Morgan Philips Group acquires Hudson’s operations in Europe
The CHRO (Chief of Human Resources Officer) has for some time considered their ultimate role to be defined as a business partner. This understanding of leading HR, which has been predominant for several decades, recognizes a core shift in identity from that primarily associated with the transactional administration of core people services to that of helping create value for the business and delivering capability based on organizational need. With businesses continuing to evolve and adapt, it is evident that the role of CHRO also needs to evolve into a new era conceptualized as a reflective partner.1
This new shape of CHRO is the culmination of a four-part evolution (see Figure 1). Each of the phases along the CHRO (and accordingly reflected in HR itself) journey can be considered as a mix of particular levels of capability (i.e., budget, people, time, and focus) and capacity (i.e., depth and breadth of experience, skills base, and industry knowledge) depending upon the purpose and role of HR within the business. Incrementally, this has broadly involved the CHRO evolving from their role in maintaining the business (as a transactional partner), to improving the business (as a service partner seeking to improve value), and most recently changing the business as a business partner.
As a business partner, the focus of the CHRO has been to change the value in the business by delivering on the HR priorities matched to the business plans and the provision of tools and frameworks to lead the change agenda. This most recent phase has involved a broadening of focus and the inclusion of specialist responsibilities that help create value from an individual and organizational perspective. It has included the CHRO leading human resources to expand its capability to include elements of talent management, workforce planning, knowledge management, and more recently, activities such as business governance and improvement. This shift has been instrumental in helping organizations better perform, more readily grow, and leverage their people and culture.
In a context that demands leaner structures, a higher capability for innovation, adherence to increasing compliance and governance demands, and increased organizational responsiveness, it is apparent that the current approach of the CHRO, that incorporates both transactional and specialist elements cannot adequately respond to current organizational needs. It is evident that the role of business partner does not sufficiently describe the evolving and growing demands of the CHRO today.
Whilst in the past these positions have been deemed as senior executives within the company structure, a reframing of the position is required in order to more fully encapsulate the qualitative nature of the relationship required between the CHRO, Executive Team, and the Board of Directors.
Figure 1: From transactional partner to reflective partner.
Thus in order to meet the changing needs of organizations, a further specific shift is needed, moving the CHRO beyond that of a business partner to a reflective partner. Such an evolution is not relevant for every organization, but assumes that the role of business partner has been established for some time and is operating with maturity.
A reflective partner seeks to not only strategically add value through the provision of high quality services and specialist functions, but also seeks to make a significant contribution to the business in alignment with the needs of the CEO in the endeavor of transformation. A reflective partner, working closely with the leadership team, is able to foresee the possibilities around the corner by having developed an excellent knowledge of the people and organization. Accordingly, it is necessary for the reflective partner to enable the executive leaders of the business to confide their thoughts, feelings, and business plans/ actions. The depth and openness of such a relationship enables a closer link between people and strategy, in addition to creating a forum for continuous reflection and the opportunity to pivot based on current or future organizational need.
The nature of the reflection involves a reciprocal flow of information sharing in a manner that facilitates senior leaders to not only share their thoughts, feelings, and business plans/actions, but also for the CHRO to share valuable metrics, research, and trends that equips the leader to have more robust and informed reflection. It is not expected that the CHRO has every piece of data at their fingertips, but they will have developed a culturally-aligned set of external providers who can provide all of the necessary data points and additional capabilities.
Therefore, such a person fulfilling this type of CHRO role, is able to:
provide considered feedback, immediate or delayed, to help process strategic thinking;
incorporate learning from other organizations (or across business units or functions
within the same company) who have experienced similar change or challenges;
foster trust so that feelings on particular matters can be openly shared to sound out
anticipate business risk and issues relating to organizational complexity;
be a source of confiding on sensitive topics requiring delicate and confidential action;
seek out further data points from various sources internally and externally (who must
be also culturally aligned); and
triangulate a range of viewpoints that need to be confidentially gathered.
Combined with this standing within the organization, the CHRO could be described as: a fixer of hard or sensitive matters (such as cultural and performance conflicts); a translator of expressions of intent that require timely and behind the scenes solutions; an early warning mechanism for probable events; and a conveyor of honest feedback of what is truly happening within the business.
