Chapter 8
Unconventional HR Leaders and the Role of the CEO
A CMO of People strategy calls for an unconventional HR leader.
Why Your Company Might Want an Unconventional CHRO
Is there (or should there be) an appetite for unconventional HR in your business?
Let’s stop to consider how the CMO of People approach looks from the viewpoint of the CEO and the Board. The CMO of People model is unconventional, which raises the question of whether your organization should be looking for an unconventional CHRO. Historically, CHROs lived in a world of administration, compliance, and providing services to the business. That is all necessary work, but it won’t transform a company. Rick Jensen, SVP, Chief Talent Officer at Intuit, observes that the best HR programs originate as small experiments in the business that scale over time—rather than big programs that come out of HR fully formed.
If you want HR programs that grow out of the business, in a test and learn approach, then it may help to have someone who doesn’t fit the mold of the traditional HR leader.
Your current CHRO might be less conventional in their thinking than you presume. There are a lot of talented HR leaders who are more constrained by their company’s expectations than by their own lack of vision. If the CEO changes the mandate of the HR function, HR might rise to the occasion.
Alternatively, you might want to bring in a less conventional CHRO from outside the company. An ideal candidate would have a mix of line management and HR experience. Unfortunately, the demand for business savvy HR leaders outstrips the supply, which means that you should consider going outside of the HR talent pipeline for a CHRO. Bringing in a business leader without an HR background to lead HR has significant risks, but in some cases, it’s your best bet.
Do CEOs Know What They Want?
It can be an interesting exercise to ask a CEO to describe how they personally do people management (i.e. picking, motivating, and rewarding their executive team) and then comparing that to the goals they set for their HR leader. What they want is often couched in terms of getting a competitive advantage from talent, and what they ask for is typically oversight of the core HR operations. Once CEOs are aware of this discrepancy, they are more open to an HR leader who can help them architect a systemic, sustainable solution in a conventional or unconventional way—that’s where the potential of a true strategic partnership lives.
What Can You Do Today?
Consider if the expectations of leadership are getting in the way of HR being more proactive and business focused. Is there a part of the business that gets more out of HR because it sets better expectations? Can the enterprise as a whole adopt the mindset of the business unit that has the best relationship with HR?
How to Convince a Non-HR Professional to Lead HR
CEOs are often attracted to the idea of bringing in a non-HR leader to run HR—is this wise?
If HR isn’t sufficiently business savvy, why not bring in a business leader from another function to be CHRO? This might sound good to a CEO, but convincing a successful business leader to move into HR isn’t easy.
Phil Johnston, an executive search leader at Spencer Stuart, said, “When a CEO asks a business leader to run HR, the most frequent response is, ‘What did I do wrong?’ It’s not seen as a desirable role; it’s seen as punishment. Of course, they haven’t had a chance to think it through—it’s just the first reaction.”
I interviewed HR leaders from non-traditional backgrounds about how it came to pass that they landed in HR. Their initial reactions to being offered the job were similar—they said, “I thought it was a joke,” “I flat out refused,” and “I was totally surprised.”
The leaders I interviewed eventually relented and took on the CHRO role because the CEO was able to sell the upside and wouldn’t take no for an answer. When Lucia Luce Quinn was being recruited out of a business development role to lead HR at Boston Scientific, she repeatedly said no. Quinn said, “What finally sold me on the CHRO role was that three board members asked me to breakfast and they explained why they needed a non-HR person in the role, and it had everything to do with getting ready for CEO succession with a potential acquisition. When it was clear why they absolutely needed me for the role, I was willing to take it on.”
If your organization is considering sourcing a CHRO from a non-HR background, then be prepared to make a compelling case about the strategic importance of the role, and how it is the best possible move for their career.
The idea that it’s a good career move isn’t just a sales pitch. A December, 2014 HBR article, “Why Chief Human Resource Officers Make Great CEOs,” cited research by Dave Ulrich, professor of business at the Ross School of Business, University of Michigan, and Korn Ferry’s Ellie Filler, showing the competencies of a CEO matched the competencies of a CHRO better than any other function. In light of this research, the CHRO role might be more than a great job; it could be the natural stepping stone to the CEO’s office in the future.
