Über die Autorin bzw. den Autor

THE EDITOR

PATRICK M. WRIGHT, Ph.D., is the William J. Conaty GE Professor of Strategic Human Resources in the School of ILR at Cornell University. He teaches and conducts research in the area of strategic human resource management, with a particular focus on how HR practices, the HR function, and HR leaders can affect firm performance.

THE NATIONAL ACADEMY OF HUMAN RESOURCES (NAHR) is an honorific organization where individuals and institutions of distinction in human resources are recognized for exceptional professional achievement by election as “Fellows of the NAHR.” In addition, the NAHR furthers the HR profession through the Chief Human Resource Officer (CHRO) Academy and other philanthropic and educational activities. For more information visit www.nationalacademyhr.org.

Copublished with the Society for Human Resource Management (SHRM), the world’s largest association devoted to human resource management. The Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 250,000 members in over 140 countries, and more than 575 affiliated chapters. Visit www.shrm.org.

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The CHIEF HR OFFICER

The Chief HR Officer offers the most current thinking on the evolving role of the chief human resource officer (CHRO). An essential resource for experienced and aspiring CHROs, the book shows leaders how to best prepare for and perform this critical role.

This comprehensive book shows how, in today's extremely competitive work environment, the job of the CHRO has expanded to encompass many important roles. Among other things, HR leaders must adapt to and address the demands of an increasingly diverse and demanding workforce, globalization, stricter regulatory requirements, increased accountability to the CEO and board of directors, and the complexity of leading the HR function with often limited resources.

This vital guide is filled with rare insights and practical guidance from some of the country's most successful CHROs who have been in the trenches as well as top academics researching the field including Randy MacDonald (IBM), Eva Sage-Gavin (Gap Inc.), L. Kevin Cox (American Express), Mirian M. Graddick-Weir (Merck), and Dave Ulrich (Ross School of Business, University of Michigan, and The RBL Group).

Sponsored by the National Academy of Human Resources (NAHR), the book covers a wealth of topics including how to develop a perspective and set of skills to effectively lead and perform in the role and how to approach strategy, management, leadership, ethics, and talent. In addition, the authors include information on forming and implementing activities that will further the firm's strategy, advice for coaching and counseling the CEO, and much more.

Aus dem Klappentext

The Chief HR Officer offers the most current thinking on the evolving role of the chief human resource officer (CHRO). An essential resource for experienced and aspiring CHROs, the book shows leaders how to best prepare for and perform this critical role.

This comprehensive book shows how, in today's extremely competitive work environment, the job of the CHRO has expanded to encompass many important roles. Among other things, HR leaders must adapt to and address the demands of an increasingly diverse and demanding workforce, globalization, stricter regulatory requirements, increased accountability to the CEO and board of directors, and the complexity of leading the HR function with often limited resources.

This vital guide is filled with rare insights and practical guidance from some of the country's most successful CHROs who have been in the trenches as well as top academics researching the field including Randy MacDonald (IBM), Eva Sage-Gavin (Gap Inc.), L. Kevin Cox (American Express), Mirian M. Graddick-Weir (Merck), and Dave Ulrich (Ross School of Business, University of Michigan, and The RBL Group).

Sponsored by the National Academy of Human Resources (NAHR), the book covers a wealth of topics including how to develop a perspective and set of skills to effectively lead and perform in the role and how to approach strategy, management, leadership, ethics, and talent. In addition, the authors include information on forming and implementing activities that will further the firm's strategy, advice for coaching and counseling the CEO, and much more.

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The Chief HR Officer

John Wiley & Sons

Chapter One

The chief human resource officer (CHRO) role has become one of the most important roles on the executive leadership team. Jack Welch, in his book Winning (2005), states of the CHRO role, "Without a doubt, the head of HR should be the second most important person in any organization. From the point of view of the CEO, the director of HR should be at least equal to the CFO" (pp. 99–100).

This has by no means always been the case. The HR function in general and the CHRO (albeit previously the director of personnel), traditionally played a largely administrative role in most organizations. However, over the past thirty years, the HR function, and especially the head of the function, has been elevated. With this increased status has comes increased pressure.

