As the Commonwealth Bank and Telstra start the hunt for new HR heads, Sarah O’Carroll finds out what it takes to fill the director’s chair
The importance of knowing the business
Human resources professionals have heard it a thousand times before: to be a really effective HR practitioner, you must know the business well. You must be able to speak the language of the CEO, understand finance and align the people strategy to the business strategy. But despite the constant reporting on the subject, many HR professionals still struggle with the fact that if they want to make it to the top, they must get a handle on the commercial side of the business.
There’s substantial evidence around it. When recruiting for an HR director, it’s been shown that CEOs prefer someone with some line management experience to demonstrate their commerciality, who can speak from the point of view of having run a business unit, been responsible for P&L and delivered the numbers on a daily basis instead of just advising people.
Strangely enough, HR professionals still don’t respond well to the notion of moving into a line management role. In a recent survey by The Next Step of almost 2000 HR professionals, only 6.6 per cent said they were attracted to moving to a line management role in the future. In terms of professional development, 33 per cent of respondents said that organisational development was the most important factor for them to develop, but only 7.3 per cent said commerce/finance was the most important skill to develop. The survey also revealed that 40 per cent of HR professionals believe HR study would impact their career the most, while only five per cent said that experience in a line management role would impact their career the most.
However, these statistics do not reflect the views of those at the top level – Telstra’s Andrea Grant, CBA’s Barbara Chapman and ING’s former head of HR Sally Kincaid, all of whom have recently left their positions as HR chiefs.
“Until you’ve done it yourself, you can have a somewhat professional or academic view of it, but once you’ve been in a line role yourself you can have that clear sense of what’s important and what’s not important,” says Barbara Chapman. “I personally think I’ve been a better head of HR for the Commonwealth Bank because I’ve run the retail part of a large bank in New Zealand.”
However, many HR people continue to show reluctance to move into these line roles.
“My observation about HR people is that they’re really passionate about HR. So the thought of not working in HR might be difficult because they truly believe in the people component of the business, which is fantastic. But stepping out and doing something else for a few years will make them better HR people – I’m convinced of that,” says Chapman.
Sally Kincaid agrees: “The really big top-end HR jobs are few and far between and they don’t come up that often,” she says. “Each HR person has to make some fundamental career choices. Do you decide to stay a purist HR person or do you decide to step out of HR and try to get some operational experience for a while? I think having that stint outside the function is just invaluable.”
Kincaid says that this is ideally done earlier on in your career and it will definitely add value to your resumé. She also believes that the second choice HR professionals should consider when looking to change role is whether to change sector, be it from financial to FMCG, professional services or resources.
“If you get the chance to move sectors it will also add a different quality to your CV than if you’d been fairly mono-line,” she says. “Headhunters also have quite an important role to play. You do want them to be open-minded to your skills being transferable across sectors, but if you can get that diversity in your career I think it can really help.”
Andrea Grant is an example of an HR director with a diverse background. She joined Telstra as the group managing director of human resources in 2005, during a period of significant change for the company. Previously, she held the role of executive director of HR at GM Holden, where she also served as first female board member. Prior to joining GM Holden, Grant was the human resources director of Merck Sharp & Dohme (New Zealand) and throughout her career has worked in senior HR roles across the finance, pharmaceutical, automotive and telecommunication industries.
Life in the top spot
Grant announced she was leaving Telstra last month. She says that over her six years with the company, taking it through large-scale organisational and cultural change, she learned some valuable lessons. But now it’s time for a break. “The decision to leave is about my life in many ways,” she says. “I’ve worked since the age of 22, which was punctuated by three babies, and I think it’s time to have a break and think about the next stage of my career.
“In big HR roles, there is a big responsibility and big accountability and I need a break from that,” she says. “I have to make a decision whether I want to go back into another big role, or whether I want to go back down the portfolio where I’ll do two or three things that I love and will give me flexibility. It’s taking time out and having breathing space in my life, because the senior HR roles that I’ve had have just been so full-on.”
Grant says that Telstra has been a great company to work for and the opportunity to help drive the transformation of that business has been really exciting and challenging. “I think it’s a wonderful job for my successor,” she says. “What I’d really encourage them to do is to continue to drive the cultural change, in terms of transforming the business into a highly customer-oriented organisation. But I’d also encourage them to really focus on making sure that employees of Telstra have a good experience when they come to work. We’ve started the journey and I’d like to see that continue.”
One piece of advice Grant would give to any aspiring HR director is to be resilient, consistent and remain optimistic. “It’s also important to always remember that even in the most senior parts of the business where decisions are made, those decisions have an impact on people and their lives. Never lose sight of that,” she says.
Kincaid, who finished up her role as executive director of people and performance with ING earlier this year, is currently working as a HR consultant before embarking on her next role. She provides a couple of tips for HR directors stepping into the top job. First, build relationships. Kincaid believes it’s important to establish your credibility early on, as people are generally ready to make a fast judgment. She also emphasises the importance of managing those key stakeholder relationships.
Another piece of advice is to strike a balance between getting some early quick wins and taking the time to sit back and listen and learn about the business and set some long-term goals.
Lessons from the HR leaders
Barbara Chapman is also taking on the next challenge in her career as the chief executive and managing director of ASB Bank in New Zealand. Chapman, who has been head of HR at Commonwealth Bank since 2005, says that one of the biggest lessons she learned during her time with CBA was that large-scale transformation is possible.
