Behavioral Competencies - Business Cluster Flashcards
Business Acumen sub-competencies
the KSAOs needed to understand the organization’s operations, functions and external environment, and to apply business tools and analyses that inform HR initiatives and operations consistent with the overall strategic direction of the organization
- Business and competitive awareness
- Business analysis
- Strategic alignment
business and compitetive awareness
Reflects an understanding of the organization’s operations, products, and services while considering the economic, social, and political environment in which the business may operate. The organization must be knowledgable of other practices in similar industries while keeping up with internal, external, and local factors.
This can be done through benchmarking or following news and trends. Organizations can ensure they are competitive by focusing on human development, the current labor market, financial policies, level of business sophistication, and overall quality of products, services, and work environment
competitive advantage
Competitive advantage refers to the factors that allow a company to produce good/services better or more cheaply than its rivals (ie. cost structure, branding, quality of product offerings, IP, customer service, etc.)
return on investment (ROI)
ROI is usually reflected as a percentage that measures how beneficial a new tool or practice has been compared to its initial investment (ROI = net return on investment / cost of investment x 100%)
return on equity (ROE)
ROE is the amount of money made compared to the average investment of each shareholder. ROE is usually a foundation of an organization’s strategic plan because the primary goal of any business leader is to offer its shareholders the largest possible return on its investment
balance sheet
A balance sheet conveys financial position and reports a company’s assets, liabilities, and equity over a specified period of time
Assets - Liabilities = Equity
asset
asset is any resource possessed by the company as a result of previous actions and from which future gains are expected
liability
A current obligation as a result of previous actions expected to result in an outflow of resources
Equity
The residual interest and assets after deducting all liabilities
budget
Collecting relevant or historical data and often stems from the organizational vision and strategic plan. The strategic plan should ensure that resources are used to support the organizational objectives.
Fixed costs, variable costs, and revenue estimates can be developed to establish the budget
bottom-up vs. top-down budgeting
Bottom-up budgeting requires department supervisors to forecast departmental expenses and payroll costs for the coming period. This method relies heavily on lower-level supervisors, with assistance from HR and final approval from top managers
Top-down budgeting involves estimating expenses and payroll costs for an entire organization than allocating a set amount to each department manager, leaving them responsible for managing their funds
cash flow statements
Cash flow refers to the amount of money taken in compared to the amount of money spent during each period.
- One obvious key factor of cash flow is profits
- Expenditures should be kept within budget and sustained
profit and loss statement
Reports a company’s income, expenses, and profits over a specified period of time.
- Income or profits increase in the form of inflows, expansion of assets, or reducing liabilities, resulting in an increase in equity.
- Expenses include decline in the form of outflows, depletion of assets, or undertaking of liabilities, resulting in decreases in equity, not including distributions
What are common elements of a business case?
A business case is a document produced to explore solutions to business problem. Based on objective data, a properly written business case clears up any potential confusion early in the project timeline, helping the firm complete the objectives more effectively.
- Problem statement: what needs to be fixed?
- Background: what caused the issues? what is needed to solve it?
- Objectives: how will this help the firm?
- Current status: how will this affect current operations?
- Requirements: what is required of the project (ie. capital, staffing, time commitment, etc.)?
- Alternatives: what are alternative solutions?
- Additional considerations: what are the potential risks or downstream effects?
- Action plan: how will the project get done?
- Executive summary
Online analytical processing (OLAP)
OLAP is on demand and facilitates decision-making. It’s capable of reporting, what-if planning, and trend spotting. OLAP allows the user to view data from different angles, which provides a deeper understanding of the subject at hand.
