Last Will and Testament of a Successful CHRO
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I, Jack P. Bucalo, of Washington, Illinois, a retired Chief Human Resources Officer (CHRO), being of sound mind and memory, and having more than 25 years of Human Resources executive level experience in Fortune 500 and Fortune 1000 domestic and international companies, do hereby declare this to be my last will and testament, revoking all prior wills and codicils.
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1. Executors
I name the current nationwide cadre of Chief Human Resources Officers and HR Leaders as my Executors, who from time to time have my consent to affirmatively take action to implement any of the contents of this will or my various published articles.
In doing so, they have the power to distribute and use any or all related documents or knowledge from my various articles to any other group or person as they deem appropriate, without authorization of any court.
2. Bequeathing
I give or bequeath the content of all my articles to the Chief HR Officer or HR Leader in any organization for whom they were written and intended. My over 75 articles do not include any far-reaching generalizations, overly broad concepts, or theoretical viewpoints on various HR subjects. Rather, they cover many critically-important HR subjects and issues that the Chief HR Officer or HR Leader faces every day. In sum, they are PRAGMATIC, DETAILED, INNOVATIVE AND ACTIONABLE documents that represent what I feel are the BEST PRACTICES on the subject.
These articles have been catalogued on two websites:
https://www.hrexchangenetwork.com/column/applied-hr-with-jack-bucalo and
https://www.bizcatalyst360.com. Go to: @scribes, @our columnists, JACK BUCALO.
3. Attesting
I certify and attest to my observations of outside business experts and line management executive’s evaluation of HR’s overall business reputation and worth is true and genuine, as the function strives to be viewed as an equal business partner to its line management peers. Most of these observations are critical of the function which can be summarized as HR having little or no practical business acumen, though it is recognized that HR typically performs its administrative duties in an effective and efficient manner.
As a proud member of the nationwide HR profession, I offer these observations in a constructive effort to help HR improve its reputation as a business partner with the CEO and line management so that it will have a better chance of having its viewpoint on various business issues prevailing more often than before.
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a. Whereas, recent surveys from Fortune and McKinsey are evidence of line management executive’s comparatively low evaluation of the function. In the former survey, only 10% of CEOs believed that HR or their leadership development programs had a clear business impact. In the latter survey, only 11% of more than 500 executives agreed that their leadership and management development programs achieved the desired business results. In other words, such programs do not directly help them operate the business, even though the company’s CEO and line management executives are HR’s ultimate customer.
b. Whereas, line management executives believe that HR is solely an administrative function that does not and cannot help them to operate the business, in stark contrast to finance and line organizations who play a major role in it.
c. Whereas, all other functions of a company have a much more direct impact on the operation of the business, which allows them to have much more influence and power in the company’s decision-making hierarchy.
d. Whereas, investors and the market hold top management of any company accountable for achieving certain financial, strategic, and operating business objectives every fiscal year and over the long-term. Therefore, these business objectives are the top priority of the CEO and line management executives. They should be HR’s top priority too.
e. Whereas, in their August 19, 2020 article in the Chief Learning Officer magazine, Jack and Patti Phillips indicated that the estimated $200 billion spent globally each year on leadership development receives little practical return on investment for the business leaders who sponsored the programs.
f. Whereas, in his classic January 2016 article in the Harvard Business Review “A 10 Year Study Reveals What Great Executives Know and Do,” Ron Carlucci identifies the four recurring patterns of executive level skills that distinguish exceptional performance, three of which are hard skills and only one is a soft skill.
g. Whereas, in his equally classic January 2016 article in the McKinsey & Company Quarterly “Getting Beyond the BS in Leadership Literature,” Jeff Pfeffer concludes that the overwhelming emphasis on singular soft leadership skills substantially oversimplify the real complexity of the leadership issues and dilemmas leaders face.
h. Whereas. line management executives believe that the hard/soft skills mix is 25%/75% for lower management, 50%/50% for middle management and 75%/25% for senior and upper management, while HR believes the mix to be 25%/75% for all management positions.
