The Secret To Boosting Every Company's Performance -- It Starts In Human Resources
By Natalie Burg
Outstanding human resources leaders haven't been tucked away in the back office for a long time. Rather than sticking to traditional roles, such as recruiting talent and managing payroll and benefits, HR leaders today have a prime seat at the top leadership table. They have significant influence to set and accomplish strategic business goals.
"The role of today's HR leader is to fully integrate leadership capabilities and talent strategies with business performance," said Cindi Cooper, co-Chief Operating Officer for performance consulting firm Gap International. "Top HR leaders are often a fully relied-upon partner with the business." Yet, while having this seat at the table, it isn't always clear how they can deliver what the organization needs.
Driving Business Success
Gap International describes what it takes to be a 21st century organization that can compete and thrive in current market conditions. The consulting firm's white paper states that, in today's complex business environment, "competition for employee attention and full engagement can be as intense as the competition for the best and most profitable customers."
This makes HR leaders more critical than ever to current and long-term business success. Sitting at the junction of talent and business management, they are uniquely positioned to help create a Breakthrough Performance EnvironmentTM, which Gap International explains is an organization engineered to outperform competitors and regularly achieve extraordinary outcomes. This happens when leaders develop a mindset that focuses on specific inputs for the environment, thereby influencing the performance outcomes.
As explained in the white paper, "Having an environment where people can achieve their best performance, as well as continue to challenge themselves and grow, allows for an organization to be successful, attractive and edgy in the marketplace."
HR Leaders Creating Breakthrough Performance
As former head of HR for both Jaguar Land Rover and Diageo, Simon Lenton has seen first-hand how this powerful brand of Chief Human Resource Officer (CHRO) can influence the creation of a Breakthrough Performance Environment. For him, CHROs with a "leadership mindset" share many attributes, such as being clear about how to win, reviewing progress regularly, taking a stand and not fearing failure.
They are also connected to the wider company purpose: "In Diageo… [the purpose] was to have the most celebrated business in every market," Lenton said.
Once upon a time, that external-facing business purpose might have had little impact on HR's role. But not anymore.
"Today's HR leaders can own business results as owners of the organization, putting them front and center. This brings about a different level of credibility in who HR leaders are," Cooper said.
And that, according to former CHRO for Baker Hughes Didier Charreton, isn't just more work for HR leaders. "It's an outstanding opportunity to actually lead the organization toward some well-defined, extremely ambitious goals," he said.
"Who better than HR to ensure that the right mindset, the right values, the right purpose are established as a framework for how the organization works?"
Although HR leaders are in an ideal position to help create breakthrough performance at all levels of an organization, that doesn't make it easy. While working with Diageo toward the goal of becoming the most celebrated business in every market, Lenton encountered a number of challenges.
"The biggest struggles I found are how do you manage these sort of 'out there' goals, and how do you hold to them in a business-as-usual world?" he said. The same is true of committing to a culture of breakthrough performance. "How do you keep those things alive in the face of the constant tide coming in of current reality? It's a bit like you're building a huge sandcastle on the beach. You have to keep building it."
Charreton sees another challenge: In order for HR leaders to take on a more strategic role within the organization, other leaders must adjust. "To achieve this," he said, "often what they need to do is make sure the right level of affinity exists within the [leadership] team, and that's not necessarily a skill that has traditionally been required from successful leaders."
Advancing The HR Evolution
HR leaders can be especially effective at helping CEOs stay committed to achieving breakthrough performance.
"I always thought the biggest role I could play in working with chief executives was to support them in maintaining their commitment to breakthrough," Lenton said. "It's a very lonely place at the top."
But HR leaders shouldn't expect a formal invitation to this expanded role, Charreton said. "I believe that HR leaders need to expand the role. It starts with us," he said. "If we want to be operating at a different level at the organization, we have to transform the way we lead."
And HR leaders are more suited to succeeding in this venture than many people may realize. Dave Ulrich, Rensis Likert Professor of Business for the University of Michigan's Ross School of Business, studied assessments administered to C-suite candidates by Korn Ferry over more than a decade. With the exception of COOs, the executives with traits most similar to those of the CEO were the CHROs, the study found.
"With others, we were initially surprised," Ulrich said, "but when we thought about it, effective CEOs have mastered marketing, finance and operations; and their differentiator is talent, leadership and organization." CEOs can turn to top CHROs for expertise on these people-related issues, which are increasingly critical to business success, yet ever-more challenging to master, he said.
For HR leaders, these issues and capabilities are second nature. With their well-honed areas of expertise at the forefront of business success, and their unique ability to lead in Breakthrough Performance Environments, this expanded role is an opportunity for CHROs and their entire organizations to achieve new possibilities.
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