“The winners of the game will be those who know the most, know it first, and are the quickest to turn knowledge into intelligence.”
ó Robert E. Flynn, Former Chairman and CEO Nutrasweet Co.
We all agree that the answer to HR becoming more strategic and a more integral part of decision-making processes includes activities such as metrics, planning, and additional education. One other change that must be part of this transformation is for HR to demonstrate a formal understanding of the competition. This formal understanding includes collecting, analyzing, and communicating competitive intelligence (CI) that is gathered from the HR vantage point. CI is passing over your desk, through your email, and within your conversations. All you need to do is understand what to look for, how it can benefit HR, why it is needed now, and what steps to take to have an impact. Simply put, HR has access to competitive information that other functions do not. With this knowledge, HR can be a strategic force within any organization. CI Defined Competitive intelligence is not espionage or some other covert activity reserved only for international men of mystery. According to SCIP.org, competitive intelligence is simply “a systematic and ethical program for gathering and analyzing information about your competitor’s activities and general business trends to further your own company’s goals.” World-class CI involves having a consistent process for data collection, data analysis and the communication of findings tailored to the people who make decisions. An effective CI program can tell you how you are doing against your competition in the areas of people, process, and technology. This is something that other “strategic” business functions within your organization likely already understand. HR and Competition Even though most HR organizations operate in an extremely competitive environment, they lack any formal CI process. When success often depends on beating your competition head-to-head ó and a single “win” can have as much impact on an organization as closing a major sale ó HR professionals need to demonstrate a competitive advantage through collecting, analyzing, and communicating CI. In contrast, the most successful sales and marketing departments have robust CI capabilities which allow them to develop strategies that result in very high levels of measurable success. As HR evolves, it needs to be equally as aggressive when it comes to the competition. Incorporating CI is a key to showing HR understands (and means) business. HR organizations that incorporate CI capabilities will be more credible, add more value to their organization, and will be more competitive as the economy improves and the battle for the best talent heats up. 8 ways HR Can Benefit From CI Here are eight ways your HR function can benefit from incorporating competitive intelligence into its business practices. Competitive intelligence practices will help you:
- Influence your organization’s strategy: CI directly impacts business strategy. As an internal source of CI, HR will play an important role in strategic decision-making within your organization.
- Anticipate changes in HR: You will not be caught off guard by events that impact HR and your team.
- Anticipate your competitors’ HR decisions: CI can provide an early warning system which will provide valuable insight into your competitors’ strategic HR decisions.
- Directly impact your organization’s competitive advantage: Informed decisions are the basis for creating a competitive advantage for your organization. HR must make decisions using internal, industry, and competitive information. In fact, decisions made without competitive information can negatively impact your organization’s competitive advantage. Internal + Industry + Competitive = Informed Decision.
- Learn about the latest HR processes and technology: Gain knowledge of innovative HR tools and practices used by your competition. Incorporate what you learn or develop a counter-strategy.
- Find new competitors: Identify and track the companies that your candidates are considering and uncover new business and talent competitors.
- Learn from others: Incorporate the successes and failures of your competition into your HR decision making.
- Open your eyes to other HR operations: CI is a great tool for ensuring your internal processes and practices do not become outdated.
In addition to the above eight ways competitive intelligence can benefit your HR function, here are four reasons why you need to start making use of competitive intelligence now:
- HR is changing. CI is even more important if you are in the middle of changing or planning to change any aspect of your HR operations. Whether you are changing your process or your practices, an understanding of what your competition is doing will drastically improve your chances for success.
- The pace will pick up. As the economy improves, you will be making more decisions faster, and likely with fewer resources, so having a full understanding of your internal, industry, and competitive environment will be critical to making the right decisions.
- There is too much data. For any given HR issue there are enormous amounts of data to sift through. This data must be analyzed and packaged in a way that will benefit HR and the rest of the organization.
- The competition will only increase. As the market improves, recruiting and retention will become more competitive and CI can provide the edge that your organization needs.
What to Collect In addition to gathering feedback on your HR own processes, you must know at least half of the following characteristics about your top competitors to compete effectively and create a competitive advantage for your organization.
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- What technologies and tools do they use within HR?
- What do they offer as part of their compensation package?
- How do their benefits compare to your benefits?
- What are the top reasons candidates select you over your competition?
- What are the top reasons candidates select the competition over you?
- What are the best parts of their recruitment process?
- What are the worst parts of their recruitment process?
- What is the value proposition they use to sell candidates?
- What are the best parts of their retention process?
- What are the worst parts of their retention process?
- What are the best parts of their management process?
- What are the worst parts of their management process?
Imagine how collecting and analyzing the information above would impact the planning and decision-making process within HR. Even better, imagine how collecting, analyzing, and communicating the information above to your senior leadership would impact the planning and decision-making process for your entire organization. Something that is very important about the questions above is the fact that, out of the entire organization, HR is the most qualified to collect, analyze, and communicate this information. In a follow-up to this article, I will talk specifically about how to collect, analyze, and communicate CI as well as identify your first steps for changing your organization’s view of HR as a strategic force.