Is the disarmingly authentic chemistry between the Economist Group's HRD and finance director the exception to the rule, or the model for how business relationships need to develop in the future?
Regular readers of HR magazine will know that the HR profession's need to understand the language of the finance director/CEO is a hotly-debated topic of conversion. But HRD Paul McHale and FD Chris Stibbs, it seems, have far bigger concerns than worrying about whether they get on well with each other. That box was ticked long ago.
This duo really are just this - a pairing that works because they are stronger as a team than they are as individuals. They do not just 'tolerate' each other; they thrive on each other's energy. They demonstrate a rare camaraderie that not only translates into respect for the other's business responsibilities, but one where mutual advice and involvement in each person's areas of expertise is not just occasional, but recurring and even encouraged. So what makes this teaming so special?
"We've never really thought about it in exactly those terms," says finance director Stibbs. "We both run functions - ones that historically did their own thing. But my view - and I think I speak for Paul (who nods in agreement) - is that everyone in this business makes decisions all of the time that have fiscal and people-related consequences. As such our joint view is that we should both work to support the business but with no restrictive notions about who is in charge of what."
Stibbs admits this "philosophy is a bit different from the situation five or six years ago", but, according to McHale, the arrangement means both he and Stibbs "have even more influence". McHale says: "We both came to the conclusion that we needed to ask ourselves 'what is it about our people strategy that we need to know that makes this business succeed or fail?' We collaborated with the new CEO and it became clear that there were a top 20 or 30 people in the group that really drive success and failure in this company. Now the two of us regularly talk about how we remunerate these people and how development and succession plan pools are maintained."
In McHale's eyes, HR is not about championing people in a 'this-is-my-area and I'm going-to-protect-my- interests way'. The former, he adds is what managers are for. The latter, he argues is simply about "doing what is right for individuals". And his mantra is that HR should not be averse to being told how it can be improved - whether it comes from the finance director or anyone else.
Stibbs says: "There is a culture here that if anyone has something smart to say, then they can say it. It's the way we work." McHale supports him. "I don't care where ideas come from. I'm not protective about sources of advice."
No place for silos
Both Stibbs and McHale are refreshingly comfortable in each other's presence, often finishing sentences for the other, and nodding enthusiastically about what the other has to say. "Other companies may work in silos, but this is not us," says Stibbs. "I prefer to put more pressure on managers to manage - it creates strong management," he adds, very much in HR-parlance.
In the week of the interview the Economist Group was celebrating record circulation growth for its main title, The Economist (up 9% to 1.3 million), with revenue up 8%, operating margins increases and a huge rise in operating profit - up 23% to £44.3 million.
"Finance sets aggressive targets for top talent," says FD Stibbs. "Long-term incentives for our top people are based on pretty complicated share price growth figures, dividends and other measures, and Paul and I will spend a lot of time working these out," he says. "Pay is a classic conversation the two of us will have. I'll be outlining what these tough targets should be - we call them how far we can 'stretch' someone - while HR is there advising me what the balance is between overloading someone and what is the right stretch target. It's HR's job to justify why one person may be set a stretch target of +20%, while for someone else it may only be +10%."
Everyone is equal
Company culture clearly has a part to play for how these two directors operate. "The journalistic ethos here is no bylines, no names - everyone is equal," says Stibbs. "The notion that anyone can contribute any idea to anyone pervades the company, and we both have a responsibility to keep this going and demonstrate that we can prove that it works between us." McHale says barely a week will go past where he and Stibbs do not have a meeting about something. Their most recent conversation was about fostering diversity in the organisation - not something for which many HR professionals would turn to their FD for advice. But Stibbs is clear about what he can add: "If an organisation is to be successful, sure it needs to have the best people, but it also has to have the best processes, and you don't develop processes just by adding up numbers. I'm on first-name terms with at least the top three or fours tiers of this com-pany, which means I believe I have a lot to offer HR when asked."
Broad career profiles
As well as a supportive company culture, perhaps the success of the partnership between the HR and finance directors also lies in their backgrounds. Stibbs has previously had direct commercial experience running businesses, and in his last role he was a corporate development director where HR actually reported to him. "I've always had empathy with HR," he says. Similarly McHale has not had a pure HR background. He started his career in Sainsbury's as a manager, before moving to management development at United Biscuits. "I've never actually worked for an HR director, only business directors," he says. "I really feel this has helped me understand how the financial metrics and HR really interact."
But surely, there must be some clashes of personality or policy? Both men look at each other, slightly puzzled, scratching their heads. "Even if there is - and I can't think of anything off-hand - we don't see challenging each other as threatening," says Stibbs finally. "In some organisations the FD or CFO will throw stats at HR and ask them what they are doing about it. Our approach is not to put HR on the spot."
McHale backs this up: "A lot of finance people still think of HR as a cost, not as an investment," he says. "Again, this isn't how things operate here. In some areas, yes, we cost money. We have ongoing Peoplesoft HR system updates and we're doing some work at the moment on how we communicate our benefits to staff. But it's not a lot of money, and it's presented to Chris as a business cost and he's perfectly happy with that." Stibbs says: "If anything, the way Paul and I talk helps reinforce to me that HR might well be a business cost, but it certainly isn't an expense."
One skill that certainly does come across is that HR director McHale is incredibly well versed in the company's financial figures. Although Stibbs - by his own admission - is less certain of precise HR metrics, he says his working relationship with McHale is not predicated on competing over who knows what about each other's function: "I couldn't quote you what our people retention figures are," he admits (McHale quickly says that they are between 12% and 15% - exceptionally good for publishing). "I know that it's decent, and I know that it could be better, and that hiring people is expensive. But it is not my job to know this, and I don't need to prove it," he says.
So are Stibbs and McHale a perfect match, a model for how other HR and finance directors should act? Both men are coy about the significance of their relationship, saying it simply works for them, and suits the style of the company they both work under. But, as they pose happily for our photographer, having their own little business meeting in the process, they are undeniably a class act. Maybe you should take a leaf from their book and ask yourself this - how often do you ask your FD for advice? If you do ask for help, you may be surprised by the positive response you get.