This chapter examines the trends that have led to the current state of the CHRO role and explores the current pressures that provide opportunities and challenges for those who hold the role. It also presents a guide to the rest of the book. Thus, we will first describe the evolution of HR from the 1980s to now, noting some of the major trends and events that have affected the profession and the CHRO role. Then we will provide an overview of the rest of the book.

Trends in HR The 1980s: HR Goes Strategic!

The 1980s saw the emergence of the concept of strategic HR. Right around the turn of the decade, James Walker (1980) revised his book on human resource planning in which he noted that one consideration in developing an HR plan was the strategy of the business. However, at that time, little knowledge of strategy existed in the HR community (even in the general manager community, strategy had only recently become a hot topic).

Over the course of that decade, the HR profession sought to align its activities with strategy, but it did so largely in a siloed manner. In fact, in one of the foundational books on aligning HR with strategy, Fombrum, Tichy, and Devanna (1984) organized the chapters around such concepts as strategic staffing, the appraisal system as a strategic control, and the strategic design of reward systems. This approach implicitly assumed that each area of HR should align itself around the strategy of the business and that the role of the CHRO was to ensure that this vertical fit existed and to coordinate across these areas to ensure their activities did not conflict with one another, thus creating the horizontal fit.

The 1990s: HR at the Table

Whereas the 1980s saw HR leaders talking about the need to be "at the table" (meaning part of the executive leadership team with responsibility for developing strategy), in the 1990s HR leaders increasingly achieved this position. Dave Ulrich's book Human Resource Champions (1996) defined the major paradigm that would guide most HR professional thinking during the decade. In particular, the role of strategic partner gained unprecedented popularity. Although this was not necessarily new in terms of defining the activities through which HR leaders could work with business leaders for the success of the enterprise, labeling the role caught the attention of those within and outside HR. In addition, Ulrich described a basic HR operating model structure that consisted of the business partners (field generalists), centers of expertise (such as functional specialists from the various HR silos), and shared services (the more transactional aspects of HR).

Although this model provided the foundation on which CHROs could build their organizations, the latter part of the decade saw the emergence of the war for talent, which would become the springboard for the increasing importance of the HR organization, and the CHRO more specifically. Michaels, Handfield-Jones, and Axelrod's book, The War for Talent (2001), suggested that CHROs would become as important as chief financial officers to the extent that they could forge a link between business strategy and talent, act as the thought leader in understanding what it takes to attract great talent, facilitate the talent review and action plans, and become the architect of the development strategy for the top fifty to one hundred HR managers. Almost prophetically, they stated, "Today many more CFOs than HR leaders are on division management teams or corporate executive committees. Now that talent is so crucial to competitive success, look for that to change" (p. 33).

The 2000s: Failings Forward

While the previous two decades saw the CHRO role increase in visibility and importance for competitive reasons, the 2000s saw its visibility and importance increase because of a number of organizational failings. In the early 2000s, the dot-com bubble burst, and this was quickly followed by a rash of corporate scandals. No other company better exemplifies this transformation than Enron. In the late 1990s, Ken Lay, chairman and CEO of Enron, had stated, "The only thing that differentiates Enron from our competitors is our people, our talent" (quoted in Michaels, Handfield-Jones, and Axelrod, 2001, p. 2). By the mid2000s, Enron was in bankruptcy, and Lay, his CEO successor, Jeff Skilling, and CFO Andrew Fastow had all been indicted and convicted. Company scandals at Enron, MCI-WorldCom, Qwest, and Adelphia Communications led to increasing regulatory pressure on companies' financial reporting requirements, particularly as exemplified by the Sarbanes-Oxley Act. This legislation, enacted in 2002, increased the public financial reporting requirements, created personal criminal liabilities for misreporting, and increased the required board governance.

Almost like a bookend, a second set of scandals rocked the business world at the end of the decade with the financial crisis spurred by the collapse of the subprime mortgage market. Massive government bailouts of the financial and auto companies increased government oversight over many aspects of firm operations, not the least of which was executive pay. This government interventionism was mirrored, and to some extent spurred, by a public distrust of large institutions in general and corporate executives in particular. In addition to the existing TARP (Troubled Assets Relief Program) regulations, the Dodd-Frank Financial Reform and Consumer Protection Act of 2010 imposed additional regulation of the financial industry.

