Many of the big issues debated in boardrooms around the globe are inextricably linked to the people agenda. It’s why CEOs and NEDs are looking towards the HRD to support them in addressing the challenges they face relating to organisational design, culture and the implementation of disruptive technology.
According to a poll of CEOs taken by Criticaleye, the two main areas where HR directors can improve is in their ability to think strategically and in how they build alignment in the senior leadership team. Amy Francis, Senior Relationship Manager at Criticaleye, says: “There is immense pressure on HRDs, particularly in global businesses, to develop a talent strategy that lines up with the business strategy.
“In most cases, this requires large-scale organisational change, which is why, if HRDs are to be successful, they need the full backing of the CEO and, ideally, the whole board.”
Criticaleye spoke to leaders to get their views on how HRDs can be effective given the expectations now placed on them. This is what they had to say:
Understand the Business
It sounds simple, but commercial awareness is essential if an HRD is to speak the language of the boardroom.
Yetunde Hofmann, Board Mentor at Criticaleye and Non-executive Director at the Chartered Institute of Personnel and Development (CIPD), says that a good HRD knows what makes an organisation tick. “Maybe they have worked in different parts of the business and also in different professions, but they understand their business.
“They get an understanding of the leadership team; they know where the business is going and they have an idea of how they want the business to get there.”
This goes hand in hand with sound commercial skills, says Yetunde, who in her executive career had senior HR roles for companies including Unilever and Allied Domecq (acquired by Pernod Ricard). “They've got to have the insight and they've got to have the power of influence to really enable the business to follow where they're going,” she adds.
It’s a point that John Duncan, Non-executive Director of The Logistics Institute and former Group Human Resources Director at Royal Mail, also makes. “What CEOs are really starting to value now is the HRD's understanding of the business – its customers, the industry it operates in and how you make the HR game plan align with the business strategy of the company to really drive results,” he says.
Building Alignment at the Top
The HRD needs to perform a balancing act when it comes to building consensus around objectives and making sure that behaviours are consistent. Julie Harding, Board Mentor at Criticaleye and former HRD for the Co-operative Bank, explains: “The HRD’s role in strategy, at one level, is no different to any other member of the executive team. It’s important to contribute to the future of the organisation and its growth.”
She argues that the HRD has a significant role to play in terms of alignment. “So, the strategy needs to line up with the people agenda, it needs to line up with the culture and values of the organisation, and I think the HRD is in a very unique position to ensure that happens,” she says.
Yetunde agrees, seeing HR as a leadership function and successful HRDs as those that recognise themselves as leaders. “They own the people agenda in the organisation and they have the responsibility and the accountability to ensure that things are done right by the people in their business and the people that their business serves.”
A Strong CEO / HRD Relationship
The relationship between the CEO and HRD must be open and direct. It can’t be the case that the HRD is seen internally as the mouthpiece or puppet of the CEO.
Gary Kildare, Chief HR Officer for IBM Corporation Europe, comments: “HRDs and CEOs need to have a very close partnership. There has to be a good chemistry between the two of them. They have to work together.”
Unless they have that trust and mutual understanding, things will unravel. Gary adds: "Every CEO is different, every HRD is different. Some CEOs may be more focused on profit and how they grow the business, others are very focused on creating the team and the talent in order to find the right combination that allows the business to succeed.
“I think this is where the chemistry comes in. There is no point working with a CEO when you are not comfortable with the relationship. If you feel that a CEO is very sales-focused or profit-focused but you’re more relationship or behaviour-focused, then that may not be a particularly good recipe for future success.”
These comments were taken from the following Criticaleye films:
Criticaleye’s HRD Retreat 2019 will take place on Thursday 28th February – Friday 1st March. For more information, and to register your interest, click here