June 29, 2021

#003: Leadership Really Is Everything – Time to Step Up

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Human resource is responsible for screening, hiring, and retaining employees. But what change can they bring to a business if they become more driven with leadership rather than merely filling positions? What if they become more involved in the actual processes, management, and workplace culture? George Randle and Tom Lokar challenge every CHRO to step up beyond their job responsibilities and start mobilizing teams towards actual growth and innovation. They explain how businesses can achieve incredible levels of improvement only if the HR department prioritizes leadership skills more than just a person’s professional capabilities.

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As I welcome Tom, the first thing that we’re going to talk about in the era of the CHRO is driving a culture of leadership and how important is that Head of HR. You had a great call out from our last episode which is the Head of HR, the CFO and the CEO, that trifecta is going to drive everything. When it comes to being a leader, how important do you think it is that leadership is the bedrock skill of those leading the human capital function?

That’s one that almost got forgotten in maybe the ’70s and ’80s in the transition from personnel office to the HR function, to chief people, chief human resource officer, which to me is a label that indicates more of a business partner. I don’t think we were great for a long period of time of practicing what we preached as Heads of HR. We were always worried about and focused on succession planning, nine-box grids. Everyone had drunk the Jack Welch Kool-Aid of eliminating the bottom 10%, which I don’t believe is true. I believe that concept was also practiced by Pepsi, well-known for its HR function and development.

The focus is you’re moving the performance distribution to the right 10% every year. Sometimes that meant losing lower performers but sometimes it meant losing high performers who weren’t going any higher. They had reached their level and the company said, “We’re going to create that opening for the next high potential who looks like they could go levels above you.” We’d spent a lot of time architecting leadership transitions and pipelining it at companies like GE, Pepsi, IBM and American Airlines.

I knew a lot of HR people that made their bones being the company psychologist or the company therapist.

They never thought of themselves as a leader.

It’s like, “I’m here to make people feel better and make sure they get paid.” We talked about that blocking and tackling. It’s critical. If you don’t get your people paid, your tenure is extremely short or about to be extremely short. We weren’t necessarily the conscience of leadership. We weren’t necessarily leaders. There were some companies that I was in that were almost the nanny state for HR. I’m not trying to poke at people intentionally but we got wrapped up and all that stuff. There was that psychologist or maybe they were the hairdresser where people would come and confess their challenges, their sadness and all of those things. It gave the side or gave a new definition to soft skills. It emphasized the soft side of HR. We didn’t do ourselves any favors back then.

I was probably entering the consulting world at the height of that. You could tell that leadership capability wasn’t necessarily something that Heads of HR felt they had to work on. It was something everyone else had to work on. They were okay managers. They could manage tasks. They can organize a team but they didn’t see themselves as the pivotal role leading the organization and leadership qualities of mobilizing teams, innovating, looking out into the future and building capabilities to future-proof your company against market trends that could negatively impact your business or market trends that could make it tougher to find talent or people or tap into the right ecosystems for your company. I don’t think that was a pervasive set of skills. It was a blind spot for a period of time. I don’t think it is anymore.

It’s fundamental to being at a CHRO job. I believe that you’re a good leader and yet George, there are many of them that are shitty at leading. They’re tyrants. They’re super smart. They’re so business-focused. They forgot about the people side of their job. They’re not fun to follow but they play-act the role of leader. It’s almost like a magician’s trick to try to make you think they’re leading but what they’re doing and they’re unaware of it or they are manipulating not leading the function. They’re manipulating and they’re playing chess pieces. They’re into the power of the role what we used to call the HayGroup positional power versus social power. They’re into the power that comes from status, being in the job and having all these people reporting to them versus the social power, “How do I mobilize this group of people across the globe to deliver value to our leaders, managers, employees to drive great customer results?”

