What CEOs want from HR

What CEOs want from HR 50
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Published Date:15-07-2017
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Research What CEOs want from HR It’s way more than HR, but above all it’s integrity Written by Nick HolleyWhat CEOs want from HR Nick Holley Background Every year the Henley Centre for HR Excellence completes two pieces of original research. In 2014 we are looking at what your key internal stakeholders, CEOs, want from HR as a function and as individuals. Over the last few months we carried out a number of interviews with Chief Executives and their HR Directors (HRDs) to compare and contrast their views. We would like to thank all those from the following private, public and third sector organisations who gave their time to be interviewed: Aldermore, Amey, BMW, Cambridge NHS Trust, Danone, DCH, Dell, Faccenda, Hertfordshire NHS Trust, Holcim, Managers in Partnership, Mars, Mencap, Mercedes-Benz, National Grid, NHS Commissioning Board, NHS Employers, NIRAS, Old Mutual, Oracle, P&G, Papworth NHS Trust, St Mungo’s Broadway, Suntory and Thames Reach. You will find their anonymous quotes in italics throughout the report. You will also find quotes from online sources and published reports italicised and attributed in the endnotes. We also carried out an online survey and received replies from 125 business and HR leaders to provide some quantitative data to back up the qualitative interviews. The questions we explored were: 1 What do you look for from your HR function? 2 What do you look for from your HRD as a leader? 3 In terms of the HRD and where they personally focus, how do you see the balance between the following? • Running the HR function and delivering the HR agenda • Contributing more broadly to running the business as a member of your leadership team over and above their HR role • Being a personal confidante • Facilitating the top leadership team 4 How do you measure the success of your HRD and of the HR function? 5 What do you see as HR’s biggest opportunity to increase its credibility and value in the eyes of the wider business? 6 How would you rate the importance and performance of HR in the following areas? • Getting the basics right – payroll, contracts, recruitment etc • Building a talent pipeline • Engaging your people • Managing performance • Building the capability of the organisation to deliver your strategy • Creating and sustaining the right culture • Managing transformational change 7 When appointing an HRD, what qualities and/or experience do you look for? 8 If you’ve sacked an HRD, what drove the decision 3What CEOs want from HR Nick Holley The key messages CEOs expect you and your team to deliver the core HR processes really well, but they don’t care about these processes beyond the fact they are done. • The day-to-day transactional… is managed out of sight, that all just works. • I want to know management aspects just work but I don’t need to know how and where. • I expect the basics but they’re a hygiene factor. • I expect the HR person to make sure the HR function operates effectively. That’s your day job; I won’t delve into it or care about it, I expect it to work. • ‘CEOs are interested in revenue growth, profitability, innovation and the ability to retain customers,’ says Jeff Schwartz, principal in Deloitte Consulting’s human capital practice and co-leader for Deloitte’s global talent initiative. ‘They are inter- 1 ested in business issues and talent issues, but not HR issues.’ They expect you to be getting on with the HR basics in the background but they don’t want to be bothered by unnecessary detail. The only time they’ll care is if there is noise in the system. If they are hearing from the business that the basics aren’t being done, or doing them is getting in the way of people fulfilling their core roles, then they will become interested. So you’d better focus on doing the basics simply and non-bureaucratically, focusing on enabling the business rather than enabling HR, because their focus is on the business not on HR. What they really want from the function and care about is your support in enabling the business strategy, building the people and organisational capability to deliver the business strategy. Indeed what they value most in an HR Director is the director bit, less so the HR bit. ‘It’s essential. If you don’t • It’s essential. If you don’t operate the HR function you’ve lost it, but it’s your ‘table stakes’ – the barest minimum. You lose so much if this is all you do. operate the HR function They expect you to bring your HR functional expertise, but above all they you’ve lost it, but it’s your expect you to be a ‘corporate director’ like any of their other direct reports. ‘table stakes’ – the barest They expect you to contribute beyond your functional role. They don’t want silence until a people-related issue is raised. They want you to be an active minimum. You lose so player counterbalancing the other players around ethical and long-term much if this is all you do.’ sustainability issues. The challenge is how to do this as part of the team and not being seen to stand apart from it. They also expect a more personal element to your position. They are under huge pressure in what is often a lonely role. They need someone they can trust, whom they can turn to for confidential advice or just to be a sounding board. This brings us to the most important finding of our study, the most consistent ‘For HR to full t fi his personal theme. For HR to fulfil this personal role, integrity is the key. Of course technical expertise, strategic thinking and commercial awareness matter, but the role, integrity is the key.’ absolute is integrity. Technical expertise, strategic thinking and commercial awareness give you the right to play as HR Director, but it’s integrity that decides if you’ll win the gold medal. As a final point, the last question we asked was ‘If you’ve sacked an HR Director what drove the decision?’ The consistent answer was a failure of integrity. There were failures of technical expertise, strategic thinking or commercial awareness, but they can be addressed. Consistent failure here of course isn’t acceptable but one failure of integrity is an absolute failure that none of the CEOs would 4What CEOs want from HR Nick Holley tolerate. In other functions they are willing to accept the odd failure of integrity but they hold HR to a higher standard. In thinking about HR capability, is this a development need or an assessment need? Can you send someone on an integrity course? The question is: shouldn’t you look for integrity when you’re recruiting at every level but especially at HRD level; and if you do, how do you spot it if it’s there or if it’s not 5What CEOs want from HR Nick Holley 1. What do CEOs look for from their HR function? 1.1 Doing HR CEOs look for several things but the underpinning requirement is doing HR well, but from a business not an HR perspective. They expect HR to execute a number of core people processes: • Basic terms and conditions – contracts, pay (paramount in many sales-driven or financial services businesses), legal, compliance, disciplinaries, and collect - ing information and data efficiently. • The employee lifecycle – recruitment, induction, retention, development (not just training but coaching, careers, succession, talent mapping, i.e. creating a culture where people are developed), and exit. ‘If employees are our most • It’s easy to get excited about the organisational stuff we attach to HR but where I’d still want to start is with where we came from. If employees are our most important asset then we important asset then we must do the individual stuff. must do the individual • HR is the face of the organisation, new people come in for interview so HR are the first people they meet and form an opinion of the organisation from. stuff.’ • Our business is about people so to be successful we need very skilled and best people. • Employee performance – engagement and well-being. ‘Beyond the classical • Culture – responsible for DNA, brand, values, behaviours, ethics, sustainability, function, HR are the culture and change. • Beyond the classical function, HR are the culture gardeners; it’s about values, it’s gardeners; it’s about values, about organisation, it’s about behaviours. it’s about organisation, it’s • HR is one of the few patrimonial functions on the executive committee that about behaviours.’ manages the assets; finance, quality and HR are accountable for assets not being damaged because of a breach of moral or ethical values or long-term sustainabil- ity. • I look at HR as an enabler for the business, translating the strategy into the culture and the way we get things done. • Organisational development – operating at an organisational not just individ- ual level, building and reinforcing an organisation’s uniqueness, ensuring the organisation is evolving as the context evolves. • We see HR as a really critical part at the heart of strategy because it builds our uniqueness. • In his recent blog ‘The Best HR Departments Don’t Just Focus on People’ Wayne Brockbank highlighted this organisational role that looks beyond just people: • However, by focusing primarily on individual contributions,…by definition, succeeds in making the organizational whole equal to the sum of the parts. This overlooks the central contribution of organization to make the whole greater than the sum of the parts. It is this integrating and leveraging function of 2 organization that creates sustained competitive advantage. 6What CEOs want from HR Nick Holley 1.2 Providing advice CEOs expect you to support the business in making decisions and managing people. This advice goes both ways as they expect you to advise them on what is going on in the organisation. They don’t want you sitting in your office. They don’t want you relying purely on the employee opinion survey (EOS). They want you to be their eyes and ears, spending time in the organisation judging feelings and the climate. • Clinical objectivity and subjective insights – at times absolutely clinical in terms of how to relate to rules, processes and regulations but at other times the feel, the sense, the temperature… something less cold and clinical. ‘I expect HR to understand, • I expect HR to understand, to have a proximity with the organisation, as I can be quickly disconnected from the base of the pyramid. to have a proximity with • Need to be good at talking to staff, picking up what people are feeling. the organisation, as I can be 1.3 How HR does it quickly disconnected from The critical message though wasn’t just what needs to be done, but how CEOs the base of the pyramid.’ want things to be done, so they want: • The basics done efficiently and effectively; to be nimble and agile not bureau - cratic and over-engineered. • I expect HR to run a slick service around recruitment, retention, the basics. • The function has to deal with the mechanics smoothly or it’s a constant night- mare if they go wrong. • If this is the case then there is room to do what they really care about, which is strategic enablement. • Preoccupation in HR is spending a lot of time on basics but this eats up a lot of our team’s time, which hinders us in doing more strategic things. ‘HR has the will to work • HR has the will to work on the strategic but to be honest they spend 70–80% on operational stuff. on the strategic but to be • HR to be the guardians of fairness and consistency, balancing the needs of, honest they spend 70–80% and managing conflicts between, managers and employees. on operational stuff.’ • Well regarded by managers and staff, a credible function especially given the nature of the work of HR. • Sometimes there is conflict between managers and employees and HR needs to stay neutral. This is a difficult balance. • HR to take accountability for their delivery. HR doesn’t have to do them but it has to take accountability for ensuring HR processes are done well and ensure they are engaging with leaders and managers not only around how, but also why these processes matter. • Responsive in giving managers on the ground ability to manage issues locally, not a central function that sucks everything up, but it enables managers to manage. • HR’s role is to ensure the appropriate management capability with the right abili- ‘The key is to coach people ties and behaviours to get the most out of employees. to make good people • The key is to coach people to make good people decisions not make them for them. decisions not make them • Leaders have to take responsibility for people and organisation not HR. They lead for them.’ the performance management process but don’t do it all, but they are account- able for the process so the process is well respected. 7What CEOs want from HR Nick Holley • HR to deliver processes systemically, bringing all elements of the HR mix to create solutions, but also integrating with other functions, not being an island unto itself. • You can’t see it in isolation it needs to be integrated into the whole organisation. • People look for HR to take the lead on people, but they are integrated with other functions in achieving the objectives. • HR to align their processes with business goals and outcomes not inputs. HR needs to ensure they are the right fit not from HR’s generic perspective but from the perspective of what is required to deliver the business strategy. • I want HR to be part of the integrity of the whole, making the organisation as successful as it can be so sometimes they have to lower their profile for the sake of the organisation. HR has its own drivers and objectives but, the success of the organisation is the key. • It is a challenge to align HR ambitions with what we can afford and keep focused on the strategic rather than on the next new thing in HR. • Gap is around business acumen. I look for solutions to be broader than HR spe- cialism, need to bridge across different functions. They bring to the table solutions that are very ‘siloed’ in their domain. In mind set they have to have an end-to-end view in creating relevant solutions. • The whole engagement with the senior management team around the business strategy is the vital role. ‘HR has its own drivers • My ambition for the HR function is to move from being an HR partner to a business partner, someone who helps you build your vision. and objectives but the • HR has its own drivers and objectives but the success of the organisation is success of the organisation the key. is the key.’ This final point is the strongest message of all. CEOs want HR to be orchestrators of the business strategy not simply executing HR processes without any thought for the context. Like leaders in most fields they expect HR to be contextually grounded. 8What CEOs want from HR Nick Holley 2. What do CEOs look for from their HR Director as a leader? ‘I assume if you are an HRD 2.1 People leader you understand HR. If he Obviously they look for all the things discussed in the previous section, for leadership around people issues: can’t run the HR function, • I assume if you are an HRD you understand HR. If he can’t run the HR function, why the hell is he an HRD.’ why the hell is he an HRD. • Someone who only comes from HR, you have a difficult conversation with them. • The point this CEO was making was that his brain doesn’t necessarily think about the critical employee issues the same way that HR does. So, he needs HR to be think- ing about things that aren’t part of his daily routine. He wants HR to take that leadership role and, in most cases, take care of these issues so he can focus on the 3 business. But they want more, much more. They expect an HRD to be a leader of the function and the people aspects of the business. They expect the HRD to: ‘First and foremost I look • Lead the leadership team through the people and organisational elements of the business strategy. for the HRD to provide • The HRD takes a lead organisationally in the same way the FD takes a lead finan - strategic advice about cially, but it’s not his responsibility to deliver the number the people elements of • Happy for business to contribute to HR and HR to contribute to the business, the more vibrant the debate tends to be. business into the corporate • First and foremost I look for the HRD to provide strategic advice about the people management team. The elements of business into the corporate management team. The great test of value is when the HRD can do that at a strategic level. great test of value is when • Shape the leadership team’s views so everyone on it recognises the centrality the HRD can do that at a of people and organisation in achieving organisational objectives. strategic level.’ • She gives a clarity of advice as we move forward – most of it is unwelcome, all of it is unasked for, but she makes sure the organisation doesn’t forget the people. She makes sure the people aspect is kept at the heart of all we do... and she never lets me forget that. • Ensure the leadership team doesn’t see people and organisational issues as a bolt on or something that HR handles. • In our top team there are various backgrounds, often strong technical back- grounds, that are laden with conventional wisdoms. What I want him to do is to sit on their shoulders and influence them to change their outlook on their people and work with them to continuously raise the bar on performance. • Keep the leadership team honest around these issues. • Bring an external, challenging, professional viewpoint. 