If we are to bring to bear our expertise in the systems and practices of managing people that enhance organisational performance then we must have a voice in those top-level strategic decisions. And to have such a role demands that we can contribute as generalists as well as specialists, which means we must have a broad understanding of the commercial issues.
But, and there is a but, whilst it is a great benefit if people working in HR have commercial acumen, let us not lose sight of the main requirement of the HR function - people insight, and dare I say it sensitivity. First and foremost we must bring understanding and intuition into the complexity of organising and leading people. This means we must understand management and workforce perspectives, as well as understanding the business context. This is where we really add value to the business. We must be able to use this insight to work with line managers on people issues that have a strategic impact on the business, and to advise them on day-to-day problems. Our technical knowledge is also important. The HR function rests on a body of knowledge that ranges from the economics of remuneration, and requirements of employment legislation to psychology and organisational behaviour. Whilst we cannot expect to be masters of all of it, we need to understand enough of it all to be sure that we put in place appropriate solutions that drive the organisation forward, at the same time as helping line managers to manage, which will give the workforce what it needs to thrive. I am not with those who see technical knowledge of little importance, I do believe that anyone in an HR role should have some understanding of the different disciplines that make up HR; not least because it should not deliver a mess of different initiatives, each directed at a particular problem and each pulling in its own direction, but rather a joined-up approach that drives organisations in a single strategic direction.
So let us get the balance right. You would be surprised to find a Finance Director who had no clue about tax or foreign currency accounting. Yet I know of organisations that have arranged expensive training for HR people to give them commercial acumen, whilst among these people were Learning and Development specialists who did not understand the role of remuneration in motivation and communication of organisational values. I know people in recruitment who haven't the first idea of how the British legal system works, and the role of employment law within this.
It looks safe to predict that our economic climate is going to demand that we achieve more with less for the foreseeable future. And we have a secret weapon to use here: employee engagement. Numerous studies show that if you raise levels of employee engagement, this leads to higher profitability. Good HR has the potential to make money for the business.
A business won a contract to implement a project they had been researching and developing for more than a decade. Its HR Director responded to the good news by publicly telling the staff that now they would have to sharpen up and, if they couldn't adapt, they could leave. Her singular lack of insight or sensitivity was especially damaging to a business made up of people with highly specialised skills that are not easy to find at the job centre or, indeed, anywhere in the country. Certainly this was not the way to raise employee engagement. Similarly, the newly-appointed HR Director who, anxious to stamp her mark, dismissed HR initiatives of the previous regime, although many individuals across the business had bought into and invested considerable time and effort in them. These examples also show incomprehension of what people want from HR, which is not a new initiative that one of the directors had heard about and thought was a good idea, but joined-up, consistent practices that the HR function, drawing on insight, and technical knowledge, assess as delivering long term benefit to the business,
Technical knowledge, of course, is worthless unless you have the right behavioural skills to enable you to apply it effectively. Coaching skills, together with project management ability, should be high on the agenda for HR. Yet, paradoxically, while Learning and Development departments are pushing training in coaching skills for line managers, I find few HR people have had training in the kind of coaching skills required to be full business partners. Even more paradoxically, coaching skills training would also equip HR people with the necessary questioning skills, and personal curiosity that are needed if you are to develop business acumen.
So what of business acumen? Of course it is vital that HR professionals know how the business works, understand current and possible future policies, practices, trends, technology and information affecting the business and organization, know the competition, know who the customers are and how they make buying decisions. This background will help HR to deliver their special perspective, to add value and help the business make better and faster decisions. But most of all, if we are to be true HR business partners, we must know how to work with the line so as to marry their commercial acumen with our people insight and understanding.
Janice Caplan is a partner with talent management company, The Scala Group
