One of the classic challenges for HR professionals, even heads of HR, is understanding the business.
My career is unusual in that I have had both senior HR roles and senior business roles, and in fact there was a period where I moved back and forward between the two.
Understanding and being able to ‘speak business’ certainly gives you a great advantage as an HR leader. In fact it is a ‘must’. On the other hand, doing business roles also helps one understand how much ‘HR’ can both help but also hinder ‘the business’!
I’ve coached a number of HR people about this, from very senior to young professionals. For example, suggesting HR people understand enough finance to read an income statement and balance sheet, or developing communication skills to both build trust and be able to challenge and influence business line managers,
However for the last decade or more I’ve also shared a multi-photocopied short article written by the HR guru Dave Ulrich and two of his colleagues*.
Like many HR professionals I’ve got a number of Ulrich’s books and also had the pleasure of spending a day with him a few years ago, in Russia of all places.
The article in question is actually about what to do as the new Head of HR in your first 90 days*. But the first of the five sections is the best summary to ‘learning about the business’ I have ever seen. And although it was written aimed indeed at a new CHRO or head of the HR function, it is just as applicable to younger HR staff trying to become ‘business partners’.
The questions in the ‘Do I walk the talk about our business’* are an excellent checklist and here are some of the highlights which I have found useful in my HR coaching (and if I am honest, for myself in some of my top HR roles).
- Do I know how we make money?*
A brilliant question! And in some companies not as straightforward as in others. Who are the real customers and why do they pay your company for products and services. And who are the suppliers to you and how does that work. The article suggests a process map could help to understand how value is created. And a cash flow map that allows you to follow the money (capital, supply, administrative and profit). Recent presentations by Board of Directors or senior management can also be helpful (as does getting to know someone who prepares these presentations). As the article says ‘it is imperative to learn the business to fix the (HR) function’.
- Do I see how (and how well) the business operates from multiple points of view?*
Ulrich makes the point that different stakeholders have different views of what the business is about and that the questions you pose sets a contract for how you might deliver value to them. So senior line managers can tell you about their business, goals, experience of HR, and how people and organisation can help them deliver. Finance and strategy people can describe their and the company’s requirements for success and can help you frame future HR investments in those terms. Customers can tell you about your company’s reputation and competition. Analysts and investors can tell you about how the company is valued and what needs to be done to increase your company’s reputation.
- Do I have first-hand experience with the product/service?*
Seeing your company through the eyes of the customer includes being a customer not just talking to them. See how the products or services work in practice.
- Do I have relationships with key people?*
Outside of HR: This is about getting to know the business people and line managers with whom you will be working. Their goals and objectives, their challenges and concerns and how you can work with them. What they can do for you (as mentors or coaches even) and what you can do for them.
Inside of HR: This comes more normally to many HR people but is of extra value when you compare their views of the organisation and management with those you have heard from the key stakeholders.
- Do I make the business the focus of my formal presentations and informal discussions?*
This is another seemingly straightforward but brilliant question. Even in HR meetings with HR people, business updates should be the starting point and shows your concern – and direct line – to and about the business.
I was reminded of one of my senior jobs in Russia when thinking about this point. Many of my fellow HR professionals were good but so focussed on improving their HR practices and processes that they had difficulty answering my questions as to how what they were doing was going to help line managers in their managing and delivering value to the business. Starting to talk about the business even in discussions with HR people (about HR) signals that HR is a business partner and cements the HR focus on business issues. (Although in reality being a ‘business partner’ is not even enough: you should be aiming to be a ‘business leader’!)
Obviously the rest of the article is also invaluable to aspiring HR superstars but is more HR-focused (HR activities being done, sense of key HR priorities, having the right team, demonstrating priorities and values through the transition).
For me the first three pages of the article are the crux of HR and The Business and why I want to share the ideas even further through this blog. On behalf of lots of other people, and including myself, thanks to Dave and his colleagues!
*Dave Ulrich, Norm Smallwood and Jon Younger, Strategic HR Review, 8 (3), pp 5-11 (April 2009)