Lessons from the Top

For our 25th anniversary issue, past winners of HRE's HR Executive of the Year award share their wisdom on the evolution and importance of the HR profession -- from whence it came and going forward.

Tuesday, May 1, 2012
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Anniversaries are a natural time to look back as well as forward, to analyze lessons learned, predict what challenges the future brings and, most importantly, think about how to prepare for them.

Since launching its HR Executive of the Year competition in 1989, Human Resource Executive® has had the privilege of talking with some of the best and the brightest in the field, and, in the process, has tracked the HR profession's evolution while sharing stories and ideas that have moved the discipline to a higher level.

So, to commemorate the magazine's 25th anniversary, we went back to some past HR Executives of the Year for a retrospect of, and a look ahead at, this evolution.

What's on the minds of these past winners today? Plenty: the continuing challenge of playing a strategic role in the C-suite, how to get the right skills and talent to move the profession forward, the value and challenge of metrics, and what it takes, personally, to be a strategic and effective chief human resource officer.

Looking back, every current and former CHRO interviewed cited the strategic role of human resources and how, while there are still challenges, the profession is moving in the right direction.

Indeed, going back through old issues of HRE, the strategic role has been discussed and struggled with in almost every issue since the magazine was launched in 1987.

Over time, with the outsourcing of technical tasks and increasing professionalization of the function, the HR executives interviewed reported playing a larger role in their organization's strategic direction than they would have in the old days, when the function known as personnel was primarily responsible for handling pay and benefits, training, industrial relations and a myriad of lesser duties such as organizing the annual corporate events.

Now, heading up HR means anticipating skills and staffing needs, and working closely with members of the C-suite -- most importantly including the CEO -- to ensure the business' human capital can deliver on corporate goals, missions and demands.

It's not that these powerful HR professionals believe HR's potential has been realized. There are some vital improvements that must be made. Yet, when they reflect on their years in the profession and consider the challenges going forward, they put their trust in the fact that HR has never stopped progressing.

As IBM Corp.'s Randy MacDonald puts it, "I think that it is actually viewed now as a profession. I think, years ago, it was viewed as a dumping ground for people who got along well with people. 'He or she has a nice way with people so let's put them in there because they didn't succeed in a line operation or a marketing operation, or whatever.' I think the people now are selected based on business acumen, operational proficiency, creativity, the ability to deliver, the ability to [build and perform in a] team, and the ability to lead."

When MacDonald, the senior vice president of human resources for the Armonk, N.Y.-based technology giant, was selected as the 2008 HR Executive of the Year, he was recognized for his outspoken passion to raise HR to that strategic next level.

He has worked hard to integrate HR fully into IBM's business, whether through planning strategy or as part of the execution. "HR is an integral part of the overall model," MacDonald says. "There are aspects of the business that can't be accomplished without appropriate design and execution of a particular HR program, policy, process or strategy."

Bill Conaty, the 2004 HR Executive of the Year who retired in 2007 as senior vice president of human resources for General Electric Co., concurs.

"I think the function is making a great deal of progress," he says. "A number of role models have managed to really gain that confidence and respect of the CEO and senior leadership team. That elevates the whole HR agenda to [being a] business issue, not an HR issue."

Even with his years in practice further behind him, 1996 HR Executive of the Year, Howard V. Knicely believes HR people get the message and have successfully become leaders more capable of impacting and influencing the business.

HR professionals seem to understand that, if they are "going to be part of the management team, [they] really have to understand the business," says the former executive vice president of human resources and communications for Cleveland-based TRW Inc., who retired in 2003. "They cannot stand outside the business and look in and [still] make a contribution."

Jeffrey S. Shuman, senior vice president and chief human resources and administrative officer for Harris Corp. and the 2011 HR Executive of the Year, remembers well when a Fast Company article, "Why We Hate HR," came out in 2005.

The article's stinging criticism of the gap between the profession's seat-at-the-leadership-table aspirations and its realities "started to spark lots of controversy about what HR can do or not do," Shuman says, adding that, in some organizations, HR is still the police officer and that's not enough in this challenging economic environment.