What It’s Like to Be CHRO for Someone with a Non-Traditional Background
Quinn sums up the experience of a business leader who had shifted into HR: “I don’t love telling people I’m in HR, but I love leading HR. As CHRO, I use every skill I ever learned.” We heard similar stories from other leaders; they were surprised to find the enormous scope, freedom, and power that lie within the CHRO role. In many ways, HR is the least siloed department in an organization. Every part of the organization has leadership and talent challenges. Every problem and every opportunity have a people-dimension. There is no issue in any part of the company, at any level, where HR cannot play a crucial role.
Imagine that the problem is excess inventory. While that might not sound like a traditional HR problem, for a non-traditional HR leader it falls clearly in their domain. They will ask, “Are the incentives leading people to build up unnecessary inventory? Have we designed the inventory management job correctly? Do we have the right people in the role? Is our training adequate? Do we have communication problems that are leading to the excess inventory?” Through the eyes of the right business leader, HR is the most strategic function in the organization.
Of course, the typical HR business partner isn’t trained to ask questions such as these, nor are they expected to ask them. That’s a barrier for a non-traditional CHRO and it’s also their opportunity to make a difference by elevating the business-savvy of all the roles within HR.
What Type of Experience Makes for a Good Non-Traditional CHRO?
From the viewpoint of the CMO of People model, the most natural place to look for a non-traditional CHRO is Marketing. Brad Brooks, CEO at OneLogin former CMO at DocuSign, says, “I absolutely would consider bringing a former CMO to become CHRO because there is so much alignment in the demeanor and skill set. It works both ways—I’d consider taking a high-level HR leader and put them in charge of Marketing. More generally, it makes sense for people to do some rotation between Marketing and HR at some point in their career.”
However, the successful non-traditional CHROs I spoke to came from a wide variety of backgrounds. Brooks nailed it when he said, “The most important thing to appreciate is the strategic importance of the HR function; it’s taking on a different level of strategic relevance and importance.” Someone who understands this is at the right starting point to transform HR.
I liked a comment that Quinn made about appreciating the strategic importance of HR. She said that she didn’t talk about the management of the HR function—she talked about business issues. Often, I hear HR people say things like, “We have to get better assessment tools for HR because our business strategy depends on talent.” That’s not wrong, but it still focuses more on management of the HR function and less on business issues. If you’re looking for an unconventional HR leader, look for someone who talks about the business, not about HR.
Note: The quotes from Johnston and Quinn come from our May 2017 HBR online article with John Boudreau, “Why More Executives Should Consider Becoming a CHRO.”
What Can You Do Today?
Send a note around your network to see if anyone worked with an HR leader who didn’t come from HR. Arrange for a chat so that they can tell you how it worked out.
Relevant Skills a CMO Brings to HR
HR can be an exciting role for someone coming from a marketing background because many of the skills are transferable:
–A customer-focused mindset (easily translates to an employee-focused mindset)
–Analytics savvy (a skill now standard in Marketing but highly sought after in HR)
–Ability to construct a compelling story (getting managers and employees to embrace change requires effective storytelling)
–Experience with a test-and-learn approach (marketing has long done test marketing, but with the advent of digital marketing their expertise with a test-and-learn approach has grown enormously)
Is the CMO of People Role Right for You?
The CMO of People role has a lot of appeal. Is it right for you?
I talked about hiring a non-traditional CHRO from the viewpoint of a CEO. What about for you personally? Is the role of transforming HR as a CMO of People, or some other unconventional model, right for you?
One way to think about it is to understand that success is defined in this formula:
Analytics x Iteration x Curiosity = Influence + Confidence
Does this sound like you? Recipes for HR success are often treated as an additive set of features; our experience suggests the success function is multiplicative. HR leaders achieve influence and confidence through the combination of the factors above, and they must balance and reinforce each other.
One of my favorite role models for “analytics, iteration, and curiosity” is Paul Baldassari, CHRO of Flex, a global manufacturer of technology. He’s always asking, “What can we do differently? What can we test out and learn from? What does the data show?”
As a role model for “influence and confidence,” you can’t do better than Jacqueline Reses, Chief Human Resources Officer at Square, a mobile payment company based in San Francisco. She said, “HR must trust more in their power and influence and enjoy the enormous freedom the role provides. My biggest issue was to get my HR colleagues to understand the power of their voice and influence.”
Do the Views of Baldassari and Reses Resonate with You?
Another way of looking at the CMO of People role is to review characteristics that appeared in our interviews with non-traditional HR leaders. Look through the list below to see how the list matches your interests and abilities.
