Chapter 1
What Is a “CMO of People”?
There is a different way to envision your HR function—and it can be great.
Organizations can improve their performance by changing how they manage people. If you are going to change how you manage people, you are going to want to change how you run HR.
The CMO of People concept is a way of framing how we think about the impact HR can have on an organization. We all know what Chief Marketing Officers do: they work to draw in customers, they aim to get the value out of customers, and to do so they seek to create a great customer experience. We should see HR through the same lens: drawing in talent, getting the most value from talent, and doing so on the basis of a great employee experience.
When you map out the duties of a CMO against the duties of a CMO of People (i.e., the head of HR)—as shown in Table 1.1—the analogous nature of the roles is obvious.
Table 1.1: What a CMO Does vs What a CMO of People Does
| CMO | CMO of People |
| Marketing & customer analytics | People analytics |
| Brand, PR & creative | Employment brand |
| Customer acquisition | Talent acquisition |
| Marketing communications | Internal communications |
| Customer retention | Talent management |
| Pricing and packaging, marketing strategy | Total rewards |
| Enablement | Talent operations |
| Events and PR | Real estate/workplace services |
In the companies I’ve worked for, growth and profitability were critically dependent on having our talent outperform our competitors’ talent. The challenge was especially poignant during times of high growth when we had to implement excellent talent management at a breakneck pace. Conceptualizing the HR leader as “CMO of People” helped guide me in my role as head of HR in a fast-growing company and provided a metaphor that the leadership team found fresh, easy to understand, and compelling.
Whereas marketing works the customer funnel, in HR we manage a talent funnel, depicted in Figure 1.1, which begins with different channels (including job boards, recruitment agencies, and our career website) that pull candidates into the funnel. Once the candidates are in the funnel, they go through various screening processes to the ultimate transaction: hiring them.
Similarly, just as with the concept of a funnel, other marketing concepts like “brand” and “customer’s lifetime value” can be translated to HR. In fact, the whole CMO of People concept fits nicely on a napkin and I have used this diagram many times with senior leaders to explain this way of thinking about HR.
Here’s how I explain the napkin to a CEO:
–On the left you see the talent funnel as explained in Figure 1.1. The process starts by drawing in a pool of candidates at the top; the hire is complete at the bottom of the funnel and the entire process ends when the person retires or leaves the company. HR’s mission is to do a better job than competitors of bringing talent in through the funnel and a better job of enabling employees to add value through their lifetime with the firm.
–After the hire we seek to maximize the “lifetime value” an employee brings to the company over the years they work there. This is analogous to marketing’s concept of a “customer’s lifetime value” which is all the value a customer brings by buying products and services for all the years they remain a customer. HR’s mission is to enable employees to give their best.
–The foundation for a good talent funnel and exceptional employee lifetime value is an “efficient engine” of HR processes supported by the right technology and analytics. The mission of HR is to be sure this engine (that gets the transactional work done) is efficient, so HR can spend time on strategic work.
–Finally, just as all of marketing is surrounded by the ideas of “customer experience” and “brand”, so too, all of HR is surrounded by the ideas of “employee experience” and the “employment brand”.
This single diagram guides us toward acquiring the best people and enabling them to perform at their best by creating an immersive and predictable employee experience that improves productivity and drives performance. There’s a lot packed into that one sentence and it points toward a new way for leading HR.
How to Increase the Employee’s Lifetime Value (eLTV)
Exceptional execution in four areas will improve eLTV:
–Leadership. People want to be inspired, motivated, and aligned with great executives. Leaders build great teams, and great teams build great companies.
–Competition. People want to be on winning teams internally and externally; to build an organization filled with respectful, talented, high performers; and to drive results.
–Communication. People want to know what’s important to their work; aligning people consistently and continuously with the mission, and priorities, pays massive dividends in the long run.
–Social Responsibility. Being proud of yourself, your team, and your company is essential; serving others is the best way to achieve pride.
How do you acquire the best people and enable them to perform better than they have anywhere else? The answer lies in having a solid foundation for the entire model: the employee experience. HR needs to develop an immersive and predictable employee experience to improve productivity and drive performance. There’s a lot packed into that one sentence and it points toward a new framework for leading HR.
I almost hesitate to use the term HR. It brings to mind a department that only delivers services like training and recruiting, as well as personnel administration and labor law compliance. Yes, an elevated HR function does those things too, but it’s not the mission—the mission is to create a competitive advantage through better and more effective talent.
