The 201 1 CH RO Cha l l enge: Bui l di ng O rga ni za ti ona l , Functi ona l ,a nd Persona lTa l ent

Resul ts from the 201 1 Chi ef H um a n Resource O ffi cer Survey by the Cornel lCenter for Adva nced H um a n Resource Studi es (CAH R S)

Pa tri ck M .W ri ght
Wi l l i am J. Conaty/G E Professor of Strateg i cH R Center for Advanced H um an Resource Studi es IL R School Cornel lU ni versi ty

M a rk Stew a rt
Seni or Consul tant M anag em ent and PersonnelSystem s

O zi a s A .M oore
IL R School Cornel lU ni versi ty

Executi ve Sum m a ry
In i ts thi rd year,tal ent w as once ag ai n the g ui di ng them e throug hout the 20 11 Chi ef H um an Resource O ffi cer (CH RO ) Survey by the Center for Advanced H um an Resource Studi es at Cornel l U ni versi ty. N earl y al l of the 20 0 U.S. and European CH RO s surveyed ci ted tal ent as the top pri ori ty on thei r CEO s ag enda for H R . In addi ti on, tal ent i ssues w ere som e of the bi g g est chal l eng es CH RO s face i n thei r rol e,parti cul arl y am ong those i n the U.S. B ut i t s the l ack of tal ent i n the H R functi on that the CH RO s surveyed sai di s the g reatest obstacl e to achi evi ng the CEO s ag enda for H R . European CH RO s consi stentl y expressed g reater chal l eng es w i th and focus on the H R functi on rel ati ve to U.S. CH RO s. The CH RO s surveyed al so i denti fi ed a num ber of best practi ces they use to i ncrease thei r effecti veness as a CH RO . O f these,externalnetw ork i ng w as the m ost frequentl y ci ted. Fi nal l y,the data ag ai n reveal s si g ni fi cant shortcom i ng s i n the H R tal ent pi pel i ne. CH RO s are bei ng i nfrequentl y prom oted from wi thi n (35 percent),parti cul arl y rel ati ve to thei r C-sui te col l eag ues. Li k e previ ous surveys, the 20 11 report com pares di fferences betw een U.S. and European CH RO s i n how they spend ti m e wi th vari ous stak ehol ders, i n varyi ng CH RO rol es, and w i th the board of di rectors. Resul ts from U.S. CH RO s are very si mi l ar to those from the 20 10 survey,i ndi cati ng that the rol e seem s to be returni ng to stabi l i ty after the turm oi l of the fi nanci al cri si s. H ow ever, com pari ng resul ts from U.S. and European CH RO S i ndi cates that European CH RO s focus m ore ti m e on thei rH R functi ons and l ess ti m e on the board of di rectors.

The 201 1 CH RO Cha l l enge:Bui l di ng O rga ni za ti ona l , Functi ona l ,a nd Persona lTa l ent
The Chi ef H um an Resource O ffi cer (CH RO ) rol e has underg one trem endous chang e over the past decade. For the past three years,w e have eng ag ed i n a stream of research expl ori ng the nature of thi s shi fti ng rol e w i th parti cul ar em phasi s on ask i ng CH RO s to descri be the strateg i es they em pl oy and chal l eng es they face. The fi rst annual Chi ef H um an Resource O ffi cer Survey w as publ i shed i n 20 0 9, and l i k e subsequent surveys, w as m ade possi bl e by fundi ng from the Center for Advanced H um an Resource Studi es (CAH R S) at Cornel l U ni versi ty. The 20 0 9 survey consi sted of responses from 56 of the U.S. Fortune 150 CH RO s,w hi l e the 20 10 survey covered responses from 72 CH RO s from the U.S. Fortune 20 0 .

Survey M ethodol ogy a nd D esi gn

Thi s year s survey conti nues to broaden the sam pl ei n si ze and footpri nt. The survey w as sent to 4 0 9 CH RO s from the l i st of U.S. Fortune 50 0 com pani es,and to a l i st of 16 0 CH RO s from som e of Europe s l arg est com pani es. The U.S. sam pl ei ncl udes 172 com pl eted surveys for a 4 2 percent response rate. Forty-four of the European CH RO s com pl eted the survey for a 28 percent response rate. Thus,i n 20 11 w e are abl e for the fi rst ti m e to com pare how European CH RO s vi ew thei r rol e rel ati ve to thei r U.S. counterparts.

TH E 20 11 CH RO CH AL L EN G E

The survey consi sted of a com bi nati on of forced response and open-ended questi ons to col l ect i nform ati on about: how CH RO s spend thei r ti m e; thei r board parti ci pati on; chal l eng es; and certai n dem og raphi c characteri sti cs. W e org ani ze thi s report around three m aj or chal l eng es that em erg ed from the survey:1) the O rg ani zati onalTal ent chal l eng e,2) the H R Functi onalTal ent chal l eng e,and 3) the PersonalTal ent chal l eng e. Fi nal l y,w e present sel ected quanti tati ve resul ts reg ardi ng how CH RO s spend thei r ti m ei n the form alaspects of the rol e.

