During the formative years of my human resources career, I found myself in several talent development roles. Each one building on top of the next. Preparing me for my first senior management position. I landed a role in designing, implementing, and leading HR strategy at the U.S. office for a global consumer products company. There, I began to see the direct link between the work I was doing and the impact on the company’s performance.
Shortly after joining the company I learned that the U.S. team struggled to hit their company goals. Every single year since they opened for business 3 years prior. Strategic and financial goals.
The priority areas for me became performance management, recognition and culture. A practice of cascading company goals to each department and individual was implemented. Core competencies were embedded into the performance management process. A new compensation model was designed, integrating individual performance, company performance and pay. A culture of accountability and transparency formed. With these changes in place, we achieved our company goals for the first time.
In retrospect, I realized there was a key ingredient that led to the success of this strategy and those that followed it. That key ingredient is business acumen.
The term business acumen appears often in conversations about the field of HR management and talent development. A core skill to gain for a transactional HR/Talent partner to become a strategic HR/Talent partner. A precursor skill for leading transformational changes. Or for gaining a seat at the table.
The acquisition and presence of this skill across the function continue to be an ongoing discussion and need. Although, not all of it is due to a lack of interest or trying among HR and talent practitioners. There is a common saying that goes, “the shoemaker’s children have no shoes.” This is a saying that resonates closely with those of us who are in this field. Too often, we put the needs of others first. Unfortunately, those decisions are made at a large expense to us. In the form of insufficient time or other resources towards our own professional growth. Leading to larger implications for companies today and the future of work.
According to the 2020 IBM/ Bersin Accelerating the Journey to HR 3.0 study, they found that only 19% of the global CHROs and HR executives surveyed believe their department has the business acumen or capabilities to drive business transformation changes to address the mounting skills gap and talent needs at their organization.
Through research and interviews, I learned that there is no common or shared definition for the term business acumen. Depending on where you’re looking or who you’re talking to, you will receive a different response. Adding further confusion for those who are working towards developing this knowledge.
From my own professional experience, I’ve come to define business acumen in 4 parts. Business strategy, core components of a business, financial performance, and language. The combined knowledge and demonstration of all 4 parts lead to transformational HR leadership.
To further examine this skill and how it’s demonstrated I spoke to three talent development leaders. Across three different business sectors. They shared their perspective on this skill and how they’re applying it to their field of work to drive business performance.
Drew Fifield is a Learning Architect at Facebook. He reflected on his experience working with large global companies and brands. His definition of business acumen? He narrowed it down to one simple statement. “It’s how a company makes money” Drew says. In his perspective, he views his purpose in talent development is to deliver a product. A product that will increase the capability of people to drive profitability for the company they work for.
“Enhancing and activating employee capability. Capability to future-proof the organization for sustained success by providing strategic development solutions. Solutions that are timely, cost-effective and fit for purpose”. That is how Melody Mitchell, Head of Talent, L&D and Organizational Development at BNP Paribas, defines her core purpose. She states, “business acumen is having the depth and breadth of knowledge. About how your organization operates. How it drives profit. Increases shareholder value. Serves its clients. Competes in the marketplace. So you can align your work to business-driving outcomes or impact.”
Healthcare is a sector that is heavily regulated by the government. It encounters ongoing technology disruption. Faces looming changes to their existing business model in the U.S. market. All while focusing on increasing value to patients. Marsha Gryvatz is an Associate Director of U.S. Oncology Training & Talent Development at Bristol Myers Squibb. Incorporating patient care principles into her work is critical. Particularly in delivering effective training programs. When developing new courses she practices empathy and user experience by looking at learning through the lens of the learner. Ensuring that the content is appropriate, positioned to meet business needs, and digestible.
“In financial services, we are competing with smaller fintech firms that have the ability to be more agile and innovate faster. We are also competing in the talent space with tech firms for niche skillsets. To evolve as an organization through our financial modeling, products, and services.”, Melody says. The solution to this problem at BNP Paribus is to build these skills themselves. To do this, they partner with external universities and online platforms. Instituting a data academy that focuses on reskilling and upskilling their employees.
“Linking L&D strategy to the strategy of the company is critical. L&D for the sake of L&D is not effective.”, Drew shares. He provided an example of this when he worked for a real estate and hospitality company. Upon joining he learned about the company’s goal through a presentation. Drive growth by increasing dollars per square foot and the ten levers that can achieve that goal.
Although the presentation hit all the main points, he saw an opportunity to make it more engaging. The L&D strategy became clear to him. He needed to ensure everyone understood and worked towards the same goal, starting on Day 1. To achieve this, the delivery of new hire onboarding needed to be both informative and fun. Drew redesigned the onboarding program to include a gamification model. It became engaging and effective. New hires were well informed about the company goal, levers, and how they can contribute. While enjoying the learning process.
Drew: I make friends in finance and legal everywhere I go. Understanding how the company is performing financially is important. Everything costs money. My advice to others is to learn how to read a P&L statement and understand what EBITDA is.
Learning & Development is the fine arts of the HR department. I understand it’s the first to get cut. I protect it by being responsible with the budget I manage and understand how it impacts revenue.
Marsha: Shadow someone who possesses the skills and knowledge you wish to gain. The ability to ask questions and listen to their thought process helps me see things from a different point of view. It allows me to understand the bigger picture.
Melody: It is key that practitioners understand the basics. Like reading a financial statement or a balance sheet. Understand the core concepts of the organization like EBIT, revenue streams, and quarterly results.
I have found that the best way to enhance my business acumen is to identify and engage with a few trusted clients on a regular basis. To understand what is happening in the business because they are much closer to it than I am.
I also make it a priority to stay informed of industry news and various other topics that may impact my industry. For example, I subscribe to the World Economic Forum. I know that data and insights from analysts and experts in other areas of focus impact our commodities business. For instance, knowing how climate changes affected wheat production gives me insight into market volatility. Staying close to politics and societal issues keeps me informed on how my firm’s strategy may need to pivot to change with our world.
The message and business case is stronger than ever before. We must prioritize and focus on our professional growth. Our ability to lead and drive business transformational changes depends on it.
Investing in learning programs to increase the capabilities of HR and talent development is critical. Because it’s also an investment in the future of work for the organizations they serve.
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