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Title People Before Strategy: A New Role for the CHRO ( )
Name Harvard Business Review ȸ 2585 Date 2015-10-06
CEO ؼ HR μ Ѵ. Ͻ ġ â ʴ´. ġ âѴ. κ θ 鿩 , CEO CHROs Ȥ HR μ Ÿ ְ, ϰ ִٴ ߰Ѵ. McKinsey 翡 ϸ, ۷ι CEO ڿ ū , ȸ系 μ 8° Ȥ 9° ߿ϰ µ, ȭ Ǿ Ѵ.

繫 μ CEO ߿ Ʈʰ Ǿ HR CEO ߿ Ʈʰ Ǿ Ѵ. CFO ڱ ̰, Ͽ CEO 濵 ϵ, CHRO ٽ 縦 ϰ, 縦 ġϰ, Ÿ μ CEO ; Ѵ. ɰϰ ۵Ǿ, super CFO ۵ 1980 , 繫 ڻ ο 켱 ڿ Ե ־ Ѵ.

CEO Ƹ CHRO ʹ ϰų, Ͻ 𸥴ٰ 𸥴. ׷, HR °ݽŰų, CHRO Ʈ DZ ޿ ͵ CEO ޷ȴ. ᱹ, 繫 μ ܼ 渮 ̻ ݻŲ ͵ CEO . μ â ͵ CEO .

HR °ݽŰ, CHRO ؾ ϸ, HR ο ̴ – CEO, CFO, CHRO ׷ G3 ο Ŀ äϴ ̴. μ CFO ŭ ġ â ִ ο CHRO . CHRO ̹ å ุ ϴ ҿ , ȸ ϰ Ǹ, ϰ غ ִ.

̷ ȭ HR ӿ ȸ ٸ Ŀ ο ߿ ȭ ´. Ͻ 繫 ڿ Ӹ ƴ϶, ڿ ȿ ִ. Ͻ ڻ꿡 GE, BlackRock, Tata Communications, Marsh ȸ ڽ ְ ִ.

The CEOs New Contract with the CHRO
CFO Ϻδ , ̻ȸ, ܺ , Ǹ ߴ. ݱ CHRO CEO Ǿ. CEO CHRO ִ 忡 ؼ и ظ , иϰ ü ؾ ϴ. ȭ μ CEO CHRO ϴ ൿ ظ ִ.

ϱ , CEO ӿ ֿ ̻ȸ Ư ̻ȸ ȸ ( ϰ Talent and Compensation Committee Ī) Ͽ, CHRO ̻ ҷμ ϴ Ѵ. , Ե , Ļ, پ缺 HR ܿ CHRO  ؾ ϳ?

츮 ߿ϰ ϴ 3 Ȱ: ϰ, ϰ, ൿ ϴ Ȱ Ͻ ġ ϴ ̴. Ȱ CHRO ̳, ʾ CEO Ǹ Ѵ.

Predicting outcomes. ( ).
CEO CFO 3 ȹ 1 ȹ Բ . CHRO ȰϿ, ǥ ޼ ȸ ؼ ־ Ѵ. ڸ, ٽ ׷ ٽ ܺ ȯ ް ȭ ߾ ñ ϰ ȭ ɼ ̸, 鵵 ׷ ¿ ִ? CHRO ׷ ؾ ϸ, ص Ѵ.

ռ (fit) ο ũ ޷ֱ ,
CHRO  Ư 䱸ϴ ؼ Ȯ ϰ, ׷ ´ ؾ Ѵ. ū ִ ū Ǹ 䱸Ѵ. HR ϰ Ϸ ִ. , 츮 ϸ Ͻ 2% 簡 98% ´.

ɼ ϴµ ϴ ׿ Ī ǰ, ̴.  Ī ߸ fit غ . ū ִٸ ̴ Ӹ ƴ϶, , , 鿡Ե Ѵ. ɰ ظ ʷϱ , CHRO ڰ ȭԿ , ൿ Ȥ ų , Ư 2%, ľϱ õ ؾ Ѵ.

