A CHRO – Chief Human Resources Officer also known as Chief People Officer or Chief Happiness Officer is a person who believes that only happy employees make better employees.

Over the past decade or so, the preferences about talent have steadily shifted from productivity and career success to personal well-being and happiness. According to a recent research by McKinsey, CEOs across the globe see Human Capital as a top challenge, whereas many of them still rank Human Resource as only the eighth or ninth most important function in a company; this perspective needs to be changed.

Besides, many CEOs are found complaining that their CHROs do not really understand the business and are usually found bogged down in the administrative tasks. But here they need to be clear that it is their responsibility to bridge the gaps that are keeping their CHROs from becoming strategic partners. It should be noted that it was CEOs who took the simple accounting to a whole new level (the Finance Department).

The core group in any successful business organization should comprise CEO, the CFO