Frontline Intelligence: Instep - Business acumen here to stay

by 03 Feb 2012

What do business leaders expect from their Human Resources function? We constantly hear the phrase, “strong business acumen required” for senior HR appointments but this is also increasingly the case for roles within the early HR career market. What does this mean for early HR career professionals is the main subject of this month’s Instep.

Models require partnering

With the introduction of the Ulrich model and “Business Partnering’’, HR functions now work alongside the business in building business efficiencies and profitability. Business acumen capability has never been more important for emerging HR professionals. There is, however, some confusion still amongst early HR professionals on what it means to have strong Business Acumen and how it can be developed.

Business acumen for early career professionals

To explore the notion of Business Acumen for the early HR profession, The Next Gen, (the early and intermediate career specialists at The Next Step), facilitated a discussion between Katie McGrath, Head of HR at BMF Advertising and one of her key stakeholders, Jenny Calcott, Head of Creative Services. The premise of the discussion was to understand the expectations of HR from the business, and particularly for early HR career professionals. The discussion set out to encourage emerging HR professionals to realise the importance of business and commercial acumen and think about how they could build their capability in this area. Katie and Jenny also explored in their discussion the added value that the business expects from the function and how pivotal it is to ensure the HR initiatives are aligned to business strategies.

It was evident from the panel discussion between the two leaders that, in their view, emerging HR professionals require a core commercial acumen skill-set in order to comprehend and evaluate business problems and solutions. They believe, just like experienced HR professionals do, that there is a real need for early HR professionals to understand the numbers on financial statements, as well as the strategies, decisions and actions that impact these and, at the least, be aware of them.

Setting up for success

The audience at the discussion heard from Katie on how she, an experienced HR Leader, set herself up for success when she joined her new business, BMF Advertising. Katie explained how crucial the first 90 days in a new role were in building and demonstrating your understanding of the business for anyone in HR.

Katie said, “the first 90 days is your chance to immerse yourself in the business completely”. She said understanding the management team’s vision and priorities were pivotal to developing a HR professional’s business understanding. She went on to say, emerging HR Professionals can build business knowledge by showing an interest and learning what every person in their business does on a daily basis, how it links into the business objectives and their challenges and external pressures.

As a senior Business Leader, Jenny spoke about what her expectations were from HR. Jenny explained that the key to HR’s success at BMF has been that Katie and her team have been able to demonstrate added value in making a difference to the profitability of the company. She explained that you need to have a strategic partner in your HR professional and every single KPI must link to the overall business (or business unit) strategy. Jenny indicated that Katie’s performance as a HR professional is measured against business revenue.

Katie and Jenny provided some simple ideas on how early HR practitioners can go about building their commercial acumen which included:

  • Read the Australian Financial Review on a daily basis
  • Stay abreast of what is happening in the external market and to your competitors
  • Spend some time in a line or operational role if the opportunity arises
  • Build a relationship with the finance team and show an interest in business financials
  • Demonstrate an eagerness to learn about the metrics and how to measure and report things the way finance professionals do.

Katie, said “by doing some or even all of these things, you are going to sound credible, and the closer you get to line managers, the better you will understand their business”.

Final note

Clearly, HR Leaders encourage the early HR career professionals within their teams to continually be thinking about developing their business acumen. It’s up to early HR professionals to take up the challenge. It is becoming increasingly important for all levels of HR to demonstrate that all HR activities, programs and processes have a positive impact on employee productivity, revenue and profit and link to the overall business objectives.

About the author

Kate Henderson is a consultant in our The Next Step's Next Gen recruitment team in Sydney. For additional information call (02) 8256 2590 or email Website: