HR Leader Development for an HR or Line Executive Role



Jack Bucalo
07/02/2019

HR Leader Development_Leadership concept with red paper ship leading among white

Some HR leaders, especially those in the early or middle portion of their business careers, may also be interested in considering advancement into line management as well as HR management.  If the leader chooses to consider advancement in line management as part of their development planning, he/she may have to overcome some or all typical perceptions of HR in their interactions with line management people.

HR Leader Development

Typical Line Management Perceptions of HR

Unfortunately, it is fair to say that when a line executive position becomes available within most companies, few HR leaders are given serious consideration among the internal candidates for it.  This is primarily due to their lack of relevant work experience in line management.  However, it is also due to several perceptions that line managers and executives have regarding HR leaders, for whom they have little respect as a business peer.  Therefore, if an HR leader wants to be seriously considered for any line management opening, he or she must fully understand and respond to these perceptions in all their interactions of line management.  

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Here are some of the important perceptions.

  1. HR leaders are viewed as an HR person FIRST and as a business person a distant SECOND.
  2. HR leaders have little or no pragmatic understanding of the strategic, financial or operating aspects of the company’s business.
  3. HR leaders have little or no understanding of the company’s strategic, financial or operating business objectives for the current fiscal year.
  4. Due to their lack of these understandings, they are considered as theoretical or conceptual thinkers, rather than pragmatic business thinkers and doers.
  5. Many line managers and executives view HR primarily as an administrative function that operates by itself, far away from the significant challenges and risks of the business itself. Line management’s compensation and reputation is directly dependent upon their ability to achieve difficult business results in this uncertain and volatile business environment.  Conversely, HR management’s compensation and reputation is primarily risk adverse while being dependent upon its administrative excellence that is unencumbered by the hectic and risky operating side of the business - in stark contrast to all other functions that deal with it daily.
  6. HR leaders are overly concerned with their administrative duties, almost to the exclusion of trying to help the CEO and line management executives to achieve the company’s strategic, financial and operating business objectives for the current fiscal year and beyond. In fact, most line executives would be elated if HR would provide some innovative and pragmatic HR program or training and facilitative service to help them achieve these business objectives.
  7. HR’s leadership development programs, especially those for senior and upper management, deal almost exclusively with soft leadership skill development, rather including the hard skills that line executives value much more in a 75% hard/25% soft skills mix. Line executives would much prefer that the APPROPRIATE MIX of hard and soft skills be TAUGHT TOGETHER while applying them to the executive’s real world business objectives, plans, challenges and risks, because that is the way they exist in their real business world.  Historically, HR leaders have tended to cover only the soft skills because they are unfamiliar and/or uncomfortable with the hard skills.
  8. Here are some examples of hard skills for senior and upper management.
  1. Functional Acumen – understanding various business functions (sales, marketing, product development, manufacturing, etc.) and sub functions (for manufacturing, they are production, quality control, manufacturing engineering, inventory control, etc.), along with planning, controlling and leading major multi-functional and/or multi-divisional team efforts to achieve critical business results.
  2. Financial Acumen – understanding the company and division Income and Cash Flow Statements and Balance Sheet, sales volume and gross profit margins for major products, budget/profit planning and performance.
  3. Fiscal Year Business Objectives - for the company, divisions and key executives.
  4. Business Strategy – understanding the company and divisional strategic plans, major product/market development plans, financial plans and contingency plans.
  5. Executive Skills – Board and top management interaction on key business issues, stock market analysis and analyst interaction, championing innovation and continuous improvement, consistently achieving a profitable financial results and strategic growth, creating an effective work place culture, leadership, and so on.
  1. HR leaders seem to spend a disproportionate amount of their time and resources on the problems of lower and middle management where the problems are relatively simple and the solutions are relatively easy, at the expense of those faced by senior and upper management where the problems are much more complex and the solutions are complicated and far from easy to implement.

