Because HR’s fundamental role is to support sustainable organisational performance, being able to demonstrate business, contextual and organisational savvy is vital – and becoming more so as companies become increasingly complex.
This is the key finding of a panel discussion entitled ‘Giving HR the Business Edge: how HR can drive impact and influence’, which took place at the annual Chartered Institute of Personnel and Development conference in Manchester last week.
A survey of HR professionals undertaken by the CIPD found that three quarters either ‘agreed’ or ‘strongly agreed’ that their role was to support the organisation in delivering on business strategy, while a mere 1% ‘disagreed’.
But three out of five likewise either ‘agreed’ or ‘strongly agreed’ that the function needed to build up its ability to understand business issues compared with 20% who ‘disagreed’ or ‘strongly disagreed’ and the rest who did not know.
Perhaps unsurprisingly then, John McGurk, the CIPD’s adviser on learning and talent development, pointed to a growing trend among employers to appoint HR directors from non-HR backgrounds such as legal, marketing, operations and sales.
While this was not to negate the value of traditional HR disciplines, what it did indicate was that they were no longer enough in and of themselves and that HR for HR’s sake was not the way to go. As a result, it was no longer possible to simply “rely on HR practice and competencies as a comfort blanket”, McGurk said.
Business person first
Tim Douglas, interim HR director and consultant, put it another way, however: “I’m a business person first and I just happen to know about HR,” he said.
What such a statement meant in practice was being able to view the business in the round rather than simply from an HR perspective. It included, for example, being able to understand how money flowed through the organisation and who helped to bring it in, whether it was sales people, fundraisers or others.
Ed Griffin, development partner at HR consultancy, the Breathe Partnership, explained: “Ask yourself where value is created in the organisation? HRs sometimes say they’ve lost sight of that and so don’t understand who the most critical people in their organisation are, even though many of them are dealing with questions of sustainability.”
Other useful considerations, meanwhile, were to evaluate who was a “hill or a mountain” in terms of power and influence, what processes were vital for the organisation to thrive and what the ratio of sales and profit to staff cost were so that they could be improved upon.
John Kempton, HR director at the Institute of Cancer Research, for example, said that he was currently undertaking a major restructuring of staff pay costs due to funding changes and a requirement by the charity to develop new imaging centres. But rather than simply wait for the finance director to tell him that cuts would likely be necessary, Kempton took a more strategic approach by proactively working out what was affordable or not in personnel terms.
Building business savvy
Another thing for HR professionals to think about, however, was their use of language in general, and of jargon in particular, in order to communicate with and influence others, the ultimate aim being to ‘land’ issues and enhance their own credibility.
But the problem with credibility was that it could end up being part of either a vicious or a virtuous circle. Griffin explained: “So if you’re very personally credible, you’re more likely to meet with key decision-makers and see the basis of why decisions are made. But if you’re not business savvy, you won’t know they’re taking place. So you need savvy to be credible, but savvy also helps make you more credible.”
Cancer Research’s Kempton, for example, decided that, on being called into his first one-to-one meeting with the new chief executive, he would not talk about HR but rather the key challenges that the organisation faced. Unlike other managers who opted to focus on their particular functions, he has since become a regular fixture in the CEO’s office and has been invited to sit on the prestigious tissue compliance committee.
The secret to building business savvy, however, is the existence of inherent curiosity as well as a desire to build a picture of what the organisation needs based on both internal and external factors. This translates into keeping abreast of relevant information, whether it comes from books, newspapers, blogs or other social networking sites such as Twitter, which can act as a useful filtering tool if used effectively.
The development of savvy can also be accelerated by a stint working in other business functions or even in a non-HR project team. As Griffin explained: “It’s not necessarily about having to step out of the traditional HR function, but out of HR tasks, and asking yourself what it would take to know more about the business than the CEO”.
This is because the ultimate goal is that your “people capabilities become part of what you’re selling, but not everything”, he concluded.
