“Ray doesn’t know business.  He doesn’t know the business I am trying to build.  He is one of those HR types that runs background checks and specializes in recruiting.  But he knows nothing about shipping, distribution, required freight costs and packaging.  Let’s not even talk about working with suppliers.” 

I nearly fell out of my chair and I looked at my friend who just stared at me as to say, “What is with you?”  Breaking the silence, I asked him, “Did you catch that?”  Returning my stare with a matter-of-fact smile, he stated, “Yeah, that’s the perception of HR on my job.” 

But for me it wasn’t that simple.  There stood two guys that had a vision of starting a company; the shingle based contracting business was only the beginning.  Yet even more surprising, they expressed an opinion of my passion and livelihood that is shared by perhaps many others – more than I (or we) probably like to admit. 

That casual comment has been on my mind now for almost two weeks with the words, “Ray doesn’t know the business” echoing in my head.  A statement so easily accepted by my friend that he barely even acknowledged that the statement had been made.  There I was with an undefined feeling that could only be described as a mixture of fury, embarrassment, and determination.  The question of ”What am I and my fellow HR professionals doing to change this perception?” looped in my conscience; loops in my conscience.   

I began to reflect on my conversations over the previous month with my fellow HR professionals searching for validation (or misguided perception) over the statement that the contractor had made. It also brought me back to the present and the topic of the day for HR: The strategic role of HR. 

We talk about it.

I support some of the practical thoughts and applaud the organizations and leaders that have found a strategic and practical solution that focuses on the business outcomes of their organizations.  However, I must admit, we still have work to do to change the perception (and reality) that HR is viewed as transactional back office work – by many and perhaps the majority of our business peers; we really don’t know – at least I have found no compelling study to convince me one way or the other. 

With all our talk of succession planning, talent management, organizational development, and a framework that contributes directly to our organization’s strategic goals and objectives, more often than not, when I dig deeper looking (and hoping) for my peers to state clearly a business case – they cannot.  Instead I hear (at best) discussion of management methodologies that are detached from the actual growth (or survival) of the companies in which they work. 

I search (sometimes in desperation) for someone to tell me the costs and financial impact to the organization’s bottom-line when employees are not properly trained in the field.  Or the horizontal-vertical misalignment that results when “key drivers” are not properly isolated or measured, directly or indirectly, to business performance (profitability or readiness).  Or why Key Performance Indicators (KPIs) are even developed from a overarching business perspective. 

For the fact of the matter is that discovering, developing, and transforming HR into a strategic driver within organizations is hard work.  It’s important work.  It must be done for the sake of our “role” in the organizations and in many cases our organization’s survival. And to be honest: We will not convince many – more than I care to even predict.  But we will convince several: The forward thinking HR-centric firms or up-and-coming organizations that realize that human capital alignment is at the center of the brush with HR professionals kneeling at the source with match in hand ready to ignite the flame.  I will even count victory for the contractors discussing business growth as they work on growing their new businesses.  Heck, I will turn flips when the social entrepreneur who is finding some success in her homeoffice discuss the importance of having an effective HR framework for her business.

So who takes the lead: We do!  And it starts with an opening of Pandora’s box.  It continues with a quest to learn the value-creating process of delivering our organization’s products and services to the workplace.  It requires a keen understanding of how business works up-and-down, end-to-end. It will require a keen insight into how HR contributes to organizational branding, operational processes, salesforce readiness, and R&D innovation.

We must make it happen; we must look to the day when we hear – regulary:   “Ray is all about business and is instrumental to our business success.”

And it must flow every so easily – as a matter of fact.

1) Secure a Lawyer/Attorney: Ideally, you are going to be negotiating and securing clients with real businesses and real customers/clients.  In a perfect world, you will negotiate the requirements, define the project, and implement.  However, in the real-world there will be gray-areas regarding intellectual property ownership, process ownership, and disputes regarding service delivery.  You must get a lawyer that specializes in these matters.  Interview several, get creditable recommendations, and secure a lawyer.  If you are working on a shoe-string budget, work out reasonable payment plan and payment option, and stick to it.  No one likes to work for free and your attorney will work her heart out, but you must pay her.

2) Secure an Accountant: Many will venture into bookkeeping services if they keep financial records at all.  I will tell you right now that without a knowledgeable accountant on your team, you are putting your business in jeopardy.  Your accountant will provide such valuable advice and services that include the dangers of commingling fund/capital, capturing depreciation on office equipment, amortizing loans, writing down bad debt, capturing interest on loans, and many other valuable services.  Consistent with my advice on obtaining a lawyer, interview several accountants, work out a payment plan, and stick to it.

3) Trademark and Register Intellectual Property: Many will be tempted to go the cheap route and think that inserting “TM” and “R” symbols within unique business processes, concepts, slogans, graphics, etc. provide them common law ownership of intellectual property.  Don’t make it hard.  Register your intellectual property, unique processes, and systems.  Protect yourself.  Don’t get caught in ligation counting on common law or assumptions.  Protect your ideas, concepts, and property with a vengeance.  As a business owner that specializes in services, your intellectual property distinguishes you,  distinguishes your business, and offer a competitive advantage. Don’t put your business model at risk.

4) Review Your Financials Regularly:  As I share in interviews and in speaking engagements, it’s not your lack of expertise that will put you out of business, it’s the absence of running your business like a business that will put you out of business.  You must know where you stand financially at all times.  In addition to having an accountant, ensure that you keep your books (back-up or primary – your choice) and can pull up the financial state of your business at the click of a button.  Look for trends: Are you bleeding?  Are you profitable?  What services are making you money?  What services are you lagging?  Knowing your financials is equivalent to keeping tabs on your health.  You neglect it, your business will neglect you.

5) Know the Difference Between Staying Productive vs. Staying Busy: Here is where many new entrepreneurs get in trouble.  They proclaim their independence, develop business and marketing plans, and work on securing clients.  However, in most cases, the new entrepreneur rarely distinguishes between staying productive and staying busy.  Working on a website for 30 days is not productive.  You are not meeting with prospects that will become clients.  You are not working on requirements that will fulfill a client’s needs.  You are are in essence “marking time.”  Designing logos, going to print shops, and developing newsletters and business cards are important, but do not bring in the revenue – at least directly.  As a matter of fact, these activities may prevent you from making money because you may feel productive when in fact you are just staying busy.  You have to (no MUST) “beat the street,” schedule and meet with those interested in your services, and know how to distinguish “tire-kickers” from organizations  that are willing to utilize and pay for your services.  Don’t get caught into the mad cycle that spending 8-14 hours a day behind your computer is making you money.  You have value to add to organizations and your services are not free.  In other words: Your business has to make money.  You have to stay productive; you have to have paying clients.  Do not feel guilty that you are charging money for your valuable services.  As simple as that sounds, many new entrepreneurs just don’t get it.

All-and-all, many of you may cringe at my advice or assume that you can do workarounds.  However, and truthfully, you are an entrepreneur first if you decide to freelance, contract for services, and/or consult.  You have to think like an entrepreneur; act like an entrepreneur, and earn revenue like an entrepreneur.

Best of Luck!