The new ChRO BRand: hR’s pROmise Of value By Flavio Kosminsky and Kathleen Cannon, Ed.D.

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The last 18 months has imposed a tremendous burden on the CHRO (Chief Human Resource Officer). They were front and center in their companies’ crucial cost cutting initiatives. In order to adjust to the ever deteriorating business conditions, much of the restructuring was done in dramatic circumstances—linear cuts targeted at specific cost reduction level, efficiency taking precedence over effectiveness, and short term survival trumping long term returns.

It seems that the worst of those days are already behind us. And, even though taking extreme care with short term indicators is still mandatory, CHROs now need to ensure that their companies become fully prepared to capitalize on the business opportunities that will arise from an improved economic environment.

As members of the executive boards of their companies, CHROs will help formulate new strategies and design innovative operating models. The success of these strategies will depend heavily on a work force that is likely to be feeling somewhat anxious, de-energized and cautious about their future and an operating model with major “holes” in terms of capabilities, competencies, and potential to lead the turnover.

The ChRO brandIn the last dozen years or so, senior HR leaders would have been hard pressed to open an industry publication, read an article online, or attend an industry-related function that didn’t address the Human Resource professional’s “seat at the executive table” referring to the need for HR to be aligned and integrated with the overall organization vision, mission, and strategy.

Today, although HR professionals have earned their place at the table, the current focus needs to be on how they can bring value and a unique perspective to the executive table. Enter the CHRO brand. The same way that all the buzz in the past was about the HR seat at the table, today’s buzz is all about brand. And, while there are as many definitions of “brand” as there are articles about the subject, we think the simplest definition is that “a brand is a promise of value.” By default, if a person’s brand is their promise of value, then the role of the CHRO is the promise of the value they bring to the executive table.

As members of the executive boards of their companies, CHROs will help formulate new strategies and design innovative operating models.

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Executive branding—a definitionAn online article on Brand Channel reporting on CEO brand research (Colyer, 2003), found that dynamic CEOs and other C-Suite leaders are often automatically and intrinsically linked to the companies they represent. Their research further shows that a CEO’s brand often accounts for up to 50 percent of the organization’s overall brand reputation. Like the CEO, the rest of the C-Suite leaders contribute to the organization’s brand equity. In the case of the CHRO, he or she needs to realize that what they say and do can directly affect the organization’s talent brand, and by default, the organization’s ability to attract, develop, and retain top talent.

That same article (Colyer, 2003) quotes leadership brand expert Leslie Mayer, noting that the leadership brand “starts with who they are, their style. Beyond that it’s values, things they hold dear, why they turn up for work and so on. Finally, it’s the understanding of what the market needs from them, and how they can have a resonance with their market. It’s about how they relate to customers, shareholders and employees” (p.1).

Executive branding consultant William Arruda (2009) describes the recent trends in executive branding as delivering on a differentiated promise—an executive stands out through his or her unique promise of value. Arruda is quick to add that branding isn’t about packaging or spin or building a false image. Instead, he proposes that an executive’s brand is built on authenticity; really understanding your unique promise of value and what makes you stand out from others.

Rather than creating a brand from scratch, Arruda (2009) says that executive brands are uncovered and nurtured using three basic steps—extract, express, and exude.

• Extracting a brand refers to unearthing a unique promise of value. Extracting a brand begins with defining strengths, goals, values and passions; identifying the people who need to be aware of the brand; and understanding peer groups and competitors—both inside and outside the organization.

• Expressing a brand is synonymous with building brand visibility. Expressing includes creating a brand communication plan—and executing the plan so that people who can help the executive be successful know and understand the brand value.

• Exuding a brand refers to managing the brand environment—everything that happens around the executive. Exuding the brand is about

In the case of the CHRO, he or she needs to realize that what

they say and do can directly affect the organization’s talent

brand, and by default, the organization’s ability to attract, develop, and retain top talent.

...an executive’s brand is built on authenticity; really understanding

your unique promise of value and what makes you stand out

from others.

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consistency, alignment (with others and with the organization brand), and even personal brand identity that includes how the executive dresses and the type of briefcase he or she carries.

Arruda (2009) concludes with noting a quote from Anne Morrow Lindbergh who said “the most exhausting thing you can be is inauthentic.”

