Part 2: Developing your own business acumen to become an HR all-star
Last month, we talked about how important it is for HR folks to possess business acumen skills in order to build the next generation of HR all-stars. This month, we wanted to take it a step further and give you some ideas and tips to build your personal business acumen skills that pair well with our courses.
Here are 7 steps that we’ve found to be crucial in developing your business acumen. Keep in mind, these will take some considerable effort on your part, but if you really want to become an HR all-star and claim your seat at the table, these steps will lead you in the right direction.
Make business acumen one of your own core competencies. Most companies have a specific set of core competencies they want employees to focus on developing. If business acumen isn’t one of your company’s core competencies already, make it one of your own personal core competencies, and then become a champion for adding it to your company’s set. Commit to making business acumen a major part of your own professional development, and your future self will thank you.
Find a mentor. Identify someone in the company who you respect and admire, ideally someone in finance or a related role, and use them as a resource. Ask them questions about their role, how it fits into the company strategy, and how you can support them. Finding a reliable mentor will be really helpful to your success in the next two steps. Additionally, spend some time learning more about your company’s products, services and how the supply chain works. Arming yourself with this knowledge will help you to better understanding your company’s key strategies.
Get comfortable with your company’s financial statements and strategies. This probably sounds pretty daunting, but know that you don’t necessarily have to become a finance expert overnight to understand your company’s financial strategies. Focus on learning about the key metrics on your company’s income statement, balance sheet and statement of cash flows. Your mentor will be a great resource to help you with this, and there are also lots of great bite-sized resources online for helping you understand basic financial metrics. Investopedia has some short and digestible videos and articles about these topics that you’ll find useful.
Listen to your company’s quarterly earnings calls. There will probably be a lot in the call that you don’t understand, and know that that’s ok. Your mentor can help you cut through the clutter and decipher which metrics, goals and initiatives apply to you and your team, and how you can impact each. Practice each quarter to help build your skillset in this area, and if you really want to go above and beyond, check out your competitors’ quarterly calls as well. Once you’ve got a good grasp on how the calls work and what to listen for, these calls will open your eyes to the challenges and strategies that are common to your industry, and help you better understand the ‘why’ behind your company’s strategies. You can find quarterly call transcripts for most public companies on seekingalpha.com.
Pay attention to business news. There are an infinite number of business news sources that you can find online, including Harvard Business Review, Forbes, The Economist, the Wall Street Journal, Google and Yahoo Finance, Business Week and more. Stay up-to-date on current events in the business world, and ask yourself questions like, “How does this relate to my company?” or “What are the ramifications of this in my industry?” Once again, your mentor can be a great resource to help you answer those questions.
Read, read, read. Develop a library of your own ‘go-to’ career-building books. Here are my top recommendations for books that will help you build your business acumen. Know that you don’t have to read every book cover to cover to gain good insight, simply having a resource to draw on when you have questions might be all you need!
Listen to your customers. Pay attention to what your customers are saying to, and about your company, and the challenges they look to your company to solve. Also remember, your customers aren’t just the people who buy your company’s products or services- they might also be internal, like your co-workers and people you interact with in other departments. Pay attention to the challenges your colleagues face and try to make connections between their work and your own.
Remember, developing strong business acumen skills won’t happen overnight- it will take hard work and dedication. But, whether you’re trying to move ahead in your career, or build a top-notch HR team, if you’re committed to developing your business acumen, these steps will set you in the right direction.
If you search for HR jobs on CareerBuilder, you’ll find more than 2,500 different postings, and you’ll notice they have a lot in common. Most include a list of required soft skills like collaboration, innovation, interviewing, verbal and written communication skills and confidentiality, and some will also include more technical skills like instructional design, video editing, and app development. They’ll also include people skills like project management, an understanding of technology, facilitation and public speaking. What you’ll also see more and more, is that “business acumen” is finding more prominence as one of those key required skills as well. But what is business acumen?
It’s not just having good business sense, and it’s more than knowing what words like “revenue,” and acronyms like “EBITDA” mean. Fundamentally, business acumen is understanding how your company makes and uses money, and then using that knowledge to make smarter, more informed business decisions. Business acumen is important for all employees to possess, from the front line, all the way to the corner office, but most especially for HR Leaders. Why is that?
Well, as an HR leader, your responsibility is to translate the company’s key growth and financial goals into professional development programs for employees within all levels of the company. If you can understand the company’s financial goals and how all the moving parts of the business work together to accomplish those goals, your leadership succession strategies and corporate training initiatives are significantly more likely to achieve the desired results. And then, you can incorporate business acumen training into your overall strategy and get the benefit of the trickle-down effect. But remember, developing an army of business-savvy employees begins with you- the HR leader.
