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Performance Management

Published September 2007

Thinking Like a CEO

  Charles Rosenblum

The trend toward talent management has increased HR's focus on business, namely, how employee performance and workplace practices affect the bottom line. But some doubt that talent managers can effectively step into this more strategic role. To earn the C-suite's respect, talent managers need to look at the business as a whole and think like the CEO.

HR long has been considered a necessary staff function with responsibility for maintaining compliance and administration at generally acceptable levels. But there is a perception that HR does not and cannot step up to the plate in the strategy ballpark. HR professionals must ask themselves, "When and how will HR officers break through the senior-strategic ceiling and become full-fledged members of the executive suite?" To counter the belief that HR is not strategic, it must make some fundamental changes in how it understands the organization's business and how it sees its role in the business. Repeatedly, we have said HR should be a strategic business partner, working with the CEO. But how do we legitimately get there?

To earn the respect of the C-suite, HR needs to begin thinking and acting like the CEO. Gaining this respect requires that you:

• Know the business you're in.

• Be aware of what's around the corner.

• Stay attuned.

• Prepare for changes.

• Align the C-suite and HR expectations.

• Translate these business challenges into HR terms.

• Make it happen.

Know the Business You're In

Understand the business — successful HR heads overwhelmingly identify this is an absolute requirement.

"It's just good business sense for me and my staff to understand the business using strategic thinking and analytical skills," said Dan Smith, Borders Group senior vice president of HR. "We must understand what's being discussed at the table and its impact on shareholders, the board and on growth and profitability."

Eileen Whalley, The Hartford executive vice president of HR, said it is also important to know where the business is headed. 

"The CHRO and his or her team must understand the business beyond selling insurance — we must know the emerging business trends in the retirement space and the accompanying innovative new products," she said. "Then, we can attract and develop the right talent to serve those needs."

In this regard, there are several questions HR heads should ask:

• What factors drive revenue?

• What is our market share?

• Do the company's product margins compare favorably in the industry?

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