–General management (rather than a functional) perspective. The head of HR is usually seen as a functional head, which implies that their contribution comes from managing their function well. A general management perspective looks at the business as a whole. An unconventional HR leader is pulling the HR levers while seeing issues the same way a business unit head would. That is, that the company’s goals are HR leaders’ goals.
–Collaboration. HR can only transform a business if it’s working very closely with other members of the C-suite. This can be hard work—it can feel like it’s slowing things down. However, if collaboration comes naturally, then you have one of the core competencies for an unconventional HR leader.
–Systems thinking. Transformation depends on getting a host of elements aligned; that requires systems thinking—the ability to see how different parts of the system interconnect. For example, you could hire more experienced people and spend less on training but more on compensation, or hire less experienced people and pay less but spend more on training—each element affects the other.
–Data-driven. Unconventional moves won’t get leadership support unless the head of HR proves that their decisions are grounded in data.
–Risk orientation and curiosity. One peculiar thing in our interviews with HR leaders who had non-HR backgrounds was their gleeful response to risk. When faced with a big challenge, they became extremely energized. This came packaged with endless curiosity. Unconventional leaders are always fascinated by what would happen if they did things differently (and are willing to try it to see).
–Adaptability and dealing with ambiguity. Closely related to the idea of loving risk is a high tolerance for ambiguity. Much of traditional HR is about driving out ambiguity with clear rules and well-defined processes. If you thrive on clarity, then you might not be comfortable with the CMO of People approach.
What Can You Do Today?
Ask a friend how they see you in terms of the six characteristics we’ve seen in unconventional HR leaders. How do their observations compare to your views of your strengths?
How to Grow HR Leaders Who Understand Business
The HR talent pipeline isn’t growing enough business savvy HR leaders.
The long-term goal for an organization is to grow HR leaders internally with, as a matter of course, the business focus and strategic knowledge required for the CMO of People approach. I keep talking about unconventional CHROs, but in an ideal world, these business-savvy HR professionals would be the norm, not the exception.
There are three main tactics for growing HR leaders who understand the business: who you hire, their development experiences, and the expectations set for them.
Hiring HR Professionals Who Can Grow into Business-Savvy Leaders
David Almeda, Chief People Officer of Kronos, has played a big role as a member of the leadership team driving Kronos’ growth. It is a $1.3 billion company that has delivered 9% compound annual growth over the last five years, while also successfully transforming from an on-premise to a cloud technology provider. It regularly lands on many “best places to work” lists and gets enviable ratings on Glassdoor (CEO Aron Ain is one of the highest rated CEOs on Glassdoor). Almeda has made a special effort to make the HR functions business focused and data savvy. A big part of this effort is hiring the right people. Almeda says that Kronos doesn’t need special assessment tools to determine which candidates have this business focus—if you are looking for it, then it stands out. Once you move the HR function in this direction, then eventually a business-savvy culture takes hold and it becomes the normal way for HR to operate.
When Almeda relates a great example of how Kronos uses data and evidence to make better HR decisions—for example, using the marketing tool of conjoint analysis to find which benefits matter most to employees—he often caps the story with, “It doesn’t feel like we’re doing anything exceptional.” That’s the right attitude to instill in young HR professionals: a business / data focus isn’t special—it’s just the normal way that HR ought to work.
Formative Developmental Experiences
There is nothing better for developing an understanding of the business than actually working in the business. Certainly, aiming to rotate people in and out of HR is a good idea. However, many organizations report that this kind of rotation is difficult to do. You might have to accept a compromise of getting HR people to simply spend as much time with the business as possible, and to work on multi-disciplinary teams, so that they get a feel for what it’s like.
One enlightening observation is how often I hear HR people saying, “I’m not really an HR person—I started in sales,” or “I’m not really an HR person—I’m an engineer.” This seems fair enough, but when you dig into their history, you’ll find that they spent the last ten or twenty years in HR and you have to go back to the earliest days of their career to find them working in another function. Luckily, that might not matter. It seems the formative experiences of working in the business can shape your perspective throughout a career.
Almeda is an interesting example because he is an HR leader who has frequently been entrusted with operational responsibilities beyond HR. However, Almeda points out that he’s spent almost his entire career in HR roles, so where does that business savvy originate? He can only point back to his earliest job as an eighteen-year-old running a section of a grocery store. Formative experiences can go a long way. It might not be necessary for HR professionals to have a lot of experience outside of HR—just a few significant experiences that have shaped their perspective.
