Episode Transcript
[00:00:00] Foreign I have something really exciting to talk about today. We are launching our Chro Insights program.
[00:00:17] For more than a year and actually for many, many years, to be honest, we have been talking to Chros and studying the characteristics and backgrounds and experiences and skills of the highest performing Chros relative to those that are still, you know, in their developmental journey. And as you know, this is a very, very important role. It has become much more important every year and now it is becoming perhaps the most important role in the C suite for many reasons. The job has evolved from that of an administrative officer 25 years ago who typically worked for the CFO and handled a of back office stuff, to a forward facing C level officer who is not only responsible for all the HR programs, strategies and services, but also responsible for the HR technology infrastructure, which is really the employee experience infrastructure. So it has a lot to do with productivity, developing and assessing leaders, managing external relations with labor unions and the federal government and other regulatory agencies, and working with the C suite on business transformation, mergers, acquisitions and movements into new industries, new countries and new product areas. So this is a big, big job that used to struggle to get a seat at the table when I started and no longer has that problem. So what we've done and I want to really compliment Bill Pelstra and Kathy Enderis who worked directly with me on this, Kathy is now leading this initiative and is we have taken all of our research and information about chros and HR organizations and companies and converged it together into a body of research that describes the skills, capabilities, backgrounds, experiences, behaviors and so forth of a high performing Chro. And before I get into the findings and some of the information that you're going to see, let me just tell you what this is. You are going to be able to receive and get access to this information by joining a special membership called the Chro Insights membership or corporate members. Many of them will have access to this. But those of you that are not corporate members, or if you are an aspiring Chro or you are a Chro and you'd like to get access to this, please contact us. You can buy the entire corporate membership or Galileo or this. So this is a new offering from us that we think is very, very important and part of the development of this was not only serving thousands and thousands of Chros but a new Chro benchmark survey that is being launched today which you can take and we'll be able to respond in a month or two and show you the results of that survey. But we've done a lot of the research already, and this comes from a massive data set that we collected with the help of Seekout and LinkedIn and some other vendors and a lot of analysis of educational backgrounds, backgrounds and experiences among different chros and correlating all of the information we can find in the outside world against both the business performance and the HR performance of their companies. Now, of course, many, many things impact the business performance of a company, but if you look at the maturity level of the HR function, using the systemic HR maturity levels, there's some pretty clear statistical evidence that certain things really make a difference in this role. And we're going to explain that to you. We're going to put together development programs around it and a whole series of tools that we've offered. In addition to that, we have the Chro Roundtables that we do the Chro Roundtable at Irresistible once a year and we'll also do one in Europe and ongoing advisory services for you guys, any of you that are aspiring to be chros or are chros. And I hear quite frequently from CEOs and recruiters all the time really that this is a very challenging job to find, a challenging job to improve and develop inside of companies. And one of the sort of symptoms of that is that many, many companies do not promote their chro from the internal HR function itself. They go outside. And I'll talk a little bit about that in a minute. Okay, so that's what this is about. Now let me talk a little bit now about this particular role and what we discovered. So it's sort of an interesting experience to look at this data because I would say for me and Kathy in particular and Bill also realize that a lot of the things that we've picked up anecdotally are statistically proven in the data. The first is something that's fairly obvious, but I just want to mention it, is that this job has really gotten hard. In fact, a study done by Nick Bloom, who's a Stanford professor, found out that over the last 20 to 25 years, I think 30 years, the number or percentage of chros that are Amongst the top five paid executives went from less than 1% to 13%.
