Is It From The Outside-in or The Inside-out?

For the past decade, we witnessed a revolution in the HR field. The notion of HR from the outside-in has marked a drastic change in how HR should deal with environmental scanning as part of strategic HR management.

Dave Ulrich, the founder of this rule says that effective HR practices are maximized when HR looks first at the external environment (Customers, communities, and investors) to understand its dynamics and to reflect them to the internal environment (Employees and line managers), which is HR from the outside-in.

If the community where your organization is placed demands a highly responsible organization, HR must reflect that demand into a strategy. It could be to enhance the environmental footprint (Increasing the number of recycled products).

 I agree with the principle. I see it as a key to organizational survival in these difficult times.

A few weeks ago, the QA head of my company came to my office and asked me to think of a new strategic idea as part of our yearly QMS requirements for renewal.

This idea (HR from the outside-in) crossed my mind. I wondered how HR might excel at applying that rule. Business acumen is a driver if we aspire to reflect the outside realities of the external environment.

This agenda has been in place for a long time, and HR is becoming better at it. I believe we missed an approach that builds HR acumen for people outside HR (Executive management, line managers, supervisors, etc.). It’s an inside-out approach.

This approach is about increasing the HR knowledge of the internal stakeholders outside HR through which we focus on leveraging the trust level in HR because people outside HR always complain that HR is not supporting the business as should be.

This perception is generated based on the experiences of their interaction with HR, which in big part shows the admin side of HR while, it should manifest the strategic footprint of HR.

Usually, the HR strategic agenda takes a long time to be materialized, and that's why internal stakeholders judge HR as a non-added value function.

By adopting the inside-out (HR acumen) approach HR can accelerate the HR strategic agenda. When the internal stakeholders understand the value triggers of HR, they will take part in the HR agenda. Here HR reinforces the idea of HR contribution. HR is not about HR; HR is here to support the business (As stated by Dave Ulrich).

There are many ways that HR can create HR acumen. You can assign general HR courses to your managers, or you can send them to the local training center, you could also design an orientation program for the managers in your company. Through which you get them into HR to be exposed firsthand to real-life HR situations. For me, I have decided to deliver the HR training myself. This is the benefit of being a trainer.

The logic between these notions (HR from the outside in and HR from the inside out) is represented below by adding a third stage that marks a complete picture.

The first stage is a prerequisite for the second one. HR would be in a better place when they prepare the managers and the employees in terms of their readiness to accept the information from the external environment and to deal with it as it supports the business. Although managers are mostly acquainted with the external environment, the fact that HR is the one responsible to shape the input from the external environment is new to the business world.

When HR adds the first stage in the context of the outside-in, then the next stage would be much more powerful. HR would easily connect to the outside when the managers are aware of that mission. They will support it because they are now vested to contribute to the HR agenda

I always receive regular feedback from the line managers about their desire to learn HR, so it’s time for HR to step in to add more value to the business.

The final stage (Stage 3) is when HR tackles the information from the second stage and delivers its value to the managers and employees. The goal is to make everyone understands their contribution to the business.

Finally, HR from the outside in is still the principle behind HR success. HR from the inside out is a complementary approach that increases your chances of success.