Shuman was recognized when he won the award for being a true strategic adviser, often involved in business decisions beyond the scope of HR at the Melbourne, Fla.-based communications and IT firm. "It's up to us to transform the function," he says. "I think we can."

But how?

Getting the Right Stuff

Transforming the profession starts from within, say the award winners.

For example, one thing Mirian Graddick-Weir has learned over the years is to "make sure we're really making the right investments and [getting the] right people in HR."

The executive vice president of human resources for Whitehouse Station, N.J.-based pharmaceutical company Merck was named 2000 HR Executive of the Year while she was still at AT&T, but the lessons have come with her.

Too often, she says, HR is like the busy shoemaker's children who have no shoes themselves.

"We're so focused on our line clients that we don't focus on ourselves and are not modeling our own values. We're not hiring the best and brightest with the highest skill sets," she says. "Even though we are under cost pressures, one of big lessons learned is that we shouldn't sacrifice ... investing in our own community."

Indeed, several of the HR leaders interviewed said they were concerned about the kinds of people HR was hiring into its own ranks.

"I'm still not convinced that we have attracted the caliber of professionals that are needed to get out in front," says IBM's MacDonald.

For example, he says, many espouse change management but don't practice it themselves: "[Looking at] the quality and caliber of leaders in HR, [many] are still, in my opinion, relatively averse to risk." MacDonald even suggests that today's HR leaders look to disciplines such as finance and marketing -- areas more versed in assessing effectiveness through metrics -- for the next generation of HR leaders.

That's why having real-world business acumen is so important, says Shuman. "When I think about the defining moments in my career, the most significant achievement was when I moved from HR back into operations and was general manager of a business, a real turnaround business. I used my whole bag of tricks to turn it around."

Shuman says he would sometimes wake up in a cold sweat at night, realizing that if he didn't turn the business around, it would be closed. As a result, he truly understood the pressures faced in operations and brought that understanding back into his HR role.

Similarly, when Graddick-Weir started her career, she was poised between an academic future -- with a doctorate in industrial psychology in hand -- or going into the corporate world to put theory into practice.

She chose practice: "One of the biases I have from my experience in HR is that I've always been a strong advocate of people rotating into other operations so they really understand how the business runs."

She advocates that people interested in HR do such rotations early in their careers and include stints in finance and marketing. That, she hopes, will prepare more HR leaders to focus on the highest business priorities and really create value, just as finance has done with its return-on-investment metrics.

John M. Murabito, executive vice president of human resources and services for Philadelphia-based Cigna Corp. and the 2009 HR Executive of the Year, adds to that proficiency the very necessary skills of constantly streamlining and prioritizing.

In the article about his award, he was lauded by the judges and other leaders at his company for adding efficiencies and reconfiguring Cigna's HR operation to great effect.

When Murabito joined Cigna in 2003, HR was decentralized to the point that each department had its own HR function as well as different policies and salary/bonus structures. He and his team centralized the organization into a "one-company" model.

Under his leadership, Cigna also developed its in-house systems to track talent management, turnover and diversity staffing, using metrics to align programs and policies with the business. It also outsourced the hiring of entry-level staff and transactional services, such as payroll and benefits, which decreased turnover rates.

"The HR function will continue to be challenged in terms of getting more out of less," he says. "We will continue to have to be more efficient and probably leaner, but expectations will not lessen. I think [HR] people will have to be very business-connected and solution-oriented, and [will have to] find the most efficient ways to fill the function. That will continue to be a challenge for most organizations."

The Metrics

With metrics looming large in every discussion of the profession, it's no surprise that it was the second-most talked about topic among the past winners.

They pointed to the critical importance of tracking employee satisfaction; determining more quantitatively what a company can do to attract, engage and retain high performers; and tracking whether professional-development programs are truly effective.

The truth is, says MacDonald, that metrics rule with CEOs: "Why does the CFO get to see the CEO before HR can? Because the CFO can bring into the CEO very evidence-based data that says if this [occurs], then this happens or this return-on-investment yields this. [CFOs] have a quantitative nature to the discipline.