CHRO ȸ ؼ KPI, ڿ , CFO Բ ־ Ѵ. ʿϴٸ CHRO CFO ο ǥ ؾ Ѵ. 繫 μƼ긦 ϰ, ϱ⿡ ϱ Ƿ, ̴. , CHRO ȵ ִ. ȸ翡 󸶳 ġ ⿩ ִ Ǿ Ѵ – ߿伺 ɼ տ . 繫 λ ̰ ҵ Ͽ Ǵ ġ ؼ ϴ ۾ ؾ Ѵ. 繫 λ Ǹ ϰ, Ͻ £ ̱ ؾ ϴ CEO Ͻ ׷ ӿ Բ ȸǸ ϴ . , ȭ ϱ 籸 ϴ ̵ؾ ϴ. ϱ ؼ, ܺ з° ȸ 󸶳 ϴ , ħü ÿ 󸶳 ȸź¼ ִ , ȭ 󸶳 Ը ø ִ  ° ޷ ִ.

ٸ μ, CMO ͸ ϴ ɷ 淯 Ѵ. CFO CHRO μ Ŵ ͸ мϴ ⺻ ۾ ʰų, 縦 äϴµ Ȧ ϸ, ο ڰ 忡 ̸, ȸ ġ ı ˾ƾ Ѵ. åڰ μ 󸶳 ο ȯ濡 ȭ Ű Ǿ Ѵ. ϳ ä ȹ ؾ Ѵ: Ŵ ä ȹ  ϴ. Ư ߿ ǥ ȴ. ٸ ϳ Ҵ̴: ο 簡 ä ǰų ȭ Ǹ, Ŵ ִ? 귣 ̰ų, õ segment Ȥ ͷ, Ű ؼ ڱ Ǵ? ׿ , ð ̰ ִ, ?

CHRO £ ؼ ǹ ִ ־ Ѵ. 屺 ľϵ, CHRO 翡 ؾ ϸ, CHRO ֿ ڵ ڵ鿡 ؾ Ѵ.
ڿ ȭ ¿ ؼ ؾ Ѵ – μƼ ̳, ⿡ , äϴ ȭ ӿ ǹ̸ ִ ؼ. , 2014⿡ Apple Ƿ 縦 äϱ ߴ. ̰ Apple ڻ ð ǰ̳ ٸ ǰ ؼ Ƿ ϰ о ϴ ȣ. Ƿ ̳, Ƿ ȸμ Ȱ û ش. ƶ ̳, ġ ȸ翡 ָ ߱ų ο û ִ.

翡 ġ ̳, , Ȥ ܺηκ īƮ , ü, ִ. A λ number ϴٴ¡ Ȥ CEO ̱⿡ ޱϰ, Ͻ 忡 ϴ١ μ åڰ ȸκ Դ١ ȭ ų ִ. ڸ, Apple ζ Ͼ īƮ õ , ζ CHRO CEO ˷, ζ󿡼 iPhone ο ؼ ־.

CHRO ڵ Ӹ ƴ϶, 忡 ִ ο ؼ Ʈ , , 並 ؾ Ѵ. X ɾ åڷ 츮 μ å ְ, ΰ? Y 츮 ȸ μ Ǵ? ׿ ̷ 繫 ǥ ڸ ϴµ ȴ.

Diagnosing problems. ( ).
CHRO Ȥ ǥ ޼ϴ ؼ Ȯϰ ãƳ ִ ġ ִ. CEO CHRO κ ׷ ڷḦ ؾ ϴ Ѵ.

κ ̹Ƿ, CHRO CEO, CFO Բ, , ο ؼ ؾ Ѵ. Ȥ ȭ ġ ȭ ܺ Ҹ Ѿ,  Բ ϴ - ȸ系 ȸ system , ڿ ϴ ̴. Ȯ ùٸ ġḦ ϸ, ݻ ϰ ȴ.

࿡ ħüǰ, ⵵ ,  ؾ ϳ . Ʈ 罿ó ϴ Ȥ ؾ ϳ? ڿ Ȥ ܺ ȭ 󸶳 °?
ѹ Ǽ, Ȥ ٺ ʴ CHRO ߴ ִ. CHRO 󸶳 ȸ ź¼ ִ , , ο ȴ.

