There's a new talent leader in town.
A decade ago, strong leadership skills and a seasoned background in human resources was likely enough to land the top people management job.
But today’s top HR officers require a much broader set of skills and experiences, thanks to the continued complexity and globalization of business as well as the heightened premium placed on skilled talent.
As the economy grows more competitive and companies begin to view talent as a key differentiator, experts say talent executives are gaining more attention and authority in the C-suite. “Many of them are taking on more strategic roles,focusing on big-picture talent issues that impact business growth, rather than the more granular day-to-day HR activities,” said John Houston, national practice leader for global workforce analytics at Deloitte in Boston.
To meet such heightened expectations, experts say HR leaders need experience outside of talent management. Spending time in sales, marketing, finance or another department can help young HR leaders develop a more holistic perspective about how the business operates.
Specifically, developing broad business knowledge is a vital step for anyone who wants to join the C-suite, said Patrick Wright, founder of the Center for Executive Succession at the University of South Carolina, which completes an annual survey on executive trends.
The 2013 survey results show chief human resources officers, or CHROs, spend more time talking to their boards of directors about executive pay than any other issue — meaning they have to be well-versed in the financial dealings of the business. “Knowledge of financial operations is much more important today for CHROs,” Wright said. “You don’t necessarily need a finance degree, but you do need a working understanding of how the business makes money.”
Aspiring talent executives will also benefit from international experience, said Steve Miranda, managing director for the Center for Advanced HR Studies at Cornell University in Ithaca, New York. This is especially the case as more and more companies enter new and emerging markets.
“CHROs have to be significantly more global than they were five or 10 years ago,” he said, noting that most Fortune 200 companies look for CHRO candidates who have led teams abroad.
Ultimately, the emerging profile of a talent executive is one that shows the ability to take risks, learn new business concepts quickly and have the confidence and management know-how to navigate change.
The following are three example profiles of talent leaders that have taken an unconventional track to the top HR job.
Minding the Gaps
At the beginning of her career in the 1980s, Eva Sage-Gavin had already identified her dream job: the head of human resources for a large, global company.
So it might seem strange to many in the HR profession to learn that, in her late 20s, Sage-Gavin purposefully left a promising recruiting position at Xerox Corp. to take an entry-level technology sales associate job at the company’s Los Angeles office. “It was either the smartest or the luckiest decision I ever made,” she said.
The choice to temporarily leave HR for another business unit is a common theme among the emerging generation of top-level talent executives. For many, the opportunity to build knowledge in different part of the business is seen as a way to add gravitas as they try to propel a career in HR to the highest level.
For Sage-Gavin, the move into sales was designed as a calculated risk, one that she took to broaden her network, expand her business knowledge and take advantage of Xerox’s intensive sales training program. Through two years in sales, Sage-Gavin said she inherited a clearer understanding of how the business worked as well as what it’s like to have a commission-based compensation plan — insights that would later help in her rise as an HR executive.
“It was a pivotal point in my career that changed the way I thought about HR,” she said.
The move also allowed her the opportunity to build relationships with business leaders who would later recommend her for more senior-level positions. Sage-Gavin would go on to hold HR leadership roles at PepsiCo Inc., The Walt Disney Co. and Sun Microsystems Inc. before becoming chief people officer at multinational clothing retailer Gap Inc. in 2003, where she stayed for 11 years. Today, Sage-Gavin is vice chairwoman of Aspen Institute’s Skills for America’s Future Advisory Board in San Francisco.
“Early in your career is the time to take risks,” Sage-Gavin said. “Even if you fail, you can learn from those experiences and apply them in your next role.”
The Next Generation of Talent Executives Needs to …
Aspiring CHRO’s might feel a little overwhelmed by the vast new set of skills and experiences they’re expected to accumulate if they want any chance of gaining the top job. But it’s achievable if you follow a few simple pieces of advice from those who have come before you:
• Take risks early.
• Look for opportunities to work abroad.
• Step out of HR into at least one business role.
• Look for opportunities to broaden your skills and work under great mentors.
—Sarah Fister Gale
For Dermot O’Brien, CHRO at human capital management software company ADP, the path to the top HR job was a circuitous one.
O’Brien began his career in finance as an international tax analyst for financial services firm Morgan Stanley. But within the first two weeks on the job, O’Brien said he realized it was really more of an HR role, because one of his primary responsibilities was handling income tax issues for the company’s expatriate employees.
“I was dealing with people’s families and creating emotional connections,” he said.
