Onboarding is a continuous and vital process. Although many talent managers realize that onboarding is critical, they often fail to effectively execute it—or ensure employee retention and success. Onboarding initiatives need to do more than just introduce new hires to the organization’s basic information, systems, and company culture. Onboarding initiatives also should focus on helping new hires understand, align, and execute the corporate strategy so they can recognize how their work affects the company’s bottom line. To help with this effort, organizations need to include business acumen in their onboarding process.
Defining Business Acumen
Business acumen is a germane understanding of how your company makes money. It includes an awareness of what drives profitability and cash flow, a market focused approach to the business, and an overall knowledge of the business and its interrelationships.
U.S. and U.K. employees are costing businesses $37 billion every year because they do not fully understand their jobs, according to a 2008 IDC white paper—and little has changed since the study’s release. Furthermore, the study showed that employee misunderstanding is defined as actions taken by employees who have misunderstood or misinterpreted company policies, business processes, job function, or a combination of the three.
The high costs of hiring and subsequently losing new managers has made onboarding a critical focus of many organizations. But even though organizations are finally focused on the onboarding process, much of that focus is spent leveraging technology systems to “check the box” and show that the onboarding process is completed.
Why Business Acumen Matters
Many onboarding programs are missing a critical opportunity to incorporate business acumen as a key part of a broader business strategy. Some onboarding programs offer skills training that is focused on the specific role or job function of the individual, but it is rarely aligned to the skills and knowledge needed to execute the overall business strategy. Organizations miss a prime chance to train new hires on how their role can directly impact the business—leaving the new hire to make decisions without understanding how those decisions impact company performance.
Often, these new hires have never been exposed to vital business acumen skills that would greatly support their personal development and the organizational growth. What’s more, the omission of business acumen in onboarding only perpetuates many of the issues that managers and leaders struggling with in their companies, and it often leads to the continued high turnover, poor business results, and disengagement.
Indeed, most onboarding systems place managers in their functional silos, preventing them from seeing the big picture, overall direction and strategy, and metrics of financial success of the company. However, a successful onboarding process will break the silo mentality and provide managers with the skills and tools they need to impact bottom line performance quickly and efficiently.
Bottom line: The onboarding process is the ideal time to introduce new hires to the fundamentals of business acumen and the specific company strategy.