The role of the chief human resources officer is changing. Over the years, the best CHROs became much more focused on the business and its strategic needs. Today, the needs of the business have evolved—and with it the demands on the CHRO. Long-established business models face disruption across sectors, forcing human resources leaders to focus much more on radically different talent needs, including elevating the employee experience and encouraging diversity and inclusion while strengthening corporate cultures. Disruption touches all areas of the CHRO’s traditional portfolio: who and how to hire, how much to pay, how to develop and train, and how to rate performance.
The best CHROs at global enterprises bring to the table the flexibility to adapt—as well as that intangible quality of seeing around corners—that we observe in smaller, venture-backed companies. These leaders have what boards of directors and CEOs are looking for in today’s CHRO: transformational skills.
To succeed, today’s CHRO must master five attributes that were barely on the HR radar five years ago: embracing disruption, practicing agility, solving for organizational structure, employing data analytics, and facilitating new work environments.
Big companies are seeing their long-established business models disrupted, often by nimble start-ups. They’ve seen what has happened in retail (e.g., Amazon), consumer goods (razor blades), and the automotive sector (ride-hailing companies, autonomous cars).
Navigating disruption has become a key skill set for CHROs. As a CHRO, how do you help your company disrupt itself before somebody else does the job? Some are creating partnerships with start-ups and putting people on the ground there to become part of the ecosystem so that they can learn and establish complementary partnerships. Others are leading management teams by going offsite—not to stale meetings at country clubs or resorts, but to visits with executives at innovative, fast-moving companies. Forward-leaning CHROs are engaging with incubators or other business accelerators as another way of tapping into the ecosystem to be on top of potential industry disruption.
Savvy CHROs recognize that industry disruption is anything but a neat and linear process and that even the best-laid corporate plans may need to be altered—and quickly—to adjust to changing business dynamics. This makes agility a critical skill for CHROs to possess and to develop in their organizations.
Agility implies the ability to spot opportunities and threats and to adapt and pivot faster than one’s peers. It also means preparing for, withstanding, and recovering from setbacks quickly. The key for CHROs, and other c-suite leaders, is to zero in on four core elements of agility we have identified as the most important: foresight, learning, adaptability, and resilience.
Today’s top CHROs ensure that leaders of the organization are continuous learners, able to spot threats to their industry and business. They also provide coaching to the C-suite to help leaders sharpen important skills such as self-awareness, as well as help the team develop a “fail fast and learn” mindset. The CHRO is the keeper of the company’s culture, and embedding these traits from the top of the organization through to those serving the customer every day fuels success for the business.
Solving for Organizational Structure
CHROs must also be able to leverage the organization in new ways if it is to benefit from agility and move nimbly. The challenge for a CHRO is significant, namely: How can I put teams together to solve a specific issue or problem, complete the project, and then redeploy those people—and do this in weeks, not months or years? How is this project informed by the company’s strategy, and what are the deliverables?
The challenge is compounded by the fact that, for the past 100 years, the facts of corporate life have been, “I report to this person, that person reports to that person, then that person reports to that person, and that person reports to the CEO; I’m seven layers down.” By contrast, the goal today is, “I’ve got these types of skills, and I get pulled into these kinds of projects very quickly to actually solve a problem.”
Today’s CHRO clearly confronts a different organizational model. In other words, work is no longer defined by an organizational chart. Work must be determined by what a company’s customers want now. In the gig economy, a company needs to move quickly to serve its customers—or somebody else will.
That might mean attacking functional silos. Despite years of discussion in big enterprises, silos endure, limiting a company’s ability to reinvent itself, move faster, increase revenue, and better understand and delight customers.
Employing Data Analytics
Top CHROs are leading the charge in using advanced tools such as machine learning and artificial intelligence to help assess performance and organizational gaps, including diversity and inclusion issues; to better understand where decision making is taking place; and to assess internal talent in terms of developmental needs and readiness for new roles.
For example, a large entertainment company is using big data to inform its talent agenda. Managing an operation with several hundred thousand employees is challenging to do on spreadsheets, not to mention an HR enterprise resource planning (ERP) system. The company is mining its data to make better staffing, promotion, and deployment decisions.
Facilitating New Work Environments
No so long ago, most employees went to work every day in offices. As we know, that’s not how people work anymore. They want to be able to work out of a coffee shop one day and at home another, while still having the ability to collaborate with their colleagues. Since it is our younger generations who most want and expect this type of flexibility, we don’t think this approach to work is going away anytime soon.
Particularly in technology and financial services, we’re seeing the work environment as an area of attention for CHROs. At one bank, the job of one high-level human resources leader focuses completely on the work environment. This is all about having a positive impact on engagement, collaboration, innovation, and velocity—for example, moving employees to virtual desktops and virtual machines. How to do this represents a new skill set for CHROs.
Wanted: The 21st-century CHRO
When CEOs and boards hunt for their next CHROs, they are looking for people with what we call transformational skills. Mastering the five attributes we have discussed here will go a long way toward building a CHRO’s 21st-century toolkit.
Today’s CHRO role is not just about running a function. The bigger job is about having a positive impact on the whole company—the business, employees, customers, and communities touched by the company. To do that, the CHRO must reimagine work as the organization’s chief transformation officer.