The O rga ni za ti ona lTa l ent Cha l l enge

As i n previ ous surveys, w e ask ed CH RO s to i denti fy thei r chi ef executi ve offi cer s (CEO ) ag enda for H R ,al l ow i ng them to i denti fy the top three i ssues. A s fi rm s beg i n to g row out of the recent econom i c cri si s,tal ent has cl earl y em erg ed as the m aj or del i verabl e CEO s dem and of H R . Thi s w as evi dent i n the 20 10 survey,as tal ent w as the m ore frequentl y m enti oned i tem ,but thi s year s resul ts show that i ti sa uni versalchal l eng e. A s Tabl e 1 show s,tal ent em erg ed as the num ber one pri ori ty for H R i n the eyes of CEO s nearl y 10 0 percent of the U.S. and European CH RO s surveyed i denti fi ed tal ent as dri vi ng the CEO s ag enda for H R . For both, tal ent w as the m ost frequentl y ci ted i n the num ber one sl ot, and the m ost frequentl y ci ted across al lthree sl ots. In addi ti on,successi on pl anni ng show ed up as the second m ost frequentl y m enti oned. And al thoug h m any peopl e equate tal ent and successi on pl anni ng as the sam e thi ng ,som e CH RO s di sti ng ui shed m ore cl earl y betw een the tw o. For these,tal ent i si nterpreted as the attracti on , devel opm ent,and retenti on of em pl oyees i n the tal ent pi pel i ne,w hi l e successi on pl anni ng i s seen as bei ng a m ore speci fi c process for ensuri ng repl acem ent tal ent exi sts for al lk ey posi ti ons. Thus,CE O s today cl earl y em phasi ze H R s cri ti cal rol ei n bui l di ng and/or acqui ri ng the tal ent necessary to dri ve short-and l ong -term success.

Ta ble 1:W hat i ssues CH RO s say are on the CEO s ag enda for H R Europe % 93 19 29 10 20 26 23 3 3 3 10 13 13 U.S. % 92 19 19 18 17 7 1 12 10 7 0 19 3

Tal ent Cost Control Successi on Pl anni ng Em pl oyee Eng ag em ent Cul ture O rg . Effecti veness H R Excel l ence Com p. and B enefi ts Exec. Com pensati on Chang e Perform ance M anag em ent H R Al i g nm ent W ork force Pl anni ng

TH E 20 11 CH RO CH AL L EN G E

In the U.S. and Europe,19 percent of CH RO s i denti fi ed aspects of cost controlas an i m portant aspect of the CEO s ag enda for H R as w el l . O rg ani zati on effecti veness (e.g .,H R dri vi ng busi ness success) and H R al i g nm ent (H R supporti ng the busi ness strateg y) are rel ated, but possi bl y di sti nct i tem s on the CEO s ag enda. European CH RO s w ere m ore l i k el y than those i n the U .S. to ci te org ani zati on effecti veness as a CEO pri ori ty for H R , w hi l e U.S. CH RO s w ere m ore l i k el y to say thei r CEO s are focused on H R al i g nm ent. Gi ven i ts popul ari ty i n the H R com m uni ty, i t i s surpri si ng that l ess than 20 percent of CH RO s surveyed i denti fi ed em pl oyee eng ag em ent as a CEO pri ori ty for H R . W hi l e not si g ni fi cantl yl ow er than cost control , thi s resul t m ay hi g hl i g ht that CEO s are not yet enl i g htened to the i m portance of eng ag i ng the enti re w ork force and are sti l l focused m ore on reduci ng costs, even at the expense of eng ag em ent. Fi nal l y, European CH RO s w ere far m ore l i k el y to i denti fy H R functi onal excel l ence as part of the CEO s ag enda for H R . A s other resul ts w i l l show ,thi si s as a consi stent them e i n Europe and area of di fference w i th U.S. CH RO s. European CH RO s seem to consi stentl y focus m ore on the H R functi on com pared those i n the U.S. The resul ts al so show that the org ani zati on/peopl e m etri cs CH RO s consi der i m portant for assessi ng the heal th of thei r hum an capi tal are strong l y rel ated to the CEO s ag enda for H R . CH RO s i ndi cated that the m etri cs they found m ost i m portant w ere those rel ated to retenti on,eng ag em ent/cl i m ate,and successi on. Ta ble 2:O rg ani zati on/peopl e m etri cs that CH RO s consi der k ey for assessi ng the heal th ofhum an capi tali n thei r org ani zati on Europe % 48 64 39 27 13 3 10 9 U.S. % 58 53 46 19 13 12 15 8

Retenti on Eng ag em ent/Cl i m ate Successi on B ench/Pi pel i ne B us/Peopl e R ati o Rev/Profi t/Custom er Internal /ExternalH i re/Prom ote Di versi ty

B oth U.S. and European CH RO s al so pl ace som e i m portance on bench/pi pel i ne m etri cs, w i th such m easures bei ng sl i g htl y m ore popul ar i n Europe than the U.S. H ow ever,U.S. CH RO s w ere m ore l i k el y than Europeans to ci te busi ness resul ts (revenue,profi t,custom er) as i m portant m etri cs for the peopl e si de of thei r org ani zati ons. B ut both g roups equal l y val ued producti vi ty m easures, such as sal es per em pl oyee rati os,as w el las percentag es of i nternalprom oti ons/externalhi res and di versi ty.

TH E 20 11 CH RO CH AL L EN G E

Fi nal l y, w e ask ed CH RO s to i denti fy the m ost di ffi cul t aspect of thei r rol e (Tabl e 3). U.S. CH RO s, consi stent w i th the org ani zati onal tal ent chal l eng e, m ost frequentl yi denti fi ed tryi ng to bui l d the l eadershi p bench/tal ent pi pel i ne as thei r g reatest chal l eng e. U.S. and European CH RO s ci ted probl em s achi evi ng bal ance as the second m ost di ffi cul t aspect of thei r rol e. The bal ance chal l eng e i s not new for CH RO s,but i ts m ani festati on seem s to be chang i ng . In the 20 0 9 survey thi s tensi on w as consi stentl y expressed by CH RO s as stri ki ng a bal ance betw een the need to reduce costs and the need to ei ther m ai ntai n strateg i c capabi l i ty or consi stency w i th org ani zati onalor soci etal val ues. In 20 11,the i ssue of bal ance seem s m ore personal ,w i th CH RO s expressi ng concerns about rol e overl oad or rol e confl i ct. The concept of rol e overl oadw as refl ected i n w hat w e l abel ed ti m e/personal bal ance,and i s exem pl i fi ed by com m ents l i k e tryi ng to fi nd enoug h ti m ei n the day to g et everythi ng done. Rol e confl i ctcenters m ore on how CH RO s m anag e thei r ti m e and attenti on for exam pl e,w hen to focus on strateg y vs. operati ons;the needs/dem ands of di fferent stak ehol ders;or bal anci ng the vari ous CH RO rol es. Ta ble 3 :M ost di ffi cul t aspects ofthe CH RO rol e Europe % 0 10 10 0 0 3 6 6 10 6 32 U.S. % 16 15 7 5 3 13 11 7 7 7 6