2.2 Corporate director But over and above this, CEOs expect the HRD to be a corporate director, ‘Of all directors, I need her operating as part of the leadership team, taking accountability for the to operate as a corporate performance of the business and the delivery of the strategy. • Someone who is a corporate director first and functional director second. director across the whole; • Of all directors, I need her to operate as a corporate director across the whole; if if she’s in an HR bubble it’s she’s in an HR bubble it’s no good. no good.’ 9What CEOs want from HR Nick Holley • As a leader they need to be able to subsume the narrow needs of HR into the needs of the organisation. • Sit as a business director who brings their specialism to the table but happy to step outside functional safety net and be a business leader. • I expect her to contribute to the business, I hold her accountable for whole business performance. • I expect my HRD to evaluate and contribute to the strategy process. The HRD is ideally positioned working on different timelines, commercial 1–2 years, HRD 3–7 years. They expect the HRD to contribute to the overall strategy and to challenge it around capability, cultural and ethical issues. For many of the CEOs interviewed, this wish is not always a reality. • Although there is clearly the need for HR to assist in the vital people dimension of corporate strategy only a bare majority of CEOs believe that the head of HR is a key player in strategic planning. However a significantly higher proportion (70%) wants 4 the Head of HR to be a key player. So what gets in the way? • The majority of HR professionals currently function in administrative roles…While these are important functions, they can easily occupy the majority of HR profes- sionals’ time and resources. Thus, the higher value-added initiatives may not receive adequate time and attention. The majority of HR professionals are hard-working and dedicated individuals who often feel overwhelmed with their administrative and largely tactical and reactionary workloads…The majority of HR professionals desire more credibility and influence with the CEO/president and senior manage - ment team but are seldom regarded as strategic business partners... The majority of HR professionals are unaware of a major paradigm shift that is occurring in their profession and the risk to their future careers…The CEO/president and senior man- agement team are unaware of the potential contributions of the competent and 5 strategic-oriented HR professional. ‘What I’ve learned is it’s • Nobody has given them this expectation. • She does that, of course she pulls in the direction of the people agenda, not 100%, about the expectations I so this is a development opportunity but has anyone put that expectation on her? put on them; if I don’t give In the past no one has asked her to broaden that engagement with the wider business. them the mandate they will • What I’ve learned is it’s about the expectations I put on them; if I don’t give them stick in their core role.’ the mandate they will stick in their core role. • Indeed from the desk research it is clear that some leaders don’t actually rec- ognise HR is this role: • Many line managers don’t even understand what strategic HR actually means. They’re also unlikely to care how strategic their HR department is when HR can’t fill job requisitions in a timely manner or deliver the types of training programs needed by employees. HR executives need to ensure they get the transactional 6 stuff right before they think about moving into the realm of strategy. • They are so preoccupied with the basics so there’s no time to talk strategically. • Their preoccupation is with the basics so hardly any time to talk strategically… they don’t have the focus. 10What CEOs want from HR Nick Holley • In some cases HR has tried to answer this by involving line managers in what have traditionally been HR tasks to free up time for the strategic, but this has produced a backlash where line managers are saying they actually value HR doing the HR aspects of their role. • As HR directors move away from the traditional ‘hire and fire’ function of what was once called ‘personnel management’ to focus on the more strategic elements of business development, line managers have voiced their concerns at having to take on people questions, and are consequently losing confidence in their HRDs… This is, of course, based on the perceptions of line managers. They believe where HR adds value is in the transactional – but this is not where HR departments achieve the best outcomes for the business. When HR directors become strategic, line managers will need the appropriate training to understand why and I don’t think employers have been having these sorts of conversations with them…It is a reputation-management issue. It is about HR being really clear about what it does ‘A significant proportion of and publicising it to show the importance of areas such as organisational devel- 7 opment and retention to increase their credibility. respondents believe that • A significant proportion of respondents believe that their heads of HR are overly their heads of HR are overly preoccupied with a narrow HR agenda. Forty-one percent think their HR heads are ‘too focused on processes and rules’ and 37% say that they don’t ‘understand preoccupied with a narrow 8 the business well enough. HR agenda.’ • They don’t have a strategic capability. • She didn’t have enough to offer in discussions. When she didn’t have enough she wastes time because she felt the need to contribute even when she couldn’t. • They don’t have the training or experience. • And here’s one more slice of telling SHRM data: When HR professionals were asked about the worth of various academic courses toward a ‘successful career in HR,’ 83% said that classes in interpersonal communications skills had ‘extremely high value.’ Employment law and business ethics followed, at 71% and 66%, respectively. Where was change management? At 35%. Strategic management? 32%. Finance? 9 Um, that was just 2%. So in some cases HRDs don’t feel they need to contribute, while in others they feel they need to contribute but can’t. • During research conducted by McKinsey and Company, corporate officers (CEOs/ presidents and their direct reports) were asked, ‘Do you believe that HR could be a high-impact business partner?’ Eighty percent of the corporate officers said it was critical or very important that HR be in that role. However, only 12% believed they 10 were actually playing that role within their respective organizations. The challenge is CEOs want and need it, so how does HR step up to the role? 2.3 Role model ‘I also want HR to be a driver CEOs expect the HRD to be a role model and thought leader, someone who can inspire confidence in managers in their ability to manage people and in a for transformation; so they number of key internal stakeholders (staff, managers, board colleagues, exec can’t only be support, I need and non-exec etc) and external stakeholders (customers, shareholders, unions, partners etc) in the organisation’s ability to deliver high performance. them to lead.’ • I also want HR to be a driver for transformation; so they can’t only be support, I need them to lead. 11What CEOs want from HR Nick Holley 2.4 Personal confidante A majority of CEOs, though not all, looks for advice and support not only on people and organisational issues but on the personal ups and downs of leadership. • According to Professor Sparrow, the head of HR often acts as a valued listener and adviser for the CEO. ‘The relationship works best when the head of HR becomes an informal sounding board, offering practical feedback on the CEO’s thoughts,’ he says. ‘CEOs tend to be creative and full of ideas, but they sometimes need a reality 11 check’. ‘One of our jobs is to provide They want more than simply passive support but challenge as a sounding board and honest broker who provides an unbiased view. They expect HRDs to be feedback to the CEO himself more of a challenger than other directors not only on people issues but also on about how his leadership their style and alignment. CEOs recognise that often they are the only person who will tell them the truth. style affects the executive • She’s a very effective prodder; I can’t ignore these issues, she doesn’t let them fester committee,’ in the noble art of inactivity. • ‘One of our jobs is to provide feedback to the CEO himself about how his leadership style affects the executive committee,’ he says. ‘We both have a duty to tell him how it really is.’ This feedback is particularly important given the reticence of many employees to criticise directly those who are above them in the hierarchy. The head of HR may therefore be able to obtain more accurate insight into what the organi- sation as a whole is thinking about the CEO. ‘People might not want to tell me what I could do better,’ says Ms Dimes. ‘The head of HR gets a different answer than I would. He also meets a broader range of people throughout the organisation than I 12 do, and they might tell him what I could improve. However, while CEOs expect HRDs to be a prodder, they also expect them to move beyond just giving advice to taking accountability – not ‘you should do this’ but ‘we should do this’. In many cases CEOs expect them to fulfil this confidante role across their leadership team. • 1 to 1, so forge a relationship with me, a confidante, someone I can trust and talk about issues with. Also a 1 to 10 relationship with exec committee members sup- porting them in their roles. Finally 1 to 100, truly leading the function to provide support to 10,000. The key theme here is that this isn’t part of the job description it is something that many HRDs had stepped into. Once a CEO had experienced it, it became an expectation, so it is critical to step into the space and earn the role even if it isn’t formally articulated or asked for. • He’s bright, young, energetic, on his way up and grabs any opportunity to contribute. 2.5 The data The online survey data reinforces these findings with a degree of consistency of views between HRDs and business leaders. ‘Identifying the implications of the strategy on organisational and people issues’ was seen as the number one priority followed by ‘Providing me with personal honest feedback’. 12What CEOs want from HR Nick Holley Identif y strategic implication s Provide me with personal feedback Employee engagement Honest broker within top team Respond to employees and managers Involved in business beyond HR Leaders HRD Ethical guardian Overall Honest broker between CEO and top team Aligning brand and culture Balancing short and long term Engage peers Remuneraoti n Committ ee 0 1 2 3 4 5 6 7 We asked a more detailed set of questions around the role of the HRD in the online survey compared to the more open-ended questions in the interviews. It is interesting to note how issues around the leadership team rather than the leader are seen as important by HRDs, but less so by CEOs. In the next section we will explore this in detail. There are also some interesting findings when we compare different populations. When we look at different sized organisations we find that ‘Responding rapidly to manager and employee concerns’ is the second most important role, whereas in the largest organisations it is the ninth. Indeed in the interviews the larger the