Business Drivers Framework

When Should We Use this Framework?

HR transformation and the envisioned new world of HR must be hard wired to the critical business issues. Our starting point is, therefore, to consider critical business drivers. Why? Without this thought, it will be impossible to:

• make a coherent case for HR transformation;
• identify HR's priorities;
• link the new world of HR to the realities that face your business.

Put another way, identifying your critical business drivers helps the HR function to answer:

• What is wrong with the way things are?
• Where is the focus for the future?
• How will the proposed way of delivering HR help the business to perform more effectively?

What Does the Framework Look Like?

Figure 1 represents visually the business drivers framework. This framework has been used in the private, public and not-for-profit sectors; hence its broad applicability has been proven.

 

Figure 1: Business drivers framework.

The framework considers the three main drivers of organisational effectiveness: revenue growth, cost efficiency and brand identity. Each of the drivers is then considered from three perspectives (you may wish to tailor these, but we have found that they tend to work well).

For revenue growth we consider:

• Customers, who are the recipients of the products/services provided by the organisation (who are they, how do we retain them, how do we attract new customers in existing markets and will we need to move into new markets and attract new types of customer?),
• Geography (where do we operate now and where are we likely to operate in the future?),
• Innovation around new products and services (what do we need to do differently to compete effectively or satisfy customer requirements?).

For cost efficiency we consider:

• Productivity (how productive are we compared to relevant benchmarks? Where do we need to raise performance and productivity? How well do we measure and reward productivity?),
• Work process efficiency/effectiveness (how well do key processes work? What are the areas of strength, areas for improvement and future needs?)
• Capital project returns (What are our key capital projects? What is our track record in delivering anticipated benefits?).

For brand identity we consider:

• Brand values (what do we stand for as an organisation and how well do we demonstrate our values internally and externally?),
• Image and reputation (what is our current image and reputation, what might undermine it and how can we protect/enhance it?),
• Consistency (to what extent are we acting in a consistent way with our customers and employees and how might future challenges help/hinder our ability to deliver consistently?).
  
  

How Do I Use this Framework?

This framework is best used in a workshop setting. We have also found it useful in one-to-one discussions to get individual perspectives and stimulate debate, but ultimately there needs to be a sharing of perspectives on critical business drivers, and this is best achieved when people are in the same room and are able to engage with one another.

To have a meaningful discussion about business drivers requires some preparation. You should draw on current knowledge of the business to populate these areas in advance of the workshop or, if you are confident that workshop attendees will have sufficient knowledge, you can populate these areas at the workshop. Where we have doubted that sufficient information will surface at a workshop, we have used a combination of pre-briefing people, inviting a senior internal client to talk about key organisational issues, and allocating pre-work so that participants can research an area.

Once there is a shared understanding of the critical business drivers, this then enables the key HR leaders and stakeholders to address three questions:

1. What are the critical people priorities that emerge from these business drivers?
2. How well are we currently equipped as an HR function to deliver these priorities?
3. How does the HR function need to change to help the business succeed?

Discussion of these areas will move you a long way towards defining the HR transformation agenda and priorities.