Along with a CEO and CFO, this is one of the most important roles for any organization
When your company is growing like crazy, it can be overwhelming. After all, hypergrowth means hyperspeed, too—a lot of decisions need to be made quickly. And one of the smartest decisions you can make is hiring a chief people officer.
Every day, headlines announce that another company has just hired its first chief people officer. Yet it’s a role that didn’t exist a little more than a decade ago. How did this role get to be so important so quickly?
The answer lies in the importance of workplace culture. It’s no longer enough to offer interesting work at a competitive salary. Prospective employees want to feel connected to the culture and values of your company. And that means you need an executive who focuses inwardly on the company in the same way that other leaders focus on financial or product growth.
In the book Talent Wins, authors Ram Charan, Dominic Barton, and Dennis Carey make the case that the chief people officer (or what they call the chief human resources officer) is one of the three most important positions in a company, along with the CEO and CFO.
The authors call for those three people to manage the company together “because deploying financial capital and human capital together is the key to success.” It also sends a signal that recruiting and developing talent is on equal footing with corporate strategy.
Elevating the person in charge of company culture to a core leadership position reflects how the role has grown beyond the traditional field of human resources. In fact, at a recent industry event, not one of the chief people officers in a panel discussion had HR in their title.
Connecting strategy to operations
A chief people officer is a business leader. John K. Anderson, managing director of executive search firm Allegis Partners, cited business acumen as the top quality of a successful CPO. That means you don’t need to limit your search to someone with experience in human resources. A better fit is someone with a lot of experience in your line of business and the ability to connect strategy to operations.
When Kathleen Hogan started as Microsoft’s chief people officer and executive VP for human resources back in 2014, her background included running the company’s customer service and support divisions and a nine-year stint as a management consultant. None of her previous jobs included human resources.
Hogan’s role as chief people officer was put to the test right away when CEO Satya Nadella put her in charge of the company’s cultural transformation. Nadella wanted to drive experimentation and encourage every employee to learn from their successes and failures.
“To get all employees at the company to understand [Nadella’s] vision of adopting a growth mindset, we had to repeat the messages consistently, frequently, and in a variety of ways.”Kathleen Hogan, chief people officer, Microsoft
“Our communication strategy was critical to making the culture transformation a success,” Hogan told Bloomberg.
The chief people officer role is essential at companies of all sizes
It’s not just global giants like Microsoft that are hiring chief people officers to maintain and grow company culture. Fast-growing startups need the same expertise when they’re hiring a lot of new people.
Companies as small as 50 people have benefited from hiring a CPO. That’s when Ilena Bajic, the founder and CEO of executive search firm Ivy Exec, found her first CPO.
Writing in Forbes, Bajic said hiring for that position allowed her to focus on product and financial growth while the CPO focused on engagement, communication, and a hiring and retention strategy to keep the company growing.
“I believe it is tailor-made for a startup environment and will be a critical component to the success and growth of any company that is flying and building at the same time,” Bajic says. “Now that I have my CPO in place, I cannot imagine life without her, and frankly, I wish I had put her in place much sooner.”
Hypergrowth companies face a lot of challenges, from product decisions to market dynamics to investment decisions. But attracting and retaining talent is perhaps the biggest challenge of all. With a talented chief people officer, your fast-growing business can keep its healthy culture and thrive in the new world of work.