organisation the more HR is seen as a strategic enabler for the organisation whereas in the smaller organisations it is often seen as a support function for management. This may be a function of the HR capability that smaller organisations can afford and their relative position, but we believe the importance of the strategic agenda shouldn’t be size dependent. The lesson perhaps is for HR people in smaller organisations to work even harder to fulfil these strategic needs and to grasp the strategic role with both hands, because it won’t be given to them. Identif y strategic implicatio ns Provide me with personal feedback Honest broker within top team Employee engagement Involved in business beyond HR Honest broker between CEO and top team 10,000 1,000 to 10,000 Balancing short and long term 1,000 Aligning brand and culture Respond to employees and managers Engage peers Ethical guardian Remuneratio n Committ ee 0 1 2 3 4 5 6 7 8 13What CEOs want from HR Nick Holley When we compare sectors there is very little difference between public and private sector organisations, but in charitable organisations there is a much stronger focus on ethics and culture, both being seen as the top roles for HR. Idenfti y strategic implication s Providing me with personal feedback Employee engagement Honest broker within top team Respond to employees and managers Involved in business beyond HR Charity Public Ethical guardian Private Honest broker between CEO and top team Aligning brand and culture Balancing short and long term Engage peers Remuneratio n Committ ee 0 1 2 3 4 5 6 7 8 14What CEOs want from HR Nick Holley 3. In terms of the HR Director and where they personally focus how do you see the balance between the following? • Running the HR function and delivering the HR agenda • Contributing more broadly to running the business as a member of your lead- ership team over and above their HR role • Being a personal confidante • Facilitating the top leadership team The data shows that leaders value the organisational more than the interpersonal elements of the role. As can be seen from the interviews, this seems to be because the organisational elements are a constant, while the interpersonal are situational; so sometimes they matter more, sometimes less. Everyone ranks running the HR function highest, but leaders value the broader contribution to a greater extent than HR does. 2 2.5 3 3.5 4 Running HR functio n Overall Contribunti g more broadly HRD Leaders Facilitanti g top team Personal confidante Again if we look at populations, smaller organisations again focus on the functional, while the largest weight all four roles more equally. 2 2.5 3 3.5 4 Running HR functio n 1,000 Contributin g more broadly 1,000 to 10,000 10,000 Facilitanti g top team Personal confidante 15What CEOs want from HR Nick Holley In terms of sectors, private and public organisations have similar scores while running the HR function ranks strongest for charities, and facilitating the top team ranks lowest. 2 2.5 3 3.5 4 Running HR function Private Contributin g more broadly Public Charity Facilitan ti g top team Personal confidante In the interviews the key is that the top two responsibilities (running the HR function and contributing more broadly) are constant but the other two (facilitating the top team and personal confidante) are situation dependent. • It fades in and out depending on the situation and time and on the relationship we build between each other. • Management is an interaction between person and context so HRD will do all of ‘if everything running well them and where we are depends where she focuses. • Varies by time if everything running well it’s about contribution to the business. it’s about contribution At times we’re dysfunctional and it moves into facilitation, then it works well and it to the business. At times drops away again. we’re dysfunctional and it If everything is running smoothly, the first two responsibilities dominate but where there is dysfunction the role switches into the others, into a more moves into facilitation, then facilitative mode. Indeed, the balance between the top two can vary depending it works well and it drops on need. away again.’ • A year ago she was focused on leading an HR people strategy today she’s part of a corporate team driving the organisation forward after a merger. The most contentious is facilitating the top team. It is very hard to facilitate and be part of the top team so you have to be empowered by the CEO or the rest of team to do it or you have to earn the right to challenge their effectiveness. If you are successful as a personal confidante to the CEO it is more likely that she will see you in the facilitation role. • Facilitating the leadership team is very important. I give the HRD the mandate to facilitate the group so they co-operate better. She is the glue of the executive team, she needs to be connected to every person where they stand, where there are issues between them. 16What CEOs want from HR Nick Holley • Dinesh Paliwal, CEO of Harman International…reveals that his head of HR can act as a vital bridge tween the CEO and the executive committee. ‘He not only needs to align people from different backgrounds, different nationalities, and with often very different personalities’, he says. ‘But he can also clarify my ideas to those who haven’t fully understood them, and perhaps, in a very sensitive way, make me ‘his head of HR can act as aware if one member of the executive committee has a personal issue that is tem- a vital bridge tween the 13 porarily affecting their work’. CEO and the executive Many CEOs see this as their role and are unwilling to delegate it, so it depends on the style and type of CEO, but others realise their senior team may be more committee.’ comfortable talking to their HRD than to them. It can therefore be a formal or informal role, a direct role or sometimes a partnership with the CEO to create a functioning top team. • My style is when I have something to tell someone I do it; I don’t delegate this. • As CEO I can delegate authority but not responsibility; I can delegate authority for my team to my HRD, but mindful responsibility lies with me. As one person highlighted, the challenge is when the issue is the CEO. You have to be very brave and very politically savvy to step into this role when it’s needed but not asked for, but if HR is accountable to a broader set of stakeholders than just the CEO then it has to be willing to take the risk. There are very few CEOs who don’t recognise and value the confidante role, but the recognition comes from a number of different angles: • There are issues that aren’t 100% obvious to me. • I’m not aware of the shadow I cast. • It’s a lonely job. • I get lots of advice and opinion but I don’t trust it all. • I am focused on so many things I can miss things. • I turn to the HRD at certain times for certain advice. • I want to understand how I’m perceived. ‘I need a balance between • I want to think how to adjust my style. • I need a balance between a personal and professional confidante. My chairman has a personal and professional been a professional confidante but can’t be a personal confidante. cond fi ante. My chairman • I want ears on the ground. has been a professional • I want someone to be watching my back. cond fi ante but can’t be a • I came through finance and a lot of these personal issues just aren’t my forte. • A personal coach in terms of my attitude and behaviour. personal cond fi ante.’ • When communicating to a broader audience I’m looking for feedback, e.g. stop joking every five minutes. • If I’m not clear that I’m not doing well enough I expect my HRD to tell me. • Give me very honest feedback on how I’m perceived in the organisation. • Challenge me and push me out of my comfort zone. • Feedback, even rude feedback, is the only way I can move my ass. I need to be pushed. • I’ve got a problem with a senior guy – not sure what I should do, what do I need to do, what options do I have? 17What CEOs want from HR Nick Holley In many cases it isn’t a deliberate request to be a confidante it often just happens because of a specific need or because of the personal qualities of the HRD. • The last two don’t come naturally to most HRDs I’ve worked with, if I don’t give them the mandate they will stick in their core role. • Others are essentials; HR earns the personal confidante role. ‘HR earns the personal • When I coach HRDs I will ask if the CEO confides in you, if they are confiding in someone else why isn’t it you? cond fi ante role.’ In most cases it is personal qualities that earn the role rather than being a part of the HRD job description. • Comes from being a confidential trusted adviser who can whisper in the right ear at the right time. • Better if it is HRD but so long as it’s happening it doesn’t have to be you, it’s not about you, it’s about the needs of the CEO. It is also interesting to note the variety of personal qualities that CEOs say lead to them using their HRD in these roles: direct, clear, neutral, no personal agenda, objectivity, courage, listening, patience to wait before responding, reflection, layered, more rounded response vs shoot from the hip, thought provoking, climate sensor, charisma, chemistry, interpersonal stuff It’s interesting to note none of them mention HR expertise, it is all about the personal qualities but the most common among them are integrity, trust, complete confidentiality and honesty. In reflecting on all the interviews this is a common theme in so many of the conversations and is an absolute non-negotiable. HR needs to be seen to be above game playing, without a personal agenda, focused on the organisation not on themselves. We come back to this theme when we look at personal qualities and why CEOs sack HRDs. 18What CEOs want from HR Nick Holley 4. How do CEOs measure the success of their HRD and of their HR function? In the same way as CEOs expect multiple layers from HR, so they measure it in multiple ways. What is interesting is that many of these measures aren’t things traditionally measured in HR but are related to a much broader organisational agenda. 4.1 Some of these measures relate to processes A minority of CEOs are interested in HR processes such as talent development, performance management, recruitment, succession planning, disciplinaries, tribunals, compensation (especially in financial services) etc or the delivery of specific projects against KPIs set at start of year, but the majority view was that HR needs to measure these things but they aren’t things CEOs are interested in. 4.2 Some of these measures relate to quantiafible outcomes What are of greater interest are the outcomes of what HR is trying to achieve. • There are very concrete measures... I hold HR accountable not their sole responsibil- ity but it falls back on HR. Some of the CEOS, particularly those from a finance background, are interested in numbers, i.e. quantia fi ble outcomes, not in isolation but measured against competitors and sector, and not just direct competitors but competitors for talent. Which metrics depend on what is required for the organisation to succeed. • Engagement, EOS data • Attrition • Diversity • Career progression, pace and quality • Talent ratios and pipeline • Sickness and absence • Union negotiations (especially in the public sector) • Well-being • Leadership and broader organisational capabilities, especially the top two to three capabilities needed to deliver the business strategy • Winning business due to differentiation What doesn’t work for CEOs are massive packs of HR Management Information that don’t relate to their agenda. 