Beyond Knowing the Numbers: Why Business Leaders Need to Understand People

If you spend any time on LinkedIn, you’ll notice a recurring theme: HR needs to know the business better. We’re told to “understand the numbers”, “speak the language of finance” and “know how the business makes money.” At Two Heads HR, I’ve lost count of how many times I’ve read some variation of that statement - often written by HR professionals themselves.

It’s not wrong; commercial literacy is essential and HR leaders absolutely should understand the financial and operational drivers behind a business. It’s what allows people decisions to be anchored in reality rather than sentiment. What I find curious is that the conversation rarely runs in the opposite direction. There’s little noise about CFOs, Sales Directors or Operations leaders developing the same curiosity about people - how behaviour shapes culture, how emotions drive performance or how conflict is resolved without leaving cultural scars.

We’re not seeing equal energy behind posts that say: “Every business leader should understand how people feel at work.”

The False Divide Between “Commercial” and “Human”

This imbalance suggests that financial performance and human behaviour sit in separate domains as if one is hard science and the other, soft art. In truth, they’re inseparable. A Gallup meta-analysis (Harter et al., 2023) found that business units with highly engaged teams deliver 21% higher profitability and 17% higher productivity than disengaged ones. Similarly, MIT Sloan’s 2021 research showed companies with strong, healthy cultures were 12 times more likely to lead their industries in financial performance. In other words: the numbers are human..... profitability is a people outcome as much as a financial one.

Why Emotional Intelligence Belongs in Every Executive Role

Emotional intelligence (EI) is not an HR construct, it’s a leadership capability. Daniel Goleman’s research shows that EI accounts for almost 90% of the difference between average and high-performing leaders in senior roles. When a CFO navigates a difficult conversation with composure, or a Sales Director manages conflict with empathy, they’re using EI. Those moments determine whether trust grows or erodes, whether performance improves or declines. At Two Heads HR, we see this every day: emotional intelligence, when embedded into leadership practice, improves clarity, communication, and cohesion; all of which directly influence business outcomes.

A Broader View of “Knowing the Business”

To really know the business is to understand both its systems and its people. Financial literacy tells you what’s happening; emotional and cultural literacy explain why. A high attrition rate isn’t just a line in a budget, it’s a sign of disconnection or fatigue. Low productivity isn’t only a metric, it often reflects unclear priorities, misaligned leadership or a lack of psychological safety.

At Two Heads HR, we work with leaders to connect these dots. We help them translate people data; engagement, turnover or sentiment into insights that inform strategy because people metrics and financial metrics are simply two sides of the same story.

Towards a Shared Responsibility

The conversation shouldn’t centre on HR proving its commercial worth. It should be about every executive function broadening its emotional and cultural intelligence. The future of leadership lies in integration, not specialisation, where financial acumen and human understanding coexist, inform each other, and shape decisions collectively.

At Two Heads HR, we believe the strongest organisations are built when people and profit work in partnership because sustainable performance comes not from choosing between the two, but from aligning them.

References:

• Goleman, D. (1998). What Makes a Leader? Harvard Business Review.

• Harter, J. K., et al. (2023). The Relationship Between Engagement at Work and Organizational Outcomes. Gallup Meta-Analysis.

• MIT Sloan Management Review (2021). Toxic Culture is Driving the Great Resignation.