A Welcomed Metamorphosis of the Chief Human Resources Officer Function
By Thomas Mielke, Managing Director, AETHOS Consulting Group London
n the late 19th and early 20th century, the French-American duo of mathematicians Henri Poincaré and Norbert Wiener investigated how minor changes can trigger an unpredictable chain of events that lead to significant consequences on a grander scale. This phenomenon is known today as the "Butterfly Effect" - a term coined in the mid-1970s by another American mathematician, Edward Norton. Norton was also a pioneer in "Chaos Theory", studying the behaviour of dynamical systems that are sensitive to fluctuations in their internal and external conditions. And, what are today's businesses and organisations around the world if not just that? They are dynamical entities adapting to the flux of markets and economies, as well as the shifting priorities or interests of customers and stakeholders. They also depend on their management teams and leaders to take the right actions to ensure success in the future. Small calibrations today can thus lead to big impacts tomorrow ...
Profiling the Chief Human Resources Officer: A New Type Of 'Experience Engineer
'Following a breakfast meeting with a senior executive from the UK restaurant industry, my attention was drawn to the fact that a small number of Food & Beverage businesses has started to hire marketers for their most senior human resource roles. Although this is not yet an overwhelming trend in hospitality, I wondered whether this approach made sense from a competency perspective. And, if so, would others follow suit? Could this be such a "butterfly moment" - one that defines roles to come as well as HR and talent management best practices for the greater hospitality industry?To address these questions, a gap analysis was needed which looks at the core competencies of senior hospitality executives holding leadership functions in marketing and compares those to the success profiles of human resources executives. Some intriguing insights emerged. Instead of looking at personality traits, AETHOS' proprietary psychometric assessment - 20|20 Skills™ - provides an overview of and benchmarks an individual's ten core competencies that predict job performance specifically in service-driven cultures:
- Execution skills - measuring Self-effectiveness, Loyalty to Company, Process Orientation and Service Orientation;
- People skills - measuring Team Building, Sense of Humour, Leadership, and Sensitivity to Diversity;
- Cognitive skills - measuring Creativity and Problem Solving.
The aggregate 20|20 Skills profiles for HR versus marketing show both function leaders are well matched on Leadership, Creativity, Self-Efficacy, Sensitivity to Diversity, Humour and Service Orientation. Both the HR and marketing executives profile here as 'achievers', i.e. A-players - and strong generalists - compared to the hospitality industry's general success profile.
Seemingly, then, there are many transferable skills between the two roles. Yet, there are also a few nuances worth exploring. Firstly, marketers are scoring higher on process orientation and problem-solving and therefore depict stronger analytical acumen as well as a more metric-driven mentality. In comparison, HR is slightly less rigid in its thinking and includes more often gut-reactions into its decision-making process. Secondly, marketers are scoring lower on company loyalty and thus more entrepreneurial and opportunistic. Their attitude is to fail as quickly as possible, learn from mistakes and move on and innovate. HR, on the other hand, is more concerned about long-term loyalty and engagement.
At face value, some of these results may surprise - for example, one might have assumed that marketers should be less process-driven and depict a stronger creative streak with HR executives being the ones concerned about policies and procedures. The fact of the matter is, however, that in today's world marketing leaders are more aligned to quantitative problem solving and strategy (e.g. digital marketing, demand generation) and less about creative endeavors per se. Also, with the split of the traditional HR function, now being much more fragmented into administration and payroll, recruitment and training as well as retention and engagement, human resources executives have become more nimble and adaptable.
Analytical and Metric Driven - New CHROs Focusing on Aligning Business Strategies to People Practices
Having compared the success profiles of marketers with HR pros, one might suspect that - given the overlap of core competencies - companies that have started to recruit marketers into HR roles are on to something. At least it makes conceptual sense, because both marketers and human resources professionals are arguably 'experience engineers', i.e. executives who are concerned about driving and sustaining loyalty and engagement (the difference is that the marketing leader does so externally and the HR professional with a focus on the internal stakeholders).
Assuming that the recruitment of commercial marketers for CHRO positions is one of those "butterfly moments," I thought about the possible consequences for the dynamic system, i.e. the organisations themselves.
As the psychometrics suggest, one possible implication of this approach might be that HR departments will become more data-driven or even formulaic - with the new type of leadership increasingly or exclusively motivated by outcome metrics and business cases, possibly at the expense of relationships or people-first culture-building. Organisations might therefore run the risk of 'commoditising' the HR function, unless there is a conscious effort to maintain and foster a service-driven mentality. Given the analytical background of marketers, and their tendency to think in business metrics, one might also expect such new CHRO profiles asking for bigger budgets to be spend on testing, analysis and other initiatives to optimise people metrics for business outcomes.
Commercial CHROs will therefore add the most value to organisations that strive to make better business sense of employee engagement, guest satisfaction, loyalty programs etc... A word of caution goes to those companies whose HR-departments are solely expected to (re-)define and/or hone brand loyalty and employee retention, and whose HR executives are supposed to look after the status quo and not 'rattle the cage'. Yet, in light of the general market conditions and the hospitality industry's competitiveness, company leaders would be unwise to pursue such talent management and HR strategies which are centred around the unwavering believe in predictability and business certainty. The truth is that today's business world is one of rapid, and chaotic, change. Commercial CHROs should be best suited to weather the proverbial storms.
Leora Lanz (for AETHOS)