ο ϴ ʿ Ұϴ.
CHRO ̳, ʿ ҷ Ű Ȱ ü ã ִ ȸ ý о߰  ۵ ϴ Ǿ Ѵ. CEO ߿ ü 繫 , 3 ͷ ǰ ִ ߰ߴ. ų ο Ƿ ǰ õ غ ȵǰ ִ. CEO CHRO , пŰ R&D 翡 ߰ߴ. ﰢ Ϸ ȸǸ ȭ ̾ .

CHRO ϰ ̽ ϴ ū ġ , ׻ ׷ ൿ ʴ´. ʰų, ǰ ̸ ǥ ʰų, ൿ ű źϰų, 躸 ൿ ʰ Ѿ ִ.  CEO 鰣 𸣴 ô Ͽ, ϰų, ü ϰ . , μ ʾ ̴. ׿ Ȳ ϰų, ϰų, ص Ȳ ȭ ̴.

ÿ CHRO âϴ ֽϰ, ׵ ־ Ѵ. ϰ ׵ ٽɿ ϰ, ̵ ٽ ϰ, 踦 â , ϰ, ̰ ǰϰ . ġ âϴ ̴.

Prescribing actions to add value. (ġ ϱ ൿ )
ø ȸ ȸ ִ ں ̵ؾ ϸ, Ÿ ߿Կ ƾ Ѵ ( ۳ +- 5% ϴ å). McKinsey 15Ⱓ 1,600 ̻ ̱
ں ߴ. ϸ, ں ̵ 56% ̻ , ׺ ̵ 30% ̻ Դ.

ڿ 뼺 ϸ, CHRO ġ â ִ ൿ õ ֵ غ Ǿ Ѵ - ߰Ͽ, High Po ԽŲٰų, ο 忡 ȭ Ű ̵Ųٰų, ο ϱ ܺηκ 縦 ȴ. ں й赵 ߿, ڿ ġ ´.

ܺ ȯ濡 ϱ , ˰ , Ȥ ȭ ȭ ɸ , ο ó 䱸 Ǿ . ׿ ޿ Ǿ ִ. ֱ , ׿ ܰ辿 ϴ , 3ܰ ʿ ִ. CHRO ̷ ġ â ִ 縦 ãƳ ϸ, ɷ  âǼ ְ ؾ Ѵ. CFO ڷκ ߷ϴ ֵ CHRO 縦 ϴ Ư ų ־ Ѵ.

Dow Chemical ȸ Ŭ R&D Բ ª Ŭ š âϱ ؼ Millennials (1978 ) ϴ ߰ߴ. 30 2004⿡ 9% 2014 15% þ . ο Ȱϱ , ȸ 20 30밡 ū ð Ǵ Ŀ η ϰ, ʱ Global Leadership ȸǿ ʴߴ.

ġ 巯 ٸ ɷ Űų ̴µ Ǵ Ŀ õѴ. ٸ ȯŲٰų, Ī ϱ council Ѵٰų, Ư ų ȭŰ  Եȴ. , venture capitalist John Doerr װ Ż ȸ ⸣ Bell Labs ְ ڵ Żȸ Ű ũũ ̿ߴ. ƶ CHRO ȭŰ ٸ CHRO Ʈũ ִ.

CHROs should recommend ways to use human capital to unlock or create value.
CHRO ġ âϰų, 巯 ڿ ϴ õؾ Ѵ.
CHRO P&L ڵ ϰų, ˹߽Ű μ ׷ õ ־ Ѵ. CHRO Ȥ ū μ ä , 䱸 Ǿ Ư ų ˾ƾ Ѵ. ٸ ó 輺, ŷڵ, , ܼ ȸ ų ־ Ѵ. ڸ, CHRO ޿ ѹ Ͻ μ ȸǸ Ͽ, ⸦ ϰ, Ȱ Ű ൿ ǵ ü ﰢ ִ.


What not to do.
ճ ϰ, ϰ, ൿ ϴ ܿ, CHRO ص Ǵ ϵ ؾ Ѵ. ̷ μ ð ־, ִ. ޿ HR ٸ μ ̰ ִ. ̹ ȸ鵵 ִ. CFO åϿ ̰ ִ. Netflix HR ϰ 繫 Ͽ ־, HR īƮ Ī Ѵ (Further Reading List ). Ǵ ٸ HR, Finance, IT μ Ȱ Shared  CFO ϰ ְ, ʰ ִ.

