There is not a CEO in corporate America today who isn’t talking about people and culture. And it’s not hard to understand why.
Unemployment has dropped to its lowest level in 50 years, and talent management is becoming a critical business imperative. Meanwhile, where we work, how we work, and who we work with is changing. Driving this change are a number of factors: technology, the gig economy, globalization, Generation Z, social media, and so many others.
At the nexus of this change is HR, specifically the corporation’s Chief Human Resources Officer (CHRO) or Chief People Officer (CPO). They are the stewards of workplace culture and the strategists of human capital, and if they get it wrong, the bottom-line impact is palpable.
The contributions of CPOs to corporations are just as powerful and critical as Chief Financial Officers. And their growing importance and influence is illustrated by the increasing number of CPOs and CHROs joining the boards of major companies.
According to Equilar, the data analysis firm specializing in corporate governance, the number of HR executives on U.S. public company boards almost tripled between 2005 and 2017 as corporate America is coming to grips with the hegemony of people and culture in today’s workplaces.
Among the latest such appointees are Kathleen Wilson-Thompson, Global CHRO of Walgreens Boots Alliance Inc., who last year joined the Board of Tesla; and Dasha Smith, Chief People Officer for the NFL, who recently joined the Board of global investment firm Cohen & Steers. Encouragingly, they are both African American women, who are growing in the ranks of corporate HR leadership.
But while we are seeing more HR leaders appointed to boards, the numbers are still too small. Of the more than 10,000 directors on the boards of the Fortune 1000, fewer than 3 percent are either current or former senior HR executives.
HR is the Business
Nevertheless, the trend is promising. HR leaders are not only finding a seat at the board table, they are becoming the CEO’s most trusted advisor on strategic business decisions. Leaders now understand that regardless of industry, they are firmly in the people business, making the CPO role indispensable to corporate success. As a result, CEOs are seeking a new and different breed of HR leaders—those with a mile-high view of strategy and culture.
My friend and colleague Marc A. Howze, who spearheads HR for Deere & Company (and also sits on the board of Nationwide Insurance) once shared that CPOs—and all HR professionals— need to embrace the attitudes and actions of a 
strategic leader in the organization. “We don’t serve the business. We are the business—as much as sales or marketing or accounting or engineering,” Marc said.
He went on to tell the story of his CEO asking him at one point if he was ready to move out of HR and into a “business role.” Marc declined, knowing that his greatest business impact could be made right in HR. From that seat, he makes vital decisions about talent, culture, and the policies that drive a global organization.
And it’s paid off for Deere, which increased its net income by 10 percent in 2018, and increased sales and revenues by 26 percent. That doesn’t happen unless you are really investing in your people.
The Future Chief People Officer
In January of this year, SHRM’s Executive Network, HR People+ Strategy, partnered with Willis Towers Watson to release a joint research report, “The Future Chief People Officer: Imagine, Invent, Ignite.” The research focuses on the growth and development of the HR executive of the future and is based on direct input from more than 520 corporate executives, including CPOs, CHROs, corporate board members, CEOs and other C-suite executives.
As diverse a group as they are, the survey respondents agreed almost universally on one thing: CPOs of the future must be “agile” and “courageous,” with the steadiness to support the organization through future complexity. But only 35 percent believe today’s CPOs are up to the task.
Agility is not a matter of shepherding companies through changes that have a beginning, middle and end. Today, transformation is constant, requiring CPOs to perpetually recalibrate and reinvent the workplace. Strategies that work in an era of full employment and a robust economy will be useless when the next recession inevitably starts to bite.
Tamla Oates-Forney, CHRO of Waste Management, Inc., believes HR’s agility is being tested acutely by the skills gap. Her organization is fighting back with a brand-new 30,000 square-foot training facility—its second—featuring a 10-acre driver training course, classrooms, computer labs and technician workstations. Attracting trainees of all ages, backgrounds and communities, the facility graduates more than 100 drivers and technicians every single week.
“It’s not just a job we want to hire them for. We want them to have a long-term, prosperous career,” Oates-Forney said. “They’ve heard we’re a ‘People First’ organization, but now they’ve seen and felt it.” Waste Management made a massive investment in its current and future workforce. That’s where courage comes in. Survey respondents stressed that the CPOs of the future must be bold and brave enough to take risks, test new ideas and make decisions that impact everyone in the workforce—and change lives. They will be letting go of traditional beliefs and roles around HR while confidently predicting the future.
The new world of work is global, flexible, driven by innovation and strengthened by well- built cultures. HR is not just at the table where these discussions are taking place, HR is at the epicenter, and they are leading the discussions.
When CPOs and CHROs are at the heart of the business, employees thrive. They get to spend their days in a corporate culture where they are free to bring their best selves to work, where they have the opportunity to grow and where they are positioned to make real contributions to the business.
With agile and courageous HR leadership, corporate America can be both visionary and nimble—what’s needed to win in the new world of work.
Johnny C. Taylor, Jr., is President and CEO of SHRM, the Society for Human Resource Management.
