Do the CEOs get the CHROs they deserve?

“CEOs get the CHROs they deserve!”, said the Senior HR leader when he was highly frustrated. This was my seventh ‘encounter’ with this gentleman (See 'Passion for work and anasakti ‘, 'Appropriate metaphors for organizational commitment ‘ ,‘To name or not to name, that is the question’ , ‘A Mathematical approach to HR’, ‘OD Quest’ and ‘Of leaders and smiling depression’  for the outcomes of my previous interactions with him). Similar to what happened in the previous occasions, this comment prompted me to think deeply about the topic.

Yes, a CEO can try to get the  type of CHRO he/she wants by 'shaping' the behavior of the current CHRO, bringing in a new CHRO etc. The degree of success of this attempt will vary based on the context and the people involved. Of course, if a CEO is looking for a difficult to find set of capabilities in the CHRO and/or if the organization context is not suitable for attracting and retaining the type of CHRO the CEO is looking for, things can get complicated. The CEO-CHRO interaction is a human interaction and hence personality related factors, connect related factors and fit related factors (including that of the unstated definitions of 'what good looks like') come into play. Sometimes, the perceived lack of alignment is just a matter of perception. For example, the CEO might think that the CHRO doesn't understand the business context and the CHRO might think that the CEO is too shortsighted! It can work the other way also. The CEO and the CHRO can form a 'mutual admiration society' and ignore problems that adversely affect organization effectiveness! 

There is no doubt on the importance of the CEO-CHRO relationship, for them and for the rest of the organization. The CEO and the CHRO need to work very closely with each other on a lot of important and/or sensitive matters, and hence an effective relationship between them based on mutual respect and trust is critical. Lack of alignment between the CEO and CHRO, apart from creating a lot of frustration for both of them, can slow down decision-making, lead to suboptimal decisions, reduce response speed on critical issues and also lead to lack of commitment and passive resistance. It can also give the impression to the rest of the organization that the leadership team is like a 'house divided against itself'. 

Again, there is no doubt on whether the HR function (and the CHRO as the head of HR) should be business-oriented/business-aligned. HR exists to support the business and hence it should be aligned to the business needs/goals/strategy. ‘HR for HR’ (‘I want to do some HR interventions and I will get the business leaders to agree’) is definitely not a good idea. The problem occurs when we look at how exactly should HR demonstrate this 'business-orientation'.

There are multiple possibilities here - each with its own advantages and disadvantages. For example, the CHRO can agree to whatever the CEO says on people related issues ('after all, we get paid to support the business'). The CHRO can take this approach to the next level by trying to ‘guess’ what the CEO will be comfortable with and advocating that ('the CEO is our primary internal customer and we should be anticipating customer needs'). The CHRO can also avoid surfacing issues (or suggesting solutions) that he/she thinks the CEO will not be comfortable with ('business leaders are already stretched to the limits fighting for the survival of the company, how can we risk annoying them at this point ?').

This approach might help in reducing the number/intensity of possible arguments/conflicts between the CHRO and the CEO and the associated investment of time and emotional energy, leading to faster decision-making and smoother relationships. In this case, the CEO might ‘like’ the CHRO and will be more likely to support the CHRO in the roll out of basic HR processes and less likely to come down heavily on the CHRO when the CHRO/HR team makes a mistake. Hence, conflicts are avoided - making life easier for both the parties involved. However, this can also lead to sub-optimal decisions (see 'Training the victim' for an example).

The other option is to develop and articulate an independent point of view – based on the HR philosophy of the organization, HR functional expertise and an assessment of the context/situation.

Yes, this point of view might turn out to be different from what the CEO has in mind/is comfortable with and hence this can create conflicts and lengthy discussions/arguments and possibly delays in decision-making. The CEO might feel that ‘HR does not understand the problems that the business is facing’, ‘HR is becoming a pain in the neck’ or that ‘HR is being too idealistic’. This might lead to a situation where the CEO becomes very demanding – questioning the rationale behind each of the initiatives that HR comes up with. Therefore, this option can make life more difficult for both the parties involved. However, if the conflict can be managed constructively, this option can lead to superior decisions and also to the development of mutual respect and trust. Of course, there is no guarantee that this can be achieved in all the situations.