I would have said that I had the great misfortune to work for two of those people that you described and now, I would say I had the good fortune to work for them because they were shining examples of what the hell not to be. Positional power, moving chess pieces, they came out of or were promoted because they could manage a COE. For those of you out there not familiar with the vernacular, Center of Excellence. A specific function within HR and they manage it. They can manage those tasks. They could give us any number of performance management systems that we had to be compliant with. They would give us any number of pulse surveys.

They seem to be the experts to your point in leadership development and the latest leadership development program but they themselves weren’t students of the business, weren’t students of leadership. In their defense, there are a lot of the C-suite executives around them that didn’t expect anything more either. They were like, “The trains are running on time. People are getting paid. Our lawsuits are down. Our attrition is where it is. I’m not going to expect a whole lot more.” With this era of HR, you could have been caught out if you didn’t have the basics. You need an advanced leadership degree to be thriving in the situation that we’ve been seeing over the months.

If you look at their career trajectory, it elevates very quickly. The rest of their career is stops for coffee at five places over a seven-year period. You can tell pretty quickly. Even if they’re not been a CHRO, George, I’m talking at the director level hiring into your HR business partner pool, your Head of TA, or your Head of OD or Learning. You can tell pretty quickly whether they figured out the leadership role. They get brought in and spit out before they can finish that cup of coffee. You go through the interview process with them. They’ve got a handy made excuse because someone told them, “You got to explain every transition you’ve ever made.”

No one can understand the business and its jobs better than its staffing. Click To Tweet

Probably someone like you had this brilliant secret to try to trick us into hiring them that explains every transition. The bottom line is they’re smart enough to tell a story. Play act that they can be a leader and that’s a gift. I give them credit for having that gift but they’ll eventually get spit out. People will tire of them or more often as in this case, they can’t deliver anything because they look behind them and there’s no one there. They haven’t mobilized a single soul toward any kind of strategy. They’re all over the map. They’re micromanaging and they’re unmanaging. They’re distracted. They start interviewing after nine months. It’s like, “I quit. You’re fired,” year after year for those folks.

You and I knew one of those. We will affectionately refer to that person as a pumpkin head. That was a person in the position of Head of HR that as I would say, I would follow but only of sheer curiosity to see what was going to happen next. By the way, I want to make a point. As we’re describing this, I’ve been dying and I wanted to put it in our book as a statistic. I want you to guess what the number is because I’m still searching for it. How many CHROs, how many Heads of HR cut their teeth and came up through the ranks of talent acquisition? I’m of the belief they never come out of my function. Once I was in talent acquisition, it’s like, “Once you get to be VP, that’s it.” It doesn’t matter how good a leader you are. If you didn’t come out of L&D, of Comp and Benefits, of OD, you were at the pinnacle of your career once you made the VP of Talent Acquisition or whatever the head title was. They never come out of our function and we’re in the business of people. That’s my personal rant and complaint about the moment.

I don’t have a theory as to why. I think it’s ridiculous they haven’t. We used to joke and I don’t anymore, except with you when no one else is around that talent acquisition was the redheaded stepchild of HR. The people in the staffing function had a singular focus and that was to fill jobs or pipeline talent to our leader or manager they had a relationship with once they had that relationship. Otherwise, it was not different.

Worst case scenario, we’re a body shop. I’ve made some inappropriate jokes about it myself.

No one had to understand the business and the jobs in that business better than staffing. One reason, George, is people in your role love that job. To have to deal with the headaches of comp and ben, salary studies, equity design, performance management programs and employee surveys. They liked the data but they don’t want to run the survey, org development work, learning and development, setting up an LMS and setting up an HRS. Once you get your ATS up and running, you are done on systems and some job boards. You run away as fast as you can for many of those other projects.

I think there’s a true passion and love for that kind of work but it’s unfortunate because there’s a breadth of knowledge that you had of our business at HP working for me. Certainly, you had at Forcepoint that I didn’t have at HP because I wasn’t seeing the flow of the business through the eyes of hiring. An undervalued asset to an HR function is where is the business pointing the staffing resources to go find talent? That will tell you a lot about your workforce plan, where the company’s going next in terms of markets, products and services. It’s a shame. I’m always amazed how many people come up from comp and ben into this role because comp and ben have always been more of the bean counter side of HR, the number side of HR. That part hangs because HR has become a much more metric business.

