Monday, 1 March 2010

Ready For The Corner Office?

Over the years we have seen organisations taking concrete steps towards becoming more people-centric. Phrases like “employee engagement” and “employer branding” have become as oft-repeated words in business seminars and Boardrooms as “operational excellence” and “stakeholder value”. And yet, as we look at the careers of most CEOs, we see that their trajectories have originated in Finance, Operations or Marketing. It is rare for a CEO to have a background in HR, though not unprecedented. In India and abroad we have seen some Human Resource professionals make a successful transition to the corner office. At The Human Factor this phenomenon intrigued us; was this indication that HR had truly become strategic and HR professionals were as business-driven as their counterparts in other functions like Operations and Finance, or was it a case of a few extraordinary people who could make it happen no matter what? Opinions and insights varied, but there was consensus that HR today is more business-driven than ever and that in some industries it was a major contributor to business results. Most, however, think that it is individual brilliance that has propelled some HR professionals to the top job.

It is an unassailable truth that neither can the CEO do everything at any stage, nor does the board expect him to be an expert in every area. What contributes to the success of a CEO is his or her ability to bring out the best from his managers and experts, which in turn depends on his or her ability to build a high performance team. Selection and people development being key functions in Human Resources, this is a skill that HR can carry to a CEO role. There is no reason that the head of Human Resources of a large company cannot step into the role of CEO, if he or she has that good an understanding of the business and the customer. Being an HR practitioner becomes an advantage in understanding the nuances of a CEO role because of the knowledge gained around how the people in the organisation function and the processes that grow around people. With these inherent advantages if an HR manager is able to become commercially capable, build confidence, raise business credibility, and make an effort to learn all aspects of the business as well as know the customers, he or she will be well equipped to make the transition to the top job. The more we look at this issue it however becomes apparent that this transition depends more on the individual rather than the industry or organisation; though earning the trust and respect of senior management and industry peers would always remain important regardless of the background.

Nonetheless, the status on HR becoming strategic has garnered little currency across the Board, with a large section of senior managers thinking that HR still does not take part in the planning stage and comes to the game only once the ball has been served. This, I believe, is a mix of perception and reality, and there is a need for proactive and collective effort on the part of the HR community to be more relevant and business oriented before other line functions perceive HR to be strategic.

Is HR ready to step up to the plate?

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