B ui l di ng the B ench/Tal ent Pi pel i ne Achi evi ng B al ance Ti m e/Personal Strateg y/O perati ons Stak ehol ders D eal i ng w /L eg al /Reg ul atory Issues D eal i ng w i th the B oard D eal i ng w /Executi ve Team Issues Executi ve Com pensati on Chang e/Pace of Chang e Transform i ng H R Functi on

The survey al so reveal ed a stri ki ng di fference betw een how U.S. and European CH RO s percei ve the chal l eng es of the rol e. W hi l e U.S. CH RO s saw del i veri ng tal ent as thei r g reatest chal l eng e, European CH RO s w ere m ost chal l eng ed by transform i ng thei r H R functi ons. Thi s fi ndi ng l eads i nto our second hi g hl i g hted chal l eng e:H R functi onaltal ent.

The H R Functi ona lTa l ent Cha l l enge

Asi n past surveys,w e ask ed CH RO s to i denti fy the m aj or obstacl es to achi evi ng the CEO s ag enda for H R . The 20 11 resul ts m i rror those of past surveys,w i th CH RO s ci ti ng the com petenci es of thei rH R team as the num ber one obstacl e to achi evi ng that ag enda. An overw hel mi ng m aj ori ty of U.S. and European CH RO s i denti fi ed thi s as a probl em . N otabl y,as Tabl e 4 show s,al lbut one of the European CH RO s surveyed found thi s to be a chal l eng e.

TH E 20 11 CH RO CH AL L EN G E

Ta ble 4 :O bstacl es to achi evi ng the CEO s ag enda for H R ,as ci ted by CH RO s Europe % 97 25 19 6 25 25 29 U.S. % 58 34 25 13 10 6 5

H R Com petenci es H R Resources (fundi ng ,# of H R ppl ) O rg ani zati onalTal ent Reg ul atory/L eg alConstrai nts H R Technol og y (system s) Li ne Support H R Processes

In the U.S.,H R resources (i ncl udi ng the num ber of H R staff and fundi ng ) w as the second m ost ci ted obstacl e to achi evi ng the CEO s ag enda for H R ,w i th aspects outsi de the H R functi on com i ng i n thi rd (org ani zati onaltal ent) and fourth (reg ul atory/l eg alconstrai nts). Yet European CH RO s focused al m ost enti rel y on the H R functi on as an obstacl e to achi evi ng the CEO s ag enda for H R i denti fyi ng H R processes, resources and technol og y as m aj or i m pedi m ents. These CH RO s al so sug g ested that a l ack of l i ne support for H R neg ati vel yi m pacts thei r abi l i ty to del i ver on the CEO s H R pri ori ti es. These i ssues are l ess cl earl y refl ected i n the H R m etri cs that CH RO s i ndi cated they use to assess the effecti veness of thei r functi ons. A s show n i n Tabl e 5,a m aj ori ty of both U.S. and European CH RO s use i nternal custom er surveys the m ost frequentl y; i n fact, nearl y al l European CH RO s do so. H R costs/ cost rati os (e.g .,H R costs/em pl oyee) w ere the second m ost popul ar m etri cs used by U.S. and European executi ves,w i th U.S. CH RO s show i ng a sl i g ht preference. Ta ble 5 :H R m etri cs CH RO s use to assess effecti veness ofthei r functi on Europe % 97 25 13 6 3 13 3 13 6 23 U.S. % 58 34 12 29 3 18 3 21 20 5

InternalCustom er Surveys H R Costs/Cost R ati os Peopl e Costs/Cost R ati os Turnover/Retenti on/Tenure [i n H R] Em pl oyee Eng ag em ent [i n H R] SL A s/Perform ance A g ai nst O bj ecti ves Recrui ti ng Effi ci ency H R Process Com pl eti on

O ne fi nal i ssue reg ardi ng tal ent w i thi n the H R functi on em erg es w hen exam i ni ng the path to the CH RO rol e. O ne m etri c CH RO s use to m easure the heal th of the peopl e si de of an org ani zati on i s the percent of vacanci es fi l l ed i nternal l y. H i g h percentag es i m pl y that the org ani zati on successful l y bui l ds i ts l eadershi p tal ent i nternal l y. B y thi s standard, an org ani zati on that onl y fi l l s 36 percent of i ts top rol es i nternal l y w oul d not be vi ew ed as a B est Pl ace for L eaders. If thi si s true, then i roni cal l y, the functi on responsi bl e for l eadershi p devel opm ent i s fai l i ng at devel opi ng i ts ow n l eaders.

TH E 20 11 CH RO CH AL L EN G E

FI G U RE 1. Path to the CH RO -U.S.