i. Whereas, senior and top line management believe most leadership and management development programs, especially those intended for middle management and higher, have failed because they: (a) concentrated almost exclusively on soft skills development, (b) excluded any hard skills development, which they feel are critical to job success, (c) provided little or no practical return on investment in relation to the amount of line management time expended on them and (d) refrained from providing any practical business value for the leader’s real world business objectives and plans for which they are accountable to top management, the CEO and the Board of Directors.
j. Whereas, every fiscal year most CEOs and line management executives establish various business objectives regarding its financial, operating, and strategic matters. Typically, these business objectives have a direct effect on increasing sales, improving market share, improving cash flow, reducing costs, improving productivity, enhancing customer care, fostering new product development and market introduction, improving product quality and so on. All other functions in the company are interested and involved in achieving one or more of them. Conversely, HR is apparently concerned solely with fulfilling its administrative duties.
k. Whereas, line management executives value hard skills much more than soft skills because, in their eyes, they are far more predictive of job success.
l. Whereas, most CHROs and HR Leaders expect that they should be respected as an equal business partner by their line management peers because of their job title, they do not understand that such respect must be EARNED by their participation with their peers in the practical operation of the business.
m. Whereas, almost every CHRO or HR Leader desires a seat at the C-Suite table, few will achieve this much-desired goal because of their lack of business acumen and direct involvement in the achievement of the company’s business objectives.
n. Whereas, line management executives believe that leadership and management development programs covering soft skills are intended primarily for first level supervisors and are not relevant or important in helping them to achieve any of their major business objectives.
o. Whereas, management succession is of major importance to the CEO and the Board of Directors, it is either not performed at all or is administered by some other department without any HR involvement. If improperly performed, it stands the risk of being considered “another HR paperwork exercise” by line management executives.
p. Whereas, line management executives believe that HR simply completes the necessary paperwork regarding salary administration matters with little or no input regarding its planning or content, which is similarly true of management bonus, incentive and stock plan design or administration.
q. Whereas, the harsh reality of today’s highly competitive business environment requires a comprehensive and on-going approach by line management to team or agile management and achieving innovative results in all aspects of the business to acquire and sustain a competitive advantage in the marketplace. Line management executives feel that HR’s support of both these critical companywide efforts has been lacking or minimally effective at best.
4. Responding
Accepting any of the above critical observations of the HR function that exist in your organization is fundamental to the future improvement of its business reputation, worth and influence. For each critical observation listed in 3. above (a. through q.), I will offer some corresponding corrective actions and advice on how to address and/or correct the inherent flaw.
a. Typically, every fiscal year the CEO and top line management executives establish various financial, strategic, and operating objectives for the company and each subordinate organization. Uncover these business objectives and seek to find some unique and innovative HR projects and/or services that will help facilitate their accomplishment. Also, meet with the CFO to understand the key financial priorities for the company and each subordinate organization, all of whom will likely relate to one or more of these business objectives. See section 6. for several examples.
In the end, if a business objective and its financial worth are important enough to have warranted a business objective for the CEO and/or the appropriate line management executive, HR should examine it in greater detail to see if there is some new or existing HR program, project or service that can help to facilitate its accomplishment.
b. For HR to be considered an equal business partner, it must get much more directly involved in the operational and strategic mainstream of the company like all the other functions. Simply performing your traditional administrative duties will not do it. In far too many companies, HR is considered an administrative afterthought, far away from the hectic yet critically important aspects of the business. Getting involved in such matters will send a loud and clear signal to the CEO and your executive management peers about HR’s desire to work with them to help the company achieve some of its critical business objectives.
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c. Once the entire organization observes that HR is playing a much more important role in helping the CEO and the company to achieve some of its critical business objectives that it is accountable to the Board of Directors for achieving, HR will have much more influence and power in the company’s management hierarchy and its viewpoint on many companywide plans and issues will be given much more serious consideration.
d. In most companies, achieving these business objectives is the top priority of sales, marketing, operations, R&D, manufacturing, finance, etc., but it simply is not for HR. Initially, line management might be skeptical of HR getting involved, but once HR demonstrates that it can provide meaningful assistance regarding the achievement of any of their business objectives, that viewpoint will change. Then, line management will seek out HRs help when appropriate.