4.3 Some of these measures relate to qualitative outcomes The more engaged and sophisticated CEOs use much subtler measures, in many cases based on their subjective sensing of the climate in the business and towards HR. ‘It’s sensing it’s about trust • It’s sensing it’s about trust not just hard measures. • Based on lots of decisions I form a picture. not just hard measures.’ 19What CEOs want from HR Nick Holley To many CEOs, the data that HR gives them is of no interest and in some cases raises questions about HR’s credibility rather than enhancing it – why are they telling me irrelevant things, don’t they realise they don’t matter, don’t they realise it makes me question why they focus on pure HR issues and not on what is relevant to the business? • Focus has to be qualitative not quantitative. One of the things we implemented were processes that failed qualitatively. Some of these measures relate to HR. ‘Measure function on • Credibility, perception of HR as administrative or enabling. • Need to move role to enable managers to manage people not overload them with credibility of the function; HR processes and systems that are aimed at making HR’s life easier; function is it well regarded?’ needs to be seen as an enabler. • Measure function on credibility of the function; is it well regarded? • She tried to do too much. • Lack of noise in the system and unsolicited feedback. • Almost the converse – no noise coming from the business, no big issues, not being taken to court – that’s good. • Function is about how many interventions from me for it to perform. If once per week doesn’t feel great so work by exception. I measure function by not hearing from it. ‘I know it’s doing badly • I know it’s doing badly when I hear from employees, managers, or – even worse – external. when I hear from • In many cases HR leads but doesn’t ‘do’, so how does the HRD drive account- employees, managers, ability within everyone so that processes aren’t just there to be done but are part of how work is done? or – even worse – external.’ • He’s not accountable for the whole business but I expect him to animate it. • It’s about clarity of responsibilities she leads and is accountable but only within context of us all. • Measure it through the engagement of the management team – very subjective but it’s a judgement you can make where individual has trust of wider manage- ment team, not only in their HR skills but in how they interact and how decisions are made especially with greater weighting on the people element. ‘Risk is – it’s seen as a task • Risk is – it’s seen as a task to be done as opposed to a way of working. HR is a way of thinking about people and it’s everyone. to be done as opposed to a • Role models the values of the organisation; how he holds himself, how she way of working. HR is a way behaves. of thinking about people • HRD needs to be modelling corporate values and behaviours. • Not just a hired HR gun but committed to organisational objectives. and it’s everyone.’ • Personal contribution as a leader around the table. • If they don’t say anything it’s not good. • Way she goes about it, completely straight forward, prods me. Can be insuffer- able, b woman, she’s right again. In my heart of heart, you know she’s right. • How well she works with the FD; if they are co-ordinated and tight it’s very powerful. • Consistent calibre of contributions, taking on proactive leadership role in top team. • H ow she works with top team; do they turn to her for advice? 20What CEOs want from HR Nick Holley • Acceptance but not at all costs. ‘It’s not about being • It’s not about being liked but are her views respected? liked but are her views • Ask tougher questions more often and be more tenacious with those questions. respected?’ • Contribution to solving disputes. • Also did he go too far, was he neutral or did he get too involved with employees? • Q uality of the relationship with the CEO as a confidante. Some of these measures relate to the wider people and organisational agenda. • HR impact on business. • Engagement – not EOS scores, but the overall mood, how aligned and engaged people are. • A shared responsibility with rest of leadership team so shared measures on overall performance of the business but also how we achieve them. • If we’re achieving our objectives by employing psychopathic pirates then that’s no good. • Bringing strategic HR issues to management committee: culture, growth, transfor- mation, social, strategic issues that support strategic decisions. • Ability to question the organisation around ability to survive and grow not just perform today. ‘Her strength is: give her • Accountability not just for HR but wider. • Her strength is: give her two glasses of wine and she’ll wax lyrical about the busi- two glasses of wine and ness not about HR. she’ll wax lyrical about the 4.4 The data business not about HR.’ The data reinforces the message. Once again getting the basics right is critical but outcomes such as engagement, pipeline, retention and winning business, as well as leadership behaviours such as challenge, respect, contribution and simplification are seen as critical by leaders. Measuring HR through SLAs and external accreditation matters less. Ability to challenge Basics Project delivery Board respect Simplification Contribution to leadership meenti gs Leaders Quality of pipeline HRD Overall Emoloyee engagement Employee intention to leave Winning business SLAs External accreditati on Union relati onships 3 3.5 4 4.5 5 5.5 6 6.5 7 Looking at populations the message is similar but unions become more significant in larger organisations, public sector organisations and non-UK businesses. 21

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