June 9, 2010 – Manny Sousa was recently appointed head of HR for Royal Bank of Canada’s International Banking and Global Insurance businesses. With over 25 years of total experience, Mr. Sousa’s background includes key HR leadership roles spanning the consumer products, financial services, retail and telecommunications industries with companies like T-Mobile, Invesco, Mars and PepsiCo. Mr. Sousa is recognized for his deep HR expertise complemented by a strong business acumen and a passion for creating value through talent. He has worked and lived in the U.S.A, Canada and Asia. In the following two-part interview, Mr. Sousa explores the new role for HR leaders, discussing the importance of managing human capital effectively and strategically, the increased importance of the HR function in today’s companies, and what companies need to think about next for their people.
What changes have you seen in your career regarding the role of HR leaders?
Through the years, large companies have experienced significant increases in organizational complexity because of globalization, greater competition, and/or just plain growth. As a result, to compete successfully, it’s become necessary for these businesses to deploy strategic responses to organizational and talent opportunities. In such companies, the expectation for HR to deliver better solutions has definitely changed. Leaders in these organizations are looking to HR to deliver innovative ideas to organize the business differently, staff up and staff down effectively, to attract, retain and develop the right talent, and create an environment where employees drive superior business results in a way that is cost effective and efficient. With payrolls comprising one-third or more of a company’s operating expenses, CEO’s know there is an opportunity to create greater value through their talent and they expect HR leaders to lead the way.
How can they best effectively do this?
It’s important for us, as HR leaders, to ask the right questions and to acquire a solid understanding of the business and industry we are operating in. By identifying the challenges and opportunities facing the business, the HR leader is better positioned to develop an agenda that is effective and credible. I think it’s important for the HR agenda to be aligned with business goals and strategies, simple for everyone to understand, and must clearly define the roles and deliverables of the HR function. If any activity is “off-strategy”, I believe we need to redirect that effort. Otherwise, the HR department ends up overloaded, under-resourced, and compromising on the things that really count.
Why is there so much disparity among organizations about the role of HR?
We’ve all read the books and listened to the speakers proclaiming a certain role for HR. And typically, this involves the presumption that all companies are the same, and that HR should have “a seat at the table”. The reality is that every company has different needs and business leaders don’t have a consistent view of HR. It is necessary for us as HR leaders to help define the role of the function within our respective organizations, clarify what the deliverables will be for all constituents, and develop a set of metrics to evaluate successful achievement of those deliverables. It’s important for everyone to know how success in HR will be measured. How else will we know what value we are creating? We’ve got to stop focusing on who is at the table, or to whom we report, and focus more on what impact we are making to help the business succeed. By achieving the latter, the invitations to sit at various tables will follow.
What about today’s boards and their expectations?
HR leaders are increasingly sought after for advice and direction from the board and are therefore expected to have valuable insights on a variety of complex topics such as executive compensation, governance, succession, and strategy. Many boards today recognize that HR can play a significant and influential role in all of these key areas, and they are holding HR leaders accountable for making a difference there. I’ve noticed more and more companies placing HR leaders on their boards and I do believe that is a positive development given the value that these executives can offer.
How has the financial crisis affected HR leaders?
I believe that the crisis and the recession have made the challenges of the HR function much more acute. On the other hand, it’s presented an opportunity for HR leaders to take charge to help guide their organizations through significant amounts of uncertainty. Critical situations like the financial crisis can have implications for how well an organization functions. HR leaders are well positioned to step up and offer a strong perspective on workforce management where to focus efforts when pressures are high. At RBC, we emerged from the financial crisis in a good position. There were other organizations that also did very well in navigating their organizations through tough decisions related to pay, benefits, and workforce reductions; others didn’t fare so well and now have some big challenges to mend fences with their employees and other constituents.
Next Wednesday, we conclude our interview with Manny Sousa.