CEOs take the lead on HR

by 17 Apr 2007

By Craig Donaldson

Over the past ten years or so, the pace and complexity of business has changed significantly. A myriad of forces have come to bear on business, and CEOs and fellow C-level executives have had to take a big step up to the plate if their companies are simply to survive.

Many of these forces have highlighted the importance of people in business. In past decades, there were a wonderful variety of ways for business to improve profit. But it is becoming increasingly evident that the competitive advantage that can be gained through people is probably the most sustainable one there is.

Traditionally considered the “people function”, HR has had more than its fair share of work cut-out in the process. Most HR people simply haven’t been prepared for the changes thrust upon them and the increasing expectations of their executives. In most companies, it’s very much a sink or swim situation that HR finds itself in.

I recently met with the global head of human capital management of IBM, who was talking about the latest trends in HR around the world (see our next edition for the interview). While some HR directors have been able to step up to the plate and work to the CEO’s satisfaction, it was apparent that most CEOs did not give their HR directors a vote of confidence.

In such instances, it was increasingly common for the CEO to move a COO into the role of head of HR. The COO brought the necessary business expertise and experience to the role, which was more important than the traditional and often softer HR skills. And if a C-level executive took up the role of HR head, then more often than not they will be wanting a switched-on, forward thinking, business savvy HR team as well.

HR can no longer afford to sit idly about and continue doing what it has always done. Change is inevitable, and those HR professionals with the ability to deal effectively and proactively with change will find themselves in a much better situation than those who are content to rest on their laurels.