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Building Business Acumen in HR

14 Jan 2014

A recent survey highlighted that 98% of HR professionals feel that it's important that people working in HR have well developed business awareness, however only 1 in 10 of the survey's respondents felt their HR department has the business acumen it need to deliver change.

We recently had the pleasure of hosting a seminar by Peter Casebow, of Good Practice, and John Ferguson, of John Ferguson Leadership, on Building Business Acumen in HR. The event highlighted how the HR industry is evolving and what it needs to do to gain the necessary skills for commercial success.

Here is an overview on what was discussed:

Where We Are

HR departments need support. In a recent report submitted by KPMG, it highlighted that only 25% of businesses felt that HR adds value to the business.

Perceptions are skewed and confusion is high. HR is seen either as an administration function, or people focused outcomes that don't tie in with business outcomes.

How quickly are HR departments ready to change, and are they ready for more risk lead leadership?

Building Business Acumen

Business acumen is the ability to make good judgements and efficient business decions.

With widespread reports of the UK economy improving, businesses are beginning to recruit again. However it's still difficult for HR and many professionals are still feeling the strains of the burden that the most recent financial crisis brought with it.

Building business acumen skills is no mean feat. In order to serve business requirements, HR teams need to predict where the business is going, and some businesses just don't know.

John highlighted that HR spend more time on steps where less value is at risk and less time on steps where more value is at risk. HR teams need to be integrated into the wider business. Using tools such as McKinsley's 3 Horizons enables HR departments to think ahead and set long term business objectives, rather than focusing primarily on the day to day operations.

In order to become commercially viable, the HR profession needs to shift its mind-set. The key question is "does the rest of the business ‘get it'"? Using HR terminology can confuse other business functions, so coach them to show how HR adds value across the entire business.

Commercially astute HR Managers don't shy away from friction. They push the boundaries of their profession to make a connection with the rest of the business.

7 Habits of a Commercial HR Professionals
  • Identify where the business is and what its challenges are
  • Understands business objectives
  • Innovatice and uses fresh insight to drive business goals
  • Sets departmental goals that complement the organisation's objectives
  • Inquisitive and keen to learn from other departments
  • Shares knowledge and information with colleagues
  • Able to get acknowledgement from senior colleagues for business growth

Final Thoughts

The perception that businesses do not have a business focus is an on-going issue, however what has caused this problem in the first place?

John mentioned that many people feel that HR is too compliant, and has been regarded as a business follower, rather than innovator for many years. However the key question to ask is why does the business accept these perceptions of HR?

It's a perennial debate, however why is HR still not at the board table? In order to do so, HR needs to spread its wings and take ownershio of changing perceptions. HR professionals should engage with employees in other departments, to develop commercial skills that complement business objectives.

Businesses should also ensure that HR departments are included in the distribution list of strategic documents. This will help align HR with the rest of the business, and ensure that everyone across the business has the goal in sight.

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