The chief people officer's subtle fight

By Dr Ann Hutchison

This article is for those who are in the human resources profession.

On the top management team in a medium to large-sized organization, the small table of people who lead the business at the strategic level will always include a CEO, and a head of finance; but other functions may or may not be included. For example, there will likely be a head of marketing or a head of operations, but there won’t always be, say, a head of sales.

One of the roles that might be perceived as an ‘optional extra’ for the top team is the role of chief people officer, sometimes referred to as a general manager HR, or HR director. For the purposes of this article, let’s call them the chief HR officer (CHRO).

It is increasingly common for the CHRO to find their place at the top table. This will be particularly the case if the industry itself has a norm of having a CHRO at the top. Organizations and CEOs mimic each other in how they structure their top teams. So, if they see their competitors have a CHRO in their top team, they are likely to do the same¹.

However, even when the CHRO is sitting at the top table, they still have a subtle fight on their hands. Maybe this fight is one they don’t even acknowledge so readily, especially if they are doing a very good job and have a close relationship with their CEO, but the fight must be considered.

The fight is this:

Financial health, in dollar terms, is the currency of business speak. It has been described as the cornerstone of organizational performance.² And this means that the balance of interest in the top team will naturally gravitate towards the chief financial officer (CFO). Admittedly nowadays, employee safety is also a top metric, so that brings in more of the CHRO’s expertise; but, primarily, the CFO is often seen as the key TMT member and he/she is much more often seen as the CEO’s successor than other executives.

This means that the CHRO has to fight for their perceived value, even if their organization deeply values people. Over the decades, those who have written about the HR profession have noted this time and time again.³ There is a fight for credibility that goes on in HR’s corner.

This fight for credibility stems from two things. First, it is difficult for HR people to quantify the impacts of their initiatives and, second, many of the people outcomes that organizations experience are not directly in the CHRO’s control. People can be crazy and unpredictable, and far less easy to contain than finances, so a CHRO’s impact may be underrecognized, even though it is still there.

Supporting this, in a study by Deloitte that looked at the impact of HR executives, some 60% of their colleagues perceived that the HR function was only ‘moderately’ helpful, where only 5% reported it as being very helpful.⁴ That puts HR on the back foot somewhat; even though the expertise they carry is potential gold.

So, how can HR professionals plan their careers so that they know they will be suitably equipped for their own future at the top table? I say this because I believe preparation for this needs to start early in one’s career.

The answer to that is rather long and goes beyond the space of this article. But, at its core I would argue that HR executives reach a point where they need to ‘get their heads out of the people stuff’ and identify as something different than an ‘HR person’. They need to learn the language that their top management team peers speak, the language of commerce and finance, and absorb that language into their repertoire.

They need to grow themselves as exceptional business leaders. Although naturally people-oriented in their lenses, they need to use other lenses that take them deeper into issues of process, structure, finance, economics, and organizational politics.

At the top table, of course, their role will remain people oriented. A great CHRO will do a number of people things for the organization: They will oversee the ‘people and culture’ department’s service delivery, they will support and initiate change, they will steward the organization’s ethical and legal people practices, and they will bring an understanding of the labor market to strategic discussions. But through all this, they also need to start identifying as sharply as they can as a ‘business leader’, and they need to develop themselves accordingly.

What a challenge, but it is a great one. The world needs great CHROs, and I have worked with a few fantastic CHROs in my time. But to make more of these fantastic ones grow, the industry needs appropriately targeted professional development strategies. It may be bold to say, but these professional development strategies need to help get CHROs’ heads out of the people stuff.

1

Bendig, D., Haubner, K., Jeworrek, S., & Hoke, J. (2024). The chief human resource officer in the C-suite: peer prevalence and environmental uncertainty. The International Journal of Human Resource Management, 35(11), 1996-2028.

2

Abt, A. & Knyphausen-Aufsess, D. (2017). Chief human resources officers on top management teams: An empirical analysis of contingency, institutional and homophily antecedents. Business Research, 10, 49-77.

3

Parkinson, A. and Plimmer, G. (2015) “I didn’t have a traditional career trajectory...”: the route to credibility in the HR profession. In: 29th ANZAM Conference 2015, 2nd - 4th December 2015, Queenstown, New Zealand.

4

Berry, M. (8 June, 2007). Rift between senior executives and human resources highlighted by Deloitte/Economist Business Unit’s ‘Aligned at the Top’ survey - Personnel Today.