For too long, HR has been labeled a “support function,” a department that exists to execute administrative tasks rather than drive business success. I reject that notion. In today’s landscape, if you’re an HR leader who doesn’t understand your business inside and out, you’re not leading. You’re just taking notes.
The best HR leaders are business leaders first. That means knowing how your company makes money, what levers drive growth, and where risks lie. It means sitting at the executive table and not just advocating for people initiatives but contributing meaningfully to business strategy.
What Business Acumen Really Means in HR
Business acumen isn’t about memorizing financial statements or throwing around jargon. It’s about understanding the factors that impact your company’s success and being able to speak the language of your colleagues in finance, sales, operations, and beyond.
For example, I don’t think about HR in isolation when I’m in a leadership meeting. I think about the broader business landscape, like market consolidation, operational efficiencies, cash flow, and growth strategy. HR isn’t just about policies and engagement surveys; it’s about ensuring that we have the right people, in the right roles, to execute on the company’s strategic priorities.
It always makes me feel great when I am told, “You’re a business guy who works in HR.” That’s the goal. If you’re seen as just the HR person, you haven’t embedded yourself deeply enough in the business.
The Cost of Strategic Misalignment
Without business acumen, HR risks being disconnected from the company’s priorities, and this is a bigger problem than many realize. Research from MIT Sloan found that while 97% of senior leaders in a large tech company believed they had a clear understanding of corporate strategy, only 25% could correctly list three of the company’s five strategic priorities. Even more concerning, one-third of the leaders responsible for executing the strategy could not name a single priority.
This disconnect isn’t unique to one company. A study of 124 organizations revealed that only 28% of executives and middle managers responsible for executing strategy could list three of their company’s top priorities. If business leaders struggle with alignment, how can HR professionals (who may not be as embedded in strategic discussions) ensure they are making an impact? The answer is simple: HR must step up and engage in business conversations, not just HR discussions.
This is more than just a personal belief, a study by the Economist Intelligence Unit found that 65% of leaders agreed that insufficient business acumen was a primary factor limiting their organization’s ability to achieve strategic goals. HR leaders who lack this skill set aren’t just failing themselves; they’re failing their organizations.
Building Business Acumen: More Than Just Training
At my company, Cooper Standard, we built an internal “university,” within the HR College, HR professionals develop business acumen. We offer short, targeted sessions on financial metrics, operations, and strategy. But training alone isn’t enough. True business acumen is built through immersion.
If you’re an HR leader in a manufacturing company, you should be doing more than sitting in HR meetings. You should be in plant operations meetings, understanding supply chain challenges. You should be in sales forecasts, analyzing how workforce planning affects revenue. You should be asking questions like:
- Why is our inventory so high? What’s the financial impact of carrying extra stock?
- What’s the cost-benefit of a particular operational shift?
- How do tariffs or market changes affect our bottom line?
When HR leaders start asking these questions, they shift from being a “support function” to being an integral part of the business.
Stop Accepting the “Support Function” Label
One of my biggest pet peeves is when HR is called a “support function.” If HR is doing its job right, it’s not supporting the business, it’s helping to drive it. That’s why I challenge my team to reject that label. If you’re in HR and someone calls you a support function, fight back. Be in the conversations where critical decisions are made. Make it clear that HR is essential to business success, not an afterthought.
Similarly, I reject the term “soft skills.” Communication, leadership, and collaboration aren’t “soft.” If they were easy, everyone would be great at them. These are critical business skills, and HR leaders need to model and advocate for their importance.
HR Leaders Must Earn Their Seat at the Table
Having a seat at the table isn’t about hierarchy, it’s about influence, and building credibility as a business leader. HR isn’t just about hiring, firing, and compliance. It’s about ensuring the business has the talent and leadership needed to thrive. If you’re an HR leader who doesn’t understand the business, you’re limiting your impact.
To be truly effective, HR leaders must:
✅ Speak the language of the business, not just HR.
✅ Be proactive in understanding business challenges.
✅ Push back when necessary and provide a strategic perspective.
So ask yourself: Are you an HR person who sits in business meetings, or are you a business leader who happens to work in HR? The difference is everything.
This article is part of the Precision Matters series. In the series, HR and L&D leaders share their expert strategies for utilizing Learning & Development tools to craft precise, impactful business outcomes and foster organizational growth.