I don’t know why they don’t put that function lock stock and barrel up under the CFO.

It’s because you would lose the total reward recognition culture-building piece if you lost that connectivity. I feel like you would. Payroll, please take it. Unfortunately, I have it again. I’ve said in the previous show, you’re only as good as your payroll system but there’s invariably a lot of process things that aren’t fixed in payroll. You have to go in and get after them almost every week or at least every pay cycle.

You’re right. When I’ve had to interview HR professionals, maybe they’re at a rare moment. There’s a tiny minuscule chip on my shoulder knowing that the Heads of TA aren’t destined for the CHRO seat. I may have possibly on occasion put an HR leader through a tougher interview than I normally would but with that said, if I look back, I on the whole had to lessen my grilling when it came to the leadership of HR professionals. I don’t know if that’s because I gave up on the equation. I usually would figure out did they have the leadership attributes or not?

If they didn’t, it was putting them through the rest of the competency questions, a few behavioral questions. How would you handle this high-risk situation, this employee relations issue? I don’t think anybody is. Maybe with the era that we’re in, maybe they will start screening for the leadership attributes first versus the COE and functional skills putting those at the forefront. You should be finding the right leader first.

I’d like to think that. I’m not a big-time CHRO, George. At this point in my career, I’m not going to get hired by Walmart, Pepsi or name a technology company down your way in Austin, a global technology company. I’m not and that’s okay. I’m not bitter about it. I love what I’m doing and that’s all that matters. I make a good living, so what the heck? I’m afraid that every CHRO, CPO job and maybe this is for every function, does start with your functional expertise and do they have the industry expertise? I still hear that from hiring CEOs. I still hear it from exec recruiters in the big five firms who are out there looking for the talent for these CEOs. There was still that overemphasis first on do they have the functional expertise? Do they have any industry experience? We don’t want to have to explain healthcare to them, retail, or oil and gas exploration.

Today's era calls for HR to put leadership attributes at the forefront of COE and functional skills. Click To Tweet

It’s a mistake. It’s not that you shouldn’t look for those things but you should try to find the best leader with the best sensibilities around how the talent equation can drive your business. That might be the Head of Marketing because of how they’ve run their function, build up the capabilities of their function, worked across the business globally. If it’s a domestic business, you might find that person sitting there. You might find it in sales. It’s not necessarily a person with an HR pedigree but we still love that one-to-one transactional relationship. I’m not trying to push a revolution here to push people like me out of the function and bring in more non-HR folks. I’m saying, if you started with leadership, you might end up with a different and better solution than this adherence to the functional expertise that someone brings.

I’ve worked for so many Heads of HR that they had 1 or 2 functional expertise areas that they were considered an SME. Frankly, as the Head of TA and a couple of companies, I didn’t give a damn what they knew about the HR function. I cared that they were a good leader. I cared that they had a vision, that they knew how to teach, coach, mentor and train. More importantly, what I had looked for when I was interviewing some candidates for CHRO was that they had the ability to connect the customer experience and the employee experience together, tell the story, and value. I knew if I had a leader like that, I’m good at my function. I will take care of my function. Starting with leadership first and selecting your Head of HR is critical. We get onto the big question and this is another jeopardy question for you, Tom. What do you think the role of HR is in driving a culture of leadership throughout a company?