“When you think about an organisation the size of the Commonwealth Bank, with 45,000 employees, the idea of making culture change is difficult,” she says. “Coming into the role five years ago, I was thinking: this is a huge business and transformation is going to be extremely difficult – if not impossible. But, in fact, it hasn’t been. We had a very clear and simple goal of improving in customer satisfaction and getting to No. 1 and we aligned all our people to it.”
Chapman says setting a very clear goal was key, followed by having all communications and KPIs focused on that one goal was extremely important. “Then we shared those results and put some energy around it,” she says. “Clarity and simplicity was important.”
According to Chapman, knowing the business inside out is really only the starting point when applying for senior HR roles, but she also believes that is almost a given at a senior level. “You need to understand the fundamentals of the business and what drives your business. That’s just the price of entry,” she says.
According to Chapman, a successful HR professional will understand the type of culture they want inside their organisation and then work out how to achieve it – building an organisation that people want to work for is critical. “To be really successful in HR, you have to have those really deep insights into an organisation’s culture,” she says.
Choosing the right candidate
David Owens, managing director of HR Partners, one of the key selection criteria is based on culture fit. “There’s a lot to be said for having a HR director who understands the business, can work well with the senior team and join with them on the journey to deliver results,” says Owens.
“The person who gets selected for the top HR jobs these days demonstrates a combination of cultural fit, along with competencies such as values, communication or commerciality. And then, of course, being able to demonstrate other competencies such as discretionary effort, and being able to develop the people around you.”.
Being able to prove your past performance through metrics will also benefit the candidate. “A HR professional must think about the metrics around how to prove they have a track record of success, and I think it’s a signal difference now that you can demonstrate success using some hard factual evidence,” says Owens. “Past performance is the best indicator of future success.”
According to Craig Mason, the managing director of The Next Step, only a small number of people are able to perform in a position with the scale and complexity of the CBA and Telstra roles. “A disappointing trend for the overall profession has been that some of these top-level roles have gone to line management professionals over the past five years or so,” says Mason. “On one level it can be looked at to be disappointing in the sense that there hasn’t been the confidence in the senior HR community that there should be in those roles.”
Mason also points out that HR professionals who have managed their career well also stand a better chance of getting to the top spot. “By managing their careers, looking ahead and working with role models and career coaches, they can build up a substantial career journey,” he says. “People will then look at that background and see that they’re equipped to take on that role.”
However, he also believes luck is involved. “At the end of the day, there’s always an element of luck and you can find yourself being sponsored by a line manager. When they move through the organisation, you end up going with them, so it’s a combination of good luck and good management.”
Opportunities and challenges
There has been a lot of movement in terms of senior roles in HR recently. Commonwealth Bank recently appointed Rhonda Brighton, former head of HR of Luxottica to the position of HR leader for the retail operations of CBA. The bank also snared former executive director of people and development at law firm Mallesons Stephen Jaques, Kate Rimer to head up HR for its wealth management division.
“When we were recruiting for Rhonda and Kate, we were quite privileged with the number and the calibre of people who wanted to come and work in this business, and I think it’s because of the story of the transformation of the business and the role HR played in that,” says Chapman. “It is quite exciting for people. HR as a discipline is quite well understood in corporate Australia, so I think there are good opportunities for HR professionals.”
With the HR market lifting this year, there are also a number of challenges facing HR professionals in the job market. “Any role in the senior market has myriad complexities,” says Mason. For senior positions, managing directors must have the right mix – the right background, the right style – and this can lead to top positions being vacant for long periods of time.
“It’s one of those really frustrating things for senior candidates. Often companies have a very narrow view of what they’re looking for in terms of the overall mix and it means that if a senior person is right for the role, they’ll be among a very small group who are,” he says.
According to Matthew Chapman of The Chapman Consulting Group in Singapore, the top end of the HR market has been buoyant recently across the Asia-Pacific region. So another challenge for HR directors searching for a position at the moment is finding a company that is stable.
“Many companies have been going through change and transformation, and the No. 1 skill set that I look for in HR leaders is adaptability and flexibility with change,” he says. “They need to be aware of things not being as they seem. Secondly, there is a lot of salary pressure out there, because there are a lot of senior people on the market, so it’s prudent to move for reasons other than money.”
Moving to Singapore, Hong Kong, Japan or China might be an option for HR directors, as the market is regionalising and many executives are viewing their career in the context of the entire region. But this path presents its own difficulties.
“The challenge for Australian talent transitioning into regional roles is just the fact that most of Australia’s HR talent only has domestic experience,” says Chapman. “But I will say Australia’s talent is very well regarded. They’re seen as flexible and well educated in HR practices, because the profession is mature in the area.”
Chapman’s advice to HR professionals seeking to step up their career is: “Try to get a business leader you connect with, a good functional head of HR, and that will lead to success. If you have one without the other, there will be a problem with success.”
Additionally, if you’re joining a company undergoing transformation, Chapman says HR directors should consider whether they have the support, the headcount and the budget to see that transformation through. “Think about what you want in your career in the future – if you’re someone who wants a future with the company, make sure you join a company with an appropriate runway,” he says.
Source: HR Leader