What Should CEOs Expect From HR?

By John Boudreau

The dilemma facing human resources’ constituents is captured in a vignette, a chief human resources officer once told me that described their first meeting with their leadership team chaired by the CEO.

The CEO introduced each member of the leadership team, including top finance, operations, marketing and information officers. For each one, the CEO articulated how that function would contribute to the organization’s success. The CEO then turned to the new CHRO and began to describe their expected contributions and paused, realizing that he had no specific idea about what those contributions were.

Instead, he said, “Why don’t I ask our new CHRO to say a few words about how HR will contribute to our strategic success?”

This CHRO is not alone. Edward Lawler and I have reported the results from our 20-year longitudinal study of HR, where we surveyed HR leaders in hundreds of organizations worldwide. We’ve noted that HR’s relationship to corporate boards of directors is traditional — the function most frequently advises on executive compensation and succession. Such a traditional mindset risks missing important future contributions and roles for HR.

How did a sample of top C-suite leaders and board members articulate their wish list for a future HR profession?

My October Talent Management  column described the work of more than 30 top HR officers engaged with “CHREATE,” the Global Consortium to Reimagine HR, Employment Alternatives, Talent and the Enterprise. This column shares the findings of the CHREATE teams that investigated the expectations of CEOs and board members.

The teams interviewed 22 CEOs, C-suite officers and board members in large U.S. and global companies. Those interviewed worked with some of the most celebrated and successful CHROs in the world and have developed some of the most advanced and emulated HR systems. One might expect their perceptions to be uniformly positive, yet even this elite group described a vital need for HR to evolve.  Here are a few actual quotes:

“HR strategy is one of five strategic pillars of business strategy along with financial, acquisition, geographic and product” innovation.

“CHRO needs to understand the world of work, trends, new approaches beyond the organization and stimulate change internally. Bring strategic insights. Translate what is happening in the world of work to business leaders.”

“Understand the cultural nuances of operating in emerging markets, vs. ‘old economics.’ ”

“A better performance management system — FAST feedback, greater variability on rewards, quicker exit.”

These CEOs and board members saw great future potential in the HR profession. They foresaw future roles for the HR profession:

  • A chief operating officer of organizational culture.
  • A leader of a board-level committee on culture and innovation.
  • Mastery of the principles that drive a new workforce that delivers business strategy, considers emerging employment and work styles, drives purpose and engagement, reflects changing organizational boundaries and is much more diverse.
  • The ability to unearth the value that lies “in between” organizations where partnerships are formed, and bring science to cross barriers between companies, with suppliers and customers.
  • Use of the cloud to bring Amazon- and Google-like insight and responsiveness to the domain of work.

CEOs, boards and other constituents often grasp at the latest “shiny object” that gains press coverage or popularity, such as big data, holocracy and neuroscience. Each can create very real and tangible value, but also carries the danger of needless disruption. The difference lies with an HR profession that brings evidence-based principles and discipline to the evaluation and adoption of such ideas.

HR’s constituents seem ready to articulate and build such a profession. Can HR leaders join them?

John Boudreau is professor and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations, and author of “Transformative HR: How Great Companies Use Evidence-Based Change for Sustainable Advantage.” He can be reached at editor@talentmgt.com.

Reprinted from TALENT MANAGEMENT

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