or broadly) as they were originally intended.

Diagnostic tools that only look at the area of the business you are interested in, for example culture surveys, have their place, but how do you know that culture is the issue – where is the diagnosis to show that a specific tool like a culture survey is the right one? There may be a need with a higher priority.

“A regular, yet effective organisational diagnostic process not only evaluates previous actions but the same data can be used to identify future needs”

It’s like going to your doctor – they will not send you for a special test or scan, until they have undertaken a more general diagnosis. In HR and OD we need to do the same. We need to use holistic diagnostic tools to help us orientate to real needs – often we react to the symptoms. It is easy to treat the cut to the hand from a fall, but if we miss the reason for the person falling – for instance, a minor stroke – sure the hand will get better, but in the mean time the stroke can do more damage.

Making evaluation easier

The more robust the diagnostic process, the easier the evaluation. Some would argue than an evaluation is just a repeat of the diagnostic but with different analysis on the results. The diagnostic is looking for an action plan; an evaluation is looking for change since the last measure. So a regular, yet effective organisational diagnostic process not only evaluates previous actions but the same data can be used (in association with a business plan) to identify future needs. Here is a simple strategic cycle:

• Holistic diagnosis
• Analysis
•  Plan
• Action
• Diagnosis

Insanity in our world?

>As the saying goes, the first sign of madness is doing the same thing as before and expecting different results. It can be a bit like watching a replay of a race and expecting someone else to win. Obvious when we think about it, but why do we do this with our business activity?

Looking back at the results from the Develop the Developer survey, I wonder why many interventions are evaluated, but with little or no formal diagnostic processes undertaken at all; then we wonder why evaluation is so difficult.

Do we, as professionals, not learn? Do we keep doing the same things (evaluation but no initial diagnosis) and wonder why we do not add as much value as we expect? Are we ‘mad’? Maybe we are just reluctant learners?

Mike Morrison is director of RapidBI Ltd, a consultancy specialising in helping individuals and organisations improve their business performance through people and organisation effectiveness.

This version first published: – HR Zone, 1st April 2008
Categories: HR Strategy

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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/
 
© This article is copyright RapidBI 2006, 2008 – it may be copied providing the authors are credited, and direct links maintained

© RapidBI.com 2008

http://www.rapidbi.com

This material may be put on your Blog or website – however please keep this copyright statement

DEEPLIST Analysis – marketing acronym

DEEPLIST analysis – an alternative to the PESTLE analysis

Is DEEPLIST better than PEST or PESTLE? or more of the same?

DEEPLIST – Demographic, Economic, Ecologic/ Environmental, Political, Legal, Informational, Social and Technology

In 2000  Paul N Finlay had a book published called “Strategic management: an introduction to business and corporate strategy”. In this book Finlay used the Acronym DEEPLIST as a way of prompting readers of the key areas that needed to be explored when looking at the “remote environment for the business” or the environment in which the business operates, which it cannot control or influence. Constraints if you like.

Traditionally marketing and business strategists have used PEST or PESTLE analysis.

In DEEPLIST the factors to be explored are:

• Demographics
• Economic
• Environmental/ Ecological
• Political
• Legal
• Informational
• Social
• Technological

 Where all but Informational are directly included in PESTLE. Demographics is an important element, but can it really be separated from social? many supporters of the ‘original’ PEST say that differentiating between Legal and Political is also difficult in some situations. Having more is not always better. Knowing how to use a model, theory or tool is far more important. I suspect that if increasingly long acronyms are created this will only lead to increased confusion by students trying to understand how to apply it in the first place.

 I wonder if many courses are starting to use this model as it is ‘new & sexy’ compared to PEST or PESTLE, or is it that people need handholding more in terms of the areas that they need to research and explore as part of the strategic planning process.

