Experts say we’re in an age where human resource directors need to move into bigger roles with strategic missions to drive growth. With the ability to unlock value in the workforce and leverage it to grow revenues, a Chief Human Resource Officer is a key component of a competitive organization.
A Forbes article says that CHROs will drive the organization of the future in a cognitive world. Inez Stewart, CHRO at Boston Children’s Hospital, told Forbes that digital is changing the organization’s human resource function by requiring them to hire and train staff that is agile in new digital applications and solutions. She said the hospital has had to embark on a new talent development process that is “highly cognitive” and uses computing to better learn how individuals fit in their organization to drive value. “It involves a much deeper assessment of our top talent and mapping that assessment to intelligent learning paths. It allows us to track progress instantaneously against [our] development plans and to have a topographical view of our top talent against our leadership competencies,” said Stewart.
This kind of strategic thinking is what CHROs now offer beyond basic human resource functions. The need for “CHROs with strong business and financial acumen is now more critical than ever,” Madhura Chakrabarti, director of the People Analytics research practice at Bersin by Deloitte, said in a public statement. Chakrabarti said that while most HR leaders only have a “fleeting glimpse” of what drives the business, CHROs need to understand where the business is going and how it makes money.
There are three critical activities that a CHRO can do, according to the Harvard Business Review: Predict outcomes, diagnose problems, and prescribe actions on the people side that will add value to the business. A CHRO should be able to assess the chances of meeting business goals with people and identify the main positions and skills that drive the business. Along with the CFO, the CHRO should consider whether the key performance indicators, talent assignments and budgets can deliver the right incomes.
HBR said that CEOs must learn to seek analysis from CHROs, instead of looking to consultants. CHROs also can help diagnose problems and pinpoint precisely why an organization may not be performing well or meeting its goals. The idea is to look beyond obvious eternal factors like interest rates and currency valuations to think about how people work together. “The CHRO also should be expert at diagnosing how the various parts of the social system are working, systematically looking for activities that are causing bottlenecks or unnecessary friction.”
Finally, an effective CHRO can recommend actions that will unlock or create value. This can include things like recognizing hidden talent, moving people to other positions to ignite growth, or bringing in outsiders to help with new technologies. While capital reallocation is important, the reassignment of people is what really can boost companies. “The CHRO should be searching for people who could be future value creators and then thinking imaginatively about how to release their talent,” HBR said.
Chakrabarti also said that CHROs especially need to be data-savvy and should be able to use analytics to “see new directions” and find better perspectives. They also should be bold and prepared to take initiative and make strong recommendations as opposed to waiting on direction from CEOs. “A bold CHRO is also proactive in identifying trouble spots and creating talent initiatives in response,” says Chakrabarti.