It is also possible that the CEO was more open than what the CHRO had guessed. Maybe, the CEO wanted the CHRO to make an independent recommendation. Again, it is possible that the CHRO’s ‘independent assessment’ of the business needs/constraints was totally off the mark, making his/her point of view completely unrealistic. Maybe, the context is such that the conflict of opinion can’t be resolved successfully quickly enough for the matter at hand. Thus, there are many possibilities here.

It can be said that if we take a long-term perspective, if both the parties are competent and open and if the conflict can be managed constructively and quickly enough, the second option will give better results. But that is too many ‘ifs’ (3 in the last sentence!). It can also be argued that the two options mentioned above are just two extremes and that reality lies somewhere in between. For example, a particular CHRO might adopt option 1 in the case of some issues and option 2 in the case of other issues – depending on the context/nature of the issues. After all, ‘picking and choosing one’s battles’ is supposed to be a key requirement for survival in the corporate world!

An important factor here is the credibility of the CHRO/nature of the relationship between the CHRO and the business leaders including the CEO. It is possible that the CHRO hasn't paid sufficient attention to positioning of the HR function appropriately, managing/shaping expectations, building capability and consistently meeting commitments/delivering value, enhancing the levels of mutual respect and trust etc. This can lead to serious problems because effectively managing the relationships with the business leaders can be the most significant enabler for demonstrating and sustaining the 'business-orientation' we have been talking about.

In this discussion about 'business-orientation' we should not forget the other customers of HR- like the employees and line managers. There is an increasing tendency on the part of HR to give less emphasis to the ‘employee champion’ role because of the increasing importance given to the ‘strategic business partner role’. This can easily lead to situations where there is not enough focus on ‘employee engagement’ (other than the cosmetic efforts/peripheral initiatives – see 'Employee engagement and the story of the Sky maiden’ for details). Of course, there are 'special-cause variations' in the focus (or lack of it) on employee engagement. For example, in response to the 'great resignation', currently there is a lot of focus (talk?) on employee engagement. 

As it is widely known, employee engagement is a good predictor/lead indicator of business results. Thus, if this 'business-orientation' (and being the 'strategic business partner') is achieved at the expense of 'employee' engagement, the result might be 'strategic (long-term) harm' to the business. This is not to say that when the business is under financial stress, the CHRO should ignore the boundary conditions set by the same. The point is just that the focus on employee engagement shouldn't be lost though the actual manifestations of this focus can be different under different circumstances (see 'Of employee engagement and the survivor syndrome' for details).  

It is also interesting to model this situation using the concepts of 'static' and 'dynamic' equilibrium (A chair has static equilibrium. A bicycle in motion has dynamic equilibrium. In a state of static equilibrium there is balance, but no change or movement that exists in the case of dynamic equilibrium). A 'live and let live' kind of arrangement between HR and business leaders (that avoids conflict) is similar to 'static equilibrium'. But, a scenario in which HR and business leaders openly and clearly state their independent opinions, followed by constructive debate/conflict leading to decisions that both the parties are comfortable with is similar to 'dynamic equilibrium'. This does not mean that the parties can't be passionate about their points of view/express 'strong' opinions. The requirement is just that they should not get too much attached to their opinions.

In general, dynamic equilibrium provides richer possibilities. However, establishing dynamic equilibrium might not be required or even feasible in all the cases. It requires more time, effort and skill (as the equilibrium needs to be constantly reestablished) . It is also more risky (you are more likely to have a fall from a bicycle as compared to that from a chair - especially when you are learning to ride - which can be compared to the 'establishing the relationship' phase that we discussed earlier!).

A key enabler for this dynamic equilibrium is for the CHRO to work with the business leaders to crystallize the HR Philosophy/the basic tenets of people management in the organization (see ‘Towards a philosophy of HR’ for details). This will also enable HR to come with quick and effective responses to various issues/situations – based on the people management philosophy of the organization, HR functional expertise and an assessment of the context/situation.  This is not to say that the people management philosophy is cast in stone. The people management philosophy can be revisited as the organization and its environment evolves. Also, if there are extraordinary situations, extraordinary responses are required!

