If you're a CEO, can the wrong head of HR cause you to lose your job? Absolutely. Ask the ex-CEO of Pfizer or the ex-CEO of Schwab, who both were fired by their boards in part for poor judgment regarding the head of HR. Astonishingly, it was the same woman, Mary McLeod. Called "Neutron Mary" at Pfizer, she had a reputation for excessive personal use of the Pfizer helicopter, tight control of relationships with the CEO at both companies, and harshness with her staff.
Done well, the practice of HR can be one of the most important relationships in ensuring strategy becomes real throughout an organization. Done poorly, not only can it put a leader in peril, it can result in alienated employees and resultant losses in customer satisfaction and shareholder value.
How do you know you have the right person? Perhaps it's easier to start by discussing the pathologies of a dysfunctional Chief of Human Resources Officer (CHRO). Here are ten clues that it's time to replace him or her. Although any one of these could indicate it's time to replace your CHRO, a pattern consisting of several of these means you should also examine whether your own judgment is under scrutiny.
- The last time your CHRO had an employee roundtable discussion was before the economic downturn. One of the most valuable roles the CHRO plays is taking the pulse of your workforce. Face time with employees is essential. If your CHRO travels only to accompany you, or keeps in touch with staff primarily through email or one-way communication such as videocasts, you've got a problem. The tougher the times, the more important it is to ensure employees are motivated.
- The language of business is a foreign language. If he or she can't name your top 10 customers, your top five competitors, or describe the basic business model, then aligning people to the business will be impossible. When the staff conversation turns to operating margins, cash flow, inventory, or revenue, does the CHRO tune out? You should be able to expect your CHRO to offer solutions for improving any of your business metrics through employee alignment and engagement.
- Your CHRO thinks of email as modern technology. Increasingly the way to reach the next generation of employees is through social media, both to recruit them and to engage them. Already 35% of the workforce is comprised of Millennials, born after 1977, and they will comprise nearly 50% of the workforce by 2015. If your CHRO can't navigate the tools they are using, it's unlikely you will have platforms to engage and retain those employees. Does your CHRO blog, tweet, have RSS feeds, and know what cloud computing, SaaS, and YouTube are? (Last year I was at an HR conference where someone asked "What is YouTube?") Does your CHRO use a smart phone? Or is your CHRO having his/her assistant print out emails to take home at night? Communicating with employees requires using the means that employees use to communicate, not necessarily the ones the CHRO is comfortable using.
- Change is a four-letter word. Could change your strategic direction in nine months or less? In this volatile climate, the new watchword for business is "agility." Your CHRO is your key resource to ensure you can achieve your strategic directions through a leadership team and employees that are aligned and executing along common goals.
- Your head of HR is hesitant to be accountable for meaningful metrics. The ability to track and analyze meaningful metrics in the HR space has changed significantly in the past five years. Is your CHRO abreast of those changes? Can you answer yes to the following questions: Does HR add value to the business through workforce analytics? Do you know what the cost of HR is per employee? Does your CHRO take ownership for improving employee engagement? Do you know the ROI you receive from investing in salaries, bonuses, or development? Do you know the impact attrition has on your customer satisfaction and your ability to grow? You should be able to get these answers.
- The vision for HR is murky, generic, or even unstated. Does your CHRO have a clear vision of how HR enables the people in your organization to achieve extraordinary performance? Or is HR focused primarily on budget cuts and streamlining administration? Operating as efficiently as possible is a minimum expectation. Ask to look at the vision and mission for your HR function. If those are realized, will it make a difference to the business? How? Is there a plan to ensure the vision and mission will be realized?
- Your CHRO knows how to lavish out perquisites, especially to the CHRO. The CHRO sets the tone for the executive team in terms of focus on special perks, and if your CHRO is focused on themselves and their need for creative pay solutions, you're in trouble. Another clue that your CHRO is more focused on style than substance is when the content of their business card, such as long listings of certifications, takes up more of their first few weeks on the job than getting to know the business.
- Your CHRO has effectively alienated you from your staff. Although it's extremely important for your CHRO to be a trusted advisor, a healthy relationship includes encouragement of your direct reports to have relationships with you as well. If the access of other executives is managed through the CHRO, a dysfunctional leadership team is not far behind. If your CHRO acts as a gatekeeper, subtly threatens your staff if thwarted, or brags about having the CEO under her thumb, as McLeod reportedly did at Schwab, you will become isolated from the direct communication that keeps you in touch with the pulse of the business. A CHRO should be helping you spread a wide net of information coming into you — not acting as a severe funnel on your behalf. Having a CHRO who sees as their main job the care and feeding of the CEO is seductive and enticing. Resist the temptation.
- The CHRO has difficult and strained relationships with his or her direct reports. A new head of HR might take six months or a year to align and shift their direct reports, but after that period, you should be able to observe a highly functional team at work. Does the CHRO pick staff who are excellent in their fields, and complement the CHRO's own skills? Does the CHRO have in place a solid lineup of successors? What does the 360-assessment of the CHRO look like? If HR itself is dysfunctional, it's hard for them to have credibility when advising others on building strong teams and employee engagement.
- Your CHRO has a nickname such as Neutron Mary (at Pfizer), Chainsaw Charles, Dolores Umbridge — or worse. If your CHRO has lost the support and respect of your workforce, your ability to motivate and align your employees behind your strategy has been compromised. Yes, the CHRO may have had to implement strong actions at times to ensure the survival of the business, but these should be balanced with actions that build loyalty and engagement. If 60 percent of your workforce would consider a job change when the economy recovers, how likely is it you'll out-compete others?
Some of these behaviors can be changed via expectation-setting, coaching, or feedback. But if your CHRO exhibits many of these pathologies, it's likely you need to make a change. The bottom line is that you can and should expect excellence from your CHRO. Do you?