Both of these traumatic events have further vaulted the CHRO role into the spotlight. The early company scandals resulted in increased board oversight of the succession, compensation, and performance management of senior executives. The more recent scandals have increasingly focused board attention on CEO pay and risk assessment. Consequently, the time that CHROs spend with board members has increased, and the critical role they play has amplified the risk inherent in their role. Those who effectively manage this new role can achieve new heights in status and impact; those who fail to do so will quickly be asked to leave the company.

Summary

This recap highlights some of the major trends and events that underlay the changing role of the CHRO. Although these events existed at discrete points in time, their impact endures. They have been responsible for creating the requirements for today's CHRO. Although they certainly enlarged the responsibilities, visibility, and impact of the role, they also created a set of pressures that make the role both challenging and difficult. We next discuss these pressures, which serve as the organizing framework for this book.

Pressures on Today's CHRO

As the CHRO role has evolved, the expectations and demands on it have risen dramatically. Today CHROs face five general pressures that make the job both critical and exceedingly difficult. The first two deal with pressures from outside the organization, and the last three emanate from within the firm. These are depicted in Figure 1.1.

First, the competitive pressures are the forces that have changed the competitive landscape over the past few decades. Globalization has resulted in an increasing number of competitors from all over the globe, each with its own unique strength—for example, low-cost labor, highly innovative talent, greater local knowledge, or something else. Globalization also has increased cost competition, which results in CHROs' having to find ways to increase productivity for their firms. Whereas cost competition requires getting cost out of the organization, building a growing revenue stream requires a focus on innovation. Finally, all of these pressures play a part in the development of a global war for talent.

Second, regulatory pressures describe the increasingly hostile regulatory environment that continues to have an impact on firms, particularly in the United States. In the early 2000s, Sarbanes-Oxley increased the reporting and governance requirements for firms. The financial meltdown of 2008–2009 placed an increased emphasis on risk management from both governmental watchdog agencies and shareholder groups. This also resulted in a more activist public policy as the U.S. Congress, the executive branch, and the regulatory agencies felt a need to exert greater control over corporate decision making in order to avoid another crisis. Finally, the health care reform act passed in 2010 will increase government regulation of a number of aspects of health insurance and health care delivery.

Third, one of the greatest pressure sources within the firm is the CEO. As the CHRO role has grown in importance, these officers increasingly interact with the CEO and do so in a way that is unique relative to some of their C-suite colleagues. The war for talent has caught the attention of most CEOs today, and they are demanding that the CHRO ensure that the company succeeds in this area. In addition, when a number of highly intelligent and highly ambitious people are put together, as on the executive leadership team, conflict is unavoidable. Thus, CHROs face the pressure to react to these team dynamics and manage them in a way that results in functional decision making and interpersonal communications. Finally, after a number of leaders in the financial industry earned large compensation packages right before the industry's collapse, executive pay has come to the forefront of public discussions. Certainly CEOs may pressure the CHRO to ensure that the CEO pay package is competitive, but given the subjectivity of the meaning of competitive, this creates another pressure for the CHRO.

Fourth, on the other side of the table is pressure from the board of directors. In particular, just as many CEOs and other senior executives want to maximize their pay packages, boards have increasing pressure to hold those packages down. In addition, boards are increasingly examined regarding their governance and risk management roles in representing shareholders. Finally, after a number of high-profile CEO firings, the importance of executive succession has risen dramatically. In all these areas, the CHRO must react to the pressures exerted by the board.

Finally, we cannot forget that at least externally, people view the CHRO as the leader of the HR function, and that function is under increasing pressure. First, with organizations increasingly competing on their human capital, the demands on HR have increased, and HR functions must become more adept in the areas of attracting talent, executive succession, leadership development, and virtually all other aspects of HR processes. At the same time that the demands are increasing, the function is being asked to meet these demands with fewer resources. Finally, the CHRO must provide for increasing demands with fewer resources, but do so with a function that exhibits significant talent gaps. Thus, CHROs face the pressure of building the talent of the HR organization while simultaneously raising the organization's game.

