How can HR professionals show they mean business? By learning to speak the board’s lingo, says Scott Beagrie.
Being fluent in the language of business goes hand-in-hand with being an HR business partner. Unless you can communicate in a language that the board understands, you have no chance of translating your ideas and proposals into real HR initiatives.
As Carol-Ann White, global HR director of PR consultancy Lewis Communications, observes: “It is becoming increasingly important for HR to play a fundamental strategic role in any organisation, and ultimately communicate as a business partner. This means being able to understand and translate business objectives into HR strategies, liaising at a senior commercial level.”
To ensure you can converse with the best of them at board level, we’ve put together this five-point plan.
1 Get in touch with the business
A solid appreciation of the commercial big picture and needs of your organisation are the foundation stones for building proficiency in the language of business. What are the company’s business objectives? Is it going through a period of sustained growth? Does it plan to diversify into new markets? Who are your competitors?
Reading and understanding the annual report is a good starting point, as is finding out what the trade and business press is saying about the organisation. Assess the current state of the market you are operating in and, whenever possible, attend conferences and industry events.
“Take time to think about how HR strategy can support the business in this context,” says Alison Gill, co-founder of talent management consultancy Getfeedback, which specialises in helping companies to enhance their business performance. “Talk to major customers about what is and isn’t working for them, shadow senior people on the board and talk to line managers about what challenges they face and what people initiatives they have put in place that have worked well.”
Bear in mind that organisations will have different business drivers and values and it is important to recognise these and marry the HR strategy to them. “For example, an investment bank might look at people as assets to drive profit, but a non profit-making housing association would see people as the creative tools to drive housing solutions that attract external and government investment,” says Susy Roberts, director of change management consulting and training business Hunter Roberts. “Understanding that context can help HR to match its messages and interventions more successfully.”
2 Mind your terminology
Being credible when speaking the language of business relies on an in-depth rather than surface knowledge of business issues. Don’t try to pull the wool over people’s eyes with the latest buzzwords.
“Be clear about the difference between the business language and business jargon. The two are very different,” says White. “Catchphrases and acronyms can often be interpreted as overcompensation for trying to sound businesslike, as opposed to actually demonstrating a clear commercial understanding.”
Equally, don’t fall back on HR’s own jargon, which can be baffling to non HR colleagues. “Employee engagement, EVP (employee value proposition), role profiles and HRBP (HR business partner) mean nothing to our colleagues,” explains Alasdair McKenzie, head of employee engagement at Penna. “Neither does it mean adopting a new language of gross margins, EBITDA (earnings before interest, taxes, depreciation and amortisation) and ROCE (return on capital employed) ratios. Use simple language in an authoritative manner.”
Remember it can take time to acquire the necessary level of commercial understanding.
3 Demonstrate HR’s bottom-line value
Getting the ear of a key strategic decision-maker on the board is much easier if you have tangible metrics or proof that what you propose to do will affect the bottom line.
“Translate warm and fluffy into measures that link to sustainable business performance,” says Susy Roberts, who was instrumental in setting up Marks & Spencer’s direct selling business. “By spelling out the total cost of poor recruitment decisions, I have gained buy-in to a new robust recruitment process,” she says. “Only when the CEO has heard the cost in terms of a drop in revenue generation capacity, a drop in favourable client perception, recruitment cost, loss in motivation in a team, management time and negative messages being carried out by departing employees, will they engage.”
Paul Turner, general manager (people), West Bromwich Building Society, who won Personnel Today’s 2004 Award for Best HR Strategy in Line with Business, reckons that his team is more focused on outputs than ever before. “We start from what the desired outcome is in business terms and work back to the service proposition,” he says.
“Providing business managers with deliverables in business terms is much more powerful than simply talking in vague terms around employee wellbeing and the like. For example, specific reductions in absenteeism, improved retention through staff motivation and increased sales through training can all be linked to a bottom-line figure and justified on a cost-benefit basis.”
One of the best examples of benefiting from being able to talk business language that Gill has come across is of an HR director whose request for a succession planning budget had been rebuffed. “Instead of talking about the need for this in HR terms, he used business language, demonstrating that the retirement age of the senior team meant that every major account would lose its key contact at the same time,” she explains. “He went on to outline the potential cost to the business of losing these accounts to demonstrate the value his succession plan would add. As a result, he was given the budget to go ahead, successfully averting the crisis.”
4 Widen your commercial exposure
A major factor in expanding your business vocabulary is exposure to commercial experiences and backdrops outside of the HR department. Seek a customer-facing placement within the organisation, or at least be proactive about meeting and talking with customers. Paul Turner spent a large part of his career in frontline and support roles and says it gave him a grasp of real business issues and an understanding of how demanding customers can be. “If you’ve never worked in a frontline sales and service role it is difficult, but not impossible, to grasp the true importance of the customer,” he says. “HR needs to build into its routine regular visits to the front line, supported by regular briefings from internal customers about what’s important to them.”
Establishing good contacts in key departments such as finance and marketing may even mean you can persuade someone to act as your mentor while you build expertise in these areas. Getting to know the lingo used by each is a must, but beware of adopting jargon.
Investigate attending financial management courses and, depending on where you are in your career, White suggests considering an MBA. “Your perception of value as a business partner will increase,” she says.
5 Make it a way of life
Once you’ve mastered the language of business, pass it on to your team and embed it into the culture of the HR department. The more comfortable and natural the team are when talking about and dealing with business issues, the more confident and credible they will appear.
“The reason our colleagues should listen to us is for the improvements we can help achieve. To enter into these conversations we need to have confidence and it is acquiring confidence that will be tricky for many of us,” says McKenzie. “We need to be sufficiently comfortable to change the perception that we live in our own soft and fluffy world to one that no business can afford to live without us at the front.”
Turner highlights the ongoing need for the HR team to make sense of the grey areas. He concludes: “Clarity on how the HR function is supporting the overarching business vision can only be developed through constant dialogue and discussion.”
Business language dos and don’ts
Do
- Be knowledgeable about your organisation’s commercial activities and business goals.
- Learn how to measure, benchmark and use metrics.
- Be prepared to be held accountable for your work.
- Meet regularly with other like-minded HR professionals who are striving to be business partners.
- Earn a serious business qualification.
- Ensure what you do is visible and keep telling the success stories.
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Don’t
- Use meaningless jargon. Express yourself in straight-talking, plain English instead.
- Forget you are an HR professional. Seek to preserve those essential qualities.
Compiled from information supplied by Carol-Ann White, Susy Roberts and Alison Gill.
