What does it mean to be a "business-savvy HR"? - Hu Xiu Net#
Omnivore#
This article discusses the understanding of the topic of "business-savvy HR" based on the author's experience. The author shares their experiences in learning and working, and proposes requirements in two aspects: understanding the external and internal aspects.
• Through studying business courses and closely collaborating with business teams, the author successfully integrated into a business team in their first job and played an important role in the team's expansion.
• In order to better understand the business, the author personally experienced the work of the business department in their second job, which helped them better manage the business population.
• The author proposes requirements in two aspects: understanding the company's market, competitors, customers, and other external environments, as well as understanding the company's core business, strategy, organizational structure, and other internal situations.
One
Being business-savvy is a topic that has been written about in numerous public articles. Today, I want to discuss the understanding of the topic of "business-savvy HR" from a different perspective based on my own experience.
First, I will share three experiences from my past.
Experience 1
I studied human resources as my major for my master's degree abroad. On the first day of the HR major course, I remember the course was called "Human Resources and Company Strategy".
To my surprise, the professor of this course basically opened the session and then stayed on the side. The guest speaker invited by the teacher, a vice president of HR from a large investment bank, gave a speech that day mainly focusing on the company's market and business strategy, with a few HR-related content interspersed.
After the class, I felt a bit confused. I attended the class with the mindset of learning HR knowledge, but throughout the class, I heard mostly about business content. I was surprised at how well the HR vice president understood the business.
I remember joking with my classmates after class that the class was too abstract and didn't provide any practical HR knowledge. Later, I realized that the intention of the school was to establish a mindset centered around business for HR students from the first day.
Experience 2
After graduating with my master's degree, my first job was as an HR specialist in a multinational high-tech company, where my role was similar to an HR business partner (HRBP). My boss, a senior HR manager, and I supported a business department of about 300 people together. My daily work involved recruitment, training, compensation, and other HR administrative tasks for this team of 300 people.
At that time, my boss's biggest requirement for me was to understand the business. To achieve this, she made corresponding arrangements:
First, my seat was arranged to be with the business department, away from other HR teams in the company. Second, she required me to attend the business team's weekly meetings, as well as monthly one-on-one meetings with several business leaders. Finally, I had to attend the business team's regular business training sessions.
Because of these arrangements, I quickly integrated into the business team and played an important role in the team's expansion from 300 to about 500 people within a year. They were also very satisfied, and at the end of the year, several business leaders specifically expressed their gratitude to my boss for my work.
Experience 3
My second HR job was as a factory HR manager in a large manufacturing company, where one of the business operations was to transport special gas products to customers using large tank trucks. The drivers of these trucks were one of my key business customers, as their work involved not only driving but also providing simple technical support services at customer sites.
I couldn't understand how the drivers could be knowledgeable in both driving and technical services. To fully understand their work, I spent three days accompanying them on their routes during my first week on the job.
I would leave the factory early in the morning and depart on long-distance trips with the drivers to deliver products to different locations, returning to the factory very late at night. After these three days, I had a clear understanding of the drivers' daily work, which helped me greatly in recruitment, performance management, training, and other HR-related work for this group of drivers.
It can be said that these early career experiences helped me establish the basic concept that to do a good job in HR, it is necessary to understand the business.
Two
Today, more and more companies are emphasizing that HR professionals need to understand the business, truly centering their work around business clients, speaking the same language as the business, and becoming true participants in the organization's and business's development.
Some people have fallen into a misconception about HR needing to understand the business, as if HR's business knowledge and capabilities should be on par with those of their business colleagues. Some companies even select candidates for HRBP positions solely from the business departments.
So, what does it mean to be a business-savvy HR? I believe it mainly manifests in two aspects:
First, understanding the external aspects.
This includes understanding the company's market, major competitors, customers, and upstream and downstream enterprises; industry market trends; prospects for technology and product development; major potential threats to technology substitution, and so on.
The following checklist of questions can help HR professionals understand the company's external environment:
1. Market: What are the current major market trends in the industry our company operates in? How do these trends affect our business and HR strategies?
2. Regulations: Are there any key changes in national and local laws and regulations in our industry recently? How do they affect our business and HR strategies?
3. Competition: Who are our major competitors? What are the differences between us and them? What are their HR strategies, and what can we learn from them?
4. Customers: Who are our target customers? How are their needs and expectations changing?
5. Technology: What are the development trends in technology and products in our industry? What are the technologies that are constantly being upgraded? What technologies might be replaced by new ones? How do they affect our recruitment and development of personnel?
6. Supply chain: Who are our upstream and downstream enterprises? What challenges and opportunities are they currently facing?
Second, understanding the internal aspects.
This includes understanding the company's own business situation, including the organizational structure and design of various departments, key business processes, and major products; the company's mission, vision, and 5-year business strategy; major business plans and key performance indicators within a year, and so on.
Similarly, the following checklist of questions can help understand the company's internal situation:
1. Core: What is the core business of the company? How does it create value for the company? What is the company's main business model? How does the company make money?
2. Strategy: What are the company's 5-year long-term business strategy and 1-year short-term business goals? What are the expected major outcomes? What are the specific key performance indicators for monitoring results? What are the key performance indicators for monitoring process progress?
3. Organization: What is the company's organizational structure design like? Can you explain the entire company's organization and department settings to a new employee?
4. Finance: How has the company performed financially in the past 5 years? What are the operating income, operating costs, gross profit, and net profit? What financial challenges does the company face in the future?
5. Products: What are the main products and services we offer? What are their competitive advantages in the market? What are the self-operated and distribution sales channels for the products? What challenges do they each face?
6. Research and development: What are the main focuses of the company in terms of product development and innovation? Are there any important recent product or service innovations?
7. Processes: What are the key business processes of the company? Which departments, teams, and positions are involved?
Three
So, how can we achieve business-savviness? Based on my personal experience, the following approaches have proven effective.
First, make friends with business colleagues.
Take the opportunity to chat and have tea with business colleagues when you have free time. Attend regular meetings of the business department to understand the challenges they face. Participate in training organized by the business department. When encountering any business-related questions that you don't understand, humbly ask your business colleagues for guidance.
Of course, if conditions allow, you can also learn from business colleagues by observing their work up close, just like I did in the past.
Second, understand finance.
The core goal of a company is to make money. Understanding finance also means understanding the logic of how a company operates. Where the financial numbers are, that's where the money is. As an HR professional, you should understand the specific financial situation of the company, such as revenue, costs, and profitability. How is the money earned and spent?
There is a method that can help HR professionals quickly understand finance: participate in the company's budgeting process. This process can help you understand how the company's annual business goals are determined, how expenses are allocated, and how costs and profits are calculated.
After deeply participating in the company's budgeting process for the past three years, I found that my understanding of both the company's finance and the essence of business operations has improved significantly.
Enhancing understanding of finance can also improve HR professionals' data analysis capabilities, achieve data-driven decision-making, and facilitate effective communication with business partners.
Third, make good use of external resources.
Consciously learning relevant business knowledge is essential to understanding the business. In this age of information explosion, there are many effective external learning resources.
Regularly read influential public accounts, journals, reports in the industry. Understand the views of key opinion leaders, speeches, influential industry forums, and seminars. These can provide necessary supplements to your understanding of the business beyond your work.