What do CEOs want from HR
Do HR directors and CEOs speak the same language?
Do they share the same goals, and do they make each other's lives easier or harder?
HR Business Network asked renowned business consultant Jeff Grout if he though they were on the same page:
Jeff Grout knows business. After transforming Robert Half into the largest specialist recruitment consultancy in the world as UK MD, he was business manager for Sir Clive Woodward from 2002 to 2006, before becoming an independent business consultant specialising in leadership, people management, team building, peak performance, recruitment and retention issues.
He has interviewed top names like Lord Alan Sugar, Greg Dyke and Lord Sebastian Coe, so understands how high-profile brains tick. And this week, he spoke to HR Business Network about HR's role in business and its relation with the person right at the top.
'The stereotypical view of the CEO is 'can my HRD help me achieve my business objectives', or are they getting in the way. HR is always at the cross-roads of re-inventing itself as a more commercial, mission-critical activity, and there's plenty of research like McKinsey that shows that those organisations that get talent right can achieve a far superior business performance. So it's very much about the HR director showing clearly the return on investment to be gained from strong talent management, whether that be with leadership, succession planning, recruitment or retention. All of these are critical.'
He says that part of the challenge is getting the communication right. 'It's about using the right language, so if you are speaking to the chief executive about a plan, don't tell them to do it because it is nice or a good thing to do or it's best practice; tell them to do it because it will improve the performance of the organisation.
'At boardroom level, HR needs to build a case, and they do that by knowing their numbers and being an enabler and facilitator for the CEO to achieve their objectives. Nowadays, it is totally unacceptable for an HR professional to come to a meeting without understanding the drivers of the business and without being armed with financial information.
'I spend a lot of my time working with CEOs, and what keeps them awake at night in many cases is not having the 'people performance' to achieve their objectives. They don't feel equipped, they ask themselves 'have I got the team that's going to get me to where I want to go', so consequently the HR function needs to show it can put that in place and make sure the teams in the organisation are fit for purpose.
'There are key areas where the average CEO needs help. Firstly recruitment at senior levels can be very poor, because some of the worst interviewers are senior line managers because they don't do a lot of it, and when they do, they hire too much on gut instinct. Similarly, communication is poor, succession planning is poor, and this is where HR can make a real impact on the leadership capability of the senior management in the organisation.
'If you asked chief executives what has been their biggest mistake, most of them would say it was a 'people mistake', either not firing or not hiring someone, or promoting them too much.'
One person he doubts made that mistake was Steve Jobs, the technology guru behind Apple who died last week.
'How often are business leaders feted in the way Steve Jobs was? People have been holding candlelight vigils, leaving wreaths outside Apple stores, and that's because he connected with people.'If you want to fill your organisation with great ideas, you need to get them through great people. Apple isn't a technology company, it's a company that's been able to harness the ideas of creative people within it. My view is that HR should be fully harnessing the creativity of people to out-perform the compeititors.'
Jeff believes that an HR professional at board level has an important role to play here, and if companies want their versions of Apple's co-founder, HR needs to help coach and mentor the leader to develop their people skills and communication skills to really engage with the workforce. He cites former BBC Director Greg Dyke as another example of someone who genuinely connected with his staff.
'When he resigned, members of the BBC took to the streets in protest and you saw people crying because as a leader, he had such a big impact.'
He admits though that inevitably this raises the question of whether or not HR has enough influence in the business, and although things are improving greatly, some organisations still don't give HR the prominence it deserves.
'It's much more difficult to do this if HR is not on the board, and there are still a large number of companies where they aren't. It would be unthinkable not to have a finance director on the board, but if you believe like I do that all organisations are people organisations, HR has to be there.'But on the board or not, he says the approach should be the same. In very basic terms he says, the strategy for an HRD should be to carry out needs analysis, look at budgets, assess the potential return on investment, build a case for it, then ensure it delivers financial performance. That, he says, is when the CEO will sit up and listen.
So what does Jeff think ambitious HR professionals should be asking themselves if they want to make a real impact?
“What do you need to do to get on the board if you aren't already?
“What are you doing to drive the people agenda?
“Do you have a clear understanding of the key drivers of the business, and if not, what are you doing to find out?
“Are you demonstrably helping the organisation achieve its strategic objectives?”
Above all, he says, make sure everything HR does lines up with the priorities of the business.