Although he would stay in the financial sector for most of his career, O’Brien transitioned into more official HR roles over time, focusing on compensation, benefits and other financial aspects of talent management. “You want to be seen as someone who can problem-solve for the company,” O’Brien said, citing the importance of financial acumen to HR.
O’Brien also knew taking risks early would bolster his career later on. When offered an HR leadership position in Morgan Stanley’s Hong Kong office, O’Brien jumped at the chance. Originally from Dublin, O’Brien thought the international assignment would give him global credibility. “I’m not an American, and I didn’t have the educational pedigree that a lot of my peers had,” he said. “Going to Hong Kong was a risk, but it helped me to be more competitive.”
He spent the next four years working in Hong Kong and Japan before being recruited back to New York by Merrill Lynch.
Shortly after taking the job with ADP, O’Brien discovered that every business unit in the company had its own schedule for giving performance reviews and accompanying raises. That made it almost impossible for his team to track performance and payroll trends, or to establish a consistent appraisal process.
O’Brien wanted every unit on the same schedule. But with each unit on its own profit and loss system, he knew the only way to get managers on board was to address the money issue head on.
That is when he discovered that the company was being extremely generous with carry-over vacation days — in some cases, allowing employees to bank weeks of time off over several years. Using financial analysis, O’Brien determined that those extra days added $50 million to the company’s costs each year. He showed the data to his CEO, who told him that if he could eliminate that $50 million, he’d give him $10 million back for his department.
O’Brien launched a change management program by letting employees know they had three years to use up their banked days. To ensure employees didn’t feel penalized, he centered the program around wellness, encouraging employees to take vacations and focus on family. Then he used that $10 million to bring every department onto a common performance appraisal schedule, covering the additional cost of accelerated raises and the expenses related to so many people taking vacations.
Within a year, O’Brien had every unit on the same appraisal schedule. He said he is now able to generate detailed reports on compensation trends, in turn bolstering the company’s workforce planning capability.
“Once we were able to get the financial issue out of the way,” O’Brien said, “we knew people would be more open to change.”
Kelley Steven-Waiss has become quite familiar with the skill of driving change.
“Being able to drive change is vital for HR leaders,” said Steven-Waiss, head of HR for Extreme Networks, a global switching and routing products firm in San Jose, California.
Steven-Waiss has spent her career moving between HR and other business roles in several organizations, which she said has provided a broader view of how companies operate and how HR can best influence the business.
One of her most unusual roles was a two-year stint in product innovation for Genentech/Roche, a global biopharmaceutical company. “That opportunity gave me a whole new perspective on how to be more innovative in HR,” she said.
Steven-Waiss then took what she learned about innovation to Extreme Networks, where she is now updating many of the company’s HR practices. She began defining a “distinct vision of the future” that includes taking greater advantage of contract labor and free agents.
She said she felt like tapping this employee class was an innovative way to deal with the ongoing war for talent. She also said it seemed like an advantageous strategy to attract Generation Y. But the existing corporate infrastructure — namely the company’s performance management and compensation programs — weren’t designed for a contract labor model.
“It’s hard to implement contract labor tools like oDesk and Elance when your process is designed for hiring people and putting them in specific boxes,” Steven-Waiss said.
Rather than trying to fit new models into the existing model, Steven-Waiss followed her innovation training and set out to change it. One of her biggest initiatives is an effort to rebuild the company’s performance management process. The old approach followed a “yank and rank” assessment — in which managers pull employees out, assess their past year’s performance and assign them a rating that determines compensation.
Steven-Waiss said she wants to ultimately replace this process with a more future-focused, conversational approach, centered on expectations and how to deliver better outcomes. She said thus far, it’s been difficult to win managers over.
“Silicon Valley was built on the yank and rank culture,” she said, noting that many of the engineers are so number-driven that it has been hard to break them of the rating habit.
Using her past experience working with multi disciplinary business teams, Steven-Waiss has focused on proving the value of change in a language they understand. “We talk about the benefits of motivating employees and how this approach will drive productivity, which will directly impact R&D,” she said.
Engineers especially responded to the idea of improved productivity, Steven-Waiss said, which helped her win them over. This where the other HR leadership skills have come into play.
“Today’s CHROs have to be change managers who understand how to sell their ideas and influence people,” Steven-Waiss said. “Being able to show someone how your ideas can solve their problems is your ticket in.”
Effective HR leaders need technology skills as well. Read the sidebar that accompanies this feature to learn more.