[00:05:27] So that is a massive increase in the level of pay, the level of authority, the level of responsibility of this job. So those of you that maybe were HR professionals in one area and always wanted to be a VP of HR or a senior HR leader, this is becoming a very business centric job. And I would say that in my experience, talking to many, many of you who do this, it is not to be taken lightly. There is a belief in a lot of non HR people that anybody could do this. And let's rotate somebody in there for a developmental assignment as part of the developmental experience. And that does happen a lot. And we'll talk about that in a second. But I would just urge you to remember that the job itself requires domain expertise in the HR function, which has 94 capabilities alone, expertise in HR technology and IT, expertise in the business and the company and the industry, and expertise working with the C level officers on their relationships and their strategies, as well as expertise in the outside market on regulatory and labor relations issues that might be relevant for your company. So it's a fantastic job. The people that have it love it, but it's not something you're going to do early in your career unless you're lucky enough to get promoted into a chro job in a small company. So what we found when we looked at thousands and thousands of these profiles and correlated them against many, many things is there are. And what we did by the way, is we looked at the 15 to 20 year history of tens of thousands of chros to see where they came from and how they got to where they are. And then of course correlated the outcomes to various maturity level. And we basically concluded that there are four major paths to doing this job. The first is the most obvious, which we call the career chro. And this is someone who has worked in HR for some number of years, maybe a decade or longer, and probably has moved around from company to company, managed one or two of the business functions, maybe had some business experience outside of HR and then a chro and then they topped out in the role in the company they were in. For some reason there wasn't an opportunity for them and they moved into a chro in a new company. We call this the career chro because these are people who tend to move around and they bring the experience of the company before or several times to their new company. And you know, there are a bunch of dimensions that affect the chro job. The industry of course, is big dimension, important. The size of the company makes a big difference. Is it local, is it global? How many people does it have? Does it have labor relations or not? The growth rate of the company makes a huge difference. Fast growing companies need very, very unique HR strategies versus stable or mature companies. And then the CEO, him or herself and who this person will be working for and with as well as the country of origin of the company and the culture of the company. So there's these Career chros move from company to company. They bring deep expertise with them and they bring fresh perspectives to CEOs and boards who simply believe that something new could be done and we don't know how to do it inside the company. And that leads me, and by the way, you know that number, that role is roughly 70 to 73% of the CHRO's out there. So this is very, this is the most common way this job evolves. The second most common is what we call the company chro. The company chro is the person that is promoted from within. And this is, believe it or not, only about 15 to 18% of organizations. Now that's not saying this isn't important. And it does lead me to believe that we have a problem in our own domain in succession management. Because if 70 or so percent of the CHROs are coming from the outside, there's two reasons for that. One could be that the CEO doesn't believe that the HR function is developing somebody that will run this function well. The other is there isn't a good succession development process and we haven't been discussing who this person could be. Now I've talked to a lot of companies that have rotated non HR people into this role and we call that the business chro. And that is one way to inject change and new ideas into the function. Um, and oftentimes these individuals are people that are on track to be the CEO and they're rotating through. This is, by the way, what Schneider Electric did through a 2, 3, 4 year or 5 year role in the HR function to learn a lot of the intricate interactions inside of the company. But anyway, one of my conclusions from this research is we need to do a better job of developing chros inside the company because there's always a risk of bringing somebody in from the outside and you don't want your greatest team in the company to leave because they don't see any opportunity to move. The third type is the business chro. Now these are many, many of these. These are a smaller percentage but very interesting roles. If you look at Elon Musk's companies, most of his HR leaders have no HR experience. If you look at tech companies, oftentimes they'll rotate somebody into HR who comes from a technology background. And as I mentioned, a lot of companies, banks, insurance companies, large global manufacturing companies, look at this as a developmental assignment for the CEO. These people have particular benefits in this job. They come in with a fresh perspective. They understand the need to integrate HR into the business and to be more Business centric. But they don't always have the maybe understanding is the word, not respect for the complexities of what's going on. And I meet a lot of these people all the time. And in the first couple of weeks of their job, they want to ask a lot of questions. And then sure enough, six to nine months later, we have a conversation about the fact that this is much harder than it looked. But anyway, that's the third category. And then the fourth category is what we call the operations chro. These are people. Traditionally, this was the most important path, but this is now a lesser path, that come from finance, that come from administration, that come from legal, that take on this job because the company has particular focus on administration, legal, or some other form of regulatory issues. And they want the chro to be an expert at labor relations or financial operations or it. You know, when we go through the research in the report, and you can read the report by downloading it, you'll see that the percentage of chros that add the value created by these different four jobs is different. It's not fair to say that one is better or worse, but there are conditions under which certain are more valuable. In most cases, the career chros are adding more value than the company chros, and they are typically more likely to be women. The business chros are more likely to be mentioned, as are the operations chros and the career chros. The ones that move around tend to have more highly leveled degrees. They have more multidisciplinary backgrounds. By the