This one’s for $200 that I’m moving up the board. It’s paramount. It is the job. This is me, Tom Lokar. You can attribute this quote to me. You can put it in your next book, George because you didn’t put it in the first one. Mediocrity is the devil’s handwork in a company. Accepting mediocrity is the devil’s handwork. I’m not purporting that we’re in a battle of good and evil within our companies, although sometimes we are. I’m not purporting a spiritual argument here. I’m saying, when you start to accept, “That person’s good enough for that role. We got to get that job filled. We have a burning platform in sales. I can’t wait for months. Let me get the best candidate in as quickly as possible,” you basically destroyed your D&I strategy. There’s no way you’re going to get diversity and certainly not the follow-on inclusion if you work that way.

The role of HR and a lot of people believe this is not my perspective. Smarter people, people have researched this, people that have worked in this space as a thought leader, as an architect of these kinds of systems. I’m thinking like a Rob Sheeran or his partners, Steve Drotter at GE or even Stephen Covey, you name it, Peter Drucker, the HR gurus of our time, Gary Hamel and so forth. Some believe that the only role of the CHRO that matters is the one of talent leadership. That is the job. That encompasses a lot of things. When you start slicing the role by its most critical elements that’s certainly one of them, I think operational HR and having a pulse on everything that’s happening in your function that’s delivering services to your employees and managers thus your customers is also an important piece.

The modern HR leader has to be attuned to technology. There’s a lot more happening in the application space between my employee and manager’s hands, the HRS. Things and solutions we can deliver to them through apps that connect one to the other that can make things like regular coaching, feedback, recognition and evaluating on the fly someone’s compensation and benchmarking it against your company salary data. As a manager, you’re very quickly coming up with a solution for retaining an employee who’s looking at another option. You do the check-off with HR. All that stuff can be happening here. That’s a key skill a Head of HR has to have. They have the fourth. To me, it’s business acumen. I would put leadership and talent right at the top. We do a disservice to other aspects of the role when we say it’s the only thing but once you get all those other things, get them running smoothly, the talent leadership job never ends.

There’s always a way to move that performance curve, that expectation curve of performance of leadership because you’re not going to have a sustainable culture and a culture of excellence. You are not going to have employees that are popping like firecrackers to come to work and to stay late to meet or solve whatever customer need is there. You’re not going to have that without great leadership. In the C-team, you’re playing the role of a leader. You should be in your own behaviors exemplifying the competencies and values of leadership in your company but at the same time, you’ve got to be circling around the team, coaching, advising and pushing those folks to do the same. That goes all the way up to the CEO and having those uncomfortable conversations. It’s a complex role for the Head of HR to drive leadership throughout the company systematically. There are lots of tools and approaches for building leadership capabilities top-down but the complexity comes when you’re working across that C-team.

I know sometimes I can be a little bit of a Pollyanna when it comes to expectations of leaders but I figure if you’re earning the big paycheck that I should be able to expect more. I’ve always wanted to work for HR leaders that were passionate about leadership. The ones that were walking the talk on company values. The things that were most important versus the leader that knew where the company values were hanging on the wall and were able to add them to whatever the latest corporate communications email was going to be or the latest all-hands slide decks that will include the values.

You have always had these high expectations of leading the function, that they had to be a leader walking the talk. For me, the people that I see as leaders or the CEO to CHRO and the COO were the three people to me that I always wanted to see it from. From the Chief Marketing Officer, the CFO, the Chief Product Officer, maybe not so much. Meaning I wanted them to be more good at the function chief product, understanding milestone development, R&D, the interface with customer service and sales.

I wanted the chief marketing officer to be the rock star putting a brand out there that both highlighted our product, highlighted our people and our culture but it was the COO, the CEO and the CHRO for me that I always kept that bar high. For me, it’s a personal bent. I’m sorry that I’m over-rotating on your quote from the last show that this is the era of HR given the pandemic and everything that’s come with it.

This is the time for the HR leader to be passionate about their leadership, the leadership in the company and developing a legacy of leadership. This is the time. I got to be careful that we don’t get too wound up. We’re going to have to edit down the show if I start bitching and griping about the performance management systems that are out there and leadership essentials. At the last company I was at, we had to go through these course leadership essentials. It was for senior managers, directors and above.

