Here's why a company's environment is key to a CHRO's success
That ‘people’ is almost all that matters has become a nice thing to say at corporate gatherings. Yet becoming a CHRO is not as cherished as becoming a CFO, or a COO for that matter. Why would that be?
Those who cherish achieving the role of CEO would want to figure out which earlier positions might lead them to where they ultimately want to be in. CHRO is not the first position that comes to mind. Why would that be?
It might be the inertia that drew people management into managerial backwaters. After all, at first, management was all about reducing costs in producing choice-limited standardized products. That was what made Henry Ford succeed. To that end, Ford secured the expertise of optimization-oriented Frederick Taylor, who broke production into the simple parts that people with a low educational level could be trained to undertake. Gantt provided the essential expertise to manage the complexity of projects handling many small parts and Johansson provided the tools that would allow standardized parts to be interchangeable.
People management fell into the prevailing production paradigm and job profiles were defined to fit into job descriptions. In pioneering industries, managing people was not more than managing interchangeable parts. It is not surprising that people management evolved to solve the puzzle of fitting people to job slots. Managers of people became interchangeable parts too, hardly offering the challenge to attract the best minds.
Times have changed in many ways, and faster than some managers have perceived. Take the role of the Chief Supply Chain Officer. That too was in some sort of backwaters, consisting of making supplies available to the factories that would transform products into what needed to be made. It was challenging enough when a factory was all in one place. But, it turns up that the internationalization of business led to parts produced in several countries, adding complexity to the supply chain role. In addition, if you consider that business has become more customer-centered, with the swift production changes that it requires, an effective supply chain officer must now be a different animal offering contributions to the overall business strategy, shaving costs of production, delivery and overall efficiency. Similarly, with people management.
Now, it is not so much whether a human resources manager can make it to top management, but what kind of a corporation does this HR person works for. If the corporation is customer-oriented, operates in an international market, and is driven to efficiency, perhaps also highly leveraged as it is seeking high growth, it is more likely that the corporation will require a results-driven HR officer who is likely to fit into top management roles. If on the other hand, the corporation operates in a protected, slow-growth and largely domestic environment happily producing goods which the customer cannot find elsewhere, the role of people managers can be filled with fewer requirements, attracting mostly people unlikely to climb up to top management. Because the latter corporations are in majority, many people think that the CHRO position is a dead end. I do not think it is a question of whether a tiger or an otter will be more fitting for the role of CHRO, but of what environment the corporation is acting out in.
There may be many tigers in that jungle but a mountain can only hold one tiger. What stripes will that tiger have, financial ones or human resources ones — that is a different question, but one thing is for sure, either-striped tiger will be a stalking results-driven officer. Whether one or another makes it to the top may well be a matter of chance. This is why I do not think that in that jungle, a CEO might expect from a CHRO what the latter cannot deliver; chance led them to their positions and the officers might well be interchangeable.
In the savannah-like slow-growth environment, challenges are altogether different. You get felines there too but the hunting skills requirements are not the same. Herds of prey-customers there can be spotted at a distance but savannah felines have nowhere to hide and stalk from. Feline success in the savannah is more of a collective endeavor which requires encircling the herd of customers. Besides a stronger reliance of extended feline support, the encirclement of customers might even require government lobbying skills. In any case, hunting by felines in the savannah requires a different set of skills from those that help sift outstanding jungle felines.
A savannah feline will not work as well in a jungle environment. Perhaps that is why we mostly have tigers in India and lions in Africa and why the real contest is between tigers on one side and lions on the other. Similarly, with corporations, tell me which environment it operates in and I will tell you whether the CHRO might work just as well as the CEO.