 In summary:

Deeplist – Demographics:

• Where people live
• Who they are – Age, sex, race etc..
• Social circumstances – Education, income and lifestyle

dEeplist – Economic:

• The extent to which the markets in which you operate is prosperous (or not) and the competitive environment
• Factors such as taxation, monetary and competition policies of your target markets.

deEplist – Environmental/ Ecological:

• What is the perception of the environment in your sector? What are customers attitudes to environmental or green issues. What about availability of materials? Sustainability

deePlist – Political

• In the political landscape in which you operate (both source materials & deliver product) – what will help/ hinder operations and products

deepList – Legal

• What are the limits or constraints on what you do. What may change?

deeplIst – Informational

• What data do you have?
• How do you use it?
• How is it protected?
• As the connected world changes with ever increasing use of the internet and social media what is being said about you, your market and your competitors?
• It is about access a to information and what you can and cannot control.

deepliSt – Social

• The needs and wants of both target markets, social attitudes to the types of products and services you offer.
• How your organisation is seen by the outside world
• CSR – Corperate Social Responsibility

deeplisT – Technology

• What is changing in the world of technology which will impact your products or services.?
• New innovations, adaptations and adoption rates of new technologies. What is changing and how fast?

Personally I prefer PESTLE, we know and understand the model. Maybe we need to change PESTLE to iPESTLE (or iPEST) where I is Information.

iPESTLE or DEEPLIST can be used to best effect when the results of this analysis are used in a SWOT analysis.

 

Footnote

One of the reasons why DEEPLIST is becoming popular in the UK is its adoption by CIMA in its course content.

One disadvantage of DEEPLIST over PESTLE is that DEEPLIST is © Finlay and this may cause organisations that promote it difficulties in the future, this is in addition to increasing the separation of some element’s that may well create difficulties in application (Political/ Legal, Demographics/ Social etc).

SWOT or SOAR? – Strategy and tools in business

Strategy and tools in business – To SWOT or SOAR?

Strategy and tools in business - Over the years a lot of good and bad stuff has been said about SWOT. Sure it is not the most robust of tools but when used in the way it was originally developed – it is a powerful tool. Some people have argued that it is time to move on from SWOT to other things – in this piece we explore SOAR an Appreciative Inquiry tool.

An interesting article on this topic was published in Ai Practitioner magazine ( http://preview.tinyurl.com/2bvobg ) (it is available here http://preview.tinyurl.com/26wk4v – or here) for those that are not subscribers). SOAR stands for Strengths, Opportunities, Aspirations and Results.

The authors propose it as:

Indeed many proponents of the SOAR method talk of it as being a “positively re-framed SWOT analysis”.

Having read the article (and several others), the SOAR approach to my mind makes the same mistake (in the context of strategic planning) that many using the SWOT analysis do – and that is they miss the context. When the (highly researched) SOFT was changed to SWOT the new authors missed the point which is why the tool is often miss-understood. It (SWOT/ SOFT) was never designed to stand on its own, nor was it ever to be part of the direct action phase – it was a diagnosis and data capture tool.

The authors of this article article on SOAR to my mind make two fundamental mistakes:

1) They assume that all applications of SWOT are in the way they describe
2) They appear to ignore weaknesses and threats – apparently believing that their solution will soar (pardon the pun) over any difficulties.

Evidence of the authors assumptions can be seen in the way they describe SWOT:

It is biased towards what they can do rather than consider what areas they should avoid. The completely miss the point about opportunities being created by the omission of others or changes in customer patterns. Weaknesses are supposed to be internal weaknesses, things that may inhibit the organization form delivering its promise – not a look externally at “who might out perform us”.

Would the shareholders of Enron be in the position they are now in (extinct) if they had faced up to their threats and weaknesses, rather than focus on what they thought were their strengths?

The SOAR article clearly states in its summary

“This article has attempted to address the strategy-to-execution gap. In doing so, we have discussed SOAR, a strengths-based framework that builds on the best points of SwOt (strengths and opportunities) in order to move beyond the “as-is” state of the organization’s environment to the “to-be”.“

Yes this as a framework can be used as the authors state to take SWOT data and apply it – but SOAR in itself is not a diagnostic or orientation tool. Anyone using this as a diagnostic tool is going to make the same errors as 1000’s of people have done with inappropriate use of SWOT.