I remember looking at the Head of L&D and the CHRO. I said, “Don’t you think it’s a little bit late to try to pull the pie out of the oven and rebake ingredients into it? Why aren’t we starting at the very basic level in building better leaders and building better managers? People get promoted into management all the time and have had zero leadership training.” That’s my little rant. This is the time for an HR leader to be passionate about leadership on every single level because that’s what’s going to make the difference. When we come across times like COVID, whatever the next pandemic is, whatever the next great political divide is going to be or whatever the latest riots and upheaval are, if you’re passionate about leadership, this is your time to thrive in, your time to make a difference.

Mediocrity is the devil's handwork in a company. Click To Tweet

I couldn’t agree with you more. I won’t overtalk your comments. We should leave it at that and go on to the next question or call it a close because that was inspiring.

I get fired up on these topics. I’ll say on every show, I’ve enjoyed the most of my career in this function. Nothing is more dynamic, fluid, ever-changing and ever-challenging than people. I had two more things that I wanted to cover up. How do you think we best start holding people accountable for leading and delivering better? What is it in our toolkit? What should we be doing that is driving better leaders in a company? Performance management sure still is not working but we know that.

I think it’s tying leaders more to factors outside of EBITDA, which is important. You can’t have a business. You can’t pay employees. You can’t develop employees. You can’t do things in the community. You can’t do things beyond your company strategy without profit. That assumes a steady revenue stream. We’ve got to start thinking about company leaders in the measures of what they do past the quarterly and annual earnings too. I’m going to pivot here. You got to start tying it to what is it our customer is paying for? How do I measure leadership’s impact on what they’re paying for?

I’ll give you a good old example from our prior life, George. The sales teams, business development teams at HP Enterprise Services would sell a BPO project/call center project or an outsourcing project. I’m going to talk about a small one. It had a 2 to 5-year window. It had a bounded bill of materials and services, a big number. That salesperson got that commission very soon after the customer signed on the line that is dotted.

About six months into the project, we’d find out we’re not going to be profitable for the first year. We aren’t going to make any money. We have this at Mytel too. We started pivoting incentives toward not the number but the profitability. The next level is the customer delight number, the NPS score from that customer and the services that we sold. I don’t have a great scorecard in mind yet but living in the world I do where the only thing we have to deliver is patient outcomes and making sure people heal within our hospitals before they go back to their group homes or other care facilities, I want to tie my leader’s impact on those more and more.

They have to run a good hospital. They have to run a profitable hospital but we have a well-defined balanced scorecard in Oceans. You’ve got to start looking at that at a lot of companies and saying, “This leadership impact is more than the bottom line. There are other factors.” In some companies, it might be community outreach. They might be the management of the carbon footprint of the company. Whatever those other factors that have become important to your company’s operation beyond your strategy. Maybe I’m futurecasting but we’re going to start expanding the assessment and measurement of leadership on those other factors. The other answer is to threaten them.

We can always do that. Modify their pay when they’re not looking. For me, one of the things that I was batting these ideas around with these HR leaders is we do this climate and these pulse surveys all the time. I want to do a leadership survey. Why aren’t we asking our employees, “Are we leading well?” Why don’t we ask straightforward questions about leadership? “Are you getting the coaching, the mentoring, the training, the leadership, the communication and the feedback from your leader?” Those are ten simple questions for every single leader. I would love to see HR lead the charge and find a way to develop a scorecard to say, “How are our leaders doing on the basics with people?” The bigger scorecards and all those other things, the business metrics are important but sometimes evaluating and championing leadership attributes gets lost in all of the myriads of tools that HR is bringing to the table sometimes.

