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Business savvy HR? Easier said than done, says CIPD

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.”