The Role of the Chief Human Resource OfficerResearch over the years points to the role of the CHRO as revolving around a

combination of values, functional responsibilities, competencies, and challenges. Korn/Ferry Chief Marketing Officer Michael Distefano sees the role and brand of the Chief Human Resource Officer as “the person responsible for linking the corporate strategy to the people strategy. Ultimately, it is the people that drive strategy, not vice versa and therefore you could argue there is no more important role in any organization.”

five critical hR competenciesIn an interview reported in HR Horizons (Beck, 2007), a newsletter that discusses strategic HR issues, HR expert David Ulrich outlined the five competency domains HR officers needed to possess and nurture in their organizations. The five competencies include:

• Being a credible activist—someone who understands the business well enough to build trust with other leaders

• Demonstrating operational efficiency—being an administrator who can expedite HR work

• Contributing business acumen—a leader who can talk easily about the business—especially in financial terms

• Managing talent—a person who can align HR strategies and tactics with organization goals

• Leading cultural alignment and strategic change—someone who can lead—and sustain—change efforts

But these five competencies are not enough according to Ulrich (Beck, 2007). Too often HR focuses on only one or two of the competencies and these are usually the more traditional HR functions like staffing, training, and compensation. Instead, Ulrich suggests that HR focus on work outcomes—the ROI of efficient and effective HR practices.

Ultimately, it is the people that drive strategy, not vice versa and therefore you could argue there is no more important role in any organization.

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Ulrich (Beck, 2007) notes that the need to change the HR focus is brought about by a host of environmental forces that include expanding global markets; increased customer expectations; new information technology; emerging employee demographic trends; and industry consolidation and convergence. Ulrich concludes by saying the biggest challenge HR—and with that the Chief Human Resource Officer—faces is how to deliver value. HR professionals need to shift to playing four roles:

1. From employee champion to human capital developer. This is a switch from the role of HR as employee champion to a role caring for employees today as an advocate and tomorrow as a developer.

2. From administrative expert to functional expert. Ulrich notes that it isn’t enough to get things done efficiently; HR needs to get the right things done efficiently.

3. From strategic partner and change agent to strategic partner. While this may seem confusing at first glance, Ulrich explained that being an agent for change isn’t enough if the change itself isn’t linked to business strategy.

4. New role as brand leader. According to Ulrich, HR leaders embody the brand of the organization. And, because HR leaders and professionals are in touch with everyone at every level of the organization, they are in a position to make sure the brand is reflected in all HR talent practices including staffing, training, and communication.

An Executive Insight article on maximizing strategy execution (Kling & Kosminsky, 2006) reinforces the concept that business acumen is a critical HR responsibility, primarily because business results depend on aligning strategy, organizational models, and people. Kling and Kosminsky note that organizations access three types of capital to support strategy—competence capital, motivational capital, and organizational capital. All three types of capital involve people alignment.

• Competence capital refers to the fit between strategy requirements and employee skills and experience

• Motivational capital is the organization’s ability to motivate employees to do their best

• Organizational capital measures the fit of the organization’s strategy with the organizational model

Organizations access three types of capital to support strategy—

competence capital, motivational capital, and organizational capital.

All three types of capital involve people alignment.

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Key ChRO challengesEvery year the HR Policy Association conducts a survey of its membership to identify the key concerns of Chief Human Resource Officers as they strive to align HR programs and policies with the organization’s business strategies (Principal CHRO Concerns, 2009).

Leadership development and succession and executive compensation practices and disclosure requirements were at the top of the list of CHRO concerns and challenges—both scoring 76%. Next came health plan strategies, employee/union relations, and organizational change, culture transformation and globalization, which scored 60%, 54%, and 42% respectively.

Similar to Ulrich’s findings (Beck, 2007), the HR Policy Association (Principal CHRO Concerns, 2009) found that HR functional development only ranked 26% in their list of concerns.

ChROs—born or made?Patrick Wright (2008) at Cornell University has been researching the CHRO role for the past three years and has identified seven tips for building the CHRO talent pipeline. His tips coincide with the development philosophy supported by much of the high-potential management and development research.