I don’t think we drill into it. It’s one of the things. I know that this sounds stupid. It’s probably ego and tooting my own horn but I remember as the Head of TA, I don’t even know how many tools are recommended to me to do my job better on a weekly basis. It’s 50 if I don’t include the latest and greatest AI pitch and then I’m into the 150 to 200. I remember talking to my team when I first came in and they said, “We need A, B, C, D, all of these tools.” I said, “How about we do the basics first and get good at that?” Everything when it comes down to holding our leaders accountable to the latest performance management tool, the latest pulse survey, the latest, “I took a survey. It’s one of the last ones in the company that I was at about how are you feeling supported during COVID? How do you feel?”

What are they going to do with that data? The pandemic’s over.

The horse is already out of the barn, for Christ’s sake.

People get promoted into management all the time and have had zero leadership training. Click To Tweet

You’re going to bring the mask back because I felt unsafe, even though we’re all vaccinated.

The success metric is the participation rate on the survey. One of the greatest challenges about holding people accountable is being the example for all things leadership, for evaluating, championing, valuing leadership, building better leaders and managers from the basics up. Not waiting until they make Director or VP to send them off to some leadership course. Start building leadership and holding people accountable at the ground level. That is one of the best ways that we can demonstrate our value as HR leaders in doing that. I know I’ve probably opened up a Pandora’s Box.

I’m going to say something slightly more important than what you said but don’t be offended. What I was going to say is you did open a Pandora’s Box and I’ll close it very quickly. Being a great Head of HR, being a great leader in HR doesn’t come from a script. When I hear about surveys like that and they’re going for participation rate or they feel like they have to ask the question so that they’re perceived asking the question about feelings, that script may or may not tie to the business strategy. My pushback is, do you know whether it ties to the business strategy? This could be one where you’re pulling back and you’re saying, “We have to have a safe work environment for employees to feel productive and to be able to focus on customers.” I get that. Is that a critical question you needed to ask because of that? I’m guessing it’s not. You can go through the whole, what I call a wheel of HR around organization effectiveness, talent management, leadership development, HRS and tools, talent acquisition.

You can pull out scripts and say, “I’m the Head of HR. I’m doing the scripts.” That’s what a lot of HR leaders I see. I’ve interviewed with a bunch of them over the years or interviewed them to work for me. I’m not interested in scripts and nor is your CEO. Your CEO wants to know you’re going to pull levers that match what your human capital needs to drive your business results. Forget the script if you’ve got a couple of tools that you like. I happen to like workday better than most HRS. It’s a behemoth and pain in the ass to implement but I like the way an API is to other things in the cloud, which what I consider best and great tools.

I’m not going to pull that lever here at my job where we’re on a different system until I have a business need to do it. There are other things to fight but I see a lot of script-leading Heads of HR in it. It drives me nuts. It leads to survey questions and employees like that. You lose credibility. When you’re in a leadership team, they’re not telling you, they got that survey too. They’re going, “What is Tom asking us? How do I feel?” They’re behind your back. They’re laughing at you.

It becomes, “We’re going to patronize them and do the survey one more time.”

Your table starts to shrink. The next thing you know, there’s Thanksgiving dinner and you’re in the other room sitting at a granted painting table for the kids while the adults are in front of the board carving the Turkey. How’s that for an analogy?

That’s beautiful. In the next episode, it’s your turn for jeopardy questions. We’re going to have a guest coming on one of the next two episodes. I want to thank all the talent warriors, HR professionals and business leaders out there for tuning in to episode three of the show. Folks, coupled with the last episode, you could start to realize how complex of a role and how critical of a role being an HR leader is but at the core of it, it’s not the functional skills. It’s the leadership skills.

In every role you have, whether you have people reporting to you or whether you’re an individual contributor, you need to be leading and you need to be leading well. That’s the difference-maker in any function in any company. As we exit the pandemic, it’s more important than ever for our HR folks to be leaders. Leaders first, leaders always and everything after that will fall into place. Tom, any parting comments before we say goodbye to the group?

No, George but thank you. Future talent leaders, HR leaders, stay focused on the things that matter to the business and you’ll win.

With that, we hope to catch you on the next episode.

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