At Spencer Stuart, we work closely with our clients to define and shape the candidate specification which lies at the heart of every search. When working on a chief people officer (CPO) search, we
make sure that we fully understand:
- the organisation’s business goals, strategies and any other current issues;
- how those issues affect HR activities;
- how the HR organisation needs to transform or improve itself in order to manage those activities;
- what the successful candidate will be expected to achieve after two years in the position.
Until recently the role of CPO was primarily administrative and operational, rather than strategic. This has started to change with HR directors now expected to contribute to the strategic leadership of the business. This shift in focus is resulting in a gradual evolution in the HR leader’s role in three broad areas:
Purpose: different things are being expected of the HR function, which affects the skills and experience required to do the job.
Means: new ways have to be found to meet these expectations.
Perception: the role of HR is being understood differently.
1. Purpose: strategic advisor
The issues faced by HR are diverse. They include demographics trends; talent management; regulatory challenges; the rising cost of healthcare and pension funds; technology innovations; increasing globalisation; growth through acquisition; along with simultaneous downsizing and expansion of the business; and endless pressure to boost workforce performance. This has made talent management a top priority and having the right HR organisation in place can make a critical difference.
At the centre of these challenges is the CPO, who is required to act as a strategist — a leader who is not only able to manage the HR function and operations team, but can most importantly provide
direct support to the CEO on a range of critical business issues. The CPO’s main role has now shifted to being a coach and special advisor to the CEO and board of directors.
In addition to supporting and implementing overall talent management strategy, CPOs must play a key role in developing and contributing to that strategy — helping the CEO and other leaders craft strategies that make sense in the light of current labour trends, available talent, and future development of the workforce.
2. Means: organisation and performance advisor
Thanks to new technologies, HR systems and processes are now more manageable. HR no longer performs simply a back-office administrative function, but has evolved into a partnership role
aimed at maximizing the performance of the workforce. Companies now face an overwhelming number of workforce organisation issues, from virtual teams, contingent workforces, job-sharing and flexible hours to workforce diversity and decisions over whether to outsource or insource part of the function. CPOs must act as change agents, helping to navigate these options, and as architects, building the newly required organisational structure and designing performance management and rewards programmes.
While CPOs are becoming increasingly focused on business issues and cross-border activities, they still need to provide day-to-day HR administration and operations in a cost-effective way, which means being accessible. They will need to spend less time overseeing their HR operations systems and processes and more time juggling a complex mix of in-house resources, as well as integrating internal and external services.
3. Perception: HR business leader’s communicator
The HR function is evolving in such a way that it is now expected to play a central role in thinking and shaping — not just staffing — the organisation’s strategy. Today’s CPOs must make sure that they are ready for this task and start seeing themselves as business leaders who must be able to communicate the organisation’s strategy.
The role is evolving at a different pace depending on industry sector and geography, but this transformation means the pressure on HR has never been so high. Businesses expect HR leaders
to use their time in a different way. Talent management and succession planning is still very high on the agenda, as are issues related to regulatory compliance, risk management, diversity, ethics and integrity.
CPOs are becoming outward-looking, expected to contribute directly to the overall strategy of the business. CPOs must, however, be convinced of their role and further develop themselves into business leaders who can articulate their contribution.
HR searches conducted by Spencer Stuart over the past 18 months for regional positions based in Switzerland show that clients want CPOs who can do the following:
- develop a total understanding of the business goals and strategies to establish organisational development (OD) initiatives in support of those strategies;
- lead business and operational HR teams to build an HR organisation that is highly client-focused and dedicated to HR activities (centre of expertise);
- perform integration and standardisation programmes across several cultures, countries and continents (M&A activities);
- drive, model or use centres of expertise (i.e. talent management) and platforms for HR global services centre (shared services, insourced or outsourced);
- contribute significantly to talent acquisition, people management processes and the development of a unified culture;
- work closely with the executive team to create an environment focused on talent development, succession planning and creating benchmarks for future leaders (including HR professionals).
In our work we come across numerous examples of CPOs who exemplify the shift of focus in the role, examples such the CPO who has previously occupied a general management role for different business units, or the CPO with specific industry knowledge who has lived and worked in several countries and led three major HR transformations (one shared services implementation and two post-merger integrations).
Conclusion
Organisations succeed by addressing three kinds of markets:
financial, product/customer, and talent. HR’s contribution is to the talent market.
It goes without saying that talent has a direct, tangible connection to business performance. The single greatest challenge in workforce management remains the ability to compete for talent. The challenge for HR leaders is whether they will be ready to become a strategic business leader — in other words, a CPO.
Note
This article forms part of the Switzerland Point of View: Summer 2007.