Identify the pool of successors earlyBoth Wright (2008) and Eichinger and Peters (2005) reinforce the need to identify the candidates who have CHRO potential 15 to 20 years before they would be expected to sit in the CHRO seat.

Wright (2008) reports on one interview with a CHRO who was telling him about a 25-year-old in his organization who he felt had potential to become a CHRO someday. It was not that he had identified the 25-year-old as his successor but rather that he had identified the person as having potential for the role and was developing the person with succession in mind.

In their article titled “There are seven CEOs working for your organization today,” Eichinger and Peters (2005) identified potential CEOs in a list that includes an 18-year-old intern, a 23-year-old MBA, a 28-eight-year-old with a strong track record on two high-visibility assignments, a 35-year-old with a diverse international background, a 42-year-old identified as a strong performer, and a 50-year-old proven performer.

Leadership development and succession and executive compensation practices and disclosure requirements were at the top of the list of CHRO concerns and challenges.

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Provide potential successors with internal and external development opportunitiesResearch by Lombardo and Eichinger (2009) reports on the 70.20.10 development rule where individuals learn the most from on-the-job experiences (70%), followed by learning from others (20%), and last learning from courses (10%).

While the percentages differ slightly (80% of learning is on-the-job learning), Wright (2008) agrees with Lombardo and Eichinger that most learning is experiential learning. Wright adds, however, that where high-potentials get sent for external learning experiences tells them how valued they are. He notes that sending high potentials to high-visibility outside programs like University of Michigan, Cornell, or the University of Southern California signals the organization of the value placed on the individual. An added benefit to the right external programs, according to Wright, is the access to a network of similar high-potentials.

Manage CHRO careersWright (2008) suggests that CHROs need a carefully managed career that includes a combination of generalist and specialist roles. Without generalist roles, potential CHROs will not gain a deep understanding of how business works; without specialist roles the same person can not develop deep functional expertise. Since a CHRO needs both experiences, potential successors need to be moved through a variety of roles to develop the needed depth and breadth of experience.

In an interview in The Human Resource Professional’s Career Guide (Palmer & Finney, 2004), Gap HR executive Eva Sage Gavin reports receiving similar advice early in her career. “It was presented to me that by having a lot of lateral experiences in my portfolio that I can draw on, I’d be able to use that diversity of experience throughout my entire career to give me a kind of credibility that I wouldn’t have been able to get if I just aimed for upward progression” (p. 79).

Linda Hyman, Senior Vice President, Global Human Resources for Korn/Ferry International had a similar experience. “I agree with Eva’s advice and managed my own career accordingly...being willing and available to take on both specialist and generalist roles. Each experience reinforces the other and ultimately helps you to make faster, better and hopefully more credible decisions that others are willing to support because you have personally walked in so many shoes. I worry a bit today that with the trend

CHROs need a carefully managed career that includes a combination

of specialist and generalist roles.

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toward greater outsourcing of HR functions and an emphasis on business-based HR strategic roles that we may be minimizing opportunities to rotate through a broad enough spectrum of specialist roles.”

Move potential Chief Human Resource Officers out of HRAccording to Wright (2008) the jury is still out on the need for CHROs to have experience outside of HR. Some of the CHROs Wright has interviewed spent their entire careers in HR while others insist that outside line experience is critical to development.

In their book, 100 Things You Need to Know: Best People Practices for Managers and HR, Eichinger, Lombardo, and Ulrich (2004), report on research that disagrees with Wright noting that line jobs on average deliver much more development than staff jobs. While the authors found that both line and staff jobs deliver development opportunities, typical line jobs deliver more lessons than typical staff jobs at the same level.

International exposureWright (2008) agrees, noting that today’s CHROs need to have much more of a global perspective than their predecessors. Wright differs from other researchers, however, in his views on the optimal length of overseas assignments. While many suggest an optimal international exposure of two to three years, Wright finds that special projects of one to three months provide a rich enough experience without risking the individual losing touch with the main office that may come about with a two to three year assignment.

An article in Workforce Management (HR Capitalist, 2009) suggests that long-term international experience can hurt more than help careers. Quoting findings from the Academy of Management, the article revealed results of research that examined the careers of over 1000 executives and found that executives who spent more time away from their organization’s headquarters took significantly longer to reach senior

leadership status. Instead, according to the Academy of Management findings, “face time” was still critical for advancement.

