Editor’s note: Today’s guest post comes from Benjamin McCall. He runs ReThinkHR.org and is an OD, T&D and business strategy specialist (who incidentally is for hire). In this post, he tackles a hot button topic: why HR pros need to focus on business intelligence over HR specific intelligence. You can follow Benjamin on Twitter @BenjaminMcCall
We all come from an interesting place
As a whole, those of us within the profession come from many backgrounds. From what I have read and the data I have seen, very few of us within Human Resources come from a background of finance, accounting, operations or business administration. While not a fairytale, it is rare to see. This is not bad. Not being born and bread in the education of business can allow us to step outside of the typical ‘numbers’ and ‘quotas’ that often are focused on by the business and pay attention to the people that essentially drive the ‘numbers’ and ‘quotas’ of the business. The funny thing – if you see someone going into HR from an area of business – the reaction given are often puzzled faces and questions. Ummm why??
The thing is, we need to have the understanding that comes with an MBA or what any degree in business holds.
What we’re good at
We are good at policy, procedure. Human Resource professionals are intelligent on benefits, compensation. Mitigating a certain level of risk. We can identify talent and create great recruiting strategies. We can align development opportunities with the gaps that may exist. We also have the PHR, SPHR, or GPHR to prove it! Overall we are good at these things (of course we all know some people within the profession that suck. However, I don’t want to argue that point).
What we are not as good at
Numbers. Aligning strategy to business goals. Developing formulas and equations to define return on investment for our departments and the programs that connect to our internal clients. Communicating. Coming up with that strategic plan. All the buzz words that are out there now.
I’m not implying that we are not good at all of these items. What I am saying is that a large percentage within our profession have never had to do it. So the practice and strengths are not so strong.
The Business MATTERS
If anyone knows this – human resources, recruiters, payroll and all the other functions within HR – should and do know that the business matters. We serve and define strategy in order to enable us to provide the best and brightest. We also do what we can to deliver on practices that will improve the competencies and people within the business. Yet when it comes to the crucial conversations – many do not often speak the language that operations and the business understand. In this, we need an education!
Practice what we preach
We hear it all the time. Talk of becoming, being and taking the role of a “Business Partner.” We even see titles changing from traditional HR to having them include ‘Performance Consultant’ and ‘HR Business Partner.’ Great but if all you have is a title and you do not posses the nerve or competencies to be a “true partner” who cares. We want to go beyond just the title and move into a true understanding of what the business needs, we as HR professionals need to step out of our own box of understanding, get out of our own surroundings and step into the box (terms and practices) of the businesses and industries we are in. This means sitting one on one with the VP’s. Talking with individuals whom work in the field (come on, who uses the term ‘whom’), front lines and shop floors. Even shadowing and rotating throughout various parts of the functions in order to get an idea of, not only the true culture of a company but also, the sub-cultures of the company.
WHY HR needs an MBA
One reason is for the common language and jargon. We in HR need to be skilled in translating our own jargon to all departments. Another, to have practice, practice and practice within the all areas of business. To tie our strategy effectively to the strategy of the organization.
What we truly need is to build and be willing to earn the knowledge, trust and power from and for the business. These traits could be earned by obtaining that type of degree or certification. However, it can also be earned by spending the time within the areas that focus on the business and its relationships.
Do what you will
I am not saying that you HAVE TO HAVE a degree in business. I’m just saying that YOU SHOULD HAVE some understanding and credentials within your business. Whether that be an MBA, B.S. in Finance, Associates in Business or a certificate in operations. If you can do it then do it, it will only make you more well rounded.
Unlike many I am open to criticism no matter how sweet or dirty. Bring it on 
{ 12 comments… read them below or add one }
Ben, excellent points. The area of financial knowledge for HR pros is something that I have been advocating for a while. I think that in addition to the individuals stepping up to grab this knowledge, I think that colleges need to consider adding some sort of financial/accounting for HR course as part of their major. Also, I believe that SHRM should be doing more to advance this idea, especially offering more affordable professional education opportunities.
Great post.
Excellent article, and I couldn’t agree more! I am enrolled part-time in a Masters program at Ohio State for Labor & Human Relations, and we often discuss the need for HR to become more business focused in order to stay relevant. The program includes an “Intro to Business” and a Statistics class as part of the curriculum, and because it’s housed in the Fisher College of Business, we occasionally can take some of the MBA courses (and we are trying to get these further integrated). I agree with John that I would love to see SHRM do more in this arena, and eventually have the PHR and SPHR to be more focused on this (although does that mean I’ve have to take the exam again? Not a chance!)
Cheers! I am in total agreement with this article. While I am not yet a pro, I realize it is important to understand the bigger picture of business in order to relate to the business in which you support. I have worked in Recruiting/HR within the banking industry for the last 7 years and last fall, began an Executive MBA program. I have also committed to completing my PHR in the next year as well. All these tools in our “belt” can only help us move forward and help our clients see us as a strategic partner at the same table. Great article! Thanks for writing.
It is interesting that those in favor of an MBA either have one or are getting one. I do not have one, not planning on getting one , yet as a member of the senior executive team, I have always worked hard to understand the numbers, the business and the return HR has on both of those. You don’t need an MBA to do that. I know many MBA’s that are not capable of taking the theoritical and applying it in real life. I also know many who can. It is not the MBA, it is the individual.
Let me discuss this as an outsider to HR/Personnel.
1. “Whom” is correct and I DO try to use it along with prepositions for indirect objects.
