How can CHRO make a difference to the HR functions?
"Two of the loneliest jobs in the corporate world are of the CEO and the CHRO of an organization. While people expect the CEO and the CHRO to make populist decisions, they often have to take a tough stance and not do what is popular, but which is in the best interest of the organization. This by itself is one of the hardest parts of the job.”
The role of CHRO to a CEO is what a Chief of Staff is to the President. A sounding board, a confidante, an influencer and someone who is not just a partner in decision-making, but also someone accountable for the endorsement and success of these decisions.
What does a CEO want from CHRO?
What a CEO wants from a CHRO has a lot to do with how the CEO looks at HR as a function. Is HR an execution vertical or transformational one? Is it a tool to manage employee relations or is it capable of making a tangible, sustainable business impact?
Somehow, most of the CEOs expect the HR to be the former of the above mentioned 2 functions; and hence, what a CEO expects a CHRO to do is to ensure that his/her decisions ‘appear’ well and are ‘managed’ smoothly. CHROs are seen acting as ‘Chief Hygiene Resource Managers’ who are ensuring that all the boxes are ticked and all the basic facets of employee experience are covered.
However, some of the most successful companies and CEOs have been able to tap into the usually untapped potential of the department and vision of the CHRO. An evolved CEO looks upon a CHRO to make a contribution to the dimensions listed below, beyond the conventional HR responsibilities.
How can a CHRO make a significant contribution to his/her company?
- Be Future-Ready – Since its inception, the idea of running a company has existed on the theory of reductionism. The complex challenge of running an organization is simplified by consecrating accountabilities among the C-suite members. For example, the CFO is responsible for managing the Finances, the CBO is required to ensure higher sales and revenue, the CTO is at the helm for driving Technology & Innovation, while the CHRO is so-called the ‘People’s Champ’ managing all people needs. That’s where the game change might happen in the next decade.
A CEO would want a CHRO to develop an organization to be future-ready by expanding the horizon beyond people and culture. To not limit his/her questions/efforts to talent acquisition, retention or development but also delve into aspects of technology, external environment, work unit climate etc. A CEO will look at the CHRO to prepare his organization in every aspect of a dynamic and volatile environment. This is an ability that will differentiate the good from the great.
- EQ with IQ – Technology and artificial intelligence is likely to solve for most IQ issues that an organization might have been facing in past decade precisely why organization behavior, psychology, and emotional intelligence will become the new ‘in-demand’ skill (a by-product of technology influx). CHRO will be the block that completes the puzzle for a CEO.
With a boardroom, full of C-suite leaders taking an epistemological stance - talking data, analytics, trends and patterns, it’s important that the CHRO is able to represent a phenomenological approach (qualitative, humanistic) and keep focus on aspects like people and driving differential effort, perceived value of the leadership and impact of motivation on performance. A CEO looks up to the CHRO to drive leadership and build consensus on how to contribute and keep the organization’s culture relevant, alive, evolving yet consistent, while the world is changing at a speed of knots.
A holistic approach by the CHRO comprises equal focus on transformation factors (long-term levers) like mission and strategy, Organizational culture etc., transactional factors (operational levers) like Structure, organizational practices etc. and individual and personal factors (short-term levers) like motivation, individual needs and productivity etc. that create the recipe for success for any organization. The keyword has been revised from ‘improvement’ to ‘innovation’ and ‘evolution’.
One of the reports by Boyden suggests that the “CHRO role experiences frequent turnover, as high as 39% among the Fortune 100 CHROs in the past two years. This churn is likely attributable to the ‘uphill battle’ HR as a whole face in establishing itself as an integral part of the businesses in which it operates and earning a leadership role, not just in name but in practice, within their organizations. The level of inclusion of the HR function in critical decision making varies and is connected directly to the CEOs and C-suite leaders’ understanding of the importance of the CHRO’s role and his/her function”.
What a CEO asks of a CHRO, quite frankly can only be answered by the CEO himself/herself. Also, how much a CHRO can instill confidence in the CEO about his/her range, depth, and quality that can take the organization to the next level can be revealed only when the two work together.