The CHRO Role Is At The Center Of Organizational Change

Challenges, culture, and consequences

Change Happens

The biggest change in the CHRO role in recent years is significantly increased expectations. A CHRO is expected to be an advisor to the CEO on business strategy, organizational effectiveness, people, and culture while also being responsible for employee relations, compliance, benefits and compensation, hiring and training, and development.

The CHRO is also expected to have leadership skills, and professionalism to represent the organization and to present human capital performance metrics to the Board of Directors. In my experience, I also had an active role with the Board’s Compensation Committee regarding executive compensation. 

To meet and deliver outcomes based on these higher expectations, the CHRO is now required to bring additional skills, including leading complex change, strategic thinking, business acumen, and delivering results. To be successful, even with all the necessary skills, the CHRO needs the support of the CEO, Board of Directors, and executive team.

The CHRO as Leader

The CHRO is expected to lead the transformation of organizational culture—a long-term investment of energy and effort to achieve behavioral and culture change. This highly impactful but difficult process is critical to the organization because it sets the stage for employees to feel engaged and committed to their work. To make change happen, the CEO and executive team play a key part: they must role model behavior and publicly support the changes. When they resist or don’t take action, it is really easy to blame the lack of progress on the CHRO. A few examples I experienced:
 

• Executives did not directly address employee behavior that negatively impacted the team, which was essentially communicating that culture is unimportant. 
• Executives showed a lack of integrity by implying or saying they supported actions to impact change, but they did not intend to follow through.

CHROS must build high-performing HR teams since, in my experience, expectations of the HR function have also increased—without increased resources. For example, business leaders increasingly ask for the support of an HR Business Partner (HRBP). However, it takes them a while to fully understand the role of the HRBP, including partnering with them, challenging the status quo, aligning on compensation decisions, hiring, performance, and firing. When there is a lack of understanding, especially when the HRBPs are building relationships, disagreements occur; and the HRBP may then escalate the challenges to HR leadership for support. The HR leader may need to make decisions that put them in an unpopular place with the business leader.  

Employee Experience

The CHRO is expected to assess and proactively manage adjustments to meet the complexity of shifting employee wants and needs to develop an employee experience to attract and retain employees. Variations in the employee value proposition have accelerated at a fast pace ever since the global pandemic changed the way we work. 

Research from Forbes indicates organizations that excel in employee experience have a significant positive impact on customer satisfaction and overall business performance. Both leadership and Boards increasingly acknowledge that investing in and nurturing company culture and the employee experience is not just a matter of ethics but a strategic business imperative. 

Yet, there can still be resistance when making changes necessary to improve culture; and when progress is not made quickly, HR is held responsible. Examples include:
 

• Investments in and management of IT may be inadequate; therefore, IT is not capable of providing modern technology platforms that facilitate transparent, timely communication from HR and leaders to employees. This barrier is not in HR’s control, but HR—and ultimately the CHRO—may be held responsible since this is viewed as employee-related.
• Investments in solutions to address employee burnout and mental health challenges may be dismissed—denying that issues may be happening within the company. When this happens, the value of a proactive investment in people and putting a solution in place is lost, leaving HR in a reactive mode and yet held responsible for presenting an issue.

Bottom line: Expectations of the CHRO have increased. And support from the CEO, Board, and executive team will play a significant factor in the HR outcomes and the success of the CHRO. 

What Drives Change?

Key drivers of a change in expectations of the CHRO are the increased importance of having the right number of employees with the right talent amid a talent shortage, shifts in what employees want from their work, and the impact of technology on jobs today and into the future.

While organizations have invested in technology and improved processes, the biggest value is still at the intersection of people, process and technology. This has played out in the past few years in several ways:  
 

• A shortage of frontline production employees resulted in slowing or shutting down production due to a lack of operators to run the equipment
• Company lacks the specialized technical abilities of certain roles which led to quality issues and re-work in the products produced.

The employee value proposition has also changed. Leaders can no longer generalize what employees want; their wants are complex and situational—forcing leaders and HR to be more proactive and focused on providing a variety of solutions.

In my experience, employees want clarity regarding their roles, but jobs are changing quickly with the continuous implementation of new technology. Employees need to adjust, requiring HR to be proactive in employee development and partnering with supervisors to provide clarity.    

Changing Technology

Technology will continue to be an important factor for the future. The CHRO and HR team will need to understand the impact of using AI on jobs as well as supporting employee training in the use of AI. The CHRO should understand and proactively lead the strategic direction of HR technology solutions like self-service platforms and HR analytics scorecards.

Environment, Social, Governance

Most employees expect their employer to proactively manage and communicate the ESG actions. HR needs to be proactive and able to tell the ESG story to potential candidates in their talent acquisition marketing materials. 

They also look for companies that value diversity and inclusion that are proactively managed by leaders. Some Boards expect HR to be proactive and manage DEI efforts—often without investments. HR is required to be proactive in implementing and furthering these efforts, integrating them into the employee value proposition through skilled organizational design, leading change and strategic communication.

Implementing Change

These are a few ways to effectively implement change in the workplace: 
 

1. Define organizational values in behavioral terms and integrate them into HR processes and practices, including performance management, talent acquisition, employee development 
2. Implement a recognition program that rewards employees for collaboration, teamwork, and other culture-building actions
3. Keep culture on the agenda when developing the annual strategic plan and identifying actions the senior leadership team is willing to take to build a culture that is desired

Embracing Change

The consequences of the CHRO due to additional expectations of the role have been increased accountability; therefore, there is additional risk or reward for the position. The CHRO’s strategic influence can be much greater and can have a larger impact on overall business strategy and decision-making, resulting in the satisfaction of HR. 

The outcome of strategic work on talent and culture takes time and support from the CEO and executive team. When the board does not hold the entire executive team accountable for culture creation, they unwisely hold the CHRO solely accountable. 

Today’s CHRO needs to continuously work on their professional development to be effective. They are required to command a more complex skill set than in the past, including strategic thinking, relationship management, business acumen, broad technical knowledge, and expertise in leading large-scale change.

Lori Wall recently served as the SVP and Chief Human Resources Officer of Foremost Farms USA dairy cooperative. Before Foremost Farms, Wall was the Chief Human Resources Officer of Restaurant Technologies.