7 Tips to Gain Business Acumen: A Call to Action for HR to Transform
Recently, the Human Capital Leadership Institute (HCLI) and Mercer held a webinar on ‘Transforming the Future of Business Through HR: Human Capital Capabilities for the Future’.
It was moderated by Doris Sohmen-Pao (CEO, HCLI) with Alexander Hungate (President & CEO, SATS), Stephanie Nash (Chief People Officer, ChapmanV and Co-creator, Thrive HR Exchange), and Lewis Garrad (Partner & Business Leader, Mercer)
The overall theme was clear: HR has great potential to drive business strategy through people, but to do so, HR professionals need to have business acumen to play their new roles of Strategic Business Partner, Marketer and Culture Shaper.
The Changing World of Work… and the Workforce
The world of work has changed. There are now rapidly multiplying ways to be closer to the customer with the digitalisation of everything, and (thankfully) there is a shifting focus on not just doing well but also doing good for people and the planet.
These shifts impact the workforce requiring new cognitive, tech and social skills; creating new modalities around work flexibility; and demanding new concerns around purpose and social responsibility. In a recent Gartner survey of 800 HR leaders, 68% said their first priority is building new critical skills and competencies for their workforce—an objective that has topped the priorities of HR leaders for three consecutive years.
However, if HR leaders want to drive transformation, they too need to build skills themselves. The most critical skill of all? Business acumen.
Only with business acumen can HR leaders connect human capital to business strategy in an incredibly powerful way.
Three Areas Where HR Leaders Can Really Make a Difference to their Business
HR Leaders as Strategic Business Partners
Stephanie Nash stressed the need for HR Leaders to be tech-driven and comfortable with all kinds of data. Knowing how to use technology to take care of more administrative areas of HR allows you to have more energy to focus on strategy. It will also give you data insights on important indicators like employee engagement, turnover rate, and informal networks. Furthermore, HR leaders need to go beyond these traditional areas of HR. They need to know wider business metrics such as P&L’s and understand internal business processes. They also need to be aware of external business environments and know how to manage multiple stakeholders.
‘You got to remember business heads are living day to day with P&L’s,’ Hungate shared in the webinar, ‘they’ve got a lot of data on how they're performing operationally, [their] customer satisfaction, financials etc., and so when the when you come to the table as a human capital professional and you can use data just as powerfully to illustrate how [business issues] might be overcome through human capital, you become a very powerful partner.’
It’s this combination of being comfortable with data and knowing the business that allows you to speak the language of senior leadership, giving you the power to propose human capital solutions to solve business challenges.
However, HR leaders not only need to amplify their communication with the C-suite, but also with the company’s talent.
HR Leaders as Marketers
HR leaders have a real power to drive purpose and meaning throughout the organisation in a way that can help to attract and retain talent, and improve employee experience. This means that they are going to have to think like a marketeer.
Nash shares that HR leaders need to know their adjacent competitors and what is the value proposition that they are bringing to market for candidates, so they know what is unique about their own organisation, and what they offer to their employees. They also need to ensure their employees are confident in describing the purpose of the organisation to external parties.
Furthermore, any culture change cannot happen without communicating like a marketeer, according to Hungate: ‘Who are the different segments that we're shooting for? Where are the gaps? How do we reach those people who may not be sitting at computers all day, for example? You got to understand where they live, how they think, where they're coming from, the best way to communicate, just like a marketing person.’
HR Leaders as Culture Shapers
One of the biggest ways HR Leaders can connect people strategy to business strategy is through intentional culture-building. Hungate shares,
‘Culture is a capability, and it may arguably be the most important capability that any company brings, to whether or not it's going to achieve its strategic goals…[HR leaders] must be thinking intentionally about where the culture needs to be for [the organisation] to be successful in achieving its vision.’
For example, if your company wants to increase digital innovation in the next 5 years, what kind of culture would you need to cultivate to support that goal?
Culture can be a fluffy thing, however. Garrad points out that when it comes to culture, we often ‘obsess about changing mindsets’. However, that’s not a strategy for real change. Asking people to have a growth mindset is kind of murky and confusing. What you may want to think about is to equip people with ‘the skills to build skills’, or what he calls Critical Core skills.
As our panelists have shared, all these three emerging roles need HR professionals who have business acumen: a good grasp on financials, an ability to manage internal and external stakeholders, and the skill to cultivate a culture that supports business strategy. But business acumen is very broad and can be daunting to tackle – which is why HCLI designed an HR Business Acumen Programme that takes participants through step-by-step.
As Hungate said,
‘All learning happens outside our comfort zone, as we know, so create those opportunities to get outside your comfort zone and you and your learning curve will start to accelerate.’
7 Tips to Gain Business Acumen
- Sit down with your Chief Financial Officer. Ask your CFO for some time and create a clear development plan around what it is you want to learn in terms of the business, the path that you would like to get there, and what his or her role could be in helping you achieve that. (Strategic Business Partner)
- Spend time with customers. Businesses thrive on understanding their customers. This is a key part of knowing your business and understanding strategy. (Strategic Business Partner)
- Take a course that can help you gain business acumen. This gives you all the tools and skills you’ll need to cultivate your business acumen in a more structured way. Make sure the course isn’t all theory but offers hands-on learning and experience that you can test out. (Strategic Business Partner)
- Talk to your Chief Marketing Officer. Ask your CMO and your marketing team about their opinions on current employer branding and internal communications: what’s working and what isn’t? (Marketer)
- Research your competitors. How are your competitors communicating to their talent? How do they brand themselves and market themselves to candidates? Notice what sets your organisation apart. Notice what you can learn from. (Marketer)
- Form a mentor-mentee relationship with a key business leader. Not only can you learn first-hand from them about the business you can also work together to see how culture can really support business strategy. (Culture Shaper)
- Find ways to jump into business issues. Volunteer, get out of your comfort zone, get onto business projects where it’s not obvious that human capital and culture change would be one of the solutions: take that leap and get stuck in. (Culture Shaper)
To conclude, HR leaders need to commit to continuous learning, and as Nash says, to ‘not be afraid to increase our tolerance for risk and to recognise that there is no playbook, there is no crystal ball and we constantly need to find new solutions to meet new human capital challenges.
If you’re just applying the thinking you’ve grown up within your organisation to many of these new business problems, you’re missing so much of what HR has to offer, as Garrad pointed out in the webinar, ‘What we really ask, is that the human capital function be as innovative as the business itself is innovative.’
Learn more here about how HCLI can help HR Leaders gain business acumen.