External hi re/ i ntent to prom ote External hi re to prom ote

CFO CEO

Internal prom oti on outsi de functi on Internal prom oti on wi th functi on

CH RO

10

15

20

25

30

35

40

45

50

55

60

65

O ur survey show s thi s seem s to be the case for the H R functi on. O nl y 36 percent of the U.S. CH RO s surveyed g ai ned thei r posi ti on throug h i nternalprom oti on (w i thi n the H R functi on),w hi l e 54 percent w ere hi red from outsi de the fi rm . Si mi l ar resul ts w ere seen i n our previ ous CH RO Surveys,yet sk epti cs questi oned w hether those resul ts di ffered si g ni fi cantl y from other C-sui te rol es. In response,thi s year w e ask ed CH RO s the sam e questi on about thei r CEO and CFO , and as Fi g ure 1 show s, the new data i ndi cts the H R functi on. CEO s and CFO s are i nternal l y prom oted at m uch hi g her rates,and hi red from outsi de at m uch l ow er rates num bers al m ost exactl y the reverse of those for CH RO s. The resul ts for European CH RO s sug g est si mi l ar probl em s (see Fi g ure 2). O nl y a quarter of CH RO s w ere prom oted i nternal l y wi thi n the functi on, com pared to 72 percent of CEO s and 39 percent of CFO s. Thus, i n Europe i t seem s that CFO s and CH RO s are m ore si mi l ar i n term s of percentag e of outsi de hi res,but that CH RO s are sti l ll ess l i k el y to be i nternal l y prom oted,w i th a g reater percen tag e enteri ng thei r rol es by bei ng prom oted ei ther from outsi de H R ,or hi red from outsi de to be prom oted i nto the CH RO rol ewi thi n a speci fi ed ti m efram e. FI G U RE 2. Path to the CH RO -E urope
Xternal hi re/ i ntent to prom ote External hi re to prom ote

CFO CEO

Internal prom oti on outsi de functi on Internal prom oti on wi th functi on

CH RO

10

20

30

40

50

60

70

80

TH E 20 11 CH RO CH AL L EN G E

These resul ts sug g est that the H R functi onal tal ent chal l eng e conti nues unabated. The functi on not onl yl ack s the necessary tal ent to del i ver on the CEO s ag enda,but i t appears to al so not be devel opi ng that tal ent i nternal l y.

The Persona lTa l ent Cha l l enge

A new questi on on the 20 11 CH RO survey probed how CH RO s devel op i n the rol e. CH RO s w ere ask ed to i ndi cate w hat practi ces they have used to m ak e them sel ves m ore effecti ve i n the CH RO rol e. B y ask i ng thi s questi on, w e expected CH RO s to focus on how they l earn, devel op, etc. i n term s of thei r ow n hum an capi tal . H ow ever, the actual responses w e recei ved i ndi cate that a num ber of CH RO s i nterpreted the questi on m uch m ore broadl y than anti ci pated. Tabl e 6 show s that the m ost popul ar practi ce i denti fi ed by both the U.S. and European CH RO s i s usi ng external netw ork s to devel op and l earn from others. These netw ork s can be throug h professi onal soci eti es,uni versi ty partnershi ps,or personalrel ati onshi ps,but the focus i s on tappi ng i nto external resources for new i deas and em erg i ng practi ces. Ta ble 6 :Practi ces CH RO s have used to i ncrease thei r effecti veness as CH RO s Europe % 20 13 10 3 13 13 10 7 0 U.S. % 22 16 15 15 9 7 7 6 3

L earn from ExternalN etw ork B usi ness Focus B ui l d InternalN etw ork s B ui l d G reat H R Team Sel f D evel opm ent Acti vi ti es B ui l d Effecti ve H R Processes M ai ntai n Integ ri ty Li sten/O pen to Chal l eng e Spend Ti m ewi th Custom ers

U.S. and European CH RO s sai d that stayi ng focused on the busi ness (e.g ., l earni ng how i t m ak es m oney,ask i ng questi ons about the busi ness,etc.) i s thei r second m ost i m portant practi ce. D oi ng thi s al so rel ates to bui l di ng i nternalnetw ork s another oft ci ted practi ce. Interesti ng l y,g i ven som e of the previ ous resul ts em phasi zi ng g reater focus on the H R functi on i n Europe, bui l di ng a g reat H R team w as m ore frequentl y ci ted by U.S. CH RO s than Europeans, and bui l di ng effecti ve H R processes w as noted m ore i n Europe than i n the U .S. O ther practi ces i ncl uded sel f-devel opm ent acti vi ti es, m ai ntai ni ng i nteg ri ty, l i steni ng /bei ng open to chal l eng e, spendi ng ti m e wi th custom ers. The si debar provi des a detai l ed l i st of exam pl es of the k i nds of practi ces noted for CH RO effecti veness.

TH E 20 11 CH RO CH AL L EN G E

CH RO B est Pra cti ces for Effecti veness

Externa l N etw orki ng Parti ci pati ng acti vel yi n C AH R S! !A nd acti vel y netw ork i ng w i th g reat CH RO s w ho set the bar for al l ofus.I m personal l y com m i tted to be a l i fe-l ong l earner i n the A rt and Sci ence ofthe H R functi on. A cti vel y m ai ntai ni ng externalnetw ork s w i th fel l ow CH RO s has been a val uabl e toolto cal i brate a sense ofrel ati ve effecti veness for m e and m y H R team . Ihave bui l t a strong CH RO netw ork external l y,across m ul ti pl ei ndustri es,w hi ch Iuti l i ze to understand and share chal l eng es and potenti alapproaches/sol uti ons to i ssues I m deal i ng w i th.The di verse perspecti ves and k now l edg e shared by thi s g roup have been i nval uabl e. Joi ni ng four uni versi ty boards to g ai n new k now l edg e and provi de bal ance to pri vate sector . Busi nessFocus G etti ng to k now the busi ness and not bei ng afrai d to ask l ots ofquesti ons about i t.A nd based on w hat you l earn,bei ng w i l l i ng to speak up and w ei gh i n on an i ssues or deci si on,even w hen i t m ay not be w hat i s tradi ti onal l y vi ew ed as som ethi ng that the H R person w oul d be w ei g hi ng i n on. M ak i ng sure Itrul y understand the w ork i ng s ofour busi ness and how w e m ak e m oney.Thi s becom es the l ens Isee m y rol e throug h,w hi ch k eeps m e rel evant and hopeful l y addi ng val ue to the busi ness. Ihave al w ays been strong i n the fi nanci aland quanti tati ve areas reg ardi ng busi ness anal yses. R em ai ni ng busi ness-focused preem i nentl y has hel ped fuelm y success.It has been necessary to partner wi th the CFO i n parti cul ar ,to assi st hi m i n devel opi ng concrete,practi cali ni ti ati ves affecti ng our bal ance sheet and portfol i o.Learni ng from and l everag i ng outsi de resources for very techni caland anal yti calsupport (l aw fi rm s,M cK i nsey,M ercer ,etc. ) has hel ped m ak e m e a better CH RO . Bui ld I nterna l N etw orks Im eet form al l yw i th the CEO every w eek to ensure al i g nm ent and com m uni cati on ofthe strateg i c focus ofthe H R functi on to the overal lcom pany.Ial so have form alm eeti ng s set w i th each m em ber of m y executi ve peers.Thi s al l ow s us the ti m e to focus on l ong -term i ni ti ati ves vs.j ust the day-to-day i ssues. M ak i ng ti m ei n m y dai l y schedul e to have drop-i n m eeti ng s w i th the executi ve team m em bers.These i nform al ,i m prom ptu m eeti ng s have a m ore open and refl ecti ve tone,so they have consi derabl ei m pact.

