Monday, October 22, 2018

Financial Statement The Blind Spot

One day I run into an executive of a profit organization and talked about the company's latest developments. He said  "we are currently reviewing financial statements such as income statement, balance sheet, financial offecir analysis , marketing and sales managers anaylsis to build future outlook and strategy". I said "well that is good but its not enough". He sat down moderately and looked at me and said "explain to me your point of view".

I told him the financial statements and information collected from the dealers directly from the market and customers is necessary and important to build a future strategic plan but it is not everything, for example If you put a program for new products, marketing and sales plan for the employees and managers to implement it and use the budget and resources required according to information and data as your measure, and you find out at the end of the year that sales are not as expected although everyone has implemented the program very carefully, how  you can explain the faults? The executive said maybe the product was defected or the marketing plan was not appropriate or the staff were not efficient in sale there are many variables to look for.

I said what if I told you that the plan was implemented as required but the customers have a negative experience with the staff of the product department because of system failure, they do not respond directly and quickly with the customers requirements and there are  delays in serving  the customer at the branches. The  executive replied how this could happen? I explain to him, because the system used by the staff is old, number of employees few compared to the size of the workload and the staff did not get proper training they just been briefed with the program and how to implement it, the executive said how I did not know about all that?

I said to him because this information was with the human resources that participated in the strategy as an executor and not as a strategic partner and decision maker like the financial offecir and marketing and sales manager who both provided you with previous information regarding only numbers and statisitcs but not the human the most important assessts in the organization to successed, the work environment and conidtions, the staff competency readiness. The executive start thinking does the human resources who is responsible for salaries, pensions and labor laws have this impact on strategy and oraganization?

This story is similar with many organization leaders who still see human resources as the function of processing employees welfare and benefits and following orders of leaders to adjust what they need in policies, procedures to fit organization need and strategy, but the reality today state that human resources is the heart of the company and part of its mind too to balance and rationlize the decision making and solving problems as well as facing challenges and leavragin on core competency of the organization to overcome competitors and grow in the market to sustain organization growth.

Human resources today consider as strategic partner, not only focus on outcomes but also on adding value to the organization's strategy, fullfiling vision and mission of the organization and work on enabling  implementation in the organization by making sure employees have the right competencies, maintaing positive organizational culture, communicating vision and mission and strategy to all levels making sure they addopt it and accepted, supporting employees development and career growth, algining organization with external environment, all these and more human resources can and will do by becoming strategic partner in the organization.  



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