̳, CHRO ̿, CHRO Ͻ ϴ Ư ľϱ ִ. ൿ̳, ǵ, ø ū Ƿ, CEO CFO Բ ϴ ּ ̴. CHRO , ڵ ̻ȸ Ȱ Ǿ ߼ ̷, CEO, CFO ڿ Ǿ Ѵ.

The CHROs fit.
CEO CHRO ο 䱸׿ 󸶳 յǴ ؾ Ѵ. κ CHRO HR pipleline Դ. Korn Ferry 翡 ϸ Fortune 100 CHRO 40 HR Ͻ ٹ ־. ׷Ƿ, Ͻ Ű , ൿ ϴµ gap ִ. , Ͻ ȸǿ μ, CHRO Ͻ ص ִ. CEO CHRO Ӱ ǵ Ұ Բ ȸ ־ ϸ, б , ô ؾ Ѵ.

CHRO ϴ ־. HR ַ ־ Ʒ μ ٰų, ǿ ´ 縦 äѴٰų, ,
ؼ Ǿ. , ׿ ġ â ʾҴ. HR cost center ƴ, ġ âڷ ϸ鼭, , , 귣 Ȥ ϰ Ǿ Ǿ Ѵ. .

CHRO ٽ 縦 μ ٸ μ Ͽ, Űų, ߿ ų ȭϱ Ī ּϰų, ֿ ǿ 縦 ܺηκ ϰų, ο Ͻ ұ׷ ų, ְ Ȥ Ʒ ֵ μ, ġ â ִ.

ū Ⱓ ٹ λ üϸ鼭, δ Ȱȭ Ǿ. λ ε忴, ĵ Ƽ, ľϿ, ǰ cycle پ. 3 ̳ μ £ 1 Ǿ.

Creating a G3
CHRO Ʈ , CEO CFO, CHRO Բ  ؾ Ѵ. ׿ ϴ 繫 ڿ ϴ ֻ ̴. ׷ μ, CHRO ⿩ CFO ϴٴ ˷ְ, HR ݻŰ ̴. ȸ翡 󼭴 ȮϿ CTO Chief Risk Officer Բ , G3 ȸ縦 ϴ ٽ ׷̴. ٸ ΰ  , G3 ̷ , Ͻ ִ. G3 Ͻ .

ũ ߰ ۷ι Marsh CEO Peter Zaffino CFO Courteny Leimkuhler CHRO Mary Anne Elliott ϴ ȸǸ Ѵ. 2015 4 ״ Ͻ ϴ ϱ CFO CHRO ȸǸ ߴ. G3 Ͻ portfolio Ͻ Ͽ, flip chart ȭ  ׸鼭 ȸǸ Ͽ. CFO о Ͻ о ̿, CHRO о . ߵǰ ִ Ͱ, ȵǰ ִ 2 ؼ ڽ .

The CEO should form a G3—a core steering team—with the CFO and the CHRO.
CFO ȥڼ Chart θ ä ־. Բ ϴ ġ ΰߴ١ ߴ. CEO ٿ. ü ȸǴ 15 ɷȴ. 츮 ȸǰ ſ ġ ִٰ ߰ߴ. 츮 Ͻ μ ̹ Ǿ ־. б ڿ 繫 ϰ ־. ׷ Ƹ 츮 Ͻ ϱ ٸ μ ʿ䰡 ٰ ִ. ׷, G3 ȸǴ ٸ ʰ Ͻ Ǹ  ؼ ְ Ͽ.

ø Ʈ ͸ ռϸ Բ ۾ϴ 4~8 б Ͻ ϴ ľϴµ Ǿ. Ǹ鼭 ȭ ǹ ִ ġ ľ ־. CEO 츮 ó ؼ 鿩 ߴ١ ׶ θ İ , µ ߿ ľ ִ δ ʾҴ. CEO HR ۾ Ǹ ȹ ࿡ ؼ ο ߴ. ״ Ͻ DZ⸸ Ȯ ߴ. ׷ Ͻ 繫 Ǹ DZ⸦ ߴ. 츮  Ű Ͻ ˰ ϰ ߴ١. CHRO ڽ Ͽ: Ǹ ȹ Ͻ īװ  ؼ ùٸ ൿ ο ϴ ؼ.