Get them out of their comfort zonesWright (2008) emphasizes the importance of getting CHROs out of their comfort zones, noting that no amount of preparation truly prepares someone for the role of CHRO. Instead, urges Wright, organizations need to put CHROs in positions where they aren’t totally prepared, don’t have all

...executives who spent more time away from their organization’s headquarters took significantly longer to reach senior leadership status.

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the information they’d like to make a decision, and haven’t faced anything quite like it before. Wright reinforces the IBM method of “double-hatting” HR leaders so they have both functional and business responsibilities—both of which they will need in the CHRO role.

Lombardo and Eichinger (2004) had similar findings in their years-long research on leadership development. In The Leadership Machine the authors note that development is about discomfort because “comfort is the enemy of growth. Staying in our comfort zone...encourages repetition. Going against the grain, being forced or venturing outside the cozy boxes of our lives demands that we learn” (p. 78).

Get them in front of the CEO and board of directorsThe CHRO is responsible for managing the programs that will ensure the workforce is prepared to deliver against the strategy and, therefore, close contact with the CEO and board of directors is mandatory. It’s not about learning from the line managers what it is that the business needs to succeed. It is, in our fast paced world, anticipating directions, competitive moves and, from there, the development of the people. For that, close contacts and active participation in the business is a key requirement for the CHRO’s success.

In her role as global leader for Korn/Ferry Leadership and Talent Consulting High-Potential Solutions, Brigitte Morel-Curran emphasizes the importance of targeted development efforts for high-potential talent. “We believe that exposing high potentials to significant senior leaders, board members, and key customers is a high-impact component in their development, especially when exposure is combined with mentoring. And we think this needs to start early.”

In Building the CHRO Pipeline, Wright (2008) reports on research that reveals the part of the job CHROs feel least confident about is their relationship with the board of directors. Wright notes that new requirements in Sarbanes-Oxley and SEC compensation disclosure rules create a heightened awareness of the CHRO functional responsibilities and critical role in the senior leadership team. Wright adds it isn’t enough for the CHRO to simply show up for leader team meetings, he or she needs to have and present a thoughtful and well-reasoned point of view.

The CHRO is responsible for managing the programs that will

ensure the workforce is prepared to deliver against the strategy and,

therefore, close contact with the CEO and board of directors is mandatory.

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what the new environment means to the ChROIn the current environment, there are a few critical talent and work force related activities and challenges the CHRO needs to address—areas where early success will become a key differentiator in the marketplace both in the short and long term and with scarce or ready availability of resources.

Develop a new vision and sense of purpose The authors suggest it is time for CHROs to revisit the old mission statement, acknowledge that the company has quite successfully gone through an extremely difficult scenario, and renew that statement with the learnings of the hard times and the possibilities of the future—materialized in a compelling vision and strategy. Additionally, CHROs need to manage stakeholder assumptions about the future of the company and about what that may bring to their careers and their well-

being as family and community members.

Align all the senior teamsOnce the mission statement is revisited, the role of the CHRO is to align all the senior teams (geographic, functional, products, etc.) behind the vision, mission and strategy. Ensure cohesion in the thinking, decision making and acting of the whole organization. The senior teams are most likely in much better shape than the work force in general; they (think they) know where the company is going, how it is going and when it will arrive there. But, after so much “battering,” the workforce needs to listen to them almost as a Gregorian Chant—an enlightening message presented in finely tuned unison.

Assess the people and capabilities needed to succeedOnce the vision, the strategy and changes in the operating model become clear, the CHRO and the rest of the senior team is likely to realize that the company either had to let go, lost or in fact never had (because they were not needed, at least in the same “amount”) some of the capabilities that have become absolutely necessary for success. We suggest you don’t take shortcuts here—different people have different perspectives about what is needed. The company’s executives and managers won’t have a good “language” and the right words to talk about capabilities and will use their own experiences elsewhere to define requirements.

CHROs need to manage stakeholder assumptions about the future of the company and about what that may bring to their careers and their well-being as family and community members.

