It was two months ago that I found myself in a new role, which was familiar at first, albeit from a different perspective, as I transitioned from being an advisor to becoming an executive. Nevertheless, both my education and my career thus far have taught me that the first step towards success is to embrace change and learn from every possible opportunity.
There is no training anywhere in the world that produces readymade CHROs. However, I do believe that a CHRO’s role is one of the few functions for which natural predisposition balances technical knowledge that could be learned along the way. With the increasing globalisation of business, the importance of the HR function is rising. Under the mantra of maintaining revenue and profit, industry leaders are becoming behemoths that feed on constant growth and must be on an endless quest into the unknown, whether it be a venture into a new line of business or an expansion into a new location.
To succeed, businesses must have the ability to deploy the right people to the right places as swiftly and promptly as possible. Agility, a capability renowned in modern business, is becoming unvaryingly applicable to both financial and human capital.
The journey which CHROs embark on nowadays in many ways resembles the transition from the accountants of the 1980s to the CFOs of the 2000s. The business community is starting to realise that it is people that generate value, not businesses. As a consequence, human resources are becoming as paramount as financial resources, and the CHRO is becoming an equally important strategic counterpart, akin to the CFO.
The most vital task of the CHRO is to identify means to use human capital in order to create or unlock value. In order for the CHRO to become a visionary and a strategist, the whole HR function must move a step beyond transactional and administrative tasks. Internally, HR must transform its mindset from being a cost centre to acting as a value creator. It should not succumb to the standard constraints of budgeting processes by sheer inertia.
We, as a company, have recognised this need and started to transfer some traditional HR responsibilities to a separate unit that will provide key services to the business under the umbrella of a shared service centre.
The journey which CHROs embark on nowadays in many ways resembles the transition from the accountants of the 1980s to the CFOs of the 2000s
The CEO has a great responsibility in enabling the CHRO to act as a partner. He should equally leverage both the CFO and CHRO, in order to comprehend the connection between business performance and organisation. Ultimately, financial results are delivered by the people who produce them.
Vice versa, the CHRO must draw from his courage and integrity to support the business lifeline. He should be empowered to allocate the right talent to the right opportunities, in the same manner as financial investors deploy material resources.
A CHRO has to lead the process of not only nurturing and assigning talent, but also identifying the most important roles that are critical to business performance and sustainability, and linking them with the right talents.
This two-way process is becoming known in the HR community as the principle of “linking talent to value”, which provides an understanding of the link between people and the potential for value creation.
Academic research has shown that capital reallocation is truly rewarded only when coupled with the flexibility of business’s human capital, and a CHRO should be mandated to recommend the reassignment of talent to positions that will generate additional value.
Today’s organisations are just starting to embrace the concept of human capital flexibility. We still seldom encourage our colleagues to step outside of their comfort zone. We tend to reward top talents by allowing them to climb the organisational hierarchy, a process which overshadows other aspects of the organisation.
In order to enable our organisation to adopt human capital flexibility, we became pioneers in the field of organisational health in our region. We focused our efforts on connecting all our employees to the purpose of their work. By building a framework to encourage and reward certain behaviour embedded in our values, we encourage our employees to actively contribute to the achievement of sustainable long-term growth.
We support our employees in their daily work by clearly communicating our goals, how we achieve them, how we can improve and achieve more, and what impact we are creating. By so doing, we are preparing our key resource, our people, for another 25 years of sustainable growth.