ȣ TRIO ߿ ľ ְ Դ.
CFO 츮 ؾ ϴ Ʈ ϱ . , 𼭺 ؾ ˱ . 츮 Ͻ Ű  Ѵٸ, 켱 ϱ . ڸ HR μ Ͻ ̵ ϴ ū ̽.  ̴å Ͻ ϰ ִ ȴٸ, ξ ȿ ޼ â ִ.

HR 迡 Ͻ ϰ, ϴ Ϳ ؼ Ѵ١ CHRO ߴ. G3 ȸǴ ̴. CEO CFO Բ ȸǸ ϸ, б̱⸸ HR ʴ´. Ͻ ؼ ؾ ϰ,  ֿ ϴ ϴ ̴١

CFO ߴ Marsh 10 ӿ ִµ, ü ӿȸǿ ̷ ȸǸ ϴ ټ ִ.  ̴, ̴ ߰ ̰ ƴϸ ƴϴ. Ͻ ü ϴµ ɷ ̿. 츮 δ G3 ȸǸ Ͻ Ǿְ Ͻ ǰ .

Tata Communications CEO Vinod Kumar G3 Ŀ Ѵ. Tata ū ۷ι ȭ⳪, ۷͸ , ǻ, Ѵ. 2012⿡ 15~20% Ǿ. ı ΰ . Tata Ͻ Ͽ ܺο ο 縦 Ͽ Ͻ Ű ߴ. – ȸμ ø ʰ ġ.

G3 ȸǿ Ǹ ߴ: Tata ߺ̰ų, ȸ ο ⿡ ȭ Ǵ ߴ. ´ ġ ̵ߴ. ̷ μ staffing 7% ٿ. Tata ο Űų, 縦 ϱ ߴ.

The G3 next went to work on changes that would occur over a longer time. Tata Communications launched a companywide program in late 2013 aimed at continuously improving productivity. The initial objective was to reduce the cost base by $100 million, but the overall intention was to seed a new culture. The G3 began by creating a cross-functional team that employees joined part-time. Ultimately more than 500 people participated, working on ideas in 50 categories and achieving even more cost reductions than originally targeted. In short, the project was a big success, and it continues to produce results.


Dialogue—both institutionalized and informal—between the CHRO, the CFO, and the CEO is now a way of life at Tata Communications. In time, as CHRO Goyals grasp of the business became evident, Kumar made a bold move: He gave Goyal the additional responsibility of managing one of the companys high-growth subsidiaries and made him part of the Innovation Council, which identifies opportunities to invest in and incubate new businesses.

Regular G3 Meetings
If a G3 is to be effective, the CEO has to ensure that the triumvirate meets on a regular basis.

Weekly temperature taking.
The CEO, CFO, and CHRO should get together once a week to discuss any early warning signals they are picking up internally or externally about the condition of the social engine. Each of them will see things through a different lens, and pooling their thoughts will yield a more accurate picture. The three dont have to be together physically—they can arrange a conference call or video chat—but meeting frequently is important. After about six weeks, and with discipline, such sessions could be finished in 15 to 20 minutes.

The CEO has to set the tone for these reviews, ensuring that the discussion is balanced and that intellectual honesty and integrity are absolute. Its a given that both the CFO and the CHRO must be politically neutral to build trust, and they must never sacrifice their integrity to be the CEOs henchmen. They must be willing to speak up and tell it like it is. Over time, each G3 member will have a better understanding of the others cognitive lenses, discussions will be more fluid, and all three will learn a lot about the intricacies of the business. They will also become more comfortable correcting one anothers biases, more skilled at reading people, and more likely to get the right people in the right jobs.

Looking forward monthly.
The G3 should spend a couple of hours every month looking four and eight quarters ahead with these questions in mind: What people issues would prevent us from meeting our goals? Is there a problem with an individual? With collaboration? Is a senior team member unable to see how the competition is moving? Is somebody likely to leave us?

