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Opinion: The Model for the New Chief People Officer

Human capital analytics are revealing for the first time the contribution of employees to the bottom line measured by their productivity, quality, diversity, wellness, and willingness to recommend. It’s now time to move from analytics to action.

By Bruce Bolger 
 
The emergence of a stakeholder approach to management requires not only a new kind of CEO focused on a strategic approach to achieving goals through people, but an officer in charge of the organization’s most important asset: it’s stakeholders. 
 
This individual does not replace the CHRO—there remains a critical need to fully focus on the needs of employees, including the equivalent of social work practices to address their wellbing—nor the CMO—someone has to focus on the day-to-day needs of business acquisition. 
 
In this new world, the CPO, or call it the Chief Engagement Officer, is half-business person, half-people person—specifically in charge of helping achieve the organization’s purpose, financial, and other goals, by making sure the organization is systematically addressing the needs of all stakeholders across the enterprise.
 

A Movement Driven by Investors 

Ironically, the human capital management movement is being driven not by educators, labor unions or consumers, but largely by investors focused on the “S” or Social of Environmental, Social, Governance (ESG). New human capital analytics capabilities make it harder than ever for investors, boards, CEOs and CFOs to ignore the financial costs of disengagement: lower productivity and quality; less willingness of stakeholders to recommend employees, customers, or investments; higher customer employee turnover, more workplace accidents, thefts, and lawsuits, etc. While employee survey results have sat unused on many corporate HR shelves for a generation, it’s increasingly difficult for CEOs to ignore human capital data that can have a direct impact on the bottom line and risk, especially with investors applying increasing pressure.  
 
As a result, it’s time for the human resources profession to rise to the occasion and once and for all embrace its role as Chief People Officer. This is not just a title, it’s a philosophy based on the same principle that helped transform quality in manufacturing during the 1990s through ISO (International Organization for Standardization) quality standards: The management of people requires a CEO-led strategic and systematic approach to creating returns for shareholders by creating value for customers, employees, supply chain and distribution partners, and communities—i.e., all an organization’s people assets. 
 

The New Vision of People Management 

The 21st century Chief People Officer is at the heart of this process that holistically and systematically aligns the interests of all stakeholders toward a common purpose, goals, and objectives. The CPO facilitates the definition of an organization’s purpose, cultures, goals and objectives, and aligns the interests of employees with those of other stakeholders—customers, supply chain and distribution partners, and communities—so all stakeholders focus on common goals and promises get delivered. 
 
So what does the Chief People Officer’s position look like in a world in which the last value bastion of value creation lies in its people? First and foremost, he or she is a businessperson in charge of the organization’s most important asset: people. Like any manager of people, the CPO needs to have empathy and humility, but most importantly, he or she knows how to manage a people-focused operating system. 
 
People management today is the state of quality in manufacturing in the 1980s in the US. It is reactive, ad hoc, siloed, poorly measured, and full of buzzwords, conditions. As with the state of quality in manufacturing during the 1980s. Companies simply built high levels of defects into their business models and pricing, addressing quality with reactive and ad hoc tactics, until the Japanese recognized the weakness and focused on total quality management as a competitive edge with stunning success. It was only through the implementation of a proactive, strategic, and systematic approach to quality were US organizations able to fight back—after a 10-year or more monumental change management effort that has created an army of quality management experts, solution providers, and numerous education and certification programs. The same approach is needed for human capital management requiring a similar army of experts.
 

CPO Job Responsibilities  

What does this mean for organizations who have grasped the economics of having stakeholders highly engaged in the organization’s purpose and vision? Effective implementation is led by a Chief People Officer (or Chief Engagement Officer) in charge of addressing the interests of all stakeholders who can have an impact on the purpose, vision, goals and objectives of an organization. The Chief People Officer is the facilitator and steward of:
  • Organizational purpose, values, and culture—making sure that all these principles are authentic, kept up to date and baked into all interactions with stakeholders. 
  • Human capital management--overseeing a business operating system that aligns the activities of all departments toward common goals and metrics, rather than the siloed approach common today, and which bases DEI (Diversity, Equity, and Inclusion) into daily organizational practices across the enterprise.
  • Human capital reporting—continually analyzing critical metrics linked to financial and other goals, including such factors as human capital ROI, human capital value-add; revenues, costs, turnover, and willingness to recommend of employees and customers, DEI (diversity, equity, and inclusion), wellness, safety and organizational culture.
  • Alignment—making sure that all activities are aligned and integrated when appropriate to support common purpose and goals, including such activities as: strategic planning, business operating systems, assessment and feedback, culture, DEI (diversity, equity, inclusion) job design, recruiting, communications, learning, collaboration and innovation, loyalty, rewards and recognition, engagement technologies, and prescriptive analytics—using data to drive better decisions.

