The world of work has changed a great deal over the last few decades, but there is one

truth that
continues to stand the test of time; people are a firm’s greatest asset. Human capital, or the knowledge
and collective intelligence inherent in a company’s workforce, can be a company’s strongest competitive
advantage, and also its greatest source of risk. It is incumbent upon CEOs and CHROs, or Chief Human
Resources Officers, to work together to manage their firm’s people assets, and to unlock the potential
in every employee. The authors of the current article suggest that organizational decision making can be
enhanced through open dialogue and discussion among the “G3” or the CEO, the CFO, and the CHRO.

The CHRO has often been seen as an agent of implementation, rather than a decision-making and
change partner. While many believe that it is up to CHROs to prove their worth and the value of their
function to the business, the authors argue the contrary. They believe that it is the CEO’s responsibility
to elevate and redefine the role of the CHRO, and that CHROs should perform three essential business
activities: 1) “predicting outcomes,” 2) “diagnosing problems,” and 3) “prescribing actions on the people
side that will add value to the business.”

PREDICTING OUTCOMES

The CHRO is uniquely positioned to give perspective on the required skills and capabilities of business-
critical roles, and assess how incumbents in these positions are performing relative to expectations.
Furthermore, she and the CFO should work together to evaluate whether KPIs (key performance
indicators), budgets, and talent strategies are aligned to deliver desired business outcomes. Good
CHROs can provide valuable insight about their company’s competitive landscapes and some of the key
changes in HR policies and procedures of rival firms which could impact their firm’s ability to attract and
retain talent.

DIAGNOSING PROBLEMS

The CHRO’s deep understanding of employees allows him or her to offer valuable insight about the
failings of a particular line of a business, and why a promising venture proved less successful than
anticipated. It can be tempting for business leaders to write off company losses as a function of a
declining economy, or as the result of unlucky circumstances. It is a bit harder to take a critical eye to
understand how individual behavior and actions may have contributed to or exacerbated already
difficult situations.

PRESCRIBING ACTIONS TO ADD VALUE

CHROs can and should make suggestions on how to tap into the underlying abilities of their workforce.
They may choose to reassign key employees by moving them to a new department where their skills
could be better leveraged, or where there is greater business demand for their expertise. CHROs can
also add value by recommending new ways company leaders can bridge critical skills gaps, and by
helping colleagues target areas of weakness and refine desirable strengths.
SUCCESS OF THE G3

If this triumvirate is to function as an effective team, the CEO needs to encourage regular discourse with
the CFO and CHRO, and make G3 meetings a priority. The CEO, CFO, and CHRO should meet weekly to
discuss concerns about internal conditions or changes in the external environment, and should meet
monthly to discuss progress towards long-term goals and people challenges that may arise a year or two
out.

By forming and formalizing G3 teams in their organizations, CEOs can make better and more informed
business decisions.

UNLOCK THE POTENTIAL IN EVERY EMPLOYEE

Does your company have a succession plan? If a top executive were to walk out tomorrow, would you
have someone to fill those shoes? Well, if you are like roughly 85% of North American companies, the
answer here is a resounding no. Or perhaps you use a common method – a program that targets “high
potential” employees. Programs like these create a steady stream of talent to ensure effective
leadership.

GETTING THE MOST OUT OF HIGH POTENTIAL EMPLOYEES

Unfortunately, these programs don’t often work well. It is hard to select employees into these talent
pipelines, and excellent employees who are not selected end up feeling excluded. Given a significant gap
regarding the actual efficacy of these “high potentials programs,” the authors (Fernández-Aráoz,
Groysberg, & Nohria, 2011) launched an analysis of how firms target and manage their top performers.
In the course of interviewing executives from over 70 companies, the authors compiled a set of practices
worth noting:

1) Align development to strategy. Make sure that your program matches your corporate strategy.
Avoid a cookie-cutter approach; while certain programs might work elsewhere, your program needs to
be unique to match your organization.

2) Select carefully when identifying promising candidates. Combine objective assessments with
nominations from managers to increase chances of selecting the right top employees. Do not waste
valuable resources on a program that fails to select the people who are the best fit.
3) Communicate honestly. Be wary of keeping selections a secret. From the employee’s perspective,
the only reason to keep the selection of high potentials hush-hush is because the program is unfair and
picks favorites.

4) Develop targeted employees thoughtfully. Include formal education programs, on-the-job

development, and self-directed learning.

5) Rotate jobs. Put high potentials in a variety of positions that match their goals and experiences.

6) Create rewards and incentives. Being designated high potential is rewarding, but should never be
the only incentive for employees to stay in a program like these. Use financial compensation – at a
moderate and reasonable level – to aid in rewarding targeted employees.