Companies do operational reviews, which are backward-looking, at least quarterly. The objective here is to be predictive and diagnostic, looking forward not just at the numbers but also at the people side, because most failures and missed opportunities are people-related. There may be organizational issues, energy drains, or conflicts among silos, particularly in the top two layers. Conflicts are inherent in matrix organizations; the G3 needs to know where they exist, whether they could affect progress on a new initiative, and how the leaders in charge are handling them. Probing such matters is not micromanagement or a witch hunt. Its a means of finding the real causes of both good and poor performance and taking corrective action promptly or preemptively.

Planning three years out.
It is common practice to plan where the company needs to be in three years and to decide what new projects to fund and where to invest capital. Often missing from that process is exploration of the people questions: Will we have employees with the right skills, training, and temperament to achieve the targets? Will our people have the flexibility to adapt to changing circumstances? In most strategic planning, there is zero consideration of the critical players in the organization—or those working for competitors.

Discussion of people should come before discussion of strategy. (This is a practice that General Electric is known for.) What are employees capabilities, what help might they need, and are they the very best? The CEO and the CHRO of one company decided that for every high-leverage position that opened, they should have five candidates—three from inside, two from outside. Talent should always be viewed in a broad context. Consider who is excelling, being let go, or being lured away, along with any other information that could affect your competitiveness or your rivals.

New HR Leadership Channels
Some CEOs might be holding back on elevating their CHROs because they lack confidence in the HR leaders business judgment and people acumen. Theres a fear that HR chiefs arent prepared to discuss issues beyond hiring, firing, payroll, benefits, and the like. That reservation must be met head-on by providing rich opportunities for CHROs to learn. Give them more exposure to the business side through meetings of the G3, and provide some coaching. If knowledge or skills gaps persist, ask the CHRO how she might fill them. Some CHROs will rise to the occasion. Others wont measure up, and the supply of suitable replacements might be scarce at first. (The same issue applied in the 1980s to finding the right CFO types from the ranks of accounting.)

An enduring solution is to create new career paths for HR leaders to cultivate business smarts and for business leaders to cultivate people smarts. Every entry-level leader, whether in HR or some other job, should get rigorous training in judging, recruiting, and coaching people. And those who begin their careers in HR leadership should go through rigorous training in business analysis, along the lines of what McKinsey requires for all its new recruits. There should be no straight-line leadership promotions up the functional HR silo. Aspiring CHROs should have line jobs along the way, where they have to manage people and budgets.

All leaders headed for top jobs should alternate between positions in HR and in the rest of the business. Make it a requirement for people in the top three layers of the company to have successfully worked as an HR leader, and the function will soon become a talent magnet. Be sure that it isnt just ticket punching. Those who have no feel for the people side are unlikely to succeed for long in high-level jobs.

The Transition to the New HR
Any CEO who is sold on the idea that people are the ultimate source of sustainable competitive differentiation must take the rejuvenation and elevation of the HR function very seriously. Creating a mechanism that knits the CFO and the CHRO together will improve the business and expand the CEOs personal capability. It wont happen overnight—three years seems to us the minimum time required to achieve a shift of this magnitude. Stating the new expectations for the CHRO and the human resources function is a good place to begin. Creating ways to blend business and people acumen should follow. And redesigning career tracks and talent reviews will take the company further still. But none of this will happen unless the CEO personally embraces the challenge, makes a three-year commitment, and starts executing.
A version of this article appeared in the July–August 2015 issue (pp.62–71) of Harvard Business Review.
________________________________________
Ram Charan is a business adviser to CEOs and corporate boards. He is also a coauthor (with Dennis Carey and Michael Useem) of Boards That Lead (Harvard Business Review Press, 2014).
________________________________________
Dominic Barton is the global managing director of McKinsey & Company and a trustee of the Brookings Institution.
________________________________________
Dennis Carey is vice chairman of Korn Ferry, where he specializes in CEO and board director recruitment. He is also a coauthor (with Ram Charan and Michael Useem) of Boards That Lead (Harvard Business Review Press, 2014).






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