Chief Commitment Officer: The New HR Imperative
To achieve business goals, HR executives need the skill to get executives and managers working together, as well as the courage to offer perceptions -- both positive and negative -- to their CEOs. "CEOs need to hear . . . when the emperor has no clothes," says one chief executive.
By Gershon Mader and Josh Leibner
Everyone knows about the poor state of employee morale. Gallup surveys repeatedly show that only the minority of workers at U.S. organizations are "engaged" in their jobs. Yet let's be clear: Poor morale is an equal opportunity affliction. It infects companies of all sorts, great performers and poor.
Some of the world's most successful companies display signs of deep discontent -- and at the highest levels of management. Online auction superstar eBay has lost a third of its executive team since just 2004. Toyota Motor Corp. has seen nearly 40 percent of its top managers exit in that same time, even though it will soon knock off General Motors Corp. from its perch as the world's largest automaker.
A company that's been successful in the past doesn't necessarily mean its management team is productive and satisfied in the present.
Thus it must be asked: Does employee engagement matter? The answer is a definitive yes. As legendary ex-GE CEO Jack Welch says, "To have a fighting chance, companies need to get every employee, with every idea in their heads and every morsel of energy in their bodies, into the game."
Demoralized employees won't get fully behind their CEO's strategy. In a world of brutal, global competition, that won't be good enough. Al Trujillo, chief executive officer of the $600 million information management company Recall, says: "No amount of rewards will ever be enough to get employees to execute at the level you need them, from the top of the organization to the people at the front lines." Companies need employees who are truly committed to making their strategies work, an organizational condition we refer to as "strategic commitment."
The question then becomes: Can HR executives do anything about the lack of strategic commitment? We argue that while lack of strategic commitment is not the fault of HR, it actually is HR's responsibility to fix. In fact, the HR chief is far better positioned than anyone else in an organization to help the CEO and his team gel, and then get the rest of the company on board with their direction.
HR executives who assume this responsibility can elevate his or her impact -- and that of the HR function -- to an entirely new level. It's a level beyond the one played by most HR executives.
Such an HR executive increasingly sees him- or herself as "chief commitment officer" because he or she is the key player behind the scenes who is helping the CEO gain internal commitment for strategic direction and initiatives. We have seen how HR executives have played outsized roles at such companies as Capital One Financial Corp. (a $5.7 billion financial institution and credit card colossus), CHEP (a $3 billion logistics and supply chain company) and Recall, to name a few.
Playing the Commitment Role
In many organizations, CEOs often ask the HR chief to help them generate internal commitment to their strategies. The problem is that HR executives are only asked to assist with half of what it takes to gain substantial employee commitment: the "content" issues of the strategy.
By content, we mean the people impact of the strategy itself and how it is communicated to employees. For example, if it's a cost-cutting initiative, HR will be involved in how many heads must be cut to achieve the target and how much in layoff compensation the company must prepare to dispense. In addition, HR is often asked to help leaders communicate the strategy to employees at all levels given that HR can be a good sounding board for what messages will resonate with or offend the masses.
But this is where HR's involvement in generating strategic commitment usually ends. The other half of what it takes for a CEO or other leader to gain commitment to his strategy is attending to what we call the context issues. If the content is the strategy itself and how it's communicated, context is about how the leaders who are creating the strategy are perceived by the people who must implement it. More specifically, it's about workers' feelings toward their leaders on four fundamental dimensions:
* Leaders' sincerity and honesty about what's really going on in the company (the reasons for a new direction) and what will happen next (good news and bad news);
* Their courage and resolve to hear the truth and make the hard decisions required for the strategy to work;
* Their competence in directing the strategic initiative at hand; and
* Their concern for those who will be affected by it.
The role of the chief commitment officer is to make the CEO aware of how he is perceived by his leadership team on these four metrics, how the leadership team is perceived by their own direct reports and so on down through the entire organization.
HR also must get executive team members to confront the negative perceptions they have about one another -- grudges, lack of personal and professional respect, and other attitudes that prevent people from trusting one another and working collaboratively. In sum, the chief commitment officer is there to help executives understand and confront what prevents their underlings from embracing their plans.
The perceptions possessed by the executive team and others up and down the organization about the CEO are the most important ones for the HR executive to bring forth to the top boss. The CEO must understand what prevents his team members and other employees from getting behind his plan. Is it people's doubts about the CEO's willingness to deal with a key executive who isn't pulling his weight and is holding the organization back (a context issue of courage)? Is it the failed strategic initiative of his predecessor that is causing people to think "not again" (a context issue of competency)? Is it their fear of suggesting process improvements that will streamline themselves out of their jobs (an issue about leaders' care and concern for employees)?
"It is crucial for a CEO to look in the mirror and appreciate how the world sees him -- not how he views himself," says Corey Heller, vice president of HR at Orlando, Fla.-based CHEP. "HR can be critical to that process, to be the consciousness of the organization. HR needs to be the voice of the workforce and engage in what we call 'courageous communication' -- communicating the good and the bad to the CEO."