The Right Expectations
Lucia Quinn (see section “How to Convince a Non-HR Professional to Lead HR” earlier in this chapter) said that one of the biggest challenges for HR teams that worked for her was that they didn’t have managers who ensured that they understood the business first. There was never an expectation that they should be able to anticipate the potential issues.
Rick Jensen noted that to be a great talent acquisition professional, it takes more than being a great recruiter. You have to understand the business short and long, be forward thinking and understand how these roles integrate with the business and how it’s scaling. Today, it takes massive business acumen, an understanding of the strategy and where the business is going. HR managers are not the only ones who fail to set the right expectations for young HR professionals; business leaders often fall short as well. Business leaders might never have worked with an unconventional HR department so they don’t know what to ask for.
If HR professionals are underperforming, it is natural to think that you need to hire different people, train them differently, or that they need better developmental experiences. Perhaps all they need is someone to set the right expectations and then empower them to deliver by getting the low value transactional work off their plates.
What Can You Do Today?
Identify some sharp people in your company who are outside of HR who you would like to join the function. Think about how you will begin to do the wooing and politicking that will bring them into the HR department.
How It Can All Go Wrong
Make no mistake: bringing in a business leader to run HR is risky.
There’s a story about award-winning novelist Margaret Atwood attending a fancy dinner party. She happened to be sitting beside a surgeon who turned to her and said, “It’s a real pleasure to meet you. You know, after I retire, I’m thinking of becoming a novelist.” Atwood smiled sweetly and replied, “What an amazing coincidence. When I retire, I’m thinking of becoming a surgeon.”
HR professionals often have a similar reaction when someone proposes bringing in a business leader to run HR. They react to the implication that HR professionals are not business leaders. More seriously, they roll their eyes at the notion that their profession is so simple that someone with no experience in it could do a great job.
The biggest risk that a CEO faces in bringing in someone without HR experience to lead HR is that both the CEO and business leader might be seriously underestimating the knowledge required to successfully run HR.
The Need to Respect the HR Profession
The worst offenders are those who scarcely see HR as a discipline at all. A financial professional might feel that all they need to do is bring financial discipline to the HR department. This is the road to disaster. If a new CHRO from outside HR tries to run the department based solely on their old skill set, they will degrade the company’s talent capabilities.
The lesser offenders are those who care about HR without truly appreciating its subtleties. Mike Haffenden, who runs the Corporate Research Forum think tank in the UK, says that the challenge with HR is that there are many initiatives that sound great, but don’t deliver value. Humans are notably complex and at times ornery. It takes years of experience to differentiate between programs that look good and those that have a business impact.
The solution is to respect the function and rely on a strong team of experienced HR professionals. Lucia Luce Quinn, an unconventional CHRO who grew up outside the function, tells a story about a time the HR team was feeling depressed about an initiative. She asked why and they said it was because they knew it wouldn’t work; they’d done it in previous years and it hadn’t delivered business impact. She then asked the obvious question, “If it’s not going to work, then why are you doing it?” The answer was that leaders had asked for it and they were just being good HR pros who did what they were told. Quinn, of course, told them to push back and asked them to design an initiative that would work. They did this with great success.
The lesson I want to pull from this story is that Quinn was relying on the HR team’s deep professional expertise to come up with an effective alternative. Her role was to help HR re-envision itself as what Dave Ulrich calls “credible activists” and not assume that leaders are always right when they ask for something.
Quinn is quite explicit about how much she relies on having a strong, experienced HR team: “If you want a compensation program or a diversity program, I’m not the specialist. I have opinions, but I look to my team for that specialist expertise.”
Rick Jensen, mentioned earlier in this chapter, says, “I work around some phenomenal HR professionals who have been in the business for twenty-five years—and they have a really strong business acumen as well an HR know-how.” If a non-traditional HR leader doesn’t have deep respect for the profession and doesn’t rely on a strong experienced team, they will have real trouble delivering the business results and struggle in the role. Even at the best of times, the transition to HR can be tough. Executive search professionals warn that moves between companies are often difficult, and moves between functional areas are even more difficult. Bringing in a business leader from a different company to run HR combines these two risks to the point that many search professionals advise against it.