These business objectives are usually established when the financial budgets for the fiscal year are established. That is time for HR to uncover them and determine where and how HR can provide its help.
e. Most current leadership development programs cover only the basic soft leadership skills used by first-level supervisors, do not cover the hard skills that line management value far more because they are more predictive of job success and, most importantly, do not cover the specific hard and soft skills needed to achieve some of the company’s business objectives. By providing important and meaningful assistance that helps line management to achieve some of its quantitative business objectives, HR will help achieve a meaningful return on investment while teaching the right mix of hard and soft skills together.
f. Most current leadership development programs avoid the hard skills that line management executives value while providing little or no practical business value. Ron Carlucci’s article illustrates the critical importance of hard skills to company’s financial and market performance. Such hard and soft skills need to be developed and enhanced through appropriate skills training for line management.
As strongly implied in his article, a major paradigm shift is critically needed in leadership development program content, especially for those in middle, senior and upper management, so that the relevant hard and soft leadership skills are taught together within the practical context of meeting some of the company’s critical business objectives. HR must accept the inherent importance of hard skills and embrace their development, rather than dealing almost exclusively with soft skill development for first level supervisors.
Such a major paradigm shift will require a significant makeover in the staff’s background and skill set, a reallocation of all budgetary resources and the use of outside business experts, especially for programs intended for senior to upper management.
g. As stated in Jeff Pfeffer’s article, the overwhelming emphasis on singular soft skill development in current leadership programs substantially oversimplifies the complexity of the leadership dilemmas and choices that leaders face. The title of his article says it all. HR should reduce the emphasis and time spent on such programs and use that time to incorporate the appropriate hard skills into the program content. You cannot effectively teach soft skills devoid of their associated hard skills.
In the end, the leadership challenges and issues faced by a first level supervisor are vastly different than those faced by middle to upper management and this difference should be reflected in the program content.
h. HR should develop and present leadership development programs that reflect the appropriate hard/soft skill mixes by incorporating more hard skills into them. To facilitate this major paradigm shift, HR should reduce the time, resources and effort associated with soft skill development to help accommodate the inclusion of hard skill development for middle, senior and upper management, especially when the program is directly related to the achievement of one or more of the company’s business objectives.
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i. There is no valid reason why most leadership and management development programs cannot correct most if not all four of these reasons for failure in the eyes of line management executives. All that is needed is a commitment to the business, and not a commitment to HR.
j. HR can provide practical business value regarding some of these business objectives when it trains line management on the hard and soft management skills that are directly-related and relevant to the achievement of one or more of them. From fiscal year to fiscal year, the skills needed are likely to change somewhat so accept this fact in planning your program development content.
These business objectives are established when the financial budgets are developed, usually about two to three months prior to the start of the fiscal year. Uncover these objectives and determine if and how various HR projects or services can assist to help achieve them.
k. Despite this fact, HR typically avoids conducting such hard skills programs, rather than embracing them, especially those management and leadership programs intended for senior and upper management that are needed to facilitate the achievement of some of the company’s critical business objectives. Once you witness the business value of conducting hard/soft skill content, you will never return to only soft skills.
l. HR can become an equal business partner when it follows the advice noted in 4. f. above. In doing so, it will earn the respect of its peers by working with them to help them achieve some of the company’s critical business objectives, which will clearly demonstrate its business legitimacy and worth.
m. Simply carrying out their traditional administrative duties, even in an effective and efficient manner, will not achieve that much-desired seat at the C-Suite table. To achieve it, CHROs and HR leaders must get more directly involved in helping the company to achieve some of its business objectives, like all other functions.
Since many of these business objectives affect the company’s financials, they should understand the key financial priorities listed in the income statement. Understanding these financial priorities and the various business objectives will provide a quantum leap in your business acumen and allow you to meaningfully interact with other executives on these business matters without necessarily having to discuss the HR aspects of them … business person to business person, and not HR person to business person.
n. This unfortunate but accurate observation is caused by HR’s total lack of participation and involvement in the practical operation of the business and its lack of business acumen. HR’s active participation in the achievement of any of the company’s business objectives and other business-related matters will significantly improve its reputation, though it will likely take several years to fully attain such a reversal.
o. This highly confidential program should be designed and administered by the top HR executive who has the respect of the CEO as a business person and executive peer. The plan should list only realistic and viable candidates who have higher line management potential and support. Questionable candidates should be thoroughly evaluated by higher line management executives regarding their most recent performance results, experience, relevant job knowledge, management/executive skills, financial acumen, and leadership skills before being listed.
