The following is a guest post written by Group HR Director and seasoned blogger Alison Chisnell which was first published to Discuss HR in January 2012
So 2012 is well and here and…here’s a surprise…it really doesn’t feel any different to 2011. The economic and work environment continues to be extremely tough for many, if not most, and as HR professionals, now more than ever, we need to grit our teeth, show our resilience and work with the business to deliver value and contribute all that we can to the bottom line.
At the end of 2011 I completed a 360 degree feedback exercise and one of the most useful and insightful comments that was made from a personal development perspective from my CEO was highlighting the potential for me to be more commercially focussed on profit drivers within the business. To be clear, I am not in any doubt that the primary purpose of HR is in supporting the business to make a profit: it’s really about taking that to the next level of really understanding what the main levers and influences for this are at a more sophisticated and granular level. This is perhaps something that HR as a whole needs to focus on more and hone our skills at…I think we are very much at the beginning of the road of understanding what that even looks like.
This raises a number of questions: how do we go about reaching a deeper commercial understanding of the profit drivers within our businesses, what behaviours and activities will this impact and what are the skills that we need to contribute at this level? Are we doing this currently or is there room for further improvement? – I doubt I am the only one whose CEO can highlight a bigger opportunity from where my knowledge and skills are currently at. Surely too this doesn’t just apply to businesses in the private sector, but also to the public and charity sectors…an in-depth knowledge of how the wider business works, what makes a difference to efficiencies, value and cost is vital.
I don’t have any definitive answers, but I do some views that I’d love your opinions on. In terms of the how, that surely comes from moving out of our comfort zones, working with senior managers to understand what influences their businesses and the amount of revenue and profit that different activities pull in, forming a close relationship with Finance and stretching our minds to understand the detail of the financial accounts, ratios of profit to people, where the business is performing and where it is weak. What makes money and why. What loses money and what can be done about it. If we are still operating in an HR bubble we need to move out of it and fast. That may involve asking some silly questions, it may involve getting some things wrong. It may take some courage and persistence in insisting on having those conversations and some prioritisation of existing workload. But, how powerful is the HR function that truly understands all aspects of the business, knows the areas and the capabilities that drive profit or efficiencies, understand where additional resource is required and why. That’s exactly where I want to be with my team.
If we are able to grow our skills successfully in this direction, then surely it will impact almost everything that we do: inform how we prioritise our HR activities, what we seek to influence, where we focus our learning and development interventions, the roles that we recruit for and restructure, where we know we add value and where there are activities that simply have no overall business benefit that we can stop doing. In these tough economic times, commercially focussed HR professionals can only be a huge business benefit.
How about you? What are you going to be focussing on this year and how will you be adding value to your business’s bottom line? I’d love to know.
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