"Analytics is the game moving forward, with HR being able to bring [metrics] into the business equation," he adds. "[HR can then say], 'If we spend this kind of compensation, our attrition will be this, our ability to promote will be this.' If you begin to create a business equation off of analytics, the CEO will begin to listen."

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As a profession, adds Graddick-Weir, HR hasn't been as disciplined in tracking policies and processes that impact the bottom line.

"I don't think we're there in the function yet," she says. "It's something that we haven't necessarily focused on in a big way. HR launches programs and processes and doesn't follow through to measure them over time."

At Google, 2010 HR Executive of the Year Laszlo Bock's people-operations organization has, as one might expect, mastered the use of analytics. As simple as some of their examples may sound, they play a big part in the technology giant's ability to engender individually tailored employee satisfaction and, in the end, high-productivity results.

For example, Mountain View, Calif.-based Google did a series of experiments that found if the people-operations team emailed a manager the day before a new employee started and asked that manager to introduce the person to at least two other people on the team and a handful of other simple things, people got up to speed fully 12 percent faster.

"What's mind-blowing to me about that is that you don't actually have to be a good manager, you don't have to like people, be extroverted or be their best friend," says Bock. "You have to just show up and make sure you say, 'Hey, Sue, let me introduce you to two other folks you're going to be working with.' That totally changes the performance trajectory and it requires almost no work on the manager's part and no work on the people-operation team's part."

In addition, Google built a model that allows Bock's HR team to forecast who, among their high-performers, is likely to leave and what 10 different variables can make them happy or sad. Now, Google optimizes the variables for each person at each point in time "to keep them at our company forever," he says.

Like Bock, many of the HR leaders interviewed say applying metrics and workforce analytics to the function will be the make-or-break competency to keep HR relevant and effective.

Qualcomm Executive Vice President of Human Resources Daniel L. Sullivan, the 2001 HR Executive of the Year, warns, though, that measuring employee satisfaction as a metric in a vacuum is wrong.

He says employee satisfaction is built on thousands of decisions being made every day in the C-suite, thus requiring a CHRO who sees the big strategic picture and uses both data and a degree of intuition and subjectivity to best advise the leadership team.

"And that's how the HR person gets to be leader rather than the person who's asking for a seat at the table or [to be] considered a partner," he says.

It's Personal

Metrics and business knowledge aside, every leader agrees that remaining connected to the people side of HR is critical and will remain critical, or, as Conaty puts it, "Never forget the human in human resources."

"It's also important to remember that there's an employee advocacy to this function," adds Conaty, frequently pointed to as one of the masters of the profession by his peers, including many interviewed for this article.

Not surprisingly, says Murabito, courage is another trait future HR leaders will continue to need.

"I think people have to have more and more managerial courage in HR," he says. "They have to be willing to put tough issues on the table and sometimes be the contrary opinion, the devil's advocate and, likewise, the advocate for great ideas."

Bonnie C. Hathcock, senior vice president and chief human resource officer for Humana Inc., based in Louisville, Ky., was chosen as the 2007 HR Executive of the Year for combining good ideas and people skills somewhat seamlessly.

After spending almost the first decade of her career in sales and marketing at Xerox, she brought to the HR profession strict attention to business strategy as well as to what people needed to do their jobs effectively and contribute to the business in a meaningful way.

"You are unique at the CEO's table," she says. "The corporation needs those qualities to be displayed at the top, to be a well-rounded organization that's appealing to our associates. Those special gifts help shape culture."

In the end, that's what HR is all about: enabling employees to bring their A game to work and create an emotional connection to the consumer or the customer. Says Hathcock, "Everybody wins in that equation."

Read other stories and features relating to the 25th anniversary of Human Resource Executive® magazine:

Brave New HR

Great Expectations

Top 25 Most-Read HREOnline Stories

Word Clouds: Then and Now

Top 25 HR Milestones

Gazing Ahead

A Tale of Two Cities

25 Haikus For 25 Years

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