Rear view mirror?

Some proponents of SOAR go as far as to say

“The reason is that 50% of the SWOT process keeps organizations looking in the rear view mirror focusing on trying to fix weaknesses and swat away real or imagined threats. Unfortunately, it keeps most organizations stuck in the status quo and saps the energy and enthusiasm necessary to move forward.”

Is this true?  Is a SWOT really just looking in the mirror? or is it about using the forward view, taking account of the rear view and side mirrors before making  a maneuver.. there is no point “changing lanes” if there is a semi-truck right next to you – its all about context and timing. Sure SWOT for personal development is not the best tool, and maybe SOAR is a better fit – but for true strategic planning its not one OR the other but BOTH….?

Appreciative Inquiry has its place

Appreciative Inquiry is a particular way of asking questions and envisioning the future that fosters positive relationships and builds on the basic goodness in a person, a situation, or an organization proponents. In so doing, it enhances a system’s capacity for collaboration and change.

Appreciative Inquiry utilizes a 4-stage process focusing on:

• DISCOVER: The identification of organizational processes that work well.
• DREAM: The envisioning of processes that would work well in the future.
• DESIGN: Planning and prioritizing processes that would work well.
• DESTINY (or DELIVER): The implementation (execution) of the proposed design.

The basic idea is to build organizations around what works, rather than trying to fix what doesn’t. It is the opposite of problem solving. AI focuses on how to create more of what’s already working.

This method is more positive in nature than many others, however it is as a strategy naive in that it assumes success breeds success – many organizations are in fact where they now because by prioritising they did solve problems and did not just focus on what works.

Would a company that currently makes plastic carrier bags be advised to use SOAR exclusively – or look at the external factors which MAY bring about a reduction or indeed the end of the need for their product? Customer pressure, Environmental impact, Cost of provision etc…

Equally any diagnostic process needs to look holistically at the people and the processes, from an internal and external perspective – not just one or the other.

 

Is SWOT redundant?…..

No but it is sure made to be a more reliable process with additions of other models in the transition to application.

Porters five forces

Michael Porter’s Five Forces

Michael Porter’s five forces is a model used to explore the environment in which a product or company (or business unit) operates.

Five forces analysis looks at five key areas mainly the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.

	New Entrants
Suppliers	Industry competitors and extent of rivalry	Buyers
	Substitutes

Introduction

The model of the Five Competitive Forces was developed by Michael E. Porter in his book „Competitive Strategy: Techniques for Analysing Industries and Competitors“ in 1980. Since that time the ‘five forces tool’ has become an important method for analysing an organizations industry structure in strategic processes.

Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should based on an understanding of industry structures and the way they change.
Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porters model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.

Overview
The Five Forces model of Porter is an ‘outside looking in’ business unit strategy tool that is used to make an analysis of the attractiveness or value of an industry structure.

The Competitive Forces analysis is made by the identification of 5 fundamental competitive forces:

• The entry of competitors (how easy or difficult is it for new entrants to start to compete, which barriers do exist)
• The threat of substitutes (how easy can our product or service be substituted, especially cheaper)
• The bargaining power of buyers (how strong is the position of buyers, can they work together to order large volumes)
• The bargaining power of suppliers (how strong is the position of sellers, are there many or only few potential suppliers, is there a monopoly)
• The rivalry among the existing players (is there a strong competition between the existing players, is one player very dominant or all all equal in strength/size)

Some academics believe that a sixth force could be included – government.

