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The Importance of Good Strategic Human Capital Management

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A productive, thriving workforce is the most important component of a successful business. This requires viewing people as human assets, not costs to the organization. As with any other asset, talented workforce can be used strategically to add value to an organization. Companies spend a lot of time and money on M&A diligence, researching CAPEX investments, vetting strategic partnerships, etc. However, many of them miss on putting the same consideration into Human Capital Management even though humans are often your only appreciating asset. Hiring, training and retaining best-in-class talent will provide some of the best ROI’s for any organization with all of the knowledge they will continue to build and greater contributions they will return over time.

Why Focus on Human Capital Management?

Hiring and Retaining the right talent. Human Capital Management is essential for hiring, managing, training and retaining talented and high performing employees. Employees are the most valuable resource in an organization. Individuals who spend maximum part of their day contributing towards the success of an organization are its most crucial resource. Employees can either make or break an organization, truly making them an organization’s lifeline. Human Capital management plays an important role in the recruitment process. It ensures that HR professionals hire individuals who really deserve to be in the organization. Recruiting the right talent is of utmost importance. An individual who is not fit for a particular role will not be able to contribute much in the long run. Turnover is expensive and can be especially costly in the legalized marijuana industry where one bad apple to spoil the whole bunch. Talent acquisition is one of the most crucial responsibilities of human resource professionals, often neglected in most organizations. Do not hire just because a vacant position needs to be filled or superiors have asked for it! Analyze the background of an individual thoroughly. Try to discover WHY someone really wants to join the organization.

Making new employees feel comfortable / Orienting them to the organization. Human Capital management plays an important role in orienting a new employee to the system. Boring and meaningless onboarding programs lead to confusions and an employee eventually loses interest in the organization. New hires make a “stay vs. go” decision within the first 24-48 hours in a new job. Do not load someone with unnecessary information, the very first day (s)he steps into the organization. Make him feel comfortable. Ask him/her not to bring lunch from home & order lunch from outside and ask all their team members to have lunch together. Such small initiatives go a long way!

Training Employees in order to constantly upgrade their skills / Making employees self-sufficient and prepare them for adverse conditions. It is essential for employees to upgrade their knowledge with time to come up with the changing situations. Human Capital Management helps in training the employees and making them indispensable resource for the organization. Employees who do not brush up on their skills from time to time find it difficult to survive in the long run. Human Capital Management helps in developing skills of employees which help them stand apart from the rest. Human Capital management plays an important role in increasing the efficiency of employees. Individuals are in a position to contribute more towards the system, eventually increasing the overall productivity of the organization.

Chief Human Capital Officer (CHCO) Role Description Highlights.

  • Strong communication skills, business acumen, professional & calm demeanor, courage and confidence to provide people with difficult feedback, attention to detail, passion for follow-up, etc., are the foundational elements of a strong and strategic Human Capital Leader.
  • Below for you is our attempt to outline a Chief Human Capital Officer (CHCO) role description in bullet-point format:
  • Responsible for the company’s overall human capital and talent strategy – Pull together all of CC’s extensive internal HR/ HC/ TA and external (us!) resources.
  • Leads the day-to-day HR operations – A heavy Strategic leader who also enjoys getting hands dirty because he knows it’s the only way to ensure success in this startup industry.
  • Champion company culture – HR/ HC/ TA professionals should play a role in supporting company culture.
  • Coaches newly-minted executives to stay in their (Ops, Fin, Mktg, Legal, etc.) lanes while preserving an all hands-on-deck startup environment – Provide valuable on-the-job career coaching to exec’s.
  • Key corporate communications leader – Plays a key role in the Corp Comms arena.
  • Assists CEO / C-Suite with organizational structure and expansion – A voice at the table in the Board Room and all executive meetings.
  • Develops, manages and leads HR department – Build a strong and stable department that can likely succeed after he is gone.
  • Point hiring authority for Director level and above – Delegates junior level hiring to his team but owns the process for key executive hiring. This ensures CC’s key decision-makers are best-in-class.
  • Manages relationship with external talent partner – Keeps us in the feedback loop & knows we will always be transparent with him. Our mutual trust is key when this business must frequently operate at ‘The Speed of Trust’.
  • Nurtures, coaches & provides resources to employees.
  • Implements processes & protocols for employee retention, diversity & inclusion hiring
    • Inspired a culture of promoting from within and holding each other to D&I selection
  • Criteria which resulted in some key women & other diversity hires.
  • Designs specific programs and strategies to ensure a healthy and engaged workplace
    • Developed & deployed some very unique initiatives, i.e., one of the first to offer a 401k.
  • Establish compensation packages and merit increases to ensure consistency throughout
  • company – Strategic about comp package offerings (not too low / not too high) and sits on CC’s compensation committee.
  • Establishes and leads with a teamwork approach – Championed a collaborative + communicative corporate culture.
  • Creates an environment of coaching and feedback throughout the company – Passionate about receiving and providing specific and timely feedback and coaching.

