By Sanjiv Anand
Twenty-five years of global consulting experience can get you a lot of grey hair besides frequent flyer miles. And the grey hair comes from trying to help CEOs better manage their people to drive enterprise and individual performance to ultimately deliver shareholder value.
Most CEOs detest this role. They often believe they have turned into part-time HR managers. They believe the HR guys could have done a better job so they can spend less time on this issue, and more time on what is strategic to the organisation – for example, managing customer relationships. Unfortunately, I don’t think they have a choice. So the only solution is to determine what HR areas should they really get involved in to add value.
At the strategic level, the key areas to worry about are the areas the CEO and board should focus on, organisational structure, compensation, taking care of star performers, setting up a strategy management office, and typical challenges in a family-owned business. Let’s pick up on a couple of themes – key areas for the CEO to personally focus on.
The first one is organisational structure. Putting great guys in the wrong structure is like having a Formula 1 driver sit at the wheel in a bus – it won’t get you anywhere.
Structure must always be aligned to strategy. The CEO has the best idea of where he wants to go. You should lay out a structure aligned to strategy and then run it past your HR team to ensure the design is compliant with HR best practices, such as span of control, etc. Generally, CEOs follow this process the other way around.
The second area is compensation. In emerging market, unfortunately, “show me the money” seems to be a common employee mantra. Of course, have HR determine the appropriate compensation for the organisation, but at the end of the day, there will be people who are key; where compensation will have to be determined on what needs to be done to retain them beyond the standard compensation framework within the organisation. Most CEOs, unfortunately, get boxed into a compensation structure HR tells them to follow.
Another area of CEO focus is the area of creating the organisation’s culture. Culture is a fluffy thing, but it’s the oxygen a company breathes. The richer it is, the better people will perform. If you ask a CEO, what’s the culture he or she wants to create, the answer often is “sales-oriented” or “performance-oriented” . Sometimes it’s “innovation” or “entrepreneurial”. Pick one that is right for the organisation, the strategy, and one that is aligned most with your leadership style. Remember, cultural change does not happen overnight.
It’s like steering a ship, and there is a way to going about doing it. For one, don’t ever create a fear-oriented culture, where people fear termination due to failure. That shuts everything down. Lastly, I want to talk about a “hit by the bus list”.
This list must be in every CEO’s drawer. It’s the list that clearly identifies who will cover the position of a key person if he quits unexpectedly or “gets hit by the bus”. It is the core of a succession planning strategy. Ensure that for all key positions, somebody has been recruited or groomed within the organisation to take over at short notice.
The bottom line on all of this is the fact that people are key to an organisation’s success and growth, and that ensuring the organisation delivers cannot be outsourced 100% to HR. Guess what, the CEO was meant to be a part-time HR manager!
The writer is the CEO of Cedar, a global consulting firm based in New York. He has recently authored a book titled, ‘Unlocking Human Capital to Drive Performance: A CEO Handbook’.
Sanjiv has over 20 years of management consulting experience across the globe. He started his career in the US, where for over 7 years he developed strategy for US telecom and electronic markets. Subsequently he set up operations in Asia, and the Middle East . He has assisted the Board’s and CEO’s of leading global and regional companies develop and execute business strategy, transformation business operations, and address strategic HR and restructuring challenges. He is a international expert on the Balanced Scorecard having executed over 200 scorecards. Sanjiv has driven over $700 million of FDI into Asia , and has assisted private equity firms in over $85 million in investments. He is well published, and has been a key note speaker at global conferences. A YPO member, he is also a Member of the Stern Alumni Council .
(Sourced from Economic Times)