The Original Five Factors:
1) Threat of New Entrants -

The easier it is for new companies to enter the industry, the more cut-throat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

• Existing loyalty to major brands
• Incentives for using a particular buyer (such as frequent shopper programs)
• High fixed costs
• Scarcity of resources
• Government restrictions or legislation
• Entry protection (patents, rights, etc.)
• Economies of product differences
• Brand equity
• Switching costs or sunk costs
• Capital requirements
• Access to distribution
• Absolute cost advantages
• Learning curve advantages
• Expected retaliation by incumbents

2) Power of Suppliers

This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that suppliers might have power:

• There are very few suppliers of a particular product
• There are no substitutes
• The product is extremely important to the buyer, they cannot do without it
• The supplying industry has a higher profitability than the buying industry
• Supplier switching costs relative to firm switching costs
• Degree of differentiation of inputs
• Presence of substitute inputs
• Supplier concentration to firm concentration ratio
• Threat of forward integration by suppliers relative to the threat of backward integration by firms
• Cost of inputs relative to selling price of the product

3) Power of Buyers/ Customers

This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that customers might have power

• Small number of buyers
• Purchases of large volumes
• Switching to another (competitive) product is simple
• The product is not extremely important to the buyer, they can do without it for a period of time.
• Customers are price sensitive
• Buyer concentration to firm concentration ratio
• Bargaining leverage
• Buyer volume
• Buyer switching costs relative to firm switching costs
• Buyer information availability
• Ability to backward integrate
• Availability of existing substitute products
• Buyer price sensitivity
• Price of total purchase

4) Availability of Substitutes

What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses to be a serious threat. Here are a few factors that can affect the threat of substitutes:

• Buyer propensity to substitute
• Relative price performance of substitutes
• Buyer switching costs
• Perceived level of product differentiation
• Fad and fashion
• Technology change and product innovation

The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker is likely to switch over to a beverage like tea because the products are so similar.

• If substitutes are similar, then it can be viewed in the same light as a new entrant.
• Consider technology substitutes (who would have thought that MP3 technology would replace tape & CD’s?)

5) Competitive Rivalry

And last but not least, this describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from:

• Many players of about the same size, no dominant firm.
• Little differentiation between competitors products and services.
• A mature industry with very little growth.
• Companies can only grow by stealing customers away from competitors.

For many industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc.

• Number of competitors
• Rate of industry growth
• Intermittent industry overcapacity
• Exit barriers
• Diversity of competitors
• Informational complexity and asymmetry
• Fixed cost allocation per value added
• Level of advertising expense

Use of the Information form Five Forces Analysis:

Five Forces Analysis can provide valuable information for three aspects of corporate planning:

• Statistical Analysis:
  The Five Forces Analysis allows determining the attractiveness of an industry. It provides insights on profitability. Thus, it supports decisions about entry to or exit from and industry or a market segment. Moreover, the model can be used to compare the impact of competitive forces on the own organization with their impact on competitors. Competitors may have different options to react to changes in competitive forces from their different resources and competence’s. This may influence the structure of the whole industry.

• Dynamical Analysis:
  In combination with a
  PESTLE Analysis, which reveals drivers for change in an industry, Five Forces Analysis can reveal insights about the potential future attractiveness of the industry. Expected
  Political, Economical, Socio demographical, Technological, Legal and Environmental changes can influence the five competitive forces and thus have impact on industry structures.
  Useful tools to determine potential changes of competitive forces are scenarios.
• Analysis of Options:
  With the knowledge about intensity and power of competitive forces, organizations can develop options to influence them in a way that improves their own competitive position. The result could be a new strategic direction, e.g. a new positioning, differentiation for competitive products of strategic partnerships (see section 4).

Porters model of Five Competitive Forces allows a structured and systematic analysis of market structure and competitive situation. The model can be applied to particular companies, market segments, industries or regions. Therefore, it is necessary to determine the scope of the market to be analysed in a first step. Following, all relevant forces for this market are identified and analysed Hence, it is not necessary to analyzer all elements of all competitive forces with the same depth.

The Five Forces Model is based on microeconomics. It takes into account supply and demand, complementary products and substitutes, the relationship between volume of production and cost of production, and market structures like monopoly, oligopoly or perfect competition.