TH E 20 11 CH RO CH AL L EN G E

Feedback i s very di ffi cul t to g et from the CEO unl ess he s unhappy about som ethi ng.Therefore,sel fconfi dence i s everythi ng.I ve found that m y sel f-confi dence i s hi g hest w hen Ifeelm y CEO and com pensati on com m i ttee chai rm an are w el li nform ed.H ave break fast or di nner w i th CEO at l east once a m onth w i th check -i ns as needed.Sam e w i th com pensati on com m i ttee chai r .N ot al w ays easy to fi nd cal endar ti m e w hi ch i s probabl y the bi g g est chal l eng e but i t s no excuse for not k eepi ng them i nform ed. Bui ld G rea tH R Tea m Em pow er seni or H R l eaders;decentral i ze deci si on-m ak i ng w here possi bl e throug h stream l i ned approvalrequi rem ents and org ani zati on structure Em pl oyi ng a terri fi c executi ve assi stant,a very strong di rect staff ,and --every few years Iconsci ousl y fi re m ysel f ,devel op fresh spec s for the CH RO posi ti on for the current chal l eng es,and rehi re m ysel f wi th those expectati ons. Ihave surrounded m ysel fw i th som e ofthe best l i eutenants i n the H R busi ness.M y team consi sts of onl y top subj ect m atter experts w ho are outstandi ng perform ers.Thi s al l ow s m e to focus on Board and executi ve team i ssues. Self Developm ent M y focus on and devel opm ent i n the areas ofeconom i c thi nk i ng and fi nanci alacum en have served m e w el l . Iw ork w i th a coach reg ul arl y.A l so,Ig o throug h a 36 0 deg ree process every year for feedback . Bui ld Ef f ecti ve H R Processes M anag em ent R esource R evi ew (perform ance revi ew s and successi on pl anni ng );and H R Servi ces (shared servi ces g roup) are both best-i n-cl ass.W e are very data-dri ven i n deci si on-m ak i ng and l aunch our new products and i ni ti ati ves usi ng phase g ate process used to l aunch new com pany products. . . has m ade our l aunches very successful . W e bui l t w ork force pl anni ng best practi ces,l everag ed our recrui ti ng m odel ,and i m pl em ented a shared servi ces m odelfor al ltransacti onalH R w ork . Li steni ng/Cha llengi ng Si nce Ibecam e a CH RO Ihave started l i steni ng m uch m ore to m y team and to the busi ness l eaders.I fi nd Ig et the best resul ts w hen Isl ow dow n and hear as m any poi nts ofvi ew as possi bl e.Ihave al so j oi ned severalCH RO associ ati ons. Constantl y chal l eng i ng m y assum pti ons.W e have al ll earned form ul as and practi ces throug h our e.H ow ever ,the w ork envi ronm ent,the careers that have w ork ed and hel ped us g et to our current rol w ork i ng popul ati on and reg ul ati on are shi fti ng rapi dl y.W e have to stay open to new approaches,new

TH E 20 11 CH RO CH AL L EN G E

w ays ofdel i veri ng val ue to the busi ness and our em pl oyees.Istay cl ose to w hat s g oi ng on around m e and future trends so that Ican stay open.Icreate an envi ronm ent w here Ichal l eng e m y team to scarem e a bi tw i th thei ri nnovati ve approaches to H R . M ai nta i nI ntegri ty R em ai n an honest brok er .Ifyou are seen as too cl ose to the CEO you l i mi t your abi l i ty to actual l y do the H R w ork requi red to g row the org ani zati on. A ctual l y Ihave tw o:1.Establ i sh a cl ear voi ce as consci ence ofthe fi rm and 2.Pi ck m y spots. Bei ng total l y and conti nuousl y transparent.The percepti on that the CH RO does not have a hi dden ag enda or unseen m oti ve resul ts i n g reat di al og ,eng enders trust and confi dence,and provi des access to m ore i nfo and i nsi g ht. Spend Ti m ew i th Custom ers Iparti ci pate i n custom er m eeti ng s.G etti ng to understand the end custom er i s a hug e advantag e i n understandi ng our busi ness and anti ci pati ng future needs. Conti nui ng to spend ti m ew i th custom ers and other k ey stak ehol ders (parti cul arl yi n Em erg i ng m ark ets) to si g ni fi cantl yi m prove m y k now l edg e ofthe externalm ark etpl ace forces i m pacti ng our i ndustry and devel opi ng a better understandi ng ofw hat i tw i l ltak e to g row the busi ness.