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Inherent Decision-Making Factors

There are certain inherent factors that relate to any selection of a person to fill a top HR or line management position at the senior or upper management level.  Some of the key ones are listed below.

  1. First and foremost is the following HARD TRUTH: As long as investors and the market hold the Boards and top management of any private or public company accountable for achieving certain strategic, financial and operating business objectives over the short and long term, any viable candidate for a senior or upper line management position must first have the necessary hard skills that meet the requirements of the position.   Without those hard skills, job success will be very difficult to achieve.
  2. Such decisions are usually made by the CEO, line management executives and, in the case of important top management positions such as the CHRO, by a member of the Board of Directors; almost all of whom typically have a line and/or financial management background.
  3. All of the decision-makers noted above probably have had little experience in their own business careers working with a business-oriented HR executive in a significant and meaningful strategic or operational way. Therefore, the HR candidate must make it explicitly clear in an interview exactly how HR can help the CEO to achieve the company’s business objectives and strategies.
  4. HR success in any company is inexorably tied to the respect that the CEO and line executives have for the HR leader as a business person. In their eyes, such respect cannot simply be handed over to the person because of their job title.  Rather, the HR leader must be able to think and act as a business person at all times in an effort to earn that respect.
  5. As a general rule, the CEO and line executives will be looking for the HR leader to “chart their own path” to the function’s legitimacy as an equal business partner by directly connecting some of their HR programs, and training and facilitation services to the achievement of several company business objectives.

To facilitate upward career growth in either HR or line management, the HR leader should consider various guidelines in their development planning in order to achieve a successful outcome.  Such guidelines are outlined below for a HR or line management path, a line management only path and an HR management only path.

HR or Line Management Path

  1. The earlier in your career that you start your development planning for either or both paths, the more likely you are to be successful.
  2. Each year, the HR leader should have a personalized development plan that takes into account the leader’s next job aspirations and management’s assessment of them.
  3. For senior and upper management development, utilize a 75% hard/25% soft skills mix because the vast majority of CEOs and line executives view and value them as such. Soft skills would include interpersonal skills, management skills and leadership styles, among others.
  4. There should be a thorough and fair assessment of the HR leader’s current hard and soft skills that are required for the next most likely management position in the career path.
  5. Assuming the HR leader’s current performance is above satisfactory, the plan should concentrate on providing the necessary hard skills set for the next most likely position while getting the approval of the appropriate management executives. These skills should be selected within the practical context of the position’s current and upcoming fiscal year business objectives and plans.
  6. The plan should include the development of the HR leader’s business acumen in relation to the company and/or division’s business plans and objectives for the fiscal year.

a. Financial

    • Net Sales or Revenue
    • Operating Profit - both dollar and per cent of net sales or revenue
    • Net income - both dollar and per cent of net sales or revenue
    • Net earnings (income) per share
    • Cash Flow - dollar amount
    • Major capital expenditures

b. Sales/Revenue

    • Top ten customers by dollar sales volume
    • Top ten products by dollar sales volume and gross profit margin percentage
    • Major sales contracts up for renewal
    • Customer Service improvement metric(s)

c. R&D and Product Development

    • Major product engineering projects to be launched in the next few years
    • Current year new product introduction and launch with the expected sales volume increase
    • Current year existing product enhancements with the expected sales volume increase
    • Expected major quality, reliability and performance specificiation improvements

d. Manufacturing

    • Quality improvement metric(s)
    • Production efficiency improvement metric(s)
    • Production scheduling improvement metric(s)
    • Specific cost control improvement metric(s)
    • Purchasing improvement metric(s)
    • Inventory Control improvement metric(s)

e. Strategic Planning

    • Anticipated acquisitions and their expected financial and market impact
    • Expected new product and/or market introductions
    • Expected amounts of net income and earnings per share improvement

This data gives the HR leader the necessary awareness of the company's critical strategic, financial, and operating business objectives and plans which, in turn, gives him/her the ability to interact with the CEO and line executives on these critical business matters, rather than only being able to interact with them on HR matters.

