Business savvy HR? Easier said than done, says CIPD

David Woods , 16 Mar 2012

small business

Three fifths of HR staff think the profession needs to build its understanding of business issues, but developing ‘business savvy’ can be easier said than done, according to the CIPD.

In a report, which was published at the CIPD’s HR Business Partner conference in London, the organisation is urging HR directors - and their staff - to deepen their business knowledge and use their unique insight into the interrelationship between people, the organisation and the wider context in which it operates in order to drive organisational performance.

The report, which summarises the first phase of an ongoing research project, explores the key foundations required for HR professionals to pursue their stewardship role from a grounded business perspective. Business savvy gives HR credibility and the courage to challenge the relentless pursuit of short-term goals that can be detrimental to the long term success of the organisation.

Business savvy: giving HR the edge identifies four key foundations, or sets of behaviours, which characterise a successful business savvy HR professional:

1. Understanding the business model at depth: Business savvy HR practitioners understand where value is created and destroyed within their organisations and identify people-related improvement points which drive value and enhance organisational performance.

2. Generating insight through evidence and data: The most effective HR professionals have the courage to ask questions and look for explanations even when the knowledge required seems masked in technical or professional jargon.

3. Connecting with curiosity, purpose and impact: To become and remain business savvy, HR professionals should demonstrate curiosity about why and how the business operates, with the purpose of identifying opportunities for improvement. HR professionals should not wait to be asked but should take a proactive approach to making connections across the business and collaborating at all levels.

4. Leading with integrity, consideration and challenge: HR should serve stakeholders, not power structures, by retaining a strong stewardship role centred on the courage to challenge the pursuit of short term business goals that are detrimental to an organisation’s people and long term success.

Stephanie Bird, director of HR capability and public policy at the CIPD, said: “This is a most important piece of research for the CIPD as it underpins our mission to help the profession build its capability to deliver sustainable - not just short term - organisation performance. Previous research has shown us business savvy is one of the three savvies that HR practitioners must have in order to do this – and this is as true from day one in a career as it is at board level. We also know that many HR practitioners find it hard to understand what business savvy really is, and how to develop it. This report is the first step in helping them to understand just that. It is also clear that without it their credibility as professionals is damaged, and their ability to challenge flawed pursuits is fatally undermined.’’

John McGurk, learning and talent development adviser at the CIPD, added: “Business savvy practitioners at all levels are essential if HR is to fulfil its potential to be central to organisational strategy, and so it’s encouraging to see that the majority of HR professionals get this and continually and instinctively step up to the challenge. However, our research shows that the associated set of behaviours needs to be constantly reflected upon and practiced if they are to become embedded.”

Business savvy: giving HR the edge draws on focus groups and in-depth interviews with a number of HR professionals in the public, private and voluntary sector, seeking to unpick the skills and behaviours that have enabled them to make the journey from deep subject matter experts to business leaders with a people specialism. A common trait in all those interviewed was a curiosity about the business in which they work and the wider context in which it operates. Liz Ogden, HR director at G4S, said: “People who are really successful have a curiosity about the whole business. Being really current demonstrates credibility and so I read all the business papers regularly, picking up information about competitors, mergers and acquisitions and senior moves. In my career I have also tried to move back into the line, out of HR, every four or five years. I see myself as a business person first, with an HR discipline; not as an HR director but as a business leader. I think if someone is really serious about a career in HR, they should get out of HR and into the business to really understand the organisation and get credibility.”

11 comments on this article

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HR needs a U turn!

Jon Ingham, Strategic HCM 16 Mar 2012

I'm not arguing with any of this (oh, except for the last bit), but it's all table stakes. Yes, of course we need to understand our businesses, do we really need to go on about it? Doing this isn't going to do anything to make our organisations healthier environments to be. Let's be concerned about the dire levels of engagement in our organisations, and show how we can make a difference to this, rather than wanting to focus on things that all our business colleagues are already focusing on. Wanting to be a business person first is a bit like our heads of procurement owning up to the fact that a company is spending twice as much as it needs to on its supplies, but saying, never mind that, I want to focus on our customers. Worse than this, HR's trying to go all business shaped at exactly the time that our business colleagues are trying to get more focused on our people. If we're not careful, HR's going to miss this key opportunity for businesses to create competitive value from our people. Business savvy yes, but more people savvy too please. If we really understood what will make the difference to people performance, then we could really hold our heads up high.

HR needs to engage with the business

Richard Lock 16 Mar 2012

HR absolutely needs to understand the business. However, I agree with Jon that engagement levels are very low and that is where HR should be able to focus and add real value. Many managers and leaders still seem to follow the view of either people or performance. Our role in HR is to demonstrate that it is far from an either or, and that good people practice drives performance. I do believe that to achieve that, we need less bolt on process and more embedded people and engagement focused strategies.

Business savvy HR?