Fi g ure 3 org ani zes these best practi ce techni ques. In the l eft ci rcl e are techni ques that hel p CH RO s devel op thei r k now l edg e base, ei ther about the busi ness or about H R . The focus i s on l earni ng new thi ng s or stayi ng abreast of em erg i ng trends. In the ri g ht ci rcl e are practi ces that refl ect tak i ng acti on i nsi de the org ani zati on. These practi ces focus on how CH RO s i ncrease thei r effecti veness as eval uated ng fal l si n the by others throug h w ays i n w hi ch they perform thei r rol e. Fi nal l y, i nternal netw ork i mi ddl e,as i ti nteg rates the l earni ng and doi ng . Throug h thei r strong i nternal netw ork s,CH RO s are abl e to access i nform ati on about acti vi ti es i nsi de the fi rm and to al so l everag e those rel ati onshi ps to g et thi ng s done.

LEARN ExternalN etw ork s B usi ness Focus M eet Custom ers Sel f-D evel opm ent Li sten/chal l eng e

CO N N ECT B ui l d Internal N etw ork s

DO B ui l d G reat H R Team B ui l d Effecti ve Processes M ai ntai n Integ ri ty

FI G U RE 3. B ui l di ng personaltal ent

TH E 20 11 CH RO CH AL L EN G E

10

Another aspect of bui l di ng personaltal ent i s the past experi ences that have posi ti oned CH RO s to tak e on the top seat. For i nstance,m any have sug g ested that one w ay of bui l di ng k now l edg e of the busi ness i s to have H R professi onal s w ork outsi de of H R earl i er i n thei r careers. In i ntervi ew s w i th CH RO s over the years, m ost have consi stentl y sai d that w hi l e w ork i ng outsi de of H R at som e poi nt duri ng thei r careers i s hel pful ,i ti s by no m eans necessary. They em phasi ze that the i m portant com petency i s k now l edg e of the busi ness,and thi s can be achi eved i n a num ber of w ays. H ow ever,our 20 11 survey resul ts m ay cal lthi si nto questi on. W e ask ed CH RO s ag ai n thi s year w hether they had w ork ed outsi de of H R at som e poi nt i n thei r career. Consi stent w i th resul ts from 20 10 , a m aj ori ty of U.S. and European CH RO s have done so. These resul ts m ay i ndi cate that w ork i ng outsi de of H R not onl y devel ops busi ness k now l edg e,but al so bui l ds a personalcredi bi l i ty w i th peers show i ng that you not onl y understand the techni calaspects of the busi ness, but can al so rel ate to the pressures of havi ng profi t/l oss responsi bi l i ty. Certai nl y, CH RO s t m ay be that havi ng thi s back g roun d em brace such accountabi l i ty reg ardl ess of thei r back g round,but i i ncreases one s personalcredi bi l i ty,at l east unti lpeers observe such accountabi l i ty over ti m e. FI G U RE 4 . Percent of CH RO s w ork i ng outsi de of H R duri ng thei r career
20 0 9

20 10 YES NO 20 11

EU RO PE

10

20

30

40

50

60

70

80

The three chal l eng es CH RO s face del i veri ng tal ent to the org ani zati on, bui l di ng tal ent i n the H R functi on, and devel opi ng one s personal effecti veness are not new and are never-endi ng . In m any cases,m eeti ng these chal l eng es requi res hi tti ng a constantl y m ovi ng targ et. In the fi nalsecti on of thi s report,w e focus on how CH RO s al l ocate thei r ti m e to vari ous consti tuents,to di fferent aspects of the rol e,and thei r acti vi ti es i n rel ati onshi p to the B oard of D i rectors.

Form a lA sp ects of the CH RO Rol e

As w i th past CH RO surveys, respondents i ndi cated the esti m ated am ount of ti m e they spend w i th stak ehol ders,parti ci pati ng i n vari ous CH RO rol es and w i th the board of di rectors (B O D ),as w el las the rol es they pl ay w i th the B O D and on externalboards.

11

TH E 20 11 CH RO CH AL L EN G E

FI G U RE 5. Ti m e spent w i th stak ehol ders

CEO i ndi vi dual i ty Indi vi dual executi ve Executi ve team B oard m em bers H R team H Ri ndi vi dual s Indi vi dualH Ps G roup H Ps L arg er w ork force EU RO PE Custom ers O utsi de Consul tants O utsi de servi ce org s Professi onal org ani zati ons Servi ce org ani zati ons O ther G overnm ent ag enci es 20 11 20 10 20 0 9

10

12

14

16

18

20

Ta ble 8:R ol es ofthe CH RO

Stra tegi c Advi sor to the Executi ve Tea m (acti vi ti es focused speci fi cal l y on the form ul ati on and i m pl em entati on of the fi rm s strateg y) Counsel or/Confi da nte/Coa ch to the Executi ve Tea m (acti vi ti es focused on counsel i ng or coachi ng team m em bers or resol vi ng i nterpersonalor pol i ti calconfl i cts am ong team m em bers) Li ai son to B oa rd of D i rectors (preparati on for board m eeti ng s,phone cal l sw i th board m em bers, attendance at board m eeti ng s) Ta l ent Archi tect/Stra tegi st (acti vi ti es focused on bui l di ng and i denti fyi ng the hum an capi tal cri ti calto the present and future of the fi rm ) Lea der of the H R Functi on (w ork i ng w i th H R team m em bers reg ardi ng the devel opm ent, desi g n,and del i very of H R servi ces) W ork force Sensor (acti vi ti es focused on i denti fyi ng w ork force m oral ei ssues or concerns) Rep resenta ti ve of the Fi rm (acti vi ti es w i th externalstak ehol ders,such as l obbyi ng ,speak i ng to outsi de g roups,etc.)