The CXO Delusion
One big mistake is to think that the safest way to elevate HR and make it more business focused is to take an existing senior executive and put them in charge of HR—while retaining their existing functional responsibilities. This is usually nothing more than knocking HR down a reporting level—the opposite of the goal of elevating the function.
In the CMO of People model, the HR leader is a CXO who handles Real Estate and Workplace Services and CSR, as well as traditional HR. This shouldn’t be confused with a combined CFO/CHRO role that is, in practice, nothing more than a VP HR reporting to the CFO.
What Can You Do Today?
Assess the capability of the existing HR staff. Do they have the inherent capability to support a CHRO who isn’t an HR expert?
A Method for Mitigating Risk
The CMO of People strategy has a lot of risks. How do you mitigate them?
Many leaders who seek to dramatically transform HR have a strange love for big challenges and leaping into the unknown. This does not mean that they take foolish chances; one reason these leaders have a high appetite for risk is that they’ve learned how to mitigate risk. CEOs can support change more effectively if they also support tactics for reducing risk.
A very important tactic for mitigating risk is the “test-and-learn” approach. This is almost the opposite of what you might expect from a confident leader hoping to transform a function. If you were making a movie about Chief HR Officers (a genre that Hollywood has, to date, overlooked), then you would expect the transformational leader to be a “damn the torpedoes,” “turn everything upside down at once” kind of person. A dramatic approach is good for movies, but in real life, when moving into unknown terrain, test and learn is the way to go.
Test and learn is common in product development where the starting point is the minimum viable product. HR programs can be treated the same way: they start in the smallest, simplest way possible—knowing that we’re testing, not producing a final product—and gradually improve through multiple iterations.
An example of a successful test-and-learn project
Iterative HR at Flex
Flex is a global organization with 200,000 people in 30 countries. It can take an engineer’s idea for a new product and provide the full range of services needed to go from Sketch-to-Scale™ production all the way to making millions of units—and they do it quickly, providing a competitive advantage in an age when cycle times are shorter than ever.
Just as the organization provides rapid, iterative product development for its customers, so too does Human Resources (HR) take a rapid, iterative “test-and-learn” approach on how it delivers its products and services to managers and employees.
A good example is how Flex approaches HR dashboards. It would be natural for HR to go about the process of creating dashboards by consulting users, having internal meetings on what the dashboard should contain, working with designers on the “look” of the dashboard, getting IT staff to build the dashboard, and finally doing a roll-out of communication and training.
This traditional approach is called the waterfall method because you can think of it as a series of cascading waterfalls, where one project is carefully completed before moving on to the next phase.
Paul Baldassari, CHRO at Flex, took a different path. His approach was to quickly get something in the hands of managers, see how they liked it, and then evolve from there. The first project his team focused on was to take the old reports, typically distributed by email, and build a live dashboard that was similar to that the traditional reports. The team got feedback on that prototype from users around the world; they found people on the frontlines also wanted more granular data. In other words, rather than a report which starts with an overview and then you drill down, they wanted the specifics of what was happening in their own area. HR improved the dashboards and got more feedback suggesting people really valued information they’d need to act on. Thanks to that learning, HR added more action-oriented alerts.
The result of the iterative approach was a dashboard that got high usage and high satisfaction. It’s unlikely they’d have achieved that without the fast turnaround of prototype-feedback-next prototype-more feedback approach. Baldassari says “We go fast, we make mistakes, and we learn from those mistakes.”
An even more interesting example is how they developed workforce planning tools. Flex produces over 10,000 unique new products a year with its customers—everything from cell phones to medical devices. The cycle time for new products is crucial. For example, the cycle time for cell phones was once eighteen months, now it’s only five months. The key to creating new products quickly is having the right quality and quantity of talent—hence the need for workforce planning.
As with the dashboard, the implementation team dove in, quickly putting together a tool that, in a complex way, captured all the relevant data. They heard from users that it was challenging to go from the data to relevant insights, so they kept iterating to better tools. The tools evolved in two directions—reactive and proactive.
The reactive use of workforce planning occurs when Flex is quoting a project for a customer. Coming up with an accurate quote is challenging because they are always dealing with new products and innovations. However, because they’ve done many projects over the years they can look back at the data and estimate how many shop floor people they’ll need (e.g. the efficiency of a worker putting screws in a phone) and how many people they’ll need in support functions such as engineering or program management, taking into account the expected frequency of change orders. Baldassari said, “We have five hundred different job functions in the company, so you can imagine the complexity, but the advantage of collecting a lot of data over time is having the capability to do good analytics.”