  1. Recognize that 70% of the meaningful and pragmatic learning and development for any management position will occur from actually performing its duties and responsibilities, 20% from team-related projects and 10% from seminars.
  2. Generally, seminars should only be used to provide some general background and information about a function or management position that the HR leader has had little or no background.
  3. Each function within a business (Sales, IS, Operations, Product Development, Finance, etc.) has four or five major sub-functions. Within each sub-function, there are several important departments that have management positions which, in turn, have four or five major responsibilities.  The HR leader should start to interact with the current managers in these positions to understand and document this information, and how it relates to the company’s ability to achieve its business objectives and strategy.
  4. The HR leader’s developmental progress versus the plan items should be reviewed at least every six months, and preferably every three months.
  5. It is important to achieve significant quantitative and qualitative business results in every one of the management positions you assume in order to reinforce to upper management your upward management potential. Achieving these results typically takes at least two years.
  6. Whichever path is pursued, establish a network of insider and outside experts in all of the appropriate sub-functions and/or departments to assist in the development.
  7. The HR leader’s developmental plan progress versus the plan items should be reviewed at least every six months, and preferably every three months.

Line Management Only Path

  1. Understand and appreciate the vast number of complexities and difficulties that the CEO and line executives must navigate within every fiscal year so that all functional aspects of the business are intertwined and coordinated successfully to beat the company’s competitors, achieve its financial goals and increase shareholder value.
  2. When establishing a development plan for an upcoming line management position, give primary emphasis to the necessary hard skills that are required for job success.
  3. Advise upper HR management in advance that you are exploring this line management career option as a possible career path. Even if the HR leader subsequently returns to HR after assuming a line management position, such experience will be invaluable to both HR and the company in the future. 
  4. Seek out an influential line executive, preferably within the particular function in which you will assume your initial management position, who knows you well and can act as your mentor. Once selected, advise HR management accordingly.
  5. If the ultimate career goal is running a business as a general management executive, you should uncover a sequential progression of management positions in the various key functions of the business (Product Development, IS, Sales, Finance, etc.) If the ultimate career goal is to become a functional executive (V-P Sales, V-P Marketing, etc.), uncover a sequential progression of management positions in the various sub-functions involved (for Manufacturing, they would be Manufacturing Engineering, Production, Inventory Control, Purchasing, Quality Assurance, etc.).
  6. In each sub function there is three or four key departments that have salaried management positions which are valued more than others. Each of these positions typically has three or four important areas of responsibility in which actual work experience is more desirable than others for advancement purposes.  If possible, you should strive to assume a management position within one of these important sub-functions.
  7. However, seek out your initial line management position within a particular function where you have had the most practical work experience interacting with their managers and different managerial positions. Review the job description and understand the position’s major areas of responsibility and the business objectives for current fiscal year.
  8. Before assuming any line management position, make a concerted attempt to participate in and/or lead a major team project that deals directly with the particular line department or take an appropriate seminar in an effort to acquire some practical department knowledge.
  9. With the advice of the mentor and the new boss, review the key areas of responsibility for your management position and each position under your control beforehand. Learn about the major projects and tasks currently underway, the progress made to date and any potential roadblocks to success.  Finally, understand how the areas of responsibility and projects relate to the department’s business objectives.
  10. Start interacting with appropriate line management executives within the function regarding the department’s various business issues and how they relate to the function’s ability to meet its business objectives.
  11. Recognizing the desired 75% hard/25% soft skill mix for any line management position, seek out and verify the position’s required hard skills for your future development.

HR Management Only Path

All of the following guidelines assume that the HR leader desires to support or elevate the respect for the HR function as an equal business partner to line executives, as they work together to help the CEO achieve the company’s strategic, financial and operating business objectives.