Not only will business acumen skills make you better at the multitude of other skills you’re expected to have mastered, it will help you prove the value of your initiatives, and in turn, your own role within the company. Really, it’s a win-win.
I know what you’re thinking- Business acumen training sounds like a major snore. Do I really need to take a class on that? The answer is, yes and no. Yes, you need to learn business acumen, but no, it doesn’t have to be a major snore fest! Learning about the business of your business can be fun, in fact, our courses continuously receive high engagement scores. Take it from some of our most recent Building Business Acumen course participants, who not only say that our class is relevant and timely, but it’s also, dare we say, FUN!
“Best course I have had in a while, I can see implementing the tools and knowledge from today in my personal and professional life.” Verizon class participant
“Hands down best class with Freeman. Very engaging and related big business to our everyday life.” Freeman class participant
So, if you feel like business acumen might help you get a leg up in your position as an HR Leader, give us a call. We’d love to help you put together a training program that can help elevate your HR department, as well as your company.
In 2012 we published our book “Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company” which became an overnight #1 Wall Street Journal and a New York Times Bestseller. The book outlines five key business drivers (cash, profit, assets, growth and people) that we’ve taught to thousands of employees in hundreds of companies over the past 14 years. We teach this framework to help companies understand how everything ties back to their financials, and how they can use that understanding to make smarter, faster and more informed business decisions.
It’s shocking (and not in a good way) how few individuals really understand how their company really makes money. While it seems like an easy question to answer, as you dive in further it becomes more complex. For example, consider the following questions: Is your company making more money than it did last year? Are you making more than your competitors? Which products are outperforming? Which are underperforming? What’s the strategy to make more money going forward? Once employees learn our 5 Business Drivers framework, they are able to answer these questions and more, which will help them align their work to help the company achieve success.
The 5 Business Drivers model is really about getting everyone thinking about business within the context of a common framework. Once that happens, we can really roll up our sleeves and get down to business (pun intended). The model gives participants the satellite view of their business, and when everyone has the same big picture approach, it gives context to more advanced concepts like “enabling growth” and “reducing risk.” These heady topics become much more approachable, more understandable, and more practical when looked at through our framework.
Without the 5 Business Drivers, finance training, especially for non-finance people, can be really boring, really confusing, or worse… both. Without this framework, participants are more likely to become disengaged or discouraged as they struggle with tough business topics because their context of the business is myopic. This is why most of our competitors revert to playing board games or running computer simulations (p.s. don’t do that). Our goal is for graduates to be able to hold their own in a business meeting, and developing business acumen through the 5 Business Drivers model gives them the foundation and confidence to understand complex business ideas and strategies, and therefore the ability to contribute more effectively.
Additionally, for many sales organizations, key salespeople understand how to speak the language of sales (the “thing to say next” in a sales pitch), but they’re not really business savvy. They may know business within the context of the products they’re selling, but they likely don’t know or understand the challenges that are really keeping their clients up at night. At the end of the day, they’ll always turn an important meeting with a client into a conversation about the features and benefits of their products. A salesperson who has developed business acumen not only understands how their products help fill a need for the client, they know the challenges that plague the client on a daily basis, and offer solutions rather than peddle products.
While the 5 Business Drivers Model will always be there to give critical context, no two courses are the same. Our clients have different operating models, different competitive and industry pressures, and different learning objectives that they want uniquely built into their business acumen programs. Your company can rest assured that the course we design to fill your needs will be strategic and actionable, taught by highly skilled trainers with exceptional business experience, and uniquely customized for your audience’s current level of understanding. It’s our customized approach that truly sets us apart.
Combine this model with our bestselling book, our exclusivity to this topic, and our research-based learning methods, and you’ll see that we have the experience and ability to move any company’s business acumen training initiatives forward successfully and meaningfully, in a timeframe that works.
Picture this– employees at your company are struggling to be engaged in their work. They don’t feel like their contributions make any sort of difference, so they just don’t care about much of anything. You feel like you have a team of zombies clocking in and clocking out, and they’re so disconnected from the other moving pieces of the company, that they have no clue if the business decisions they are making are actually sound or not, but then again, so what? They don’t care. Now picture this– your job is to fix the problem, but you have no clue how to make it happen.
You’re not alone if this is all too easy to picture. In fact, in their annual employee engagement survey this year, Gallup reported that just about seven out of 10 workers are either not engaged, or are actively disengaged in their work. That’s a pretty staggering statistic, and what’s more, companies with poor employee engagement tend to have lower earnings per share. Yikes! So your engagement problem, could actually become an engagement apocalypse if left unaddressed.