The proactive use of workforce planning is the most surprising part of the story. The worst thing that can happen in their industry is to commit to customers to deliver at a certain date only to find you are short a few people in quality control or in engineering and you cannot deliver the service you promised. If this happens, the customer is not happy, and profits can be impacted because huge operational costs are incurred catching up.
When it’s clear the challenge is talent and they have the workforce planning tool, HR can be involved in the conversation with the customer and help the business teams give an accurate assessment of when they’ll be able to deliver. Customers really appreciate the accuracy, even if it’s a later date than was first planned, because it’s a commitment they can trust.
Better conversations with customers about what they could deliver was not a part of the original design of workforce planning. Flex wasn’t just iterating on features of this business tool, they were iterating on the use case of the tool, with the user not being within HR, but involving a customer—that’s a real and unanticipated benefit that they got by trying things out and being open to learning. Ultimately, this has become a cross-functional tool for business, operations, HR, and Finance to have an informed conversation with a customer on talent availability, as well as utilization.
In the business world Flex operates in, a competitive advantage is not so much based on cost, as on speed of innovation. There is something to be said for approaching HR the same way. The back and forth of iterative design feels a bit unique. It also means being willing to put something out there that is in development. However, this iterative approach creates a product the users really value in the shortest period. It’s not always the intuitive approach, but it should probably be the default way of tackling an HR project in today’s world.
Why “Test-and-Learn” Isn’t a Normal Thing to Do
The “test-and-learn” approach sounds like common sense; it’s about taking small steps and checking along the way to be sure what you are doing is working. If something isn’t working, then you course correct.
However, “test and learn” can be difficult to implement for a variety of reasons:
–Low tolerance for missteps. When something goes wrong, is the company culture inclined to say, “This is great, we learned something,” or “This is terrible, you messed up”? Unless the culture embraces the idea that it is okay if things go wrong, then it’s hard to follow test and learn. (This tolerance for learning starts with the CEO.)
–Desire for speed. If you are pretty sure that you know what needs to be done, it’s tempting just to roll it out rather than go through a more methodical test and learn process.
–The unpleasantness of after-action reviews. Even companies that embrace errors as a tool for learning find after-action reviews unpleasant. In his book Creativity Inc., Ed Catmull discusses how people adapted to after-action reviews by finding safe comments, rather than insightful ones. He had to keep changing the format to keep it fresh.
–The risk of saying “I don’t know the answer.” In business, we like leaders who exude confidence. Saying that you want to test and learn can sound a lot like saying that you don’t know what to do.
–Lack of familiarity with this approach. When Marketing says they need to run a pilot or Manufacturing wants to set up a test for new equipment CEOs, don’t bat an eye—the idea of testing and learning is obvious in those contexts. However, since a disciplined test-and-learn methodology is less common in HR, it may be harder to get that investment.
Why Make a Commitment to Doing These Difficult Things?
I’ve just listed four reasons why it’s difficult to follow a test-and-learn approach. Why bother? It comes down to the logic that if you want to transform HR, you need to make a move into the unknown, which means that you must mitigate risk. Since test-and-learn is the best way to mitigate risk, you must confront the factors that make it difficult. This is part of the method of embracing a CMO of People model.
What Can You Do Today?
After-action reviews are a concrete practice you can adopt that will help with building the foundation for a test-and-learn culture. There’s no reason why you can’t schedule a meeting right now with a few people who recently completed a project and have an informal after-action review on the project.
How to Run an After-Action Review
The core questions that drive an after-action review are:
–What was expected to happen?
–What actually occurred?
–What went well and why?
–What can be improved and how?
However, there are many useful variations of these questions; Senior Lieutenant Colonel Karuna Ramanathan and his team in the Singapore Armed Forces developed this 2–5–1 set of questions:
2
–Who you are.
–Summary of your experience.
5 (fingers)
–Little finger. What parts of the effort did not get enough attention
–Ring finger. What relationships were formed? What did you learn about relationship building?
–Middle finger. What did you dislike? What/who made you frustrated
–Pointer finger. What would you do better next time around? What do you want to tell those who were “in charge” about what they could do better?
–Thumb (up). What went well? What was good?
1
–The most important takeaway from the effort.
What Should a CEO Ask of HR?
