Managing Expectations: A CEO-CHRO Saga

The VUCA world is unrelenting. Whether CEOs or the CHROs, challenges continue to evolve with unprecedented speed — from volatile markets, increased regulations, technology, data security, and a diverse workforce, to other newer areas of risks and opportunities. It is well appreciated that CEOs can derive a lot of value from having HR leaders at the table. But although much has been written and spoken about CHROs and their capabilities to be strategic business partners, at the end of the day, there is usually no communication between the CEO and the CHRO on many things. 

Where on one hand, the CEOs expect HR leaders to be partners but are frustrated by how far HR leaders are from becoming actual business partners; on the other, these very expectations have proven to be the top challenges that the CHROs face today. 

Through this cover story, we seek to understand the expectations of the CEOs and CHROs from each other. Although CEOs expect HR leaders to deliver the core HR processes and contribute beyond their functional roles, do they really care about processes beyond the fact they are done? Are CEOs only interested in business and talent issues, but not HR issues? What do CHROs think the CEOs should understand to enable them to be better decision-makers at the table? How can the CHRO balance such expectations of the CEOs with their own roles? 

The HR function is no longer a back-office function, and the CEOs have already realized this. Investment in people is ‘the’ mandate and a core element of operating a business, and who knows this better than the CEO! But as technology disrupts and workplace/workforce trends evolve, so does the business strategy. A CHRO has already been credited with being an indispensable part of a company’s leadership who provides essential strategic insights about people and talent and drives business outcomes through them. However, despite this admittance by the C-suite, CEOs are frustrated by the fact that CHROs are far from becoming actual business partners. So what do CEOs expect from the CHROs?

CEOs expect CHROs to be business partners. But this doesn’t mean just a seat at the table, it means that they need to provide those strategic insights that enable and drive innovation. The CEOs look to the CHROs to support the business strategy from a human capital standpoint. CHROs need to be able to offer proactive solutions to the CEOs and take accountability for the business performance and strategy delivery. They want CHROs to bring their specialist insights and contribute to the strategy process while assisting in the vital people dimension of corporate strategy, and move away from the traditional ‘personnel management’ to focus on the more strategic elements of business development through gaining experience in financial planning and analysis and collaborating with other leaders. 

As companies operate in evolving business landscapes, they need to factor in the trends and absorb them in the workings of the business. Whether contingent workforce, altering expectations of the employees, or the need for reskilling, changes made to the business strategy need to be communicated at every level of the organization. And who is better for this than the CHRO who knows the pulse of the organization? When it comes to people, CEOs want the CHROs to become their representatives and manage the narrative of such changes. CHROs need to translate and articulate the CEO’s vision to the employees and also become the face of the organization to the external world.

With the evolving contexts in organizations, the CHRO needs to reciprocate to diverse situations. Depending upon the context, the CHRO needs to align, optimize, and prove that the HR function can perform efficiently and create even more impact. However, in today’s times, adeptness in technology, financial planning and analysis, and marketing are the three core areas that the CEOs expect the CHROs to excel in. CEOs want the CHROs to go beyond their core functional expertise, seek information, augment their knowledge, and use that knowledge to do more for the organization and employees alike. The need for the CHROs to stay abreast of the digital trends is immensely crucial.

The CHRO needs to play the role of a confidante and coach to the CEO, along with being a contending persona who can hold open and honest dialogues. CHROs need to give impartial developmental feedback to the CEOs while continuing advice and support the CEOs. A CHRO needs to be the CEO’s informal sounding board who offers practical feedback on the CEO’s thoughts and strategies and also to give a reality check. 

For a CHRO, a CEO’s expectation list is unending. From being a trusted business partner or adviser, having a strong voice in how the business is managed, enabling the business strategy, building people and organizational capabilities, and being a confidante and an honest sounding board, the expectations are many. But where it is true that the CEOs expect CHROs to deliver the core HR processes along with strategizing for business, when it comes to knowing the nitty-gritty of the processes, the CEOs don’t care. As long as the transactional is managed out of sight, it works fine. But what do the CHROs really expect from the CEOs? 

The importance of a robust organizational culture is not unknown. However, the official responsibility of building and sustaining culture has become a transactional "box-ticking" exercise for the HR. But can HR alone do it? The answer is ‘NO’. In a Harvard Business Review article, Rebecca Newton says that “HR can’t change company culture by itself. It is really only successful and powerful when business leaders see it as their responsibility and see HR as a resource for helping them achieve it.” CEOs need to be culture leaders. Period. 

Talent management strategy needs to be driven from the top. CEOs need to become talent value leaders who take the company’s pool of talent as a personal priority. Although talent management has traditionally been the domain of HR leaders who have been responsible for executing talent management strategy, being custodians of the talent management process and often providing guidance and fresh thinking about talent management programs; with increased disruption in the workplace trends, it is a strategic necessity for the CEO to be involved in strategy and initiatives related to talent management. Talent management should be explicitly linked with overall strategic business planning and should deliver the quantity and quality of leaders the company will need in the future to achieve its goals.

With disruption in every sphere of the business and the workplace, especially with the entry of millennials and the contingent workforce, the need for newer skillsets and talent has become paramount. As these evolving workplace realities create newer employee expectations, CEOs need to actively support the CHRO in creating employee experiences that cater to those expectations. 

Big Data has affected almost every aspect of the business, but the impact that it has had on HR has been insurmountable. HR is already using data to take strategic steps and making critical decisions related to people. It is important for the CEO to initiate a data-driven culture and make it as a part of the organizations DNA. With workforce analytics providing insights into every aspect of talent, CEOs should support the optimization of their workforce management by enabling initiatives and investments towards it for enterprise competitive advantage.

Communication has always been a weak point between a CEO and a CHRO. Although CEOs do expect CHROs to provide candid feedback on strategic matters, the reality is far from true. New research suggests that a CEO who asks for feedback on his or her performance from top leaders can improve the executive team's confidence and, through that confidence boost, can affect firm performance positively. It thus becomes imperative for the CEO to be accessible, accepting, and receptive to appropriately delivered feedback of the CHRO and other leaders of the organization for generating trust and making collaboration easy.