Business acumen? Sounds strange, right?
This might be a word you are not conversant with or have not heard as a newbie in HR.
In your few months or years as an HR professional, you have been told that HR is all about hiring and firing, policing, managing the humans in the workplace, ensuring that they are happy and adhering to the company’s policies. But, this is not all there is to being a solid HR.
In today’s newsletter we will be focusing on something we weren’t told enough in school or even during our HR certification courses.
Being an HR without having business acumen is like driving a car with your eyes half closed.
You might be experienced in creating policies, conducting interviews, carrying out surveys, or boosting engagement, managing performance, onboarding new hires – but if you don’t know and understand how the business makes money, the company’s ROI, the different streams of income and how it survives, then your HR value is very low.
What is Business Acumen?
In simple terms, business acumen is a comprehensive understanding of how a business operates, makes money, delivers and promotes value, sustains itself, and remains relevant in the business world—and how every team/department’s function, including HR, contributes to that.
To further break this down, business acumen means:
- Speaking the language of the business, be it finance, operations, or strategy
- Seeing the bigger picture behind the daily HR tasks (growth, revenue, scaling, etc.)
- Proposing and making HR decisions that align with and support the business goals
- Gaining the trust and respect of management by understanding what them
Business Acumen as a Game-Changer
Having business acumen distinguishes you and gives you an edge over the traditional HR professional. And here is why:
- It projects you as a partner, instead of an “ordinary employee”
- Strategic decisions cannot be made without you in the picture
- You have an understanding of what profit margin means and how it impacts operations
- You have a broad understanding of how employee turnover and hiring decisions affect revenue
- You understand how each employee, team member, department and decision are interwoven and cannot survive alone
How To Build Your Business Acumen as an HR Newbie
1. Start by learning the business model and channels of the company. You can start by asking the following questions:
- How does my company make money?
- What are my company’s top products and services?
- Who are the customers, consumers, and end-users?
- What are the biggest challenges right now?
- Are there products and services we can diversify
- Is there a need to expand our operations beyond our locality?
2. Go through the company’s financial statements and records.
- Look at your company’s annual report or budget
- Ask questions where and when you are confused
- Do not become an investigator. Seek to know and understand
- Understand both basic and difficult terms
- Do not rush the process. You are dealing with numbers and figures, so you will need to be patient
3. Shadow and Collaborate with other Non-HR Colleagues
Like the Operations team, Health and Safety team, Procurement team, IT and Communications team, PR team, etc. Talk to the managers, supervisors, team leads and team members.
The idea is to have an understanding of how they function in their individual roles, why their roles are important, and how they align with the overall vision of the company.
This will help you to design HR initiatives and strategies that are practical and business-oriented.
Ask questions:
- How does each team function?
- What is each department’s workflow?
- What’s one challenge the team is facing?
- How can HR support the team better?
4. Attend strategic meetings
Demand to be invited. Show that you deserve a seat and that you have what it takes.
Doing this will expose you to:
- What matters to the management
- How the business angle of the company functions
- How decisions are made
- How HR fits into the overall business plan
5. Get involved
Get your hands dirty. Visit the company’s sites (if this is the case for you). Know how to market the company’s products and services.
Be an all-rounder. Attend business meetings held outside of the company, conferences, events and exhibitions.
Do you know what this will do?
- You will have first-hand experience with all the teams
- You cannot be sidelined easily
- You will be able to generate ideas for the company
- You will be able to offer solutions on a larger scale
Steps to Take to Develop Your Business Acumen Skills
- Take business and strategy courses (online and offline)
- Read books on business
- Subscribe to newsletters
- Listen to podcasts relating to business
- Follow industry news and trends
- Seek to learn. Ask questions
- Learn to collate and interpret HR data (turnover rate, cost of hire, performance, etc.)
- Seek mentorship and caoching
Final Note
You are not “just HR.” You are an HR leader with a business mindset that drives business growth. The earlier you start thinking like one, the faster you will grow.
Step up your HR game!!!
Freebie!!!
We want you to take action right away, that is why we have designed a Development Tracker to track your Business Acumen Skills.
Click on the link to access your freebie and start building your skills.