So, do the CEOs get the CHROs they deserve? ‘Probably, to a large extent’ – is the best answer that I can come up with at this point. After all, the CEOs hire and fire the CHROs and are their direct managers (with the associated powers of 'carrot and stick'). Also, the CEOs want the CHROs to be aligned to them. This doesn’t mean that the CHROs can’t influence the CEOs. A lot of CHROs manage to do this. Yes, this requires competence, deep business-understanding, courage to speak truth to power, and clarity on values. The CHROs won't be earning their salary if they don't put forward their professional opinion. If CEOs want someone who will just execute whatever they ask without discussion, such a person can be hired at a much lower salary than what CHROs are paid. Also, the CHROs are not trees - CHROs can move (to another organization with a different CEO)! If all these are true, why do the CEOs get the CHROs they deserve to large extent?

One possible factor here is the hierarchical nature of many of the organizations. In hierarchical organizations, if the CHRO disagrees with the CEO, it can very easily get misinterpreted as 'lack business-understanding', ‘lack of competence’ or as ‘lack of trust in the judgment of the leader’. The relatively 'fuzzy' nature of the HR domain (that makes it difficult to prove or disprove things conclusively) also contributes to this. Yes, the CHROs also realize that there are no perfect CEOs/ organizations that would exactly match their preferences and hence learn to adjust (to varying degrees).  

Of course, there are other factors. Let's look at one of them. I spent the first five years of my career in HR in HR consulting. One of the things that amazed me was how easy it was to into walk into any organization, do a diagnosis and find many areas where there was potential for significant improvement. Why would the CHROs (who were much more experienced than me) fail to identify and act on those areas? Initially, I thought that this was mainly because of the ‘fresh eyes’, specialized diagnostic tools and 'learning from other contexts' that the external consultant brings in. Now, I am convinced that that there is much more to this.

Many of the organizations are not optimized for effectiveness. Organizations tend to gravitate towards a way of working that is most comfortable for the people who run it – even if it takes away from the effectiveness and efficiency. Of course, the leaders would like to believe (and make others believe) that what they are doing is the best way of functioning. Perpetuating this ‘convenient collective delusion’ (or at least not disturbing it) is often one of the unstated expectations the leaders have from the CHROs. This works even better if the CHRO is someone with impressive credentials – with best of the qualifications and prior experience in reputed MNCs and with a reputation for having done transformational work in those organizations. If such a person is the CHRO and he/she is not doing any transformation in the current organization, then the organization must be perfect – without any need to change!!!!

Of course, there is a positive side to 'CEOs getting the CHROs they deserve'. Progressive CEOs get (hire/retain/develop) progressive CHROs. There are indeed a lot of CEOs who push their CHROs to focus on  building an effective organization that is a great place to work, and also support the CHROs in this endeavor. These CEOs also set an example by role modeling the right behaviors. Again, we have no reason to believe that there are more 'good' CHROs in the industry than 'good' CEOs! 

We must also remember that there is a larger organization ecosystem that both the CEO and the CHRO are part of and it has expectations and/or influence on the CEO, CHRO and the CEO-CHRO relationship. Also, the strength and tone of the relationship that the CHRO has with the other CXOs in the company might have an indirect influence on the CEO-CHRO relationship. In MNCs and in companies that are part of a business group, the CHRO is likely to have an additional reporting manager (apart from the CEO) and this also influences the CEO-CHRO relationship/power balance! Yes, the strength of this influence will depend on the strength/nature of this additional reporting and the personalities involved. Therefore, the power that the CEO has over the CHRO (and on the decisions related to the CHRO role) will not be an absolute one! Also, CEOs are often people who have spent many years in organizations and hence learned to live with some degree of 'imperfections' in organization life. Hence, they might not have the compulsion to get exactly the kind of CHRO they want!

Any comments/ideas?