As HR executive search experts, we are constantly asked by clients to find HR leaders with high levels of business acumen. This is often described in terms such as ‘business first, HR second’ which is how many progressive organisations want their HR functions to be operating. Whilst HR leaders can absolutely build their business knowledge in an HR role, one of the best ways they can get ‘closer to the business’ is to actually go and spend some time as a business leader or in another function. We see this transition occurring mainly at two junctures. Either early or midway through a professional career when the individual decides that operations/marketing/sales isn’t for them, and they have a strong bias towards the people agenda, so they gravitate towards an HR role. Or we see it at the very top when business leaders are appointed into CHRO roles which often brings mixed fortunes for the success of the HR function.
However, what we are starting to see is a little more fluidity. Experienced HR leaders are moving into business roles and actively seeking these out. This is still not a well-trodden path but can be hugely additive to both the organisation and the individual.
We posed some questions on this subject to Alim Dhanji from Adidas, who was previously the Senior Vice President, Global Talent and Head of HR for Global Brands, based in Germany and is President of Adidas Canada.
Tell us a bit more about your journey in terms of the mix of business and HR roles you have held over the years?
Within HR, I’ve held roles across all ‘centres of expertise’—for example, talent management, rewards, and organisational design as well as HR business partner roles for commercial functions and support/strategic divisions like finance and marketing. Outside of HR, I’ve had the opportunity to stretch myself into finance, M&A, operations roles and am currently in a country head role with full P/L accountability. My roles have covered global, regional, and local leadership scope – each offering different perspectives and experiences to learn from and including the opportunity to live in six countries and travel to over 100.
Having always had such a diverse career in HR and in business roles previously has this variety been something you have aspired to?
Absolutely. It’s the sense of curiosity, growth mindset and learning that comes from diversification that motivates me, and in turn enables me to be a more effective leader, innovator and a trusted partner who can truly understand the global/local, long-term/short-term and innovation/risk dynamics that comes of the exposure the various roles have provided me with. HR professionals who have broadened their aperture through stepping out of HR and truly experiencing global roles have collected cross-cultural experiences, deeper financial and business acumen enabling them to balance the strategic and operational needs of running a business. They tend to not only focus on traditional HR programs on like engagement and rewards but can go much deeper into shaping and influencing the operating model, value chain and economics of the business as a formidable C-suite leader with credibility.
What advantages do you see in bringing your HR expertise into a business role?
Other than navigating a balance sheet—which I believe is essential to understand and more adequately leverage specific performance drivers—‘business acumen’ is also about sound critical thinking, decision making, team leadership, shaping culture, driving innovation and high performance. All of which I have my career in HR to draw from.
Time in HR has nurtured a talent mindset within me and a true appreciation of HR programs as strategic investments vs expenses. It’s given me the tools and know-how on harnessing diversity, employee development, succession planning, etc., to cultivate high performing teams.
What are the challenges of making this move?
It’s more challenging at senior levels, making a cross-functional move, and quite rare to be given sizeable P/L responsibility without sales experience. Having the CEO’s trust, demonstrating learning agility and a commercial mindset—and most importantly, being comfortable with vulnerability and checking the ego—is essential to maximise learning and therefore avoiding risk with high-stakes decision making.
Practically speaking, one challenge is investing the time in both learning new skills whilst at the same time operating with excellence in the role. You’ve got to commit to and truly want to continuously learn. This is less challenging at more junior levels which is why I always counsel early-stage HR professionals to seek out commercial roles before returning to HR before progressing to more senior roles. The benefits far outweigh the challenges.
Conversely what advantages does a business background bring into the HR function?
Business experience can help offer perspective, credibility, confidence, trust, and empathy from understanding the commercial drivers and levers and a more comprehensive understanding of a company’s value-chain and operating model to be an equal C-suite contributor.
Commercial experience helps to ground HR strategy with practical realities which business leaders must deal with on a day-to-day basis. Helps to ensure HR programs aren’t lofty and conceptual but rather, are operational, deliver sustainable value and competitive advantage for the company.
A CHRO without any technical HR expertise can still be effective in providing their leadership team with arguments rich in content expertise. There are trade-offs—greater business leadership may mean less appreciation of human capital strategies or thought leadership in the moment, especially during a crisis or high-stakes situations. This is why, the ideal—in my opinion—is taking deep HR expertise and combining it with business and operational experience to round out the CHRO’s effectiveness.
Do you think this is a growing trend in terms of HR professionals moving into business roles?
I don’t see enough of it today but do hope this will become a growing trend. It benefits our profession as well as organisations to have more well-rounded leaders.
What advice would you give to HR leaders looking to move into the business and broaden their careers?
Invest in understanding core finance skills—this isn’t as intimidating as it seems. It can be done through direct learning (online) or through academia. Take an active interest in understanding value creation in your organisation and read the annual and quarterly reports to follow the P/L and balance sheet.
Share your interest and ambitions with senior commercial leaders, especially those who trust you. They will see the value in giving you an opportunity for a cross-functional move.
Demonstrate a desire to learn and be able to showcase the many transferrable skills and capabilities HR professionals already have.
Your final thoughts.
The demands of CHROs and HR leaders have changed significantly over the last two years. For example, the pandemic has brought about change, forcing all organisations to rethink the future of work; the rise of social justice requires a new way of harnessing diversity and ensuring equity; and eCom/digitisation of the business has accelerated significantly, requiring new business/operating models—not to mention, ESG requiring HRs to play a more public and external-facing role.
All the more reason why HR leaders with cross-functional business experience will be in greater demand and perhaps offer the unique capability to help organisations to better respond to change.
The Future of HR Leadership
So as Alim says, there is not enough of this happening today, but it could become a ‘growing trend’ over the next few years. We believe there will be increasingly more cross-pollination between the business and HR as we see in the finance function for example. HR leaders with commercial acumen are much more effective in the board room. Certainly, those with a deeper understanding of operations/finance/P&L tend to have the skills and confidence to shape and influence the value chain/operating models and economics of a company.
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