Consists of three basic analytical operations: consolidation (roll-up), drill-down, and slicing and dicing
OLAP clients include many spreadsheet programs like Excel, web application, SQL, dashboard tools, etc.
advanced analytics
Advanced analytics, by way of data mining, reporting, formulas, and algorithms, can be used for forecasting, pattern detection, and demonstrating correlation
business intelligence portals
A business intelligence portal is a centrally stored collection of firm data that’s accessible on demand across the organization. The portal has a user interface that allows employees to run a number of analytical processes. The portal will show the results of queries in a visual format, making it easier to spot trends and answer business questions
Profitability ratio
Profitability ratios analyze a business’s ability to generate earnings in comparison to expense costs
- Gross profit margin = revenue - cost of production (or cost of good sold)
- Operating margin (return on sales) = operating income (or revenue - COGS) / net sales
Liquidity ratio
Liquidity ratios measure the business’ available cash or ability to pay off short-term debts (can we turn assets into cash quickly and cheaply)
- current ratio (ability to pay off current abilities) = current assets / current liabilities
- quick ratio (ability to meet short-term obligations w/its most liquid assets) = [(cash & cash equivalents) + (marketable securities) + (accounts receivable)] / current liabilities
What are the three most common operations and business development metrics used to measure performance?
- Number of activities: an exact or estimated count of how many tasks the organization is attempting to do at one time (workload capacity)
- Opportunity success rate = the number of opportunities taken advantage of / total number of opportunities available
- innovation rate = gross revenue from new ideas, products and services / total gross revenue
Business analysis methodology
Business analysis methodology works as a vehicle for introducing change into an organization, the product of which is often a series of proposed solutions that align stakeholder needs and business capabilities.
HR practitioners might assist with business analysis in the form of being strategists (ie. SWOT) identifying leadership goals, or acting as change agents.
What are the sub-competencies of consultation?
Consultation is defined as the KSAOs needed to work with organizational stakeholders in evaluating business challenges and identifying opportunities for the design, implementation and evaluation of change initiatives, and to build ongoing support for HR solutions that meet the changing needs of customers and the business.
⊲ Evaluating Business Challenges ⊲ Designing HR Solutions ⊲ Advising on HR Solutions ⊲ Change Management ⊲ Service Excellence
Lewin’s change management model
Kurt Lewin’s theory of change describes three stages for planning change:
- Unfreezing - occurs when current values, attitudes, and behaviors are challenged, and people understand the need for change
- Change - action phase, whereby the situation is examined, and a new equilibrium is created. People develop new values, attitudes, or patterns of behaviors
- Refreezing - change is stabilized and new patterns are solidified. Refreezing requires that people experience positive consequences to strengthen their continuing commitment to the change process
McKinsey 7S model
The McKinsey 7-S model is used in strategic planning and change management. You can use the model to identify which elements of the 7-S’ you need to realign to improve performance, or to maintain alignment and performance during other changes. These changes could include restructuring, new processes, an organizational merger, new systems, and a change of leadership.
- Strategy - plan for competitive advantage and growth regarding business, products, and markets
- Structure - structure of reporting hierarchy
- Systems - everyday procedures and processes
- Shared values - core concepts and work ethic, organizational mission, and goals
- Style - leadership approach and operational culture
- Staff - employee development and empowerment
- Skills - competencies and capabilities
Kotter’s 8-step change model
- Create a sense of urgency - examine the competitive market, identify threats or opportunities, articulate importance of speed, and make the case for change
- Build a guiding coalition - establish support from executives, and design a group with credibility and power to lead change efforts
- Develop a shared vision and strategy - create a plan to direct change efforts, and develop success metrics
- Communicate the change vision
- Empower action - eliminate obstacles, systems, or structures that undermine the new idea, and reward creativity
- Generate short-term wins - recognize and reward visible improvements in performance
- Capitalize on momentum - take advantage of small wins, reinvite those who have resisted, and become reenergized
- Make the change stick - continue to encourage new behaviors and leadership development
Kubler-Ross change curve
Kübler-Ross Change Curve model has been extensively used by individuals and organizations to help people understand their reactions to significant change or loss
- Shock
- Denial
- Frustration
- Depression
- Experiment - initial engagement with new situation
- Decision - learning how to work in new situation; feeling more positive
- Integration - changes integrated, renewed individual
Dalton’s theory of lasting change
Many change efforts struggle to produce lasting and sustainable results. Although initial goals may be met, the ability to stick to the efforts or behaviors needed to prolong the success proves to be more difficult.