When the mission of HR is framed in this way, the job of the head of HR begins to sound a lot like a CMO. That’s why I decided to title this book The CMO of People. I’ve played this role, if not necessarily sporting that title, at three successful organizations. For me, it was the best way to understand the mission, communicate the mission, and establish a framework that enabled us to execute the mission.
The Mission of HR
HR is the group within a company that has expertise in talent. It knows how to find, motivate, and develop talent. It is responsible for a range of different talent processes from recruiting to training to compensation. The mission for HR is to use its expertise and its ownership of talent processes to create competitive advantage that will help the organization achieve its mission.
Being Serious about the Concept of Brand
The nature of the employee experience is captured in the concept of employment brand. Many people talk about the employment brand. It’s a popular topic. However, too often people think of the brand in terms of a glitzy image. If you are serious about the employment brand, then it will reflect each employees’ daily reality. If the brand says that the organization is fun, then employees should be having fun. If the brand says that the organization is dynamic, that should be apparent as soon as you walk in the door.
In the CMO of People concept, the brand is brought to life through an immersive and predictable employee experience that drives productivity and performance. It’s a real thing, not an aspiration. It’s everywhere (immersive) and every-when (predictable). It should be as real to employees as Disney’s brand is to theme park visitors or as Starbucks’ brand is to coffee lovers.
One of the biggest differences between the CMO of People approach and more common approaches to HR is the absolute obsession with bringing the employment brand to life.
What Makes Up the Employment Brand?
Like corporate brands, an employment brand defines the value proposition the company offers to prospective, current, and alumni employees. It’s a core part of the overall communication hierarchy of a company that includes vision, mission, and values, and it enables people to better understand what to expect from an employment experience. Values and employment brand work very closely together to paint a realistic picture of what life is like in the four walls each day.
The Link from Employee Experience to Productivity and Performance
All the organizations I’ve worked in have faced intense competitive pressures. The CEO supported HR’s obsession with the employee experience for one reason: that experience brought the best people through the talent funnel and delivered the best lifetime value. The experience naturally had to be a good one for employees, but its success was not measured by employees’ happiness—it was measured by the business’s growth and profitability.
How do you design an immersive and predictable employment experience that improves productivity and drives performance? You start by looking at each interaction an employee has with an HR process (i.e., each touchpoint). What should onboarding do? It should be laser-focused on getting people up to speed quickly and instill the cultural values they’ll need to perform. What should workplace services deliver? They should deliver services that remove distractions that harm productivity and should create an environment that the best workers won’t want to leave behind. Linking the employee experience to productivity at each touchpoint is not rocket science; it requires focus and discipline.
This intense focus on productivity and performance implies an equally intense focus on data. For example, onboarding isn’t assessed simply on whether it appears to support the employee experience—the CMO of People wants to see data on how it works in practice.
Not Rocket Science
One of the most important things about the CMO of People approach is that it does not involve rocket science. Yes, the CMO of People cares about analytics, but these can be just the basic analytics that any mid-sized company can afford. Yes, the CMO of People wants the brand to show up in how the company stages a town hall meeting; that doesn’t require genius—it just needs someone to ask, “Does how we’re running this meeting support the brand?” The know-how to execute the CMO-of-People model already exists in many HR departments.
The approach does demand design thinking. Design thinking is a concept from the world of product design. If you want to design a great product you have to think about it as the customer will experience it, and you have to think of that experience as an integrated whole—not as a collection of disconnected features. Design thinking, with respect to HR, rests on two main principles:
–See things through the eyes of the employee’s experience.
–Approach issues holistically, with integrated initiatives and cross-functional collaboration.
For example, if you are designing an employee handbook you could potentially just put all the essential information in a binder and make it required reading. However, ask yourself how that may look to an employee: it’s a boring activity they are forced to do. A design-thinking perspective would aim to create an employee handbook that employees would want to read that would be aligned with the employee experience the company was trying to grow.
Design thinking forces us to ask how something will impact the employee experience—every time. It also forces us to step back and think about the different elements that affect a project’s success, which inevitably means collaborating with departments outside of HR.
What Kind of Person Becomes a CMO of People?
If you are looking to hire a CMO of People or become one, then you should consider the characteristics that stand out in this role. A CMO of People has some particular tendencies:
–A general management (rather than a functional) perspective. The CMO of People is part of the core team driving growth and profitability. Yes, they are responsible for an incredibly fun and important part of the business (talent). However, they don’t see themselves as the leader of a function; they are a leader in the business—a C-level executive.