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The ChRO burdenAlong with the CHRO’s brand comes the CHRO’s burden—more specifically we are referring to the Chief Human Resource Officer’s responsibility to their HR teams, their functional responsibilities, and their organizations. They continue to earn their place at the executive table through their ability to focus on three “brand differentiators—strategy, execution, and results.”

Developing strategy refers to helping to create a new vision, a sense of purpose in the organization. It includes aligning the senior leadership team around the company’s vision, mission, and strategy. Executing the strategy is a matter of developing the capabilities needed for success. In execution, the focus is on systems, platforms, and processes. Finally, the primary CHRO burden comes from the organization’s need for results—in terms of people and organizational effectiveness. For the CHRO, the ROI is measured for talent attraction, engagement, performance, development, and retention.

It is this focus on the three brand differentiators—strategy, execution, and results—that deliver on the CHRO’s promise of value and earn his or her right to a place at the table.

Along with the CHRO’s brand comes the CHRO’s burden—more

specifically we are referring to the Chief Human Resource Officer’s responsibility to their HR teams,

their functional responsibilities, and their organizations.

Arruda, W. (2009). What is executive branding? Retrieved online from theladders.com October 12, 2009 from http://www.theladders.com/career-advice/What-is-Executive-Branding.

Beck, B. E. (2007, July). HR at its core. HR Horizons. Retrieved October 7, 2009 from http://hrhorizons.nacubo.org/x129.xml.

Colyer, E. (2003, April). Lights. Camera. Action: CEO in the spotlight. Brandchannel. Retrieved October 12, 2009 from http://www.brandcameo.org/features_effect.asp?pf_id=152

Eichinger, R. W. & Peters, J. (2005). There are 7 CEOs working in your organization today. Retrieved October 8, 2009 from http://www.kornferryinstitute.com/ebook/570/There%20are_seven_CEOs_working_for_your_organization_today

Eichinger, R. W., Lombardo, M. M. & Ulrich, D. (2004). 100 things you need to know: best people practices for managers and HR. Minneapolis, MN: Lominger International a Korn/Ferry Company.

HR Capitalist (2009). Do I really need international experience to be a player in HR? Retrieved October from http://www.hrcapitalist.com/2009/08/do-i-really-need-international-experience-to-be-a-player-in-hr.html

Lombardo, M. M. & Eichinger, R. W. (2009). FYI For Your Improvement™: A guide for development and coaching. Minneapolis, MN: Lominger International a Korn/Ferry Company.

Lombardo, M. M. & Eichinger, R. W. (2004). The leadership machine. Minneapolis, MN: Lominger International, A Korn/Ferry Company.

Palmer, J. with Finney, M. I. (2004). The human resource professional’s career guide: Building a position of strength. San Francisco, CA: Retrieved online October 13, 2009 from http://www.scribd.com/doc/19709673/THE-HUMAN-RESOURCE-PROFESSIONALS-CAREER-GUIDE-wwweducationforcareersusacocc

Principal CHRO Concerns. (2009). HR Policy Association. Retrieved September 15, 2009 from http://www,hrpolicy.org/about_Concerns.aspx

Wright, P. (2008, July 1) Tips for building the CHRO pipeline. Human Resource Executive Online. Retrieved September 30, 2009 from http://www.hreonline.com/HRE/story.jsp?storyId=106219735

References

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Flavio Kosminsky is a Senior Client Partner in Korn/Ferry’s Rio de Janeiro office.

Kathleen Cannon, Ed.D., is with Korn/Ferry Leadership and Talent Consulting Marketing.

about The Korn/ferry instituteThe Korn/Ferry Institute was founded to serve as a premier global voice on a range of talent management and leadership issues. The Institute commissions, originates and publishes groundbreaking research utilizing Korn/Ferry’s unparalleled expertise in executive recruitment and talent development combined with its preeminent behavioral research library. The Institute is dedicated to improving the state of global human capital for businesses of all sizes around the world.

about Korn/ferry internationalKorn/Ferry International, with more than 90 offices in 40 countries, is a premier global provider of talent management solutions. Based in Los Angeles, the firm delivers an array of solutions that help clients to identify, deploy, develop, retain and reward their talent.

For more information on the Korn/Ferry International family of companies, visit www.kornferry.com.