Overview of the Book

Given these challenges, CHROs must play multiple roles, and it is those major roles that form the structure of this book. Part One describes the CHRO job from a broad perspective. J. Randall McDonald, CHRO at IBM, opens the part by laying out his learnings over almost forty years in HR. In particular he focuses in Chapter Two on what is required to be successful in terms of delivering results and how to develop a perspective and set of skills to perform in the role effectively. In Chapter Three, Eva Sage-Gavin from Gap Inc. describes what she refers to as the art and science of HR. This is the combination of the science in terms of proven tools and frameworks, as well as the art of knowing intuitively how to handle the variety of situations that CHROs face in their role. Richard Antoine, former CHRO at Procter & Gamble and currently the president of the National Academy of Human Resources, describes in Chapter Four the broad responsibilities of a CHRO. In particular, he points out that the critical areas for a CHRO are to deal with ethics, talent, and courage and coaching. In Chapter Five, Patrick Wright and Mark Stewart present the results of the Cornell/CAHRS Survey of Chief Human Resource Officers. They identify the seven roles of CHROs, five of which comprise the structure of the remainder of the book.

Part Two merges two of the roles that Wright and Stewart identified in Chapter Five. The strategic advisor to the executive team role entails sharing the people expertise as part of the decision-making process, as well as shaping how the human capital of the firm fits into its strategy. It entails the activities focused specifically on the formulation and implementation of the firm's strategy. Playing the role of talent architect requires that CHROs help the executive team see the importance of talent, identify existing and expected future talent gaps, and come to own the talent agenda. In many ways, these two roles are two sides of the same coin, with the only major difference revolving around whether the focus is exclusively on issues pertaining to the high-potential talent and senior leadership versus the issues with regard to the entire workforce.

Part Two begins with former Caterpillar CHRO Sid Banwart's chapter on the intertwined nature of talent and strategic advising. He describes in Chapter Six the importance of employee engagement to the firm's success and the need to have effective leaders who can build that engagement. L. Kevin Cox, CHRO at American Express, then provides a clear path in Chapter Seven and a set of guidelines for optimizing talent management. John Boudreau builds on these concepts in Chapter Eight. He shows how HR leaders can engage leaders from other disciplines by applying the logic of their proven business models to vital questions about talent and human capital. Michael Davis, CHRO at General Mills, describes in Chapter Nine the important work of CHROs in shaping and maintaining culture. Laurie Siegel, CHRO at Tyco, describes in Chapter Ten the strategic advisor and talent architect roles she had to play when taking over this role after the near bankruptcy of Tyco. Northrup Grumman CHRO Ian Ziskin closes out Part Two with a discussion of the unique role that the CHRO plays in talent and strategy when working for a government contractor.

Part Three addresses the issues that those in the CHRO role discuss only among their own in a dark corner of a secluded, nondisclosed location. Senior leadership teams are made up of highly intelligent, highly ambitious, and highly competitive individuals who are expected to work together. Needless to say, each individual has his or her own personal weaknesses, and the dynamic that emerges when all are thrown together can lead to significant conflicts that CHROs find themselves in the middle of. This role is a broad one and can entail anything from behavioral or performance counseling to being the personal sounding board for the CEO.

David A. Pace, the former CHRO at Starbucks and now the CHRO at OSI Restaurant Partners, describes in Chapter Twelve the challenge that aCHROmay find when the chairman, CEO, and other members of the executive team find their agendas, personal or professional, in conflict. Elease Wright, CHRO at Aetna, has served under five different CEOs, and in Chapter Thirteen, she shares some of the tips she has found over the years in adapting her style to the style of each CEO. Similarly, Pamela Kimmet has served as the CHRO at Lucent and Bear Stearns, and currently serves as the CHRO at Coca Cola Enterprises. In Chapter Fourteen, she also shares her insights to how to adapt one's style and agenda to different CEOs. Elizabeth "Libby" Sartain, former CHRO at both Southwest Airlines and Yahoo! describes in Chapter Fifteen the need for CHROs to identify their personal values and brand. Finally, Patrick Wright and L. Kevin Cox discuss the results of the Cornell/CAHRS CHRO Survey again, this time with regard to how CHROs perceive their CEOs' strengths and weaknesses in relation to HR.

(Continues...)

Excerpted from The Chief HR Officerby Patrick M. Wright John Boudreau David Pace Libby Sartain Paul McKinnon Richard Antoine Copyright © 2011 by John Wiley & Sons, Ltd. Excerpted by permission of John Wiley & Sons. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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