A look at the CHRO experiences of two energy companies suggests that CHROs who take an analytical and strategic approach are most effective.
This article is provided to Changeboard by our Future Talent 2018 partners, Heidrick & Struggles. You can see Heidricks' Managing Partner Colin Price in conversation with Aviva's CEO, Mark Wilson, at Changeboard's Future Talent Conference 2018.
Talent is the ultimate differentiator in business, and HR serves the critical function of attracting, retaining, and nurturing top performers. A high-performing CHRO can make or break a company’s talent strategy and have an outsized influence on its culture. But not all CHROs are created equal.
Do you think in PowerPoint—or in Excel?
Consider two energy companies we’ve studied. We’ll call them Company A and B to protect their anonymity.
Company A has a CHRO that thinks in terms of data, and Company B doesn't.
The leadership of each organisation gathers for their annual strategy meeting. They recognise that despite volatile energy prices, the oil market in West Africa is poised to change dramatically over the next several years.
For example, right now each company only needs a handful of employees in Nigeria, but in five years the business could require 1,200 people - mostly engineers. Further, each company knows it must better understand the region’s challenging, often opaque regulatory environment and strict local-content requirements.
The CHRO of Company A gets to work. She establishes a partnership with two local universities and the local government to launch education programmes that will produce the high-calibre engineers the company needs. She begins working with real estate in the region to acquire the land. She helps ensure the people are there when the company needs them.
Company B's CHRO is more of a "gut feel" type. The market in Nigeria is unsettled, and despite the country’s promise he sees no reason to dramatically alter the company's talent strategy on unproven grounds.
Play forward the decisions a couple years and the results are striking. The reward for Company A of being proactive and navigating this change: $3 billion in new business and a stronger regional foothold in the industry.
What global companies want in a CHRO
Our experience working with CHRO candidates and companies looking to hire and develop them suggests that CEOs prioritise the following attributes in CHROs:
- Relies on data—not gut feelings. A CHRO should not only understand but lead the charge to incorporate data analytics into the HR function.
- Predicts employee behaviour. Leading CHROs are fluent in the predictive analytics that have revolutionised talent attraction, retention, and management (including management of talent risk).
- Understands how the company makes money. A successful CHRO is, in essence, the CEO of HR. You run your department like a business and constantly seek new ways to gain a competitive advantage.
- Acts, doesn’t react. What is your company's core function? How might it change in the coming years? Your talent strategy must stay ahead of these changes.
- Is a “courageous consigliere.” Successful CHROs have the courage to speak up and tell the rest of the C-suite - particularly the CEO - when something is amiss.
- Champions your company culture. A great CHRO understands the cultural attributes that best serve the business and actively works to create a high-performance environment.
- Travels. Business knows no borders, and top CHROs deliver a global savviness and an ability to see into the future of global markets.
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About the authors
Dan Kaplan leads the global human resources officers practice for Heidrick & Struggles; he is based in the New York office.
Colin Price is an executive vice president and the global managing partner of the leadership consulting practice based in Heidrick & Struggles’ London office.