The new CEO and the HR director
Five key areas where a modern HR director can help the new boss get it right from the start
Chief executives don’t last all that long. The average tenure of FTSE100 CEOs, the men and women running Britain’s largest companies, is just 5.25 years according to City AM. If you’re the HR director of a big firm, there’s a decent chance you’re going to be responsible for bringing a new chief executive on board, helping them adjust to life in their new role and hit the ground running.
But how can the HR director best help the new boss? Life at the top is so complex, and so different from any other role, it can be hard to know where to start. Some chief executives instinctively know how to work with their HRD, one of the most critical members of the executive team. Some don’t.
The School for CEOs has carried out research among leading chief executives, chairs and HR directors. Here are the five key areas where a modern HRD can help the new boss get it right from the start:
- Setting the agenda – the new CEO needs to be visibly in charge of the organisation. Many companies are overloaded with initiatives, projects, aspirations etc, the result of the natural desire to resolve all the organisation’s challenges at once. Now, a good business can push forward three major initiatives at any one time. If it succeeds in accomplishing one major objective in a year, it’s had a good year. The HRD can help the CEO prioritise appropriately throughout the organisation, challenging and coaching any tendency she may have to overload the team
- Setting the tone – from the very first moment the new CEO walks in the door, she is setting the tone for the organisation. People will observe what she does and how she goes about it. They will start reflecting back her behaviours. Consciously and unconsciously, the business starts to develop a new culture. The HRD has important role in shaping this difficult-to-define but critical business lever which can make all the difference to the company’s success over the long term
- Creating the team – crucially, the new boss must decide who’s ‘on the bus’. Building a strong, cohesive, commercially driven team is essential to the performance of the business. Selecting the right people in and out of the top team is fundamental to success. Most HRDs will feel this is a core part of their responsibility and competence, helping the new CEO make decisions on changes and implementing them once they’re made
- Developing the team – how does the new CEO get the most out of her new team? Each individual needs his/her own development plan, building their capabilities and confidence. And the team should be led to work constructively and effectively together for the benefit of the business. Clearly, the HRD has a big part to play in bringing out the senior team’s potential, working closely with the new chief executive
- Incentivising the team – successful executives, those with a track record, face an increasing range of career temptations. For example, private equity offers much greater potential financial rewards than corporate businesses have historically been willing to consider. Thanks to new technologies such as LinkedIn, making a career move is easier than ever before. Designing the right incentives has therefore taken on added importance. Retaining key staff and raising their performance, while keeping costs down, has the potential to tie up a lot of time and energy. Again, the new CEO will look to the HRD for help in this complex and often emotive area.
These five areas illustrate the breadth of skills and depth of commerciality required of the modern HR director. The new chief executive is, potentially, in a very vulnerable place. There’s an enormous amount for her to learn in a short period of time. The HR director can play a huge role in helping the CEO make the right moves and set the right tempo through the business. It’s in everyone’s interests that she succeeds.
Patrick Macdonald, former CEO of John Menzies and current chairman of Reconomy, is a partner at the School for CEOs, where current CEOs and chairs teach and develop the next generation of business leaders to help them succeed in senior roles. School for CEOs is sponsoring the Most People Focused CEO category at the HR Excellence Awards 2016