Traditional HR might be just fine. (Thank you very much.)
Let’s put aside the few bad HR departments that might actually get in the way of the organization achieving its goals. Fixing these departments matters, but I don’t want to tackle this issue here.
In this book, I’m advocating for a type of HR function that is deeply involved in driving business success—that isn’t the only model for HR and it’s not the one most CEOs have in mind. What many CEOs want (and it is probably the only thing they have ever experienced) is a solid support department that takes care of details that they don’t want to worry about.
In the support model, HR takes care of details such as ensuring compliance with laws around employee leave, handles the flow of incoming resumes, protects the CEO from headaches of managing legally required training, and so on.
HR’s role in the support model is a bit like the role of a plumber you’ve hired to fix your drain. If the drain gets fixed, you’re happy—you don’t want advice on remodeling your bathroom. However, under the CMO of People approach, that is exactly the type of advice you will get. An elevated CHRO role is critical to decisions that affect every inch of the company—and if they think the bathroom needs remodeling, they’ll say so.
If the CEO actively opposes a big role for HR, then you shouldn’t fight it. The CEO must run the company as they see fit; if they need a support HR function, then that is what it should deliver. However, most CEOs have never seen the value HR can add when it is elevated to a higher role. They will be delighted when they find HR actively driving growth and share price; actively helping the organization overcome difficult problems; actively being part of the core team.
There is no question that people are a strategic asset (just like marketing brand), so when a CEO hears the phrase “CMO of People” it’s easy for them to see HR’s potential for playing an elevated role. I’ve learned from CHROs who play this elevated role that CEOs love when they demonstrate that they can add this kind of value. In fact, it goes all the way up and down the organization. When a business leader finds that HR can help them with a business issue, they’ll eagerly accept the help.
Often this collaboration starts with shared data. For example, partnering with a technology leader focused on achieving the company’s product roadmap milestones, we had to go back downstream to the predictability of the talent acquisition pipeline. As we reviewed the analysis, the leader mentioned that we have clearly “six sigma-ed” the process, understood all the market variables, and could now focus on the quality of candidates and the efficiency of particular channels to meet our objectives. This translates back into his planning ability to make and deliver commitments.
Don’t make the mistake of assuming that a traditional role for HR is necessarily a mistake. However, you must also recognize that most CEOs might not have experienced an alternative and might not know what they’re missing.
What Can You Do Today?
Think about the executive team, which would like to see a more aggressive and impactful HR organization. Who would prefer an administrative HR function that stays in the background? Can those in favor of an elevated function drive the organization in that direction?
How the CEO Contributes to the CMO of People’s Success
What should a CEO do to get the most out of the HR function?
Assuming that the CEO wants a high-impact HR function, there are a few things they can do to make success more likely. Here are a few tips:
–Get HR involved at the start of strategic initiatives. Get the HR executive involved in M&A activities when you first consider the options. If the CEO thinks that HR doesn’t need to be involved until after the deal is done, then they won’t get the value they should from an advanced HR function.
–Task HR with business goals. The HR executive should be judged on how well they contribute to the business’ success, not how well HR programs are run. For example, if the business urgently needs to cut costs (without degrading its capabilities), then the head of HR should be judged on cost reduction across the business, not how well they cut HR costs or how well they communicate about a wage freeze.
–Get the HR executive involved with the board (and not just for compensation). If the HR executive is only brought in on narrow HR matters—such as compensation—then it positions them as a specialist, not a member of the core leadership team. A nice fit for the top HR executive is, in partnership with the CEO, to define the multi-year organizational structure and related capacity and capability needs to ensure business results. Tying business results to strategic talent management is a great angle and is directly focused on business success.
What Can You Do Today?
Look at each of the tips—pick one area where HR’s role should be upgraded.
Takeaways
–Many organizations have not been taking full advantage of the HR function; they should consider some form of elevated HR led by an unconventional HR leader.
–CEOs should consider bringing in someone from outside of HR to be an unconventional leader, while recognizing the associated risks.
–Leaders outside of HR should consider whether it might be a good career; if they have the right competencies, then it could lead them to an exciting job of helping to transform the company by transforming HR.
–CEOs say they want business-focused HR professionals but have not done much to ensure that the talent pipeline delivers the experiences that HR pros need to understand the business.
–Given the risks involved in transforming HR, it’s useful to adopt a test-and-learn approach.