The role of CHRO has become increasingly complex since the COVID-19 pandemic began in 2020, with CEOs and boards of directors calling on HR executives to not only lead strategically in a variety of new areas—from return-to-office mandates to an employee mental health crisis—but also to have a firm grasp of the business itself, advises former Google CHRO and HR expert Laszlo Bock.
Bock, who is a fellow with the National Academy of HR and was named the Human Resource Executive HR Executive of the Year in 2010, today is co-faculty director of the Berkeley Transformative CHRO Leadership Program. He frequently sees how modern HR leaders are being challenged; the business understanding required, for example, goes well beyond and deeper than familiarity with a company’s products and services, he says.
CHROs and candidates for such challenging roles need to know much more, says Bock, also a co-founder and former CEO of Humu, the nudge-theory-based HR tech solution now owned by Perceptyx.
“It’s not that [CHRO candidates] don’t understand that we make widgets,” he says. “It’s that they don’t understand why we’re willing to pay $1.3 billion to buy a company but not $1.4 billion.” A CHRO, for example, ideally can project cash flows at certain discounted rates for an acquisition and understand that high federal interest rates can drive up the discount rate. That means the cash flows are lower and may indicate you can’t afford to pay more in the deal.
“The ability to understand that kind of thing is uncommon among CHROs,” says Bock. He recently sat down with Human Resource Executive to share his insights about CHROs today and how current HR leaders can become compelling CHRO candidates when CEOs and boards or directors are hiring. To start, he suggests that aspiring CHROs develop skills beyond the HR function.
Consider working temporarily in finance, operations or the legal department to sharpen your business acumen, Bock advises, rather than taking a typical HR career path within the HR department.
Either way, plenty of opportunities arise for top HR leaders, executive recruiting firm Korn Ferry notes in a report. The findings reveal the average turnover rate for CHROs is 3.7 years, compared with the overall C-suite’s 4.9 years.
Learn more from HR leaders presenting at the upcoming HR Technology Conference & Exposition, Sept. 24-26 in Las Vegas. To name just two, Northwestern Mutual CHRO Don Robertson will discuss “Harmony in HR: Striking the Right Balance Between Data & Human Experience” and Katie Carter, SVP of Global HR Evolution for Hyatt, will join a panel on the topic of “Program Management: The Dynamic True North for Transformation.” Learn more and register.
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