HR’s Role in Driving Business Impact

Blog-ImageIn my previous blog, I discussed how the L&OD team learned to speak the language of business and facilitate Paradigm Learning’s Zodiak ®: The Game of Business Strategy and Finance simulation.  Now I would like to share how the L&OD organization joined with the company’s HR Business Partner (HRBP) to make a bottom-line impact and, in the process, elevated the perception of HR’s value as business partners.

Beyond functional expertise

The idea for a business acumen simulation came up at a meeting Ramona (the HRBP) set up with Frank (the new SVP of supply chain operations). The words on Frank’s whiteboard—Gross Margins, Cost of Goods Sold (COGS), Other Costs of Goods Sold (OCOGS), Payment Terms—got me thinking. I suggested to Frank that my L&OD team deliver a business acumen simulation to help his managers understand and apply these and other financial concepts.

Frank’s response was unequivocal: “Steve, I am sure the managers in my organization understand these concepts.”

To which I replied, “Frank, you may find that many managers on your team, and even senior directors, aren’t familiar with the basic financial concepts. In fact, you may find as you engage across the company that even VP levels may be lacking in business and financial acumen.”

Were these leaders and managers highly intelligent, committed and expert in their functional areas? Absolutely! Did they possess the business and financial acumen they needed to make a stronger impact on the business—and advance in their careers? Probably not.

 Executive sponsorship ignited the effort

Nothing happened—for a while. Then business conditions put pressure on Frank to reduce COGS & OCOGS and improve the company’s gross and operating margins. Frank decided it was time for something new.

“Can you and Ramona deliver that business simulation to my leadership team, VPs, and senior directors?” he asked.

We immediately got to work planning for a successful roll-out. Frank signed up as executive sponsor to launch the program and set the context for his team. We also asked the controller to participate in the afternoon Connections activities to guide participants in relating the financial concepts to their day-to-day decisions and responsibilities.

High-energy learning generated ‘incredible feedback’

We delivered the program in one day for 65 managers and leaders. Ramona introduced the program followed by Frank, who did an outstanding job of setting the stage. This high-energy discovery learning event generated incredible feedback.

At Frank’s next staff meeting, his leadership team debriefed the program and recommended that all managers and individual contributors complete the program within the next 90 days.

The bottom-line impact

  • Gross margins for products (the area in which the Operations Team has the greatest impact) improved by 5 points over the previous quarter and 1.7 points when compared to the same quarter in the previous year
  • Operating margins improved by 1.3 points quarter over quarter
  • The supply chain organization strongly aligned with the company’s financial objectives—and learned to think and act accordingly
  • The HR and L&OD teams earned respect as true business partners conversant in the language of finance; they are now working strategically with leadership to build new capabilities and fill business performance gaps

Most business challenges are rarely neat or easily solved. So I don’t mean to suggest that the Zodiak business simulation was the “silver bullet” in improving gross and operating margins.  I am confident, however, that building the business acumen of the supply chain organization not only led to bottom-line improvements, but also laid the foundation for success well beyond one quarter.

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Steve Dolan, SPHR, is the principal consultant at 2020 Talent Management, a boutique HR consulting firm. Steve has more than 20 years of global HR and business leadership experience with companies such as IBM, Compaq Computer, J&J, Juniper Networks, LGE Performance Systems (The Human Performance Institute) and American Power Conversion. He holds a master’s degree from the Cornell University School of Industrial and Labor Relations. In 2011, Steve was nominated for the CLO Vanguard Award, Bersin’s Leadership Development Strategic Excellence Award, and an ASTD Leadership Development Award.

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