Like many before you, you’ve probably tried lots of things to solve this problem. You’ve probably tried implementing incentives and bonuses to help employees feel valued. You’ve probably incorporated a professional development training strategy and brought in motivational speakers to teach skills like communication, leadership, assertiveness and teamwork. You may have even decided to hold focus groups or allow for more convenient and casual working conditions. Heck, you may have even started stocking the company kitchen with all-you-can-eat baked goodies to help employees feel more valued.
All those things are good, and you should probably keep doing them, but there’s a reason you’re probably not seeing results yet. A company’s most engaged employees think and act like owners of the business, but they need to be empowered to think that way. What your employees are lacking, is business acumen. Our CEO Kevin Cope recently wrote an article for Fast Company where he addressed the issue of employee engagement, and he prescribed that you can empower employees to think like business owners by helping them to develop business acumen. He boils it down into two steps
Step 1: Focus on purpose. Cope says, “People will work hard for a paycheck, harder for a person, and hardest for a purpose.” Employees need a personal connection to the company’s purpose, or in other words, the company’s mission, or they’ll be more likely to lack the perspective to feel like their work matters. So, how can you start to implement this change? Regularly discuss the company mission statement as a team, and how each member of the team fits in to fulfill that mission. You could even have each employee write their own mission statements for how they will ascribe meaning to the company’s mission.
Step 2: Connect to the bottom line. At Acumen Learning, we’ve surveyed more than 50,000 people in 30 different countries and we’ve found that a staggering 90% of employees don’t understand their company’s important business metrics. That’s another staggering statistic! You can’t expect employees to be engaged contributors if they have no clue how their work contributes to the company’s bottom line. Chances are, they want to use their full potential, but they don’t have all the tools they need to help them get there. So what can you do? You can help your employees understand how their decisions affect the bottom line, which will help them see the value in their work, and in turn help them focus on doing the things that really count. And that, is what business acumen is all about.
If you implement these two steps, you’ll start seeing your employee engagement improve, and individual contributors will become less zombie-like– and more like the passionate, intelligent and gifted employees you hired them to be. If these steps seem overwhelming, we can help. Give us a call and we can help you develop a business acumen training strategy that will bring measurable results, and impress your boss.
June 14, 2016 marks a first for Acumen Learning: Senior Consultant Dave Butler’s novel The Kidnap Plot was released. You can find the book in a bookstore near you, or on Amazon here. In this post, we talk with Dave about The Kidnap Plot and about the business of being a novelist.
Acumen Learning: I guess you want to tell us what the book is about.
Dave Butler: Naturally! The Kidnap Plot is about a boy named Charlie, whose father is kidnapped. Charlie organizes a rescue party, including a troll lawyer, a kobold inventor, an outcast pixie, and two chimney sweeps. Over the course of the investigation and the rescue, Charlie becomes an adventurer and learns dark truths about his father and himself.
AL: That sounds like a fantasy novel for kids. Something like Harry Potter, maybe?
DB: Exactly. And like J.K. Rowling, hopefully I’ve written an adventure tale that can be enjoyed by adults as well as by children.
AL: I’ve heard you say you’re an advocate for writers being more business-savvy. Can you tell us what you mean? Better yet, can you tell us what you mean using the 5 Business Drivers™?
DB: You bet. Every writer begins not just as a business, but as a start-up. Your key drivers for a start-up in any industry are Cash and People [makes the dance moves]. You get investor money and watch your cash burn rate, or as veteran writers always tell the newbies, don’t quit your day job!
You as CEO of your writing business also make your key alliances: Will you have an agent? Will you contract an editor, an assistant, a publisher? Will you do all the marketing yourself, or will you engage help? Who will distribute books to readers? On what terms, and what roles with those people play in your business? Like any startup, you’re looking for a path to get your product to market in a way that generates positive, consistent, predictable cash flows . . . at which point, you’re not a start-up anymore.
AL: Tell me about Assets. You write with a laptop?
DB: Sure. And I have maps and notepads and books for research and a home office. But my key assets are the intellectual property I’m generating—the stories, protected by copyright. And my key questions are really all about those Assets and People: Are my stories protected from pirates? Will they appeal to the publishers who are my channels to readers? Will they appeal to readers, and to which readers? How are they positioned with respect to other stories in the market? How will they be viewed by bookstore owners and managers?
AL: So besides consistent cash flow, how will you measure Growth?
DB: Publications. Publishing contracts. Publishing milestones like foreign rights sales, performance rights sales, and so on. Social media followers. Bestseller lists. Repeat customers. Reviews. Profit, hopefully. So far my writing business makes losses. Ha!
AL: Well, I hope you’re working on that. I’ve heard it said that to be sustainable a business needs to generate positive Profit over time.
DB: Fortunately, I know what my levers are: keep costs down, differentiate my books, and above all, sell more copies!