Targeting and developing high potentials effectively is essential for organizational success. While the
authors are quick to point out that these are not definitive “best practices,” they are worth considering.
If you do not already have these in place, adopting them may provide your organization with a greater
competitive advantage in the long run.
changed a great deal

What is the future of HR? A new article in Harvard Business Review (Cappelli, 2015) discusses some of
the ways that HR can shed its bad reputation and prove itself a strategic business partner:

It’s no wonder that human resources functions have developed bad reputations in many organizations.
It falls to HR to make sure employees complete their new hire paperwork, to penalize individuals who
do not attend required training, and to remind employees to elect their health benefits for the coming
year. Furthermore, human resources professionals who offer anecdotal evidence rather than solid
business metrics to back their visions, may reduce HR professionals’ credibility as masters of personnel
management and change leaders. However, many HR departments have recently made great strides in
quantifying the value of people processes and in using people metrics to support their cases for HR
programs.

HISTORICAL TRENDS

Historically, top executives have relied on HR professionals the most when the economy is on the
upswing. During times of recession, employees value job security and work their hardest to keep their
jobs; turnover is down because employees know they are replaceable. When labor is scarce, sourcing
the right people and retaining top talent becomes an ever more critical business priority.

As the economy continues to recover from the 2008 financial crisis, HR will increasingly be called upon
for meaningful support.

STEPPING UP TO THE PLATE

Few CEOs have formal experience working in the “people” side of business. They must rely on their HR
teams to keep a pulse on critical talent both inside and outside their organizations. Human resources
professionals have valuable insight to impart on important people topics like layoffs, recruiting, flexible
work arrangements, and performance management.

While most human resources professionals have a strong understanding of the people-side of the
company, many lack financial acumen or business sense. In order to truly make the most of their people
metrics, HR departments need to attract and cultivate analytical HR minds that can identify important
relationships in HR data and interpret people trends. Companies like Microsoft and Google have had
great success in using their companies’ personnel data to encourage better hiring decisions, and IBM has
a long history of leveraging its employee data to create more effective project teams.

RETURN ON INVESTMENT

Bringing HR into the 21st century means HR will need to be able to prove the return on investment (ROI)
of its people programs. Human resources is in a prime position to show the relationship between
employee engagement and important business outcomes like turnover, sales, and profits.

THE FUTURE OF HR

Rather than reacting to immediate talent needs, HR can and should become a strategic business partner
by predicting future talent trends and preventing problems before they arise. Human resources
professionals must also take greater steps to study the impact of human capital initiatives, and to
measure progress towards goals and intended results. For example, Comcast has decided to bring its IT
capabilities in house rather than outsourcing IT needs. As a result, the company’s HR team must now
source desired IT talent from the Philadelphia area, which is no small task. Frequent measurement of
the success of talent acquisition and retention measures will enable Comcast and its senior executives to
understand and assess progress towards desired targets.
By challenging long-held misconceptions about HR as a function, and by quantifying the impact people
processes have on business, a new breed of HR leaders will prove themselves an invaluable asset to any
team.

PERFORMING RELATIVE TO EXPECTATIONS

Feedback has long been considered a focal point for employee development and advancement within
organizations. But why is it so important, and how can creating a feedback-friendly culture benefit the
organization as well as the individual?

THE BENEFITS OF FEEDBACK

Historically, feedback has been primarily used to provide information about the company’s immediate
goals and to guide the employee’s future behavior. Effective feedback ensures a smooth flow of
organizational goals from the leadership to the employees, boosts creativity, promotes trusts, and drives
motivation. A company that uses effective feedback techniques has a much greater competitive
advantage in today’s fierce economic climate.

ENCOURAGING A FEEDBACK-FRIENDLY ORGANIZATIONAL CULTURE

An organizational culture provides employees with a shared set of values, rules, and regulations for how
to work optimally. A feedback-friendly culture is one that allows the benefits of feedback to enrich the
entire workplace. This concept refers to organizational practices and interventions that emphasize the
importance of quality feedback in the company while providing support for the use of feedback.

A new study (Baker, Perreault, Reid, & Blanchard, 2013) found that nurturing a feedback-friendly culture
ultimately has the largest impact on the perception of feedback in the workplace. That is, by
encouraging a workplace environment in which feedback is encouraged and appreciated, it increases
the meaning and acceptability of feedback and its perceived usefulness among employees.

THREE STEPS TO FACILITATE FEEDBACK-FRIENDLY CULTURE

The study listed three elements that can help to facilitate the cultivation of a feedback-friendly culture in
the workplace:

A leader must strive to create an environment that encourages learning in order for feedback to be
perceived as supportive suggestions rather than criticism.

It is important to establish a psychologically safe and trustworthy workplace in order to make feedback
useful and receptive.
Emphasizing ongoing dialogue between higher management and other employees can help increase the
meaningfulness of feedback.

THE BOTTOM LINE FOR ORGANIZATIONS

The creation of this feedback-friendly organizational culture allows the benefits of feedback to
proliferate, while simultaneously enhancing the meaningfulness of its message. In the end, the study
found that organizations that work towards developing a feedback-friendly culture can increase
employee performance and improve overall well-being.