CHROs are in increasingly high demand — but it’s far from an easy job. And as the demand for top HR professionals heats up, so are CEOs’ expectations for the role.
In fact, a good CHRO needs many of the same skills and competencies required for other C-suite roles — even the CEO, according to Bill Conaty, former senior vice-president of HR at General Electric (GE), speaking at a Human Resources Professionals Association (HRPA) event in Toronto.
So what does it take to be an excellent CHRO or senior HR leader? And to truly earn that seat at the strategy table?
“The greatest challenge is to convince more CEOs that we’re up to the task,” he said. “If the CEOs don’t have high expectations for the HR function, there won’t be any change. You could be the sharpest knife in the drawer but you’re not going to accomplish much if the CEO isn’t backing you up.”
An HR professional has to become a legitimate business partner to be able to leverage her ability to make a difference in HR, said Conaty, co-author of The Talent Masters: Why Smart Leaders Put People Before Numbers.
“It’s only going to be as impactful as the CEO wants it to be.”
The CHRO role
CHROs have a bit of a tenure problem, said Conaty, citing data from the Human Resource Policy Association in the United States. Its survey of 344 American companies found nearly one-half (42 per cent) of CHROs have been on the job for less than two years.
“If you go to three years, it’s 56 per cent. And if you go all the way over to the seven-year-plus point, that’s only 20 per cent of the total,” said Conaty, who worked alongside GE CEO Jack Welch for 40 years. “So lots and lots of movement in that function — way too much.”
Also, the vast majority of C-suite positions are being filled by external hires, he said — even among HR leaders.
“That is an indictment of a profession that’s supposed to be the expert on succession planning.”
HR can also struggle with lingering negative perceptions from many in other fields, he said.
The idea that HR is full of administrators, not strategists, is one theme that emerged in response to a recent LinkedIn post by Jack Welch, as was “(HR professionals) are paper pushers who sell fear,” said Conaty.
“These are laughable but these are real, live comments,” he said. “I would say 70 per cent of the comments that came in — and there were thousands of them — were negative. So it says we’ve got a little image issue.”
There’s still a lot of room for improvement but the profession is rapidly improving, he said.
“We have a number of significant role models out there today that we didn’t have 10 years ago.”
When he was working at GE, Conaty wrote a roadmap for how HR would become a valuable business partner to the wider organization.
“I wanted the HR team to be highly visible, credible, value-added business partners,” he said.
And the word “partner” is key.
“As I look at key characteristics for future HR leaders across the globe, you really have to find a really critical balance and fit between (the CHRO), the CEO and the CFO. I find those three jobs to be really, really critical… you’ve got to be able to work with both those functions,” he said.
“That’s not always a really congruous match-up but it’s one you’ve got to… make work. You’ve got to have the trust and confidence of the entire senior leadership team. I’ve seen (many) HR people say, ‘I’ve got a great relationship with the CEO.’ And I’ll tell you right now, if that’s the only relationship you have, I give you about 12 to 18 months.”
You’ve got to be a talent magnet, a global operator, have excellent assessment skills and the ability to strategize and the capacity for complex problem-solving; you’ve also got to be the external face of the company, so you are representing more than just yourself when you’re in that key role, he said.
“You could probably use some of these same specs for a CEO job.”
Lessons on HR leadership
HR leaders should have a strong understanding of not just the business itself but also of the industry or sector, said Conaty.
“Understanding the industry is as important as understanding your particular business.”
It’s about building the HR vision and strategies around the business model — and to be a problem solver, not just a problem identifier.
“You’ve got to be able to identify a problem before you can solve a problem, but I never dropped an issue on Jack Welch’s desk that I didn’t say, ‘I’m here to tell you this is going on but I’m working on it… if I can’t solve it, I’ll get back to you.’ So I never add it to the pile on their desk — our job should be to take stuff off the pile. And when you do that, you’re a welcome visitor at the CEO’s office.”
It’s also important to have the personal confidence and convictions to push back against the system when necessary, said Conaty.
“You can’t do it all the time — you’ve got to pick your issues. But when you see things that are really outside your values and outside the company’s values that just don’t feel right, you need to really weigh in. And you might not prevail all the time… but you need to weigh in.
“Never forget why we’re at the table — you need to be both an employee advocate and a business partner at the same time.”
Alignment between your personal values and the organizational values is key, as is candour and trust, he said.
Back in the early 80s at GE, employees would have to create an annual self-assessment with their strengths, development needs and plans, said Conaty.
“We always put a boatload of strengths and no real weaknesses,” he said. “So (Jack Welch) just blew that to smithereens… he forced the candour in the system. He forced people to come up with their own self-assessment of their development needs.”
A development need is purely a development need, unless you don’t address it — then it becomes a fatal flaw, said Conaty.
“People were very leery of serving up a development need because they thought it just put them higher on the layoff list. And that’s the fact that you don’t trust the system. So it took us quite awhile, probably about five years, until we got to the point that people could actually feel comfortable citing a development need.”
But, at the same time, you need to differentiate between the top performers and the stragglers, he said.
“This is a tough topic,” he said. “The way we looked at is was differentiation creates a meritocracy; treating everyone the same breeds mediocrity.”
With a large body of employees, you ought to be able to differentiate between who’s your best and who’s your least effective, said Conaty.
“Performance culture has consequences. Everybody talks about, ‘We have a performance culture in our company’ — most don’t. Unless there are consequences, (positive and negative), you don’t have a performance culture. Performance culture is when your best get recognized, promoted, rewarded and the like, and where your least effective either improve or get removed. So it’s a tougher game.”
And it’s important never to get too far removed from the rest of the organization, he said.
“The closer you get to the top of the organization, the more insulated you are from the noise in the organization. So you’ve got to find ways of getting down into the noise of the organization, whether it’s holding skip-level meetings, dialogue meetings, surveys, whatever. But don’t just rely on emails and surveys to get that done. They’re all great tools but there’s no substitute for a little personal touch and getting down in the organization yourself.”
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