  1. HR leaders will typically have an ultimate career goal of being a Chief HR Officer (CHRO) or the head of a HR sub function, such as V-P Compensation & Benefits. The development plan for one is very different than the one for the other.
  2. If you desire to pursue the CHRO path, it is critical to assume important salaried management positions within the following critical sub functions: Compensation (including executive compensation), Talent Management, HRIS, Management Training & Development and, if appropriate, Labor Relations. If you desire to pursue the path as a sub-functional HR executive, you should acquire actual job experience in the appropriate major departments within the sub-function.  For example, under the Compensation sub function, the departments would be Salary Administration, Executive Compensation, Benefits Planning and Benefits Administration, while emphasizing the understanding of various HR-related laws and legal requirements.
  3. Whichever path is pursued, establish a network of inside and outside experts in all the appropriate HR sub-functions and/or departments to assist in your development.
  4. It is important for the HR leader to establish and maintain a personalized data base of important outside research papers, survey results, functional reports, major internal proposals, seminar notes, and other relevant information for each sub function to help facilitate movement into any new salaried management position in the career path.
  5. Before the start of every fiscal year, fully understand the company’s and/or division’s strategic, financial and operating business objectives so that you can interact with other company executives regarding them. For each business objective, seek out a new and innovative HR program or management training and facilitation service that can help the CEO and line executives to achieve them.  Such HR efforts will clearly demonstrate HR’s business value to the company. 
  6. To accomplish 5 above, the training/facilitation services provided by the Management Training and Development department will have to shift its program emphasis AWAY FROM providing development on only interpersonal skills, simple leadership styles and basic management skills, and MOVE TOWARD offering a BALANCED PORTFOLIO of soft skills development and business-related skills development.
  7. To accomplish 6 above, seek out HR programs and training/facilitation services such as those outlined in the following examples.

Financial Objectives

To improve earnings per share from “X” to “Y” dollars/share.

o With Finance, implement a Cost Control/Profit Improvement workshop to identify and quantify potential cost savings and profit improvement opportunities.

o With Engineering and Marketing, implement a Product Improvement workshop to identify product/service innovations that can gain market share +/or reduce product cost.

To increase cash flow by “Z” dollars.

o Train Sales staff how to resolve and collect outstanding receivables to bring in more cash.

o With Manufacturing, implement an Inventory Reduction workshop to identify and quantify items that can be eliminated, reduced or replaced by less expensive ones.

Strategic Objectives

To develop 20 general managers who can operate a $50M/year business.

o With outside experts, develop a seminar workshop that covers strategic planning, financial management, product/market  development, sales and leadership.

o Set up a personalized development plan for each general manager.

o Review the entire compensation package for each general manager annually.

To increase sales 20% by acquiring a business that uses an important new technology.

o Update the Sales Incentive plan to recognize the new technology and improved profit.

o With Sales, evaluate the competency level of Sales staff in the new technology.

o Evaluate the current recruiting sources in the new technology and identify new ones.

Operating Objectives

To reduce time-to-market for product “A” by 30% to exceed industry standards.

o With Engineering and Marketing, implement several team efforts to reengineer and streamline the entire design and launch cycle.  Retrain management on key changes.

o Conduct a Project Management workshop to ensure that this project, and all subsequent product development projects, are achieved on time.

To improve customer care to exceed industry standards.

o With Customer Care, survey outside and company experts to catalog new key service principles, standards, measures and reporting requirements.

o Determine the new key skills areas required for success and assess the competency level of these skills on current staff.

o Hire new personnel and retrain all staff on new principles, processes and measures.

o Review findings with top management and acquire implementation approval.

  1. When HR is considering a new or improved HR software package, ensure that the first priority is given to which software package will best directly support the company’s business objectives. Once that is satisfied, the second priority should be which software package will best improve the effectiveness and efficiency of HR performing its administrative duties.
  2. In all interactions with the CEO and line executives, think and act like a business person FIRST and an HR person SECOND.

Summary

The above guidelines are primarily designed to facilitate the career growth of any HR leader who has the potential to work in senior or upper management, while supporting or elevating the respect for the HR function within the company.

Picture courtesy Stock Photo Secrets

 

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