HR divisions are undergoing a period of transition. There is some disillusionment with the Ulrich Model, which many leapt on, only to find it didn’t have the dramatic effect on the function that everyone expected. So there’s sense now that HR is moving in a new direction.
Across industries, organisations need HR people who are outward-looking and have commercial acumen. Manufacturing and process centric industries may value someone with employee relations experience, but overall, what companies demand of HR is a sharper business focus.
The expectation is that the CHRO of tomorrow’s company will act as an advisor to the CEO, and will lead discussions on how the organisation can use its human capital to achieve business goals.
This means acquiring a business mindset and a broad range of experience across sectors, divisions and even countries. What I see more frequently is a move from sector to sector, for example, a CV that includes spells in finance, commercial services and global manufacturing.
Tomorrow’s CHRO will be expected to play an active part in shaping corporate strategy, and will be called upon to advise the board on issues such as succession planning, remuneration and corporate governance. That calls for clear financial and operational knowledge, if not experience, as well as their own expertise. They will be committed to demonstrating the performance payoff of HR, driving cost-effective initiatives to support corporate goals.
Unfortunately, in some circles, HR’s reputation as innumerate and out of touch with business still sticks. So you need to gain credibility as a business person if you aspire to CHRO. Here’s how:
Broaden your experience
The biggest trend is for companies to demand people, especially at senior level, with non-HR experience. Organisations want someone who has worked in another part of the organisation — in operations, sales or marketing. My advice to aspiring CHROs today would be to get some line experience. That may not always be easy to move out of HR and into other divisions. You’ll probably have to fight to make it happen, but it is vital.
Become a talent magnet
Talent acquisition and management, along with analytics, are where forward thinkers are focusing their efforts. With competition for talent increasingly fierce, recruiting and retaining critical skills to meet strategic goals remains HR’s priority. Mentoring and developing executives is part of that role, as is building a diverse and motivated workforce. It is HR’s job to embed creativity, agility and speed, according to IBM’s Working Beyond Borders study, and to navigate complexity in order to get everyone moving in the same direction.
This means building a strong culture — one that is inclusive and reflects your customer base, and where people genuinely understand their purpose in the business and live its values. HR professionals need to learn to think creatively about how to impart these values. Look beyond your own industry for inspiration: IBM’s study cites Medecins Sans Frontieres/Doctors Without Borders as a perfect template for organisational agility. When Great Ormond Street doctors wanted to improve its turnaround rates, they turned to Formula 1 pit crews for ideas.
Bridge the generations
Millennials have already radically changed the way we work and think about work. Tomorrow’s CHRO will have a clear understanding of this, and the next generation. Digital natives with a keen sense of social conscience and a desire to be heard, Millennials may work in ways that seem alien to older managers. HR professionals must act as the bridge here, ensuring that the business gets the best from its Millennials by learning what makes them tick.
Dig the data
HR is increasingly data-driven, with many organisations desperate for people who can interpret the numbers, so a spell in analytics can be a major advantage.
More often than not, the CHRO will also be head of ‘people analytics’, harnessing data on performance, productivity, engagement, compensation, return on talent investment and succession. An ability to extract meaning from the data will be highly prized, not only because it enriches decisions, but because it lends credibility to HR.
Good analytical skills are also a valuable source of strategic foresight, and allow you to anticipate broader business needs with greater accuracy. Understanding data is a key opportunity for HR to demonstrate its ability to add commercial value.
Gain global perspective
International experience matters more and more — you won’t be a FTSE-250 HRD without it. And it is not just a question of working overseas, but of living there, so that you acquire a multicultural mindset. US experience used to be the primary goal, but organisations are now looking for people who’ve lived in China, India and Malaysia.
What other skills do HR people need to build sustainable teams? You have to be a good networker, and adept at integrating social media into what you do. You need a unique combination of diplomacy and directness to be able to communicate with employees and board members alike.
You must be grounded, numerate and have a real understanding of the commercial infrastructure of your organisation. That means you have to be able to read a balance sheet. Overall, you need to be a credible individual with deep functional expertise and a broad business understanding.
It’s a big ask, and people with these skills are rare. If we are to develop tomorrow’s CHROs, HR needs to raise the bar a bit: we need to sharpen up how we develop people for careers in HR.
I’d like to see is professional bodies and industry representatives pushing people to become edgier and more innovative. We need organisations that will give HR rigour and leadership, and will see that it filters down to university and educational teaching.