Unless you have been under a rock for the last few years, you have heard how critically important business acumen is as a competency for HR professionals. Actually, I think it is a critical competency for all professionals. In SHRM's new HR model Business Acumen made the cut.
Anecdotally, I have heard from business leaders and HR leaders alike how important business acumen is for HR professionals.
So, I wanted to dissect this competency by discussing, what it is, why it is so important and what to do to get it.
The following slide is how SHRM defines business acumen:
I found another perspective on business acumen: (Building Better Business Acumen, Drs. Raymond and Gregory Reilly)
Business acumen is keenness and quickness in understanding and dealing with a business situation in a manner that is likely to lead to a good outcome.
I believe you can spot the people with business acumen a mile away, especially in HR. They are the people that recognize strategic business issues, understand their industry from an internal and external perspective, and they understand operations, finance and accounting principles. They also understand that people get things done so they are great in the relationship management area as well.
So, now we know WHAT business acumen is, let's answer the question, so what? Why should I bother?
I am answering this question from an HR perspective. Here is the #1 main reason you should care as an HR professional:
Your job depends on it. Period.
How can you be strategic in HR and be a business partner in HR if you don't understand the business?
The final part of the question is how to obtain business acumen if you don't have it or need more of it?
I know that you learn a lot about business through experiencing business. You also learn a lot about business concepts in college. It's applying all of that knowledge that is the best classroom for this competency. I believe there are definitely activities you can do that also build business acumen as well:
1) Read, read and more reading. I read everything about my industry I can get my hands on.
2) Get a mentor and/or a coach
3) Ask great questions to executives
4) Volunteer in a leadership position for an association or a non-profit
5) Study other business savvy individuals and find out what made them successful
6) Study your companies financials until you understand them
7) Find out how your product or service is different than your competitors
8) Work on special projects outside your specialty area
9) Research your industry, company and competitor's and stay current on all trends
10) Go back to school, get a degree, or a second one
I know I missed several in my list above. How have you developed your business savviness? Do you think it's important?