Why CEOs And HR Should Be Joined At The Hip

The day the Jacobs Suchard (now part of Kraft Foods) board of directors promoted me to the C-suite, they strongly suggested I align myself with the CFO. The advice proved excellent, and for the rest of my days in the corner office I was joined at the hip with an outstanding finance executive who is now the CFO of Lindt & Sprüngli, the world’s leading chocolatier.

My regret is that I did not free up my other hip for Human Resources, a group of eager young managers at the rear of the functional pecking order.

Now I must admit that my Nabob Foods and Jacobs Suchard alumni would be the first to tell you that marketing occupied that prime piece of bone real estate. After all, I had come up through the marketing ranks. Yes, we were a marketing-driven company and yes, my mind was consumed with marketing and strategy, but it wasn’t marketing wizardry alone that made the organization sing. It was the exquisite and enthusiastic melodic rhapsody performed by the complete orchestra.

In the background, my Glee Club (HR) made culture their top strategic priority. You see, the “talk” of cultural strategy (we called it the credo) that hung on the walls of the company was “walked” by the leadership team.

Ultimately, it is the CEO who determines the corporate culture, whether good or bad. Over my long tenure, I was extremely competitive, action-oriented and results-driven. So is it any wonder that my employees acted similarly?

I’ll explain it this way: First, these cultural characteristics were monitored and measured. Second, we recruited for the right cultural attitude, followed by skills. Third, our superior financial results were a result of this modus operandi. Could I have done more if HR had been attached to that other hip? There’s no doubt.

Today, with declining loyalty and greater job hopping, it is critical that CEOs partner with HR. Here are four good reasons:

1. HR’s most important role is to influence the CEO on the corporate culture. This is especially important in “revolving door” environments where multi-nationals make a habit of inserting up-and-comers into general management roles in foreign countries and smaller business units.

2. An adept HR executive is the CEO’s window. HR can be an excellent radar screen for “reading the tea leaves” amongst the work force with regard to organizational health. The individual should be on top of changes to business plans and how they are being accepted. Key to success is the HR executive’s ability to instill trust at all levels. The “window” begins to close when HR becomes a bunch of cops. CEOs must watch for that.

3. HR ensures an effective system to pinpoint high-potential talent and probable successors. This brings me back to culture and this is why Procter & Gamble and Walmart are very good succession planners. By the time an executive rises to the top, he/she will have spent several years within the organization. The CEO designate will be a “believer” in the culture that makes their company great.

4. On a personal level, a strategic HR team can be instrumental in helping the CEO realize a leader’s greatest sense of gratification—that gratification is encouraging, nurturing and allowing human beings to reach their full potential, both personally and professionally.

Take a look at the perennial success companies. Often, they have a “way”—a distinctive culture that works for them. The custodian of the “way” is the CEO and the CHRO. It is time to use the HR group strategically and bring their leader into the board room. And the only person who can do this is the CEO.

  • http://twitter.com/jacobsmadsen Jacob Sten Madsen

    Beautiful article and very very true. I have myself worked in a subsidiary of a global very well known IT giant and seen what this can lead to. CEO and HR director a very close knit team leading to 1. company performing in top 10% within its group (geographical region) 2. Outstanding internal movement of talent (30% of all roles_) 3. talent magnet meaning easy to attract outside talent. 4. 5 (five) consecutive years of winning No. 1 place of Great Place To Work (highest international accolade for superior work environment) I would almost go as far as call this a dream team scenario.
    Ohh if only more companies like this, what workplaces they would be.

  • http://twitter.com/JohnRichardBell John R. Bell

    Thanks for the insight, Jacob. You are in a very good place and space. Enjoy.

  • http://twitter.com/JonathanRDSmith Jonathan Smith

    Or to put it another way… it’s a cliché for organisations to say ‘Our people are our greatest asset’, but in the cashflow statement salaries usually account for a very high percentage of overall costs. So the CHRO is effectively responsible for managing the ROI on the single biggest line item in the business accounts.

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