By David Creelman

The universal complaint about HR is that it is not sufficiently business savvy. Is this something we can fix through training and development or are we stuck? If we teach people to read financial statements will that help?

What is Business Savvy?
In the context of HR, business savvy means understanding what our business partner is trying to achieve and how we can help with that.  That’s definition is so simple that I feel I ought to be elaborating on it in some way, but there’s no need. That’s what you need to achieve; get that sorted out and you’ll be seen a business savvy.

Here’s a tip: your business partner is not trying to increase engagement, reduce turnover, or minimize time-to-fill. If they talk about those things it’s because they learned they need to adopt HR language to communicate with you, not because they are revealing their real needs.  Their real needs are more likely to be things like getting a project done on time, increasing product awareness, reducing complaints from angry customers, dealing with unproductive employees, forecasting revenue, clearing out excess inventory…the list goes on and on.  If your business partner’s goal is forecasting revenue more accurately, and you can help with that, then you are high on their list of favourite colleagues.  If instead you have a corporate program to reduce turnover, well that’s a big yawn, it may even be creating work that gets in the way of their real goals.

Now I know every HR professional worth their salt can come up with reasons why turnover is important to the business; they can even put a dollar figure on it. But if you are working on that you are working on the HR agenda not the business agenda; it may be a good thing to do but that’s not the road to business savvy.  The road to business savvy is understanding what your clients really want.

How to Develop Business Savvy
Teaching HR professionals to read a balance sheet is not a great way to build business savvy. In fact, while there’s minimal harm in getting an MBA (Henry Mintzberg’s warnings aside) it is not a direct path to business savvy either. The path to business savvy begins with listening to your clients.

Listening effectively isn’t easy. People usually want to talk about annoyances and those are rarely directly related to significant business issues. You have to encourage them to discuss what their boss is expecting of them, what will make them look good at year’s end, and what things they dare not get wrong. Don’t try to rush people into listing their top issues; just have a series of conversations while remaining clear that ultimately you need to understand their business issues.

As they reveal their issues, avoid the natural tendency to apply HR solutions. The first step to business savvy is just being able to see the world through their eyes and speak their language. Once you know the problem, then finding ways to help takes some patience; and usually involves more questioning (“What do you think the options are?”) rather than offering solutions (“Why don’t you provide training?”). But ultimately you and your business partner are likely to discover that HR can help and can help a lot. Problems are solved through incentives, better hiring, communication, job design…the list of levers HR has to improve things is a long one.

The signal that you are on the right track is that the solution feels really specific to the situation.  If the solution ends up sounding like “attracting, retaining and motivating talent” you are still in HR land.

David Creelman is CEO of Creelman Research. He is best known for his workshops on Agile Analytics, Evidence-based Management and the Future of Work. You can connect to him on LinkedIn or email dcreelman@creelmanresearch.com.