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Business Development Plan

Business Acumen – What is it and How Do I Get It?

During my 9 year career as in house HR, the term “business acumen” was typically applied to HR in the following ways: “Our HR department needs more business acumen” or “HR has a lack of business acumen”. Inevitably, these statements would come from the company’s business leaders and would therefore ruffle the feathers of the HR leadership team. As a result, there would be “business acumen” teachable moments in our HR all hands and often times “business acumen” would land as an HR strategic priority. The problem with trying to enhance business acumen with these tactics is there was very little context given to the HR organization. Mostly comments would be centered on business acumen as being an important skill set for the HR team but no context for what it was, how to build it, or what the impact of it was. By giving the HR employees concepts with no definition or concrete frame, some individuals often struggled to pull out the pertinent pieces of information from these business acumen lessons and rarely knew how to use the information in a strategic way. To help in understanding what it is and what to do with it once you have it, read on.

To begin we must first define the concept of business acumen. Raj Charan, once said that business acumen is “…linking an insightful assessment of the external business landscape with the keen awareness of how money can be made – and then executing the strategy to deliver the desired results”. In essence, business acumen is the triangulation between, external pressures, internal strategy and commerce. Therefore, to ask the human resources professional to have more business acumen is truly about understanding where the company is going given the external market conditions and the overall company strategy and then linking this knowledge to the impact it will have on the people component of the organization. By understanding where the company is going based on these business components, human resources can impact how quickly the organization remains ahead of the curve.

For example, we often talk about the impact of emerging competitors, but what does that mean for HR. It means being attuned to the impact this will have on the recruiting base, how we retain and compensate current employees, who in the organization might be impacted, etc. In addition to being attuned, a strategy needs to emerge to address these issues quickly and effectively. What this implies is, not only do you need to know where the overall organization is going, but also have an understanding of how it impacts the organizational structure, leadership needs, retention, staffing, etc. and then make recommendations or changes based on all this information. To start, all HR professionals need to understand and internalize their businesses and driving business needs. Below are some tips on how to gain more business acumen within your organization.

4 Steps to Improving your Business Acumen:

Understand your company’s business model, structure, products and services. This means talking to people who are in the business. The goal is to understand the underlying organizational system and how you (your group) support it. Keep informed. Read the information that is passed down from your executives including press releases and market analysis. Attend all hands, investor relations calls (if applicable), strategic planning sessions or any other “live event” that will give you the latest company information. Make sure you understand how the business and HR goals link to the overall company priorities and to all the information you are receiving. Spend time ensuring your goals link to the business. If you can’t see the connection between your goals and the HR Goals or Business Goals, you are either not focusing on the right things or are still unclear about the links.

The more you immerse yourself in the language of the business the clearer it will become to you and the greater impact you will have. Once you can see the trends you can begin to offer suggestions at a more strategic level thus having a bigger impact to the company’s bottom line.

By: Silvia Johnson

About the Author:

Silvia Johnson is a Coach and Consultant in the Silicon Valley with more than 10 years of experience. Silvia has a proven track record of helping organizations and people remove obstacles in order to help them in becoming highly effective and efficient. You can learn more about her experience and services on her website: http://www.insightscc.com You can also gain some tips for personal and organizational growth by visiting her HR Blog: http://successfulhr.wordpress.com/

Posted on Sunday, September 20th, 2009 at 5:38 am under Cat: Resources for Business. Leave a response, or trackback from your own site.

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