Influencing the Power of Five Forces
After the analysis of current and potential future state of the five competitive forces, managers can search for options to influence these forces in their organization’s interest. Although industry-specific business models will limit options, the own strategy can change the impact of competitive forces on the organisation. The objective is to reduce the power of competitive forces.

The following figure provides some examples. They are of general nature. Hence, they have to be adjusted to each organization’s specific situation. The options of an organization are determined not only by the external market environment, but also by its own internal resources, competence’s and objectives.

Reducing the Bargaining Power of Suppliers

Partnering Supply chain management Supply chain training Increase dependency Build knowledge of supplier costs and methods Take over a supplier

Reducing the Treat of New Entrants

Increase minimum efficient scales of operations Create a marketing / brand image (loyalty as a barrier) Patents, protection of intellectual property Alliances with linked products / services Tie up with suppliers Tie up with distributors Retaliation tactics

Reducing the Competitive Rivalry between Existing Players

Avoid price competition Differentiate your product Buy out competition Reduce industry over-capacity Focus on different segments Communicate with competitors

Reducing the Bargaining Power of Customers

Partnering Supply chain management Increase loyalty Increase incentives and value added Move purchase decision away from price Cut put powerful intermediaries (go directly to customer)

Reducing the Threat of Substitutes

Legal actions Increase switching costs Alliances Customer surveys to learn about their preferences Enter substitute market and influence from within Accentuate differences (real or perceived)

Generic Strategies to help counter the Five Forces

Strategy can be formulated on three levels:

• corporate level
• business unit level
• functional or departmental level.

The business unit level is the primary context of industry rivalry. Michael Porter identified three generic strategies (cost leadership, differentiation, and focus) that can be implemented at the business unit level to create a competitive advantage. The proper generic strategy will position the firm to leverage its strengths and defend against the adverse effects of the five forces.

Assumptions made about the Five Forces model:

• That buyers, competitors, and suppliers are unrelated and do not interact and collude
• That the source of value is structural advantage (creating barriers to entry)
• That uncertainty is low, allowing participants in a market to plan for and respond to competitive behaviour.

Use of the Five Forces model

The Five Forces tool is a simple but powerful tool for understanding where power lies in a given business situation. This is important, as it helps you understand both the strength of your current competitive position, and the strength of a position you’re looking to move into.

With a clear understanding of where power lies, you can take fair advantage of a situation of strength, improve a situation of weakness, and avoid taking wrong steps. This makes it an important part of your business planning toolkit.

	Supplier Power Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry
Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products	Degree of Rivalry Exit barriers Industry concentration Fixed costs/Value added Industry growth Intermittent overcapacity Product differences Switching costs Brand identity Diversity of rivals Corporate stakes	Threat of Substitutes Switching costs Buyer inclination to substitute Price-performance trade-off of substitutes
	Buyer Power Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers’ incentives

Application with other tools

Porters five forces model works well in association with  a SWOT analysis and a PESTLE analysis

About Michael Porter

American Michael Porter was born in 1947. After initially graduating in engineering, Porter achieved an economics doctorate at Harvard, where he was subsequently awarded university professorship, a position he continues to fulfil at Harvard Business School. Porter’s research group is based at the Harvard Business School, and separately he co-founded with Mark Kramer the Foundation Strategy Group, ‘a mission-driven social enterprise, dedicated to advancing the practice of philanthropy and corporate social investment, through consulting to foundations and corporations’.

After his earlier work on corporate strategy Porter extended the application of his ideas and theories to international economies and the competitive positioning of nations, as featured in his later books. In fact in 1985 Porter was appointed to President Ronald Reagan’s Commission on Industrial Competitiveness, which marked the widening of his perspective to national economies. By the 1990′s
Porter had established a reputation as a strategy guru on the international speaking circuit second only to Tom Peters, and was
among the world’s highest earning academics.

Porter’s first book Competitive Strategy (1980), which he wrote in his thirties, became an international best seller, and is considered by many to be a seminal and definitive work on corporate strategy. The book, which has been published in nineteen languages and re-printed approaching sixty times, changed the way business leaders thought and remains a guide of choice for strategic managers the world over.