Ti m e Sp ent w i th CH RO Sta k ehol ders

Tw o m ai n observati ons em erg e from thi s data. Fi rst, wi th reg ard to the U.S. sam pl e, i t seem s that the rol e has beg un to stabi l i ze after the di sconti nuous chang e resul ti ng from the fi nanci al cri si s. In m ost cases the ti m e spent i n 20 11 i s al m ost exactl y the sam e as that spent i n 20 10 ,and w here there i s di verg ence,i ti sl ess than 2 percent. It m ay be that these resul ts beg i n to reveal how CH RO s tend to spend thei r ti m e under norm albusi ness condi ti ons. Second,the data revealthat European CH RO s al l ocate thei r ti m e qui te di fferentl y than those i n the U.S. They spend si g ni fi cantl yl ess ti m ewi th the CEO i ndi vi dual l y and i ndi vi dual executi ves, and m ore ti m e wi th g overnm ent ag enci es, thei r H R team , and the l arg er w ork force. G i ven the i nsti tuti onal di fferences i n Europe versus the U .S., the ti m e spent w i th g overnm ent ag enci es i s not surpri si ng . Consi stent w i th previ ous resul ts, the cl ear di fference i n European CH RO s seem s to be i n the di recti on of w ork i ng w i th thei r H R team .

TH E 20 11 CH RO CH AL L EN G E 12

FI G U RE 6 . Ti m e spent i n CH RO rol es
Strateg i c advi sor

Counsel or/ confi dant/ coach B oard l i ai son

Tal ent archi tect EU RO PE HR functi on l eader W ork force sensor 20 11 20 10 20 0 9

Fi rm representati ve

10

15

20

25

30

CH RO Rol es
CH RO s al so reported the ti m e spent i n the vari ous CH RO rol es (see Tabl e 8 for descri pti ons of the rol es,i denti fi ed from previ ous CAH R S research). Fi g ure 6 show s that w i thi n the U.S. sam pl e,CH RO s ti m e al l ocati on to rol es i n 20 11 seem s stabl e,al m ost i denti calto those reported i n 20 10 . They spen d the m ost ti m e as H R Functi on L eader fol l ow ed by Tal ent Archi tect,Strateg i c Advi sor,and Counsel or/ Confi dante/Coach. Al so si mi l ar to previ ous resul ts,European CH RO s al l ocate thei r ti m e di fferentl y com pared to thei r U .S. counterparts. A g ai n,they report spendi ng m ore ti m e as H R Functi on L eader and Fi rm Representati ve, and l ess ti m e as B oard L i ai son and Strateg i c Advi sor. A s w e di d for the fi rst ti m ei n 20 10 ,w e ask ed CH RO s ag ai n thi s year to assess thei r ow n i m pact and effecti veness i n the di fferent rol es (Fi g ure 7). The resul ts show that,l i kel ast year,i n 20 11 U.S. CH RO s bel i eve they have the g reatest i m pact as Tal ent Archi tects, fol l ow ed by H R Functi on L eaders, Counsel or/Confi dante/Coach and Strateg i c Advi sor. The European CH RO s report al m ost the exact sam e rel ati ve i m pact rati ng s,al bei t a bi tl ow er for Strateg i c Advi sor and Counsel or/Confi dant/Coach,a bi t hi g her for Fi rm Representati ve,and m uch l ow er for B oard L i ai son. Reg ardi ng thei r effecti veness i n vari ous rol es, CH RO s from Europe and the U.S. i denti fy l eadi ng the H R functi on as thei r g reatest streng th (Fi g ure 8). U .S. CH RO s rate thei r effecti veness i n the Counsel or/Confi dante/Coach rol e as a cl ose second,fol l ow ed by Tal ent Archi tect and Strateg i c Advi sor. H ow ever, European CH RO s rate them sel ves a ful l poi nt l ow er than thei r U .S. counterparts on effecti veness i n the Counsel or/Confi dant/Coach rol e and as B oard L i ai sons.

13

TH E 20 11 CH RO CH AL L EN G E

FI G U RE 7. Im pact of CH RO rol es
Strateg i c advi sor

Counsel or/ confi dant/ coach B oard l i ai son

Tal ent archi tect EU RO PE HR functi on l eader W ork force sensor 20 11 20 10

Fi rm representati ve

FI G U RE 8. Effecti veness In CH RO rol es

Strateg i c advi sor

Counsel or/ confi dant/ coach B oard l i ai son

Tal ent archi tect EU RO PE HR functi on l eader W ork force sensor 20 11 20 10

Fi rm representati ve

TH E 20 11 CH RO CH AL L EN G E

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Pa rti ci p a ti on w i th the B oa rd of D i rectors

W hi l e CH RO s do not spend the bul k of thei r ti m ewi th the B O D i n the B oard L i ai son rol e,m ost of the ti m e they do spend i s al l ocated to executi ve com pensati on (Fi g ure 9). U.S. CH RO s al so report spendi ng si g ni fi cant ti m e wi th the board around executi ve successi on and CEO successi on. In contrast, European CH RO s report spendi ng m ore ti m e on executi ve successi on and other i ssues, such as: H R Inform ati on and educati on, Trai ni ng them i n H R, O nboardi ng new externalB oard m em bers, H R pol i ci es, W ork force Q ual i fi cati on i ssues, and D i scussi ng strateg i c/tacti cal busi ness needs, proposal s,sol uti ons,and advi ce on H R m atters. FI G U RE 9. Ti m e spent on i ssues w i th the board

Executi ve pay

CEO successi on

CEO perform ance

Executi ve successi on

Executi ve perform ance EU RO PE Ethi cs/ com pl i ance/ g overnance O ther 20 11 20 10 20 0 9

Ri sk m anag em ent

10

15

20

25

30

35

40

45

50

55

Fi g ure 10 depi cts the vari ous w ays i n w hi ch CH RO s rel ate to the B O D . Interesti ng l y, the data show that 4 7 percent of the European CH RO s reported bei ng a form al m em ber of com m i ttee com pared to onl y 18 percent of U.S. CH RO s. Thi s year w e al so ask ed CH RO s w hether they w ere form al l yi nvi ted to attend al l board m eeti ng s (i .e., thei r attendance w as expected absent unusual ci rcum stances). A m aj ori ty of the U.S. CH RO s responded affi rm ati vel y,com pared to 4 2 percent of the European CH RO s.