Assuming the program lists only viable candidates, the key to its success is how the data is used throughout the year as promotional, compensation and development opportunities arise. HR should track all such matters so that all succession candidates are given fair yet appropriately better treatment.
p. HR should be responsible for the design and administration of the company’s salary administration, incentive plans, management bonus, and stock compensation plans. All such plans should be competitive within the industry and/or geographic market, while being fairly administered to provide for internal and external equity. These plans act as a foundation upon which all other HR plans and programs are built.
p. To effectively support these critically-important companywide efforts, HR needs to reexamine its related policies, practices, and programs to ensure that they fully complement both efforts. This includes its company culture, interviewing, selection, on-boarding, compensation, training (problem-solving, conflict resolution, trust-building and collaboration skills), team and innovation recognition, remote employee involvement, and employee advancement.
When, and only when, the CHRO or HR leader offers some pragmatic and innovative HR projects, services and solutions that help senior and higher line management executives to achieve some of their business objectives will HR ever be considered an equal business partner.
5. Governing Law
I declare that this will be governed by the construed in accordance with the laws of the state of Illinois and the United States of America.
6. Codicil
This critical supplement is intended to provide CHROs and HR leaders, as executors of this will, with some practical guidance regarding the administration of it. It provides some pragmatic examples of how various innovative and significant HR projects can assist line management executives in achieving their business objectives.
Before proceeding, it is important to clarify two major terms. First, practical business value is achieved primarily when an HR project or service is directly-related to the achievement of one of the company or division’s specific business objectives regarding financial, operating, or strategic matters. Typically, it is achieved to a far lesser degree by improving an existing HR program or service, which is usually only indirectly-related to the business in general.
Secondly, being directly related means that the HR project or service is in support of a specific business objective, which has a direct impact on increasing sales, improving cash flow, reducing costs, improving productivity, enhancing customer care, fostering new product development and market introduction, and so on. In other words, the business.
Financial Objectives
To improve earnings per share from “X” to “Y” dollars/share.
o With Finance, implement a cost control/profit improvement workshop to identify and quantify potential cost savings and profit improvement opportunities.
o With engineering and marketing, implement a product improvement workshop to identify various product and/or service innovations that can help gain market share and/or reduce product cost.
To increase cash flow by “Z” dollars.
o Train sales staff how to resolve and collect outstanding receivables to bring in more cash.
o With manufacturing, implement an inventory reduction workshop to identify and quantify items that can be eliminated, reduced, or replaced by less expensive ones.
Operating Objectives
To reduce time-to-market for product “A” by 30%.
o With engineering and marketing, implement several team efforts to reengineer and streamline the entire design and launch cycle.
o Retrain management on key changes.
o Conduct a project management workshop to ensure that this project, and all subsequent product development projects, are achieved on time.
To improve customer care to exceed industry standards.
o With customer care, survey outside and company experts to catalog new key service principles, standards, measures, and reporting requirements.
o Determine the new key skills areas required for success and assess the competency level of current staff on all required skills.
o Identify new positions and retraining that is needed for all staff on new principles, standards, processes, measures, and reporting requirements.
o Conduct on-going innovation workshops to continually improve service.
Strategic Objectives
To develop 20 general managers who can operate a $50M/year business.
o With outside experts, develop a general management workshop that covers strategic planning, financial management, product/market development, sales, and leadership.
o Set up a personalized development plan for each general manager.
o Review the entire compensation package for each general manager annually.
To increase sales 20% by acquiring a business that uses an important new technology.
o Update the sales incentive plan to recognize the new technology and improved profit.
o With sales, evaluate the competency level of the sales staff in the new technology.
o Evaluate the current recruiting sources in the new technology and identify new ones.
In witness whereof, I have hereunto set my hand and seal this 30th day of June, 2024,
Jack P. Bucalo
Signed, sealed, published, and declared by Jack P. Bucalo as and for this last will and testament, in the presence of, who, at their request, in their presence, and in the presence of each, have subscribed our names as witness on the date above.
Witnesses:
1. _____________________
2. _____________________
3. _____________________
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