Chief People Officer Skills Requirements  

The CPO  needs to have strong leadership, verbal and written communications skills, along with patience, strategic planning, and team-building capabilities, and she or he has to be a business person able to wear many hats. 
 
From a skills perspective, the ideal candidate has come up through the ranks of management in the organization or in their career with front-line and preferably management experience in one or more areas of business operations, sales, marketing, human resources, finance, etc. From a knowledge perspective, candidates must have a clear grasp of the principles of human capital management metrics and reporting, and the tactics of engagement, including:
  • Business operating systems to keep the organization focused on critical objectives consistent with organizational purpose and culture.
  • Assessment and feedback (stakeholder voice) to make sure all stakeholders are being heard and ideas crowdsourced.
  • Communications in every medium and two-way when possibly to make sure all stakeholders are informed of critical information and have a say.
  • Learning platforms to equip stakeholders with the information they need to better fulfill their roles with the organization.
  • Innovation and collaboration to create a sense of meaning.
  • Loyalty programs to promote retention and referrals.
  • DEI (diversity, equity, inclusion) strategies aimed at optimizing the organization’s pool of talent, customers, distribution and supply chain partners in order to maximize market share.
  • Job design to make work more interesting and engaging to foster greater productivity, quality, and satisfaction.
  • Rewards and recognition to share genuine appreciation and gratitude for efforts and accomplishments.
  • Engagement technologies to align and integrate the above activities to provide a more holistic approach to implementation, management, and analysis.
  • Prescriptive analytics using data to make better decisions.
Nobody can be an expert in all these areas, but it’s important for the CPO to have training in the key elements of stakeholder engagement, human capital management, Enterprise Engagement practices, DEI, metrics, and reporting, and the connection to financial results. Like management in marketing, engineering, and operations, leaders need to have enough knowledge in all areas to ask the right questions. 
 
As with the total quality management movement in manufacturing, what’s critical is the process of continuous improvement, learning from the actual results of your actions so that you can adjust your processes going forward. 
 
If people truly are an organization’s biggest assets, then they must be managed accordingly. Today’s Chief People Officer can have a profound impact not only on the bottom line of an organization but on the experiences of all stakeholders, creating a win-win for shareholders, customers, employees, supply chain and distribution partners, and communities. 



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Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
 
The Enterprise Engagement Alliance at TheEEA.org is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
 
Training and Thought Leadership 
  • Founded in 2008, the Enterprise Engagement Alliance provides outreach, learning and certification in Enterprise Engagement, an implementation process for the “S” or Social of Stakeholder Capitalism and Human Capital Management and measurement of engagement across the organization.
  • The Enterprise Engagement Alliance provides a training and certification program for business leaders, practitioners, and solution providers, as well as executive briefings and human capital gap analyses for senior leaders.
  • The EEA produces an education program for CFOs for the CFO.University training program on Human Capital Management.
  • Join the EEA to become a leader in the implementation of the “S” of ESG and Stakeholder Capitalism. 
EE for CEOsEngagement Digital Media and Marketplaces
Video Learning
The EEA Human Capital Management and ROI of Engagement YouTube channel features a growing library of 30- to 60-minute panel discussions with leading experts in all areas of engagement and total rewards.
 
EE RoadmapBooks
Enterprise Engagement Advisory Services 
The Engagement Agency helps:
  • Organizations of all types develop strategic Stakeholder Capitalism and Enterprise Engagement processes and human capital management and reporting strategies; conduct human capital gap analyses; design and implement strategic human capital management and reporting plans that address DEI (Diversity, Equity, and Inclusion), and assist with managed outsourcing of engagement products and services.
  • Human resources, sales and marketing solution providers profit from the emerging discipline of human capital management and ROI of engagement through training and marketing services.
  • Investors make sense of human capital reporting by public companies.
  • Buyers and sellers of companies in the engagement space or business owners or buyers who seek to account for human capital in their mergers and acquistions
For more information: Contact Bruce Bolger at Bolger@TheICEE.org or call 914-591-7600, ext. 230.
 
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