15

TH E 20 11 CH RO CH AL L EN G E

FI G U RE 10 . CH RO rol es on the board

Form al board m em ber Form al posi ti on

M em ber of com m i ttee

Resource avai l abl e to BOD EU RO PE

L ead m anag . repres. speci fi c com m i ttee Resources avai l abl e speci fi c com m i ttee

20 11 20 10

Invi tati on to attend

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

Fi nal l y,CH RO s w ere ask ed to report the types of externalboard acti vi ti es i n w hi ch they parti ci pated (Fi g ure 11). The data show that both U.S. and European CH RO s are acti ve i n a board capaci ty across a num ber of publ i c, non-profi t and professi onal org ani zati ons. U.S. CH RO s w ere m ore l i k el y to be m em bers of nonprofi t/professi onalboards w i th fi duci ary responsi bi l i ty (59 percent),w hi l e European CH RO s w ere m ore l i k el y to be m em bers of a professi onalsoci ety board (50 percent). FI G U RE 11. Types of CH RO board acti vi ty
M em ber publ i cl yhel d com pany B O D
M em ber advi sory board publ i cl yhel d com pany

M em ber professi onal soci ety B O D EU RO PE

M em ber nonprofi t professi onal soci ety B O D

20 11 20 10

Trustee of uni versi ty

M em ber nonprofi t advi sory board

10

15

20

25

30

35

40

45

50

55

60

TH E 20 11 CH RO CH AL L EN G E

16

Gi ven the i ncreasi ng requi rem ent for CH RO s to acti vel y parti ci pate w i th the board of di rectors,these acti vi ti es seem to be one m ore w ay they can devel op thei r personal tal ent. The 20 10 survey reveal ed that CH RO s noted that such acti vi ti es are extrem el y val uabl e for devel opi ng a better understandi ng of the pressures board m em bers are under,and consequentl y,w hat they m ay expect of the CH RO . It m ay be that these posi ti ons on other boards w i l l prepare the w ay for m ore CH RO s to si t on corporate boards of di rectors.

Sum m a ry a nd Concl usi ons

A s the CH RO rol e evol ves over ti m e,i ncum bents shoul d feelextrem el y opti mi sti c. The i m portance of tal ent to CEO s has and w i l lconti nue to provi de an opportuni ty for CH RO s to act as val ued l eaders i n the busi ness. Thi s fact shoul d be tem pered by the real i ty that the H R functi on has i ts ow n tal ent chal l eng es to be addressed. CH RO s see the l evel of functi onal com petence as an obstacl e,sug g esti ng that g reater effort m ust be i nvested i n fi ndi ng new and i nnovati ve w ays to bui l d H R functi onal capabi l i ty. CH RO s exposure to and i nteracti on w i th the board of di rectors conti nues to i ncrease, requi ri ng CH RO s to devel op new k now l edg e and sk i l l s. Fi nal l y,to del i ver org ani zati onal tal ent,bui l d g reat H R team s, and m eet the em erg i ng requi rem ents w i th the board, CH RO s m ust conti nual l y devel op thei r personalsk i l lsets. Carl Frost, one of the earl y org ani zati on devel opm ent consul tants w oul d sug g est that w e, as hum an bei ng s, are constantl y i n a process of becom i ng . H e w oul d then i ssue the chal l eng e: Are you m anag i ng w hat you are becom i ng ? Today s CH RO s face i m m ense and chang i ng pressures as they l ead wi thi n org ani zati ons i n the process of becom i ng . Thi s report sug g ests that the l arg er chal l eng e for the m odern CH RO i s to effecti vel y m anag e that process for the org ani zati on,functi on,and ul ti m atel y,hi s or hersel f.

17

TH E 20 11 CH RO CH AL L EN G E

T he a uthors w i sh to tha nk the fol l ow i ng p eop l e for thei r hel p conducti ng thi s survey:
ness J eff M cG ui of the H R Pol i cy A ssoci ati on Kl aas W assens from the Rotterdam Schoolof M anag em ent

W e al so w i sh to tha nk the fol l ow i ng seni or H R executi ves for thei ri np ut on the desi gn of the survey:
Eva Sag eG avi n M arci a Avedon K en Carri g K evi n B arr Mi keD Am brose Mi ri an G raddi ck W ei r Pam el aK i m m et J. R andal lM acD onal d H ug h M i tchel l L . K evi n Cox J ohn M urabi to J oe Ruocco L ynn M i nel l a L auri e Si eg el El ease W ri g ht Sati sh Pradhan L ynn Tetraul t Al ex W i l son Wi l bert B ui ter

193 Ives H al l ,Ithaca,N Y 14 850 6 0 7.255.9358 w w w .i l r.cornel l .edu/cahrs cahrs@ cornel l .edu

The Center for A dvanced H um an Resource Studi es (CAH R S) i s an i nternati onal center servi ng corporate hum an resource l eaders and thei r com pani es by provi di ng cri ti cal tool s for bui l di ng and l eadi ng hi g hperform i ng H R org ani zati ons. CAH R Sm i ssi on i s to bri ng tog ether partners and the IL R School s w orl d-renow ned H R Studi es facul ty to i nvesti g ate, transl ate and appl y the l atest H R research i nto practi ce excel l ence.

TH E 20 11 CH RO CH AL L EN G E

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Thi s report w as supported by a g rant from the Center for Advanced H um an Resource Studi es i n the IL R Schoolat Cornel lU ni versi ty. Any errors or concl usi ons are the sol e responsi bi l i ty of the authors.