The rise of the CHRO

March 07 2019

Big employers are starting to think differently about what they want from their HR departments and their chief HR officers says Heather Landy of Quartz at Work. As more organisations take a people-first approach to growth, HR is in the spotlight.

As I explored in a previous blog, more and more of the issues leaders are facing are people-centric and this trend is set to continue. With the rise of AI and automation in the workplace, there is increased value being placed on what is uniquely human.

As DDI highlighted at the start of the year, as more jobs and workplace activities are automated, people are freed from tasks that are largely routine and predictable, but they are also challenged to manage new technologies and exercise greater critical thinking and judgment.

Therefore, organisations need to find and grow essential human skills such as communication, empathy, and trust. This brings us onto what Grant Thornton CEO, Mike McGuire calls the people-first growth strategy.

The people-first organisation

“What does it mean for leadership to put people first? And who are the right leaders to do it?” asks McGuire. HR leading the way isn’t a new concept, but it seems that organisations are now playing catch-up by focusing on talent to fuel their growth plans.

In 2015, the authors of a piece in HBR laid out a vision for the future of the CHRO and it’s a piece I often turn back to. People Before Strategy: A New Role for the CHRO (written by Ram Charan and senior leaders from McKinsey and Korn Ferry) introduced the concept of the G3:

“Elevating HR requires totally redefining the work content of the chief human resources officer—in essence, forging a new contract with this leader—and adopting a new mechanism we call the G3—a core group comprising the CEO, the CFO, and the CHRO.”

The vision was that rather than being a supporting player brought in to implement decisions that have already been made, the CHRO of the future will have a central part to play in corporate decision making. This relationship between the CHRO and the rest of the leadership team is at the heart of a people-first growth strategy.

“How could we be a people-first organisation without the chief people and culture officer, the talent function, reporting directly to the me, the CEO?” asks Mike McGuire.

 

CHRO to CEO?

So, could this shift mean that CHRO becomes a new path to the CEO position?

The G3, comprising the CEO, CFO, and CHRO will, according to McKinsey’s model, build the talent systems and culture necessary for linking talent to value. It would therefore make sense that the CEO has an HR and / or finance background.

I hope we’ll see more CEOs coming from an HR background but for that to happen, HR has to be valued as a strategic function within the business. Part of the reason I founded Stratigens was because although I was constantly challenging why organisations make strategic decisions without taking people into account, and without consulting HR, I didn’t have the solution.

HR often doesn’t have access to the data on talent trends, behaviours and activity in external environment that are influencing an organisation’s chances of success. Skills supply and demand, employer brand perceptions, employee expectations, competitor strategy, employment law and HR maturity all impact the viability and cost of doing business. HR needs this credible information to hand if it’s to fulfil its ambitions.

The rise of the CHRO is undoubtedly being facilitated by advances in technology that bring the lens onto talent. At Stratigens we’re proud to be part of this journey and look forward to more CHROs taking the step to CEO.

To see a demo of the Stratigens platform please contact us.