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Why CEOs terminate heads of HR

Using analytics to enhance customer value is one way to keep the CHRO off the chopping block

By Ian Hendry

One of the prettiest places in England is Henley-on-Thames, which is where the Royal Regatta is held every year. If you are visiting England, it is within a short drive from Heathrow Airport, and worth a quick stop. It is also the home of the Henley Business School and I recently came across some research from there. The following quotes identified reasons why CEOs chose to terminate their CHROs:

“It was a function of the agenda. The individual didn’t have the capability to step up again.”

“We had taken the game up a notch. We had someone who was successful in the old agenda but not in the new. They weren’t a failure; it depended on what we wanted from them.”

“Intellect was the key. They didn’t have the ability to make sure my thinking on strategy was matched to their deep knowledge of the capability to deliver it.”

“We are dealing with more complexity on a broader scale. Once we got six variables to think about versus four, they didn’t have the capability to think at that level on a broader scale.”

CHROs clearly need to stay abreast, (better still if they stay ahead) of changing business demands and the Strategic Capablity Network (SCNetwork) endeavours to share the thinking of future- oriented academics, leading consulting firms, and senior practitioners in peer level networks.

Deloitte, for example, suggest that most Canadian companies are not prepared for major advances in technology such as robotics and artificial intelligence. Even more worrisome, one-third of the 700 companies studied, scored poorly on each of the four key measures — awareness, innovation, agility and the ability to channel resources. The Canadian government has created The Centre of Excellence for Evidence-Based Decision Making Support which will be tasked to make government programs more cost effective. Similarly, in Britain, they have created the Behavioural Insights Unit, which will use “proven behavioural science” to teach bureaucrats to make more cost-effective choices.

Data analytics has caught everyone’s attention as an emerging area of importance. I don’t think this means that CHRO’s need to become data scientists, but comfort with interpreting data, including financial information, is now a table stake. Perhaps this quote by a CHRO in retail makes the point best: “We need to think about human capital the same way as any other asset to achieve a return, and an analysis system can help to get us there.”

Using analytics to enhance customer value will bring organizational value, and, another way of keeping us off the chopping block.

There has never been a more exciting time to be a CHRO. Are we up for the challenge? What do you think?

Ian Hendry

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