References:

This tool was created by Harvard Business School professor, Michael Porter, to analyze the attractiveness and likely-profitability of an industry. Since publication, it has become one of the most important business strategy tools. The classic article which introduces it is “How Competitive Forces Shape Strategy” in Harvard Business Review 57, March – April 1979, pages 86-93

Michael Porter’s key books and publications:

• Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1980
• Competitive Advantage: Creating and Sustaining Superior Performance, 1985
• Competition in Global Industries, 1986
• The Competitive Advantage of Nations, 1990

SWOT analysis

SWOT Analysis

Is a planning tool used to understand the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business. It involves specifying the objective of the business or project and identifying the internal and external factors that are supportive or unfavourable to achieving that objective. SWOT is often used as part of a strategic planning process.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats.

There are several ways of graphically representing the this on an analysis matrix or grid. Several versions are shown on this page – use the one which is best suited to your application and preferred style.

While at first glance this looks like a simple model and easy to apply, I can say from experience, that to do a SWOT analysis that is both effective and meaningful, requires time and a significant resource. This cannot be done effectively by just one person. It requires a team effort.  The methodology has the advantage of being used as a ‘quick and dirty’ tool or a comprehensive management too, and that one can lead to the other. This flexibility is one of the factors that has contributed to its success.

The term “SWOT ANALYSIS” is in itself an interesting term. Many believe the SWOT is not an analysis, but a summary of a set of previous analyses – even if those were not more than 15 minutes of mini-brainstorming with yourself in front of your computer. The analysis or more correctly interpretation comes after the S W O T summary has been produced.

Read more

Evaluating the impact of training – another failure

On one forum I regularly visit was the question:

• I am currently trying to answer a question for my course, but have hit a slight problem.
  The question I need to answer for my written project is:-
  Conduct an analysis to determine the effects that training has had on the success of your organisation.
  I was planning on writing about Customer Service training we have been running on going for the last 18 months, but all the recent reports I have read have shown our customer satisfaction has actually gone down.
  I thought I could use another topic but it has come to light that my organisation is very poor at evaluating the impact of training so could not produce me with any hard proof that our training is helping.
  Has anyone got any ideas on how else I could answer this question?
  

This is a common challenge

From the little information the individual have provided it does appear that there is strong anecdotal evidence that training is having a negative impact – this is helpful and a an effect on the success of the organisation.

If I were the L&D or Training manager I would be looking at the training we are doing, the customer satisfaction results and looking for correlation – unfortunately this impact is common but because it is negative people tend to dismiss it – it is information plain and simple.

Was it Einstein that said “the definition of insanity is doing the same things and expecting different results”?

The fact that the initial results have show that training is NOT helping, is a legitimate evaluation result – just not what many have been expected to obtain.

Evaluation in the marketing world requires a number of different attempts and to progress with the strategy which is the most successful – they trial – in many training interventions it is the first solution that is deployed. This is a side effect of training becoming a commodity – the reality is that training is and never will be a commodity – but for as long as it is treated this way organisations will not get the best of returns.

Solution
As an L&D or training function we need to look at what we can learn from other parts of the business world, and in the case of evaluation from the world of marketing. When rolling out a programme for a significant number of people that needs to have a substantial business impact we need to make sure we understand the needs and the audience, then we need to run a number of controlled pilots (not just one) and then to evaluate which method delivers the best business benefit – or indeed to go back to the drawing board.

This is a reason why L&D must be strategically aligned to the business and its objectives, otherwise we just will not have the time to research and develop effective solutions and run the ‘first solution’ off the starting blocks – and then wonder why as a function we are often not seen as strategic in many organisations – time to stop the catch-22 situation and educate our managers.
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Mike Morrison is director of RapidBI, an organizational effectiveness consultancy. He has been involved in HR, OD and strategic development for over 20 years. He can be contacted via www.rapidbi.com/

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