Dave Mettam 16 Mar 2012

This is a quotation from the full article: “It’s not possible to be business savvy isolated in an HR department. We need to connect first and foremost internally with different parts of the organisation. We also need to connect externally, seeking insight and inspiration from elsewhere.2 The core issue is about both business AND Organisation though there is little in the report about “Organisation”. There exists a “Science of Effective Organisation” that exists in a different (academic and business thinking) silo to ‘Management’, ‘Business’, and ‘Behavioural Science’ etc. [Ross Ashby, Stafford Beer, Allena Leonard, Michael Jackson, Patrick Hoverstadt – there is a whole body of knowledge and practice here] In the spirit of, “Cultivating curiosity through practice, learning and networks” (another direct quote from the paper), it has to be worth HR professionals at least taking a look – just out of curiosity, and perhaps making some connections across these silos.

Business Savvy is People Focused

John McGurk 16 Mar 2012

John Ingahm make the point that CIPD is going in the wrong direction by focusing on business when we should be focusing on people. But the report fully integrates the business and people aspects. Our four foundations connect deep business understanding and evidence based HR to connecting with curiosity and purpose (enagement etc), and leading with integrity (trust and authenticity). These four foundattions support a balanced and sustainable approach with both the business and the people agenda central as they should be. John McGurk CIPD Business Savvy project lead

Business savvy

Michael Moran 16 Mar 2012

I think I am having a Homer Simpson moment. You can't be, you weren't ever able to be an effective HR practitioner without understanding the business in which you worked. Unless you know what drives the point of competition of your business, you can't possible successfully implement a HR recruitment strategy for example. CIPD's desire to be a more a more insightful profession is to be applauded but it was ever thus!

Business View

John Baker 16 Mar 2012

I'm with Michael Moran on this one. Having spent a good deal of my career in the business before moving into HR, I was tired of HR people coming to me with solutions that took no account of the business reality and pressures I was facing. I agree that low engagement is a key issue and for HR to help line managers they have to have credibility as an adviser - that means understanding the reality of being a line manager and designing solutions that are pragmatic and take account of this.

Business savvy - a "must have" for HR

Brian Goulden 16 Mar 2012

I agree with Michael Moran and John Baker - business savvy is a "must have" for HR practitioners. Without a demonstrable understanding of the business, an HR practitioner is unlikely to have the necessary credibility to influence their organisation effectively. Working for Post Office telecommunications 30 years ago, I had to force my personnel manager / officer teams to connect with the operational units we served. After a lot of pain, the light dawned on my team and they found their willingness to engage with line-managers paid off. We reduced sick-absence levels, increased our "open for business hours" to our 24/7 workforce and became an accepted part of the strategic management team. My team benefitted - they felt more valued by their "customers" and had greater job-satisfaction. Here in southern Africa, the "administrative" role of HR is still more prevalent - possibly because without a "force for good" like CIPD, the professional status of HR people is still in doubt. I am speaking at a Commonwealth HR event in London next month and running a strategic human capital course next month in Cape Town; this article and the comments have come at a very good time - they will support my strong proposition for changing the way HR people look at what they must do to be effective!

Yes but

Jon Ingham 16 Mar 2012

Just to explain, though I did say the same thing in my original comment, that I'm not against business savvy. So John, there's nothing I object to in the CIPD's report. What I don't like is the business person first thing - to my mind, businesses already have a surfeit of these. That's why most of them are such energy sapping and uninspiring places to be, and why such few people are fully engaged or working at anything like their full potential. So it's not that there's anything wrong with the report, it's just not what I think the CIPD, or HR practitioners, should be focusing on.

Good debate

Simon North 16 Mar 2012

Brian Goulden's comments resonate most for me in this lively debate. The focus must be on "how" HR professionals go about their work effectively. We get loads on "what" needs doing in these reports/debates and need more focus on the "how".

More action less thinking

Dorothy smith 17 Mar 2012

The hr community is part of, not separate from the business it serves. Why do we still have to generate curiosity for the working environment when it is impossible to function effectively without being involved in it? New HR people need more how to, others need to perhaps leave their desks and get beside their managers and people to find out what is happening in their day to day. We can then play the advisory, integrated role intended.

Not a New Need

Donna Stevenson 17 Mar 2012

Having spent many years on both sides - as General Manager in Operations and Leader of Strategic Planning as well as Leader, Training and Development as part of the HR team, I continually wonder at this type of discussion and why this continues to be raised as a need for HR practitioners. HR develops policies and procedures for the people who work on the front line, who deal with customers daily, who are the ones directing the daily performance of the business, in other words, all members of the organization. Why would they not regularly keep themselves informed on the business needs, direction, issues, challenges and goals? To be fully engaged requires, at least, a cursory knowledge of how the business operates and how it is performing. If HR practitioners do not have this cursory knowledge, how engaged can they be? To grow their knowledge, they only need to ask questions of the 'field management', build relationships with this management, and regularly, seek their input and feedback on HR goals and plans. Very quickly, through these relationships, both sides will develop a knowledge and appreciation for each other's role and contribution to business development and growth - winning combination for the organization.

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