2. “Greg” is correct in that one doesn’t NEED an MBA to understand the fundamentals of business. However, to rise from the ranks to a senior executive position is rare and being self-taught is difficult. “Life long learning” is trite and poor silliness foisted on us by the K-12 crowd trying to justify their bloated school district budgets. You will learn what you need in your job when you need it. Of course it is the individual.
3. HR types don’t NEED an MBA but they damn sure need SOMETHING to teach the “business of business” to them. The author points out other acceptable options. His strengths and weaknesses paragraphs border on stereotypes (how un-PC) but they are correct! HR probably isn’t any worse than the other departments but your reputation of having little or no business sense is worse than other departments.
4. Most MBA’s are not “rocket science” but you will need to study probability and statistics. You’ll need to understand compound interest and the time value of money. You will need to understand exponents and logarithms for some finance courses. But unless you get into a program that stresses mathematically sophisticated methods you won’t need much else. If you are “math phobe”, never had algebra in high school or need a calculator to calculate your tip at dinner, then you’ll have some problems trying to calculate ROI or do a cost/benefit analysis.
5. For the near future stop worrying about being a “strategic partner”. You are deluding yourself. People are a dime a dozen. Your greatest value now is to keep companies legal.
6. Since we are stuck in a global economy you really need to become bi-lingual and have a sense of geopolitical events and market machinations.
7. DO NOT EXPECT THE MBA TO MAKE YOU A BETTER BUSINESS MAN OR WOMAN. It’s fundamental usefulness is to teach the “business of business”.
8. DO PURSUE FORMAL STUDY IN BUSINESS ETHICS! Workshops are NOT sufficient. That means courses in Philosophy and Acquinas.
9. Finally, stop taking yourselves so seriously.
John, Courtney, Christina – Glad you understand. Where I see the knowledge and understanding more greatly is the content and practice that a certification and degree can bring. It is not the end all be all but it does show some level of dedication to that topic, subject or field. What I think many people do is look at their own piece of the puzzle rather then look at all the pieces and use what they know to increase the vision of the overall puzzle.
Every puzzle piece fits somewhere and contributes but if all you are is that piece then…
Greg – you are correct. Many times the things we preach are the passions we hold. However, I have held this belief long before I was close to obtaining a master’s. I would not even say it is an individual. It many times is the competency and drive that an individual brings. You could have loads of passion and it not matter if you do not act on it.
Great thoughts people!
Ben, I tend to use the term “business acumen”, to me it encompasses more than the financials – it’s about understanding BUSINESS. Strategy, operations, marketing, IT, and the numbers. I think HR needs to have a much better grounding on how their company works – what is the business model, who are the customers, what are the KPI’s (leading and lagging indicators), etc. You don’t need an MBA to do it, you do, however need curiousity, thick skin and guts to say “I don’t know this, but I’d like to find out and I’m going to ask someone in my company to help me learn”. My favorite article about this was in T+D a few years ago…called Building Business Acumen. You can search at ASTD: http://www.astd.org/TD/
So true! HR wants a seat at the table but keeps going to the wrong table–i.e., trying to get the rest of the company to see how they’re valuable instead of proving it with their knowledge of the business. One of my clients put it this way: HR speaks a different language than the C-suite. HR doesn’t speak in the same kinds of business terms and/or often produces metrics to prove their productivity without thinking about whether those metrics (number of jobs filled, time to fill, etc.) are in sync with business objectives–or even relevant.
@Vincent – I agree with many of your points. I disagree with the need to completely understand all the statistical numbers and financial concepts. However, have the acumen to go where you need to go and translate those for the role of HR and the role of business is important. Note: so glad you remember all those big words, I wish I could remember all of it. That is why I keep my books
@Holly – It’s the idea of what comes with an MBA that keeps some C-Suite executives with using the excuse that you have no idea what is going on in the business, but yes – you do not need the MBA. What people need is the knowledge that many MBA’s bring!
@Heath – I think many of my HR colleagues are past the “seat at the table” argument. Frankly we are tired of hearing it. That is often why I never use it. We do speak a different language but it is as much the job of the business to understand and speak the language of people, as it is the job of HR to adequately translate understand and translate the language of business!
Thanks for all the feedback from everyone. A great conversation indeed!
http://ReThinkHR.org
twitter: @BenjaminMcCall
Quick rebuttal:
The mathematical tools and methods that I mentioned are necessary just to get through the standard, core courses in the MBA and I missed a few more also. You may see many of them later but it depends on what your company expects from their HR managers.
The basis of any degree program is that you have the discipline to learn concepts that may be out of your comfort zone. As noted, the skills HR is typically good at are also why they become pigeon holed in organizations.
HR has to demonstrate that they can move into other areas of the business by understanding the fundamentals and how that translates into making strategic decisions. The MBA gives a framework on how all the moving pieces work. It still takes initiative to understand how it works in the real world.
Can someone do it on their own? Yes, though without a mentor or strong internal development program I have rarely seen someone in HR attain those skills.
I am a contributing writer for a human resource education resource on the web and we have heard both sides of this argument from our users. My experience has shown that an MBA is not necessary; however, senior management must rely on their HR management team to understand the impact of human capital on financial and operational impacts and are more likely to take HR input when making strategic decisions. The feedback I have received is that the MBA comes in handy when dealing with major organizational change, restructuring, etc. Mid level HR management have indicated that they don’t feel that the time and financial commitment is worth the gain. An interesting topic that continually comes up in discussion on our team.
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