 

As you can see, this profile and function has progressed from fighting for a seat at the table to playing a key role in the executive team as a strategic partner to the CEO and CFO. The HR profession has evolved in recent years and with it the role of the Chief Human Capital (or ‘Resources’) Officer. The CEO, CFO and Chief HC/HR Officer should be viewed as equally responsible for executing the business strategy, with distinct yet highly interdependent roles to play: the CEO defines &/or leads the vision/strategy, the Chief HC/HR Officer articulates and drives the people agenda, while the CFO manages financial resources and investments. It takes people and financial resources to implement the business strategy, which is why the relationship between these (3) leadership roles is so vital.

The role of the Chief HC/HR Officer is becoming increasingly complex and is continuously changing due to a wide range of factors, including the advent of technology, artificial intelligence, automation, the changing profile of the workforce, new ways of working (remotely/ WFH!), and the increased focus on talent. The profile has shifted from a traditional HR professional narrowly focused on his/her function to a well-rounded business leader who can contribute meaningfully in all areas of the business. Today’s HC/HR Chief is a culture-carrier and change-agent who is commercially astute, analytical and technologically savvy, who speaks truth to power and influences softly yet assertively.

In order to keep up with the changing demands of the world of work, this leader must be intellectually curious and have a desire to learn. They must keep abreast of developments, embrace technology, adopt a data-driven approach, obtain business experience, develop a strong network, keep growing, have a business mentor, a coach, and seize opportunities to participate in a wide range of business projects.

In short, Strategic HR Leaders are performing jobs that would have been unrecognizable a decade ago & I believe that the job will continue to evolve rapidly over the years.

The Chief HC/HR Officer role is continuously changing, demanding different capabilities.

Strategic mindset and business acumen: Expected to be discerning, future-orientated, openminded, commercially judicious and able to make evidence-based decisions. She/he is expected to develop robust people plans aligned to the business strategy. A people plan cannot merely serve internal HR functional requirements, it must demonstrate impact to the business.

Change and transformation management: Play a leading role in defining and adapting corporate strategies, structures, procedures and technologies to handle changes in external conditions and the business environment. The people side of change management is often the most important element above the technical tasks necessary to enact change. When the people side of change is poorly managed, change often fails or doesn’t achieve desirable results. Driving change management and transformation requires an organization to embrace learning agility and innovation as a culture. The Chief HC/HR Officer is often expected to embody this agility and be the catalyst for change and transformation.

Mastery of executive compensation: Issues of pay equality continue to gain prominence in the market and this leader must play a key role in designing competitive, equitable compensation and incentive structures to attract and retain key talent. The role is to continuously test internal pay structures against the market and changing legislation; where potential gaps and risks are identified and must develop risk mitigation plans.

Clear understanding of board governance: The remuneration/human capital committees are increasingly scrutinizing executive compensation, examining linkages of talent and performance, focusing on CEO succession and the broad talent agenda. The Chief HC/HR role can add value to the board by bringing expertise in compensation, succession, talent, and the people implications of mergers and acquisitions.

External focus: Today’s HC/HR Chief has to have a good sense of the external industry competitive landscape. She/he can keep abreast by playing an active role in relevant industry bodies. Talent is becoming increasingly mobile, which makes it all the more important for this leader to have a global mindset.

Shape culture: Hold a key role in defining and co-creating the organizational culture with the executive leadership team. A company’s organizational culture can make or break the most insightful strategy. The executive leadership team and the HC/HR Chief have a shared responsibility in creating and driving a culture that is aligned with the business strategy.

Committed to diversity and inclusion: In order for diversity and inclusion to be successful, it has to be a top-to-bottom business imperative that is embedded in all aspects of the organization. Diversity and inclusion cannot be an HR-led initiative but rather it should be CEO-led in partnership with the HC/HR Chief who should play an important role in articulating the business case for diversity alongside the CEO.

Leadership gravitas: Must possess significant power underpinned by competence and an undisputed delivery track record. This power is acquired through strong interpersonal relationship skills, the ability to influence others, and being respected and admired. This type of power is particularly important in this role, since it is built on collaboration and influence rather than command and control.

Balance agendas of high-level stakeholders: Serve multiple high-level stakeholders such as the CEO, the board, shareholders and employees who often have competing demands. She/he must effortlessly navigate and balance the various demands through effective communication, seeking alignment and managing expectations.

Visible, value-added partner: Must be seen everywhere within the organization. She/he must be in touch with the pulse of the organization at all times to make unpleasant surprises less likely to happen.

Courageous: Must have the ability to assess risk, to demonstrate independent thinking and speak truth to power, having the courage to say “No,” if necessary.

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