way, a lot of the degrees. We found out that the most highly correlated college degrees of the highly effective chros is political science. Believe it or not, economics scored right below that, law school scored right below that, and then an HR below that. And what that points out is that this is a very multidimensional job, and we need to develop skills in organizational dynamics and change and organizational strengths and weaknesses. And those are in some sense similar to political skills and understanding how to manipulate or understand and move and change a complex network of people. People with technology backgrounds, much lesser success rate at being a chro. People with marketing backgrounds, much lesser success rate, and actually people with business degrees, much lesser success rate, Believe it or not, which is a little bit odd. But I have noticed in my own experience in the education side of this industry, particularly my work at UC Berkeley and other educational institutions, is that most business schools don't teach this area at all. They might have a course on culture and they might have a course on leadership, but I think it's very Unusual to see a business school that teaches somebody about the operations of the HR function. I think this is unfortunate, but that's just the way it goes. So you have to come to us or others to really learn an in depth background in this particular career. Anyway, this report is filled with information that you're going to find really, really valuable in understanding your career path, potentially your succession program in your company, or your opportunities to select or find a Chro if you're a CEO or another business leader. I will add a couple of more things. In addition to this kind of data that we're doing in Chro Insights, we're also going to be providing a whole bunch of tools. One of the tools that we're launching today for the clients, and you can get this if you'd sign up, is a development planning tool for you, depending on your background. Now, we have two really tool sets here. One is the tool being introduced today and the other is the career navigator that we have for hr, which is the AI system that we offer as part of our academy. So when you go through this, if you're, you know, sort of aspiring to this career at some point in the future, you can see the kinds of skills and experiences you need to put yourself into this role. I would also say from my experience with many of you and talking to many, many chros is that you have to learn this job by doing it. There's no other job quite like it. And a significant number of the people who succeed at it come from heads of talent or heads of talent acquisition where they've had a lot of complex, interconnected business functions reporting to them. And they've seen the interoperations between the HR function and the business function in a dynamic way, because that's what this really is. But there are so many surprises in this job that I really think those of you that want to do it are going to have to sort of jump in and find an opportunity in a company that's appropriate for you and learn. And the reason for that is, you know, certainly in the last decade and probably for the last multiple decades, the number of surprises that the Chro has to deal with is endless. There's business surprises like the company has a downturn or needs to lay people off or does a merger. There's regulatory surprises where the federal government passes some massive regulation and changes the whole nature of the workforce. We're going through that right now. There's company crises where there's plane crash or a fire or something terrible happens. There's the pandemic there's things like that, there's floods and other sort of environmental things that affect the workforce. There's the changes in the workforce itself. In some countries there are tremendous shortages of workers. In other countries, there are labor union issues and skills issues. So this is a job that's not just running things. You obviously have to run the operation too, but you've got to be ready for a lot of new things to deal with, many of which have never happened before now. You know, every year I kind of think about the fact that, wow, that was a really astoundingly interesting year. We just finished, but I can never predict what's next. And if you think about AI, we know a lot about what's going to happen in AI. We've been researching that and talking about it a lot, but we really don't know everything. We don't know the impact on the organizational structures in companies and how these data management tools are going to work and so forth. So it's a really challenging job. So there's two things I would like you to do immediately. First, register to get your hands on the research because we want everybody in HR to read this so that you can use it in your job and your role in your company. And the second is take a look at the survey. For those of you that are in senior level positions, we would love you to take the survey because you will see from us over the coming years and coming months much more detail on what's going on in this role by industry, by location, by company size, by growth rate and so forth, because we're going to really dig into this. I personally believe this is a major hole in the market. There are very, very few resources for you other than CHRO roundtables and executive recruiters that can really help you understand how to make this role more valuable, whether it be in sourcing or development or improvement of the job itself. And we will also have much more CHRO interactions, both in our own roundtables that we do around the world and virtually at the Irresistible conference and through direct conversations with us. And if you sign up to be part of the CHRO Insights program, you will also get access to me, Bill, Kathy and other leaders in our company directly to coach you. So this, in a sense, is not just a research offering, but also a developmental and coaching offering. And in the Josh Burson Academy, in the new release that will come out later this year, we will have a whole track of content targeted towards senior HR leaders that will be a way for you to just keep up to date and brush up your skills in a whole variety of areas. So I'm really excited about this. I want to personally thank Kathy in particular for her work on this over the last year or two. And it is part of our mission here to make organizations better, to make life better, to make work better for all of you through this HR function. And of course, this role is one of the most important ones. So if you have any questions, please reach out to us. Have a great week and look at some of the other announcements that are coming out this week and read our blog. Thanks a lot. And don't forget to get your hands on Galileo. All of this material is available in Galileo Galileo. And you can ask Galileo any question you want about the Chro role or your career, and it will help you figure out what you need to know. Thank you.
