January 30, 2019 – The role of the chief human resources officer is changing again. Over the years, the best CHROs became much more focused on the business and its strategic needs. Today, however, the needs of the business have evolved – and with it so have the demands on the CHRO, according to a new report by Heidrick & Struggles.
Long-established business models face disruption across sectors, said the report, co-authored by recruiters Brian Klapper and Mike Theilmann. As a result, HR leaders are being forced to focus much more on radically different talent needs, including elevating the employee experience and encouraging diversity and inclusion, while strengthening corporate cultures. The 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.
Flexibility is Key
The CHRO job, according to the report, has become much more like that of a chief transformation officer. To succeed, the 21st century CHRO must master five key skills that were barely even on the CHRO radar screen five years ago: embracing disruption, practicing agility, solving for organizational structure, employing data analytics and facilitating new work environments.
“The best CHROs at global enterprises bring to the table the flexibility and ability to adapt – as well as that ineffable quality to see around corners – that we observe in smaller, venture-backed companies,” said Mr. Theilmann. “These leaders have what boards of directors and CEOs are looking for in today’s CHRO: transformational skills.” Such skills are embodied by the five key attributes, said Heidrick & Struggles:
1. Embracing Disruption
Big companies are seeing their long-established business models disrupted, often by nimble start-ups. They’ve seen what has happened in retailing (e.g., Amazon), consumer goods (e.g., razor blades) and the automotive sector (e.g., 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?” asked Mr. Klapper. “Some are creating partnerships with start-ups – or example, in Silicon Valley – 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 lush country clubs or resorts but to visits with executives at innovative, fast-moving companies,” he noted.
2. Practicing Agility
Savvy CHROs recognize that industry disruption is anything but neat and linear and that even the best-laid corporate plans may need to be quickly altered 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,” said Mr. Theilmann.
3. 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. Mr. Klapper said that the challenge for a CHRO is significant. Leaders must ask: 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?
4. Employing Data Analytics
Companies are beginning to employ data analytics throughout the organization, and the top CHROs are leading the charge in their areas of responsibility. Mr. Theilmann said they are using 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.”
5. Facilitating New Work Environments
Not long ago, most employees went to work every day in offices. “As we know, that’s not how people work anymore,” said the Heidrick report. “They work on the fly. They don’t want to sit in an office all day. They want to be able to work out of a coffee shop one day and at home another. They want to have flexibility. They want to be able to collaborate with their colleagues. And since we’re speaking mostly of younger generations who 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,” said Mr. Klapper. “At one bank, the job of one high-level human resources leader focuses completely on the work environment. This isn’t just about what kind of snacks to offer but how the work environment can have an impact on engagement, collaboration, innovation and velocity — for example, how to move employees to virtual desktops and virtual machines. How to do this represents a new skill-set for CHROs.”
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media