HR leaders need to be well-rounded managers. If we really want to become strategic partners, we need to understand the business we support. And one key to understand it is to know the language of finance.
I once heard a university professor argue that "If a director of HR can't read his company's balance sheet, he shouldn't be a director". I think he was right (even though his statement made me feel very bad at the time).
More generally, Karen BERMAN and Joe KNIGHT advocate for financial literacy for all. They believe that organizations would be better run if all managers, even all employees, understood the basics of finance.
In this brilliant book, they explain the many subtleties of corporate finance, and how these can affect HR:
- How to read an income statement, a balance sheet, and a cash flow statement;
- Why these are relevant and complimentary to understand the realities of a particular organization;
- How finance is as much an art as a science, because estimations and assumptions can have a strong impact on the numbers published;
- How this "art of finance" can have important consequences for an HR department;
- How to calculate and use relevant ratios;
- How to champion financial literacy in your organization.
This is really a must-read for every HR leader.
- Financial Intelligence for HR Professionals: What You Really Need to Know About the Numbers
- By Karen BERMAN and Joe KNIGHT, with John CASE
- Harvard Business Press
- 232 pages (+appendixes)
- Available on Amazon.com: Financial Intelligence for HR Professionals: What You Really Need to Know About the Numbers
For additional information and updates, the book has an official website: www.financialintelligencebook.com.