–Risk orientation (implying curiosity and a willingness to learn). Okay, you’ve decided to depart from the proven way of framing HR to a new model based heavily on parallels to marketing—that implies an appetite for risk. It also implies fevered curiosity (“I wonder how we can make this work”) and a willingness to learn (especially when things go wrong).
–Collaboration. It’s hard to overstate how tightly linked the work of the CMO of People is to the work of the CMO, CFO, and other C-suite leaders. In this model, the head of HR is forever sitting in the offices of other C-suite leaders, making sure that everything is aligned and integrated.
–Systems thinking. To ensure that the employee experience is exceptional, all the elements of what HR does (and other parts of the business) must fit together. The CMO of People must be a systems thinker—the kind of person who can see how the whole thing can be sketched on the back of a napkin.
–Data driven. These days, it almost goes without saying that credible business leaders must have data to back up their decisions.
–Storytelling. Data never gives the answer on its own; the CMO of People must look at the mosaic of metrics and craft a compelling story.
–Adaptability and dealing with ambiguity. In rapidly growing firms, nothing is clear-cut and nothing stays the same for long. A leader in that kind of environment must be adaptable and comfortable with ambiguity.
The Role of the CEO
It’s easy to get excited by the CMO of People approach, but it has to suit the CEO’s needs and style. The following conditions must exist for this new HR model to succeed:
–The CEO must want an elevated HR function. While they might not say it in so many words, many CEOs don’t want to transform HR; they just want an efficient HR function that provides support and keeps HR issues out of their hair. Unless the CEO wants a different kind of HR function, it will be difficult to pursue the CMO of People model.
–The CEO must be comfortable with the risk. The CMO of People model leads you toward doing things differently, and that entails risk. At the very least, the CEO will be forced to explain to the board and C-suite why their HR organization isn’t doing what other companies’ HR departments are doing.
–The CEO must be patient with change management. The usual rules of change management apply: It takes twice as much effort and twice as long as you expect to get people on your side. If HR is going to work differently, then a lot of explanation is required. If you embrace the model, the CEO will need to be patient with the effort involved.
–The CEO must believe the value created can far exceed any costs. Any change to the status quo will incur costs, but the CEO must have a sense of the value that can be created by elevating HR.
There’s an important takeaway here: this approach to running HR isn’t for everyone. It’s one specific tactic for running an elevated HR function. It’s about the CEO, and, as a result, all of the management team, being clear on the need and the impact they are looking for.
Ideas to Watch for
Some ideas regularly pop up in a discussion of the CMO of People approach. As you read the book, keep these themes in mind:
- The CMO of People is a part of the leadership team that drives profit and loss. In this approach, HR and the other functional areas aren’t seen as cost centers. The CEO treats the functional heads like a team of general managers.
- There is laser-focus on having the highest performing company in which employees can be their most productive. This parallels marketing’s goal of having the most profitable customers (as measured by lifetime value). This goal is achieved through a differentiated employee experience that enables productivity and attracts talent. It’s not enough to have good talent or to have satisfied talent; the talent must deliver high performance. It’s also understood in marketing that you don’t get exceptional performance from a generic brand; similarly, the employee experience must be differentiated from competitors. The CMO of People’s impact on the business is through increasing productivity and performance, not through “best practice” HR programs and processes.
- The employment brand is centrally important to the organization. The employment brand is not just an outward-facing message to attract new employees; the brand promise is a real fact of life for employees in the organization. The employment brand draws on marketing concepts such as “strategic communication at every touchpoint,” “a well-articulated story arc,” and “a consistent, predictable experience.” A clear brand allows employees to decide if they want to be part of it and creates the conditions for deep commitment.
- The primary design consideration for HR activities is the impact on the end customer (i.e., the employee). The HR organization’s efficiency is a secondary design consideration.
- The CMO of People philosophy accepts taking on risk with surprising enthusiasm. It embraces the “test, iterate, and measure” approach of product development, rather than a cautious approach that takes pains to avoid mistakes.
- The CMO of People, like all other senior executives, insists on having good numbers to support their decisions. They have the guts to invest in people analytics right away in the belief that, without it, HR won’t have an accurate idea of how to have an impact on the business.
- The HR organization is elevated in importance, but leaders own the culture. HR designs the framework for making the company culture come alive; the leaders own it. Leaders cannot use HR as a crutch when it comes to managing people.
What Can You Do Today?
This book has been set up for self-managed learning. The ideas are presented in easily digestible sections. If you are serious about working through this concept, set a schedule for reading each section. Also, take a moment at the end of each section to ponder the “What Can You Do Today?” question. This will guide you to ideas you can implement.