Here's what CHROs should demand from CEOs

It has almost become a cliché that we live in a volatile, uncertain, complex and ambiguous (VUCA) world.  It certainly seems as though it has been like that for a very long time now.  What seems to be different is that many view this as something to be coped with, almost as though it is a symptom of an incurable illness.  

But, ask any CEO what they fear and they are likely to tell you that the last thing they want is stagnation… and that is the opposite of VUCA. Yes, most CEOs will tell you that stagnation makes it much harder to find a differentiator, USP, or a competitive advantage. Disruption, change, and uncertainty creates a fertile environment in which innovation can flourish.

So, the questions often asked are, “What does the CEO demand of CHRO?” and, “What does the CHRO demand of the CEO?” in this type of world.

Let’s take the CEO first. Their primary obligation is, and always will be, to their stakeholders. Without investment, there is no organization.  But, the CEO also knows that they have to meet the stakeholder demands through the people, whether in manufacturing, services, not for profit, etc. And, people prefer certainty.

So, the successful CEO seizes on external uncertainty whilst demanding internal certainty. I’ll use the analogy of captaining a longship to explain.  

The CEO, the captain of the ship, wants a strong, fast ship, surging through turbulent waters, racing ahead of floundering competition. Naturally, the CEO needs a strong, skilled, stable crew, ambitious and capable of winning every race by pulling together, no matter what conditions they face.  And, the CEO wants to know that irrespective of the destination, course, weather, and port of arrival, they can easily take on board any additional crew needed for the next leg. That is the challenge for the CHRO.

What does this mean in the real world of organizations today?  What precisely do CEOs look for in the CHRO? To stretch the analogy further, their four demands are equivalent to:

CHROs need to be actively involved in the development of an organization’s strategy, and not just support it

In a VUCA world, that is not a set of minor demands; those are very substantial.  

We have struggled for decades with optimizing performance, and the recent scarcity of resources has forced organizations to cut back on training and development.  Rough waters and limited supplies have left many “crews” tired, disengaged with many longing for terra firma — a change of ship or even profession!

So, what do CHROs demand from CEOs? Frankly, few CHROs make demands of CEOs. But they should. I contend that courage and personal effectiveness are two skills needed in most HR leaders!  

At first sight, it might appear that the answer to the question, “What do CHROs demand from the CEOs?” is money – “Give me more resources and I’ll pay King’s ransom to get you better crews, I can then also pay them more if they sail faster!”  But, we know that this is only a small part of the challenge. Money does not solve many people issues and often causes others. Performance related pay can be one of the most disruptive and damaging processes.

These two sets of demands seem obvious and easy, yet are realized so rarely.  Hopefully, the sea will calm down enough for the CEO’s (the Captains) to realize that they can make much more effective use of HR. And, perhaps HR can muster the courage to go up on the bridge more often and challenge the Captain about the destination and route.