Connor runs a small number of exclusive round table events for senior HR people. At our latest one we asked HR leaders how they were meeting the challenge of delivering organisational change. There was one recurring key to success – being commercial. Here are some indicators that suggest you're leading a commercial HR function in your organisation.
Actions speak louder than words and that is a view shared by our forum when it comes to demonstrating an HR function's commerciality.
One HR director summarised this opinion: "HR must show an interest in the business. Don't just sit in your office worrying about your policies and procedures. When you show an interest, doors open."
A similar view was shared by another HR leader: "HR must live and breathe the business. It's about spending time in the field with people who are in touch with your customers, not just at head office."
HR professionals are no different to their finance or marketing counterparts – they have their own vernacular complete with buzzwords and acronyms. The HR leaders we spoke to were careful not to let these creep into their exchanges with their leadership team.
"Everything people related needs to be translated into a commercial language."
One HR director explained how she changed her team's language in this regard: "We used to talk about retention and the business switched off. So we started to talk about the commercial impact of key people leaving to our bottom line and customer experience and suddenly the business wanted to know more. Everything people related needs to translated into a commercial language."
Another HR director concurred: "Some finance directors and CEOs still perceive people issues to be less important than others they face. So change your language and the context to raise their significance and put financials alongside them. Traditionally that's been uncomfortable for the HR leader but you've got to have a commercial debate and stand your ground."
There was agreement that HR business partners and managers also require commercial acumen to deal with complex people issues. The HR directors we spoke to achieved this through developing those who showed an aptitude to be commercial and moving on those who didn't.
One HR director talked of how she developed her team: "I inherited a team of HR business partners but they weren't true business partners it was just a new, sexy label. We now focus on delivering strong HR advice backed up by a real knowledge of the challenges that we face. You have to demonstrate to your internal client that you understand their world."
"I challenge my HR peers about the importance of commerciality. If HR isn't seen as commercial that's likely to be a challenge."
Another revealed a different approach: "If you aren't commercial you won't survive. We got rid of colleagues who couldn't work with the business. We've recruited replacements from areas like retail and the NHS. HR professionals from these industries tend to have the right skills because they've been brought up with them."
Another member of our forum commented: "You have to know your numbers and evidence the value you bring to the business." Do you and your HR team have productive commercial conversations with your finance team and senior managers? They will want to know how financial performance has been improved as a direct result of what HR has led and delivered. If you have improved employee retention you can calculate the cost savings achieved by recruiting and onboarding fewer new employees.
When it comes to the return on investment for things like training development and leadership programmes, think about how you can measure the success of what you deliver. As part of a leadership development programme for energy provider Flogas, delegates were asked 18 questions on their beliefs in their capabilities before the programme and the same questions after. Confidence had improved in all areas with a particular highlight being a 29% increase in confidence to coach teams rather than tell them what to do.
Being commercial and delivering change is about adapting your style and developing your skills and those of your HR team. But you must also be yourself as one HR leader concluded: "I challenge my HR peers about the importance of commerciality. If HR isn't seen as commercial that's likely to be a challenge. It's about holding your nerve, insisting on being commercial and delivering your plan in an authentic manner."
Connor provides personal development for HR professionals – a programme for improving the effectiveness of HR leaders and their teams. So if you're feeling like you or your team could benefit from becoming more commercially-minded, speak with us today.