I’ve had the honor of working with famous CEOs that expected and got A Player heads of Human Resources. Some HR heads rose to CEO (John Hoffmeister, Shell) and others were retained when a new CEO was named (Bill Conaty, under Jack Welch and Jeff Immelt). But, too often HR has the suffered the Rodney Dangerfield issue –“I don’t get no respect.”
Please don’t shoot the messenger (me!). I asked three dozen CEOs what they think of their top HR professionals. I heard a lot of versions of, “They’re good people and competent in HR narrowly defined, but they aren’t tough enough on talent and not focused enough on the most important strategic decisions.”
One CEO pointed to a current issue of a prominent HR magazine that has articles on union organizing, e-verify, helping women get to the top, competency models, how to get ahead (emphasis on accepting change, not being afraid to be critical, communicating better), getting certified in payroll, personalizing training, having Millennials teach tech to older managers, running an efficient HR department (how: automate), and using technology for sourcing candidates. The CEO said, “These are all worthy topics but said, “HR, you don’t get it! Performing in these areas is just the routine of HR, and it’s hard to connect these things to profits.”
The main advice to HR from my unscientific sample of CEOs is:
- Get an MBA, not a Masters in Human Resources. Think like a business person, not an HR specialist. Study with future CEOs, not just future heads of HR.
- Hold peers accountable for maintaining an A Player standard. Be tough minded. In talent reviews don’t wait for the CEO to say, “Good ‘ol Charlie has missed budget 3 years in a row and must go.” Do that yourself.
- Measure quality of hire, and do it honestly. I met with the heads of HR of just the largest 100 companies in the world, and they said they mis-hire people 75% of the time. The head of HR for a large pharma said in a professional meeting, “We achieve 97.5% good hires.” The moderator asked how “success” is defined and the answer was,”We send an email to the hiring manager 30 days after someone is hired, asking, “Does the person you hired a month ago have skills to do the job?” Huh? That’s like asking if the new hire has a pulse.
- I’ve been in meetings in which CEOs rolled their eyes when HR bragged about reducing time to fill jobs and cost to hire, and said, “Great – we mis-hire 75% of the time but we’re quick and inexpensive doing it.” Use hiring methods with documented success of 75% high performers hired. Measuring quality of hire HONESTLY is one mark of an A Player head of HR.
- Be realistic. Look at yourself honestly. A CEO sent me an article in a recent CFO Magazine, it showed that HR inflates their influence in M&A:
Finance and HR have different opinions regarding the extent to which HR actively participates in M&A transactions. In the eyes of finance managers, HR overestimates their level of participation in choosing target companies, due diligence, and integration. I get HR magazines and cannot recall any article suggesting how HR can be effective in these aspects of M&A. But for many companies, M&A is discussed all the time by the rest of the C suite.
This is just one example of a contribution HR could make if HR had the education and experience to offer valued insight on strategic initiatives that “move the needle” for the company.
CONCLUSION: The vast majority of HR heads I’ve known have been perceived by CEOs to be soft – paying attention culture, emotional intelligence, etc. – which is fine — but NOT really understanding the business operations and finances, and not contributing as much as other functions to the strategic issues that determine the success of a company. Hence, CEO advice is to get a business education, learn operations and finance, and develop a reputation for REQUIRING the hiring of high performers and in performance reviews NOT letting managers get away with excusing chronic low performance.