Gene Dalton argued that change would not occur without a feeling of loss or pain to motivate it and that people will continue old patterns of behavior unless they feel a need for change.
What are examples of organizational change management processes
Examples include:
- obtaining leadership buy-in;
- building a case for change (ie. action research model, data gathering, feedback)
- engaging employees (ie. asking for feedback)
- communicating change;
- removing barriers (ie. regular communication, involving employee advocates, training programs or technologies)
What are tactics to accomplish a successful change effort?
- have a change sponsor lead the initiative
- communicate a clear need for the change
- create a shared vision of the organization post change
- rally commitment or request participation from all involved
- integrate past systems, structures, policies, and procedures into the new normal
- monitor progress and benchmark results against other successful companies
- make change sustainable by having a clear plan and rewarding desired behavior
Why do change efforts fail?
- change was not strategically aligned with organizational goals or mission
- change was not communicated meaningfully or was perceived as a superficial, quick fix
- change was unrealistic given the current economic and political environment
- change leaders were inadequate or lacked the necessary commitment
- measurable goals or timelines were not established
- resistance to the change thwarted change efforts
discovery phase of consultation
The first step of the consultation process, during discovery consultants get all the relevant information through an audit process and review the facts. In this phase, consultant will hear business and user requirements This may be done through methods like content analysis and employee interviews
analysis and solution of consultation process
After discovery, consultants should conduct a SWOT analysis as well as utilize any other methods that are appropriate for the situation. The consultant should investigate best practices and strive for solutions that fit the staff and customers.
Once the organizational culture and any potential barriers have been considered, a diagnosis can be made, and solutions can be created. **Engage stakeholders in developing solutions when possible for increased satisfaction with the process and outcome
recommendation (consulting process)
Recommended actions and goals should be detailed in. a strategic project plan. During this stage it is important to clearly document how the solution will develop from the current state to the desired state and how the process will be managed.
implementation (consulting process)
Once the strategic project plan has been accepted, implementing the solution is critical. HR consultants must manage all logistics to include staffing, scheduling, procuring needed supplies and equipment, and communicating the project status to stakeholders.
Clear processes and procedures to support and utilize the situation should be established, and training opportunities should be available as needed.
What are effective consulting techniques?
- Understand organizational culture > how and why a company operates
- Recognize the areas and limits of your own expertise > defer to other resources or consultants
- Set reasonable expectations > explain what is realistic and why, communicate changes
- avoid overpromising
What are key components of successful client interactions?
Listening, empathy, communication, and follow-up
What are the sub-competencies of analytical aptitude?
The KSAOs needed to collect and analyze qualitative and quantitative data, and to interpret and promote findings that evaluate HR initiatives and inform business decisions and recommendations.
⊲ Data Advocate
⊲ Data Gathering
⊲ Data Analysis
⊲ Evidence-Based Decision-Making
descriptive statistics
Descriptive statistics are used to summarize data that has been collected. Descriptive statistics can measure central tendency, dispersion, variability, frequency distribution, and proportions.
Most common descriptive statistics is the average or mean.
Correlation
Correlation is the relationship between two variables. The strength of this relationship, or the correlation coefficient, is reflected as a range from -1.0 to 0 for negative correlations and 0 to 1.0 for positive correlations
Regression analysis
Frequently used for predicting and forecasting, regression analysis is another statistical measurement used to find relationships among a set of variables. Regression analysis estimates or predicts the unknown values of one variable (dependent variable, labeled as Y) from the known or fixed value of another variable (independent variable, labeled as X).
Linear regression = only one independent variable to consider
Multiple regression = multiple independent variable to consider