Thus, the term “reflective” is deliberate in order to highlight that the CHRO is not necessarily the initiator of discussions, but a facilitator when occasions arise from one-on- one meetings with the CEO or senior executives. Such opportunities are usually informal in nature, often taking place outside the normal business parameters (e.g., on a plane, car/ taxi trips, prior to or at the close of the business day).
In order to assume such a role within the company, the CHRO requires a detailed knowledge of the business activities along with a thorough understanding of the key individuals within the company. It is imperative that the CHRO has an understanding of both the business culture and the explicit needs of the CEO, executives, and Board. The CHRO should have a continuous and visible presence within and across the business in combination with a regular presence with the Board (e.g., REM, safety, and governance committees) and an understanding of the Board dynamics. To provide the sufficient capacity, it is also essential that the CHRO has developed a strategic set of relationships with specialist HR related service providers that are attuned to the organization (and responsive in their capability) with a comprehensive set of tools and frameworks that can be utilized within multiple scenarios and level of complexities to help create synthesis.
Particular competencies required to undertake this role comes with experience and wisdom that can only be acquired by many years of exposure to a broad range of business activities and cycles. To be credible, such a role requires someone with a significant depth and breadth of experience (e.g., across cultures, industries, and regions) and not simply a younger HR type, regardless of their strategic ability. Similarly, there must be cultural alignment between the CHRO and the CEO and Executive Team, else the potential of the relationship will be significantly inhibited. As a key catalyst for change, it is more important for the CHRO to have alignment with the current leadership team (and their goals) rather than the current state of the broader organization. Thus a local (or internal) appointment is not always best as it is not necessarily a predictor of alignment with the culture and intentions of the executive leadership – particularly if the executive team are all, or by majority, expats.
Any person wishing to succeed in this role must ensure that their workday/week allows sufficient time to be free of scheduled commitments that gives “space” to spend time in the company and with externally related agencies/consultants in order to bring in the specific skilled resources. Being the ‘busiest’ HR person will sabotage any potential for the reflective partner approach to be realized, inhibiting opportunities for deeper discussion and responsiveness with the executive leadership. Thus, the CHRO as reflective partner should be seeking to invest (and have available) a significant and proportionate amount of their time every day. Given that many of the most strategic opportunities for the CHRO to be a thought leader are unplanned, their schedule and presence must be sufficiently flexible to respond when needed.
In order for the CHRO (and HR) to succeed as a reflective partner, it is important to stress that they are known, understood, and accepted by the key players within the executive leadership. The CHRO must have a freedom to operate throughout the company whilst keeping the confidence of the conversations held with various people at all levels.
There are three key signals that indicate the role of CHRO operating as a reflective partner. First, continuing invitations to attend (be that at customer, supplier, or team events) and observe executives in action and provide feedback to the leader based on the CHRO’s key observations. Second, constant one-on-one time with the CEO to canvas views and input towards undertaking significant change, achieving strategic objectives, and making key appointments or separations. Third, conversations with individual Board members or committees in regards to cultural, people governance, or compliance issues and in particular improving the alignment with community and customer evolving expectations.
In the current context of organizations that have an increasing appetite for transformation, HR must continue to evolve just as business are required to do. In light of this, CHROs must fulfill a more significant role than that of business partner. In order to operate effectively in this new role as reflective partner, the highest levels of capability and capacity – that which only results from a broad experience and wisdom – are necessary. From an organizational perspective, it is essential that CHROs have sufficient ‘license to operate’ from the CEO and BOD. Without this permission in place, a CHRO simply cannot fulfill this role regardless of his or her intent to undertake the role or whatever title may be on their business cards. As a reflective partner, the CHRO must mirror the current intent and aspirations of the CEO and BOD and have a purposeful voice throughout all levels and functions of the organization.
With so much writing on ‘what’s next’ in HR, it’s clear that any conversation on the future shape of the CHRO must grapple not only with the past approaches, but also the enormous array of global challenges and opportunities – not to elevate HR for its own sake, but to help ensure organizations are best positioned with their people to perform and grow.