That is a role that Heller has taken on at CHEP. As an adviser to the firm's chief operating officer, Dave Mezzanotte, Heller has been helping his boss understand the dynamics of his executive team, including their feelings about him. Mezzanotte has led CHEP's U.S. business to rapid growth in the last three years, but not without the pain that comes from stretching people and operations to demanding levels of performance.
"Once you've improved the core processes that drive growth and productivity, the next avenue to increase business performance is greater employee commitment," says Mezzanotte. "This requires a new level of trust and communication. Corey is helping me achieve this at CHEP."
John Powenski, an HR executive at Capital One, plays an instrumental role in gaining employee commitment at the McLean, Va., financial services firm: partnering with company leaders tasked with delivering business process and technology changes.
"Delivering initiatives that fundamentally change a business requires much more of its leaders," he says. "They must maintain people's focus over multiple years, align the work of thousands of employees across different functions and business lines, and integrate a massive web of interdependent projects that are big and complex. These projects must be delivered in unison at the same time. These are the leadership challenges that now face our business leaders."
As Powenski says, developing a sound strategy is not enough for such initiatives to succeed. "To have a chance to deliver something with audacious goals, you need the unified commitment of many. You can expect breakdowns, no matter how good the planning. Your team's resolve to succeed carries the day when the plan breaks down."
Powenski has helped project leaders monitor the strategic commitment of project workers. "This is much different than the traditional morale survey," he says. "These metrics are intended to measure confidence, cultural alignment, leadership behaviors and the support needed to deliver our business strategy. We get at the heart of what drives commitment to the initiative and monitor these vital signs on a constant basis. What sets our leadership agenda is connecting to the team's dynamics. Responding to the team's needs is what builds passionate commitment."
This results in practical actions, too. Leaders quickly address bottlenecks, escalate critical decisions immediately and illuminate work-flow barriers, Powenski says. "We established a set of 'delivery culture behaviors' and consciously changed management processes and leadership behaviors to ensure we live them." Support provided ranges from providing extra IT support in the office to help at home in the form of car washes and meals. "We recognize we are asking a lot of our associates," Powenski says. "They are making sacrifices in their personal [lives] and we continually look for ways to support them. "
Powenski believes that every HR executive has a chance to increase employee commitment to the company's strategic initiatives. "Unleashing commitment is truly the strategic sweet spot for HR professionals," he says.
The advice corporate leaders get from their HR heads about how the boss is managing things is invaluable. But it is also rare. Most CEOs we know hear mostly positive things. Few of their direct reports -- HR or other -- want to be the bearers of bad news, particularly if it's about the CEO's own behavior.
"But it is definitely a critical role for getting an organization aligned with the CEO's strategy," says Peter Dumoulin, Recall's HR chief. His boss, CEO Al Trujillo, agrees wholeheartedly: "This is an important job for an HR director. CEOs need to hear from them when the emperor has no clothes. I ask Peter after every management team call how it sounded and what he is hearing from others."
Commitment Problems -- and Solutions
This reality, that many CEOs don't want to hear bad news (especially about themselves), leads us to conclude this article with advice for HR executives who view the chief commitment officer role as being on the list of most dangerous occupations.
To be sure, this role is neither easy nor risk-free. Being a chief commitment officer is, indeed, a challenging role. To take it on, HR executives must have the courage and the skills to get executives and managers at all levels to productively share their feelings about one another and then push the leader's strategy ahead as if their careers depended on it.
This is by no means simple. But the risk for HR executives of letting a culture of poor commitment perpetuate itself is far greater over time than the risk of offending the executive team. In fact, we expect most CEOs to soon demand their HR executive play the chief commitment officer role. We see this happening if for no other reason than self-preservation. With CEO turnover rising dramatically -- 15 percent of CEOs in the world's 2,500 largest public companies left office last year vs. only 9 percent in 1995, according to a report by McLean, Va.-based consultancy Booz Allen & Hamilton -- the executives who run companies will soon embrace anything that prolongs their shrinking tenure.
Finally, this is the role that anyone charged with nurturing an organization's "human resources" must play. "As far as business 'fixes' go, this is one of the most effective, least expensive and quickest to pursue," says Trujillo.
How so? It is because employee commitment is just waiting to be turned on. Every employee has a built-in capacity for commitment. Most hope to find it in the companies they join. But too many have it snuffed out by poor leadership.
HR executives are perfectly positioned to reverse this situation. As Powenski says, "I am passionate about HR's role in building strategic commitment. The HR role of the future is being a partner with the executive team in building commitment to their business strategies. You can assume people's participation and effort. But you can't buy their commitment. It's an emotional reaction." We hope Powenski's passion for the role becomes contagious in the HR community.
Gershon Mader and Josh Leibner are the founders and principals of Quantum Performance Inc., a management consulting firm that helps HR executives and business leaders generate employee commitment to organizational strategies. For more information, see
www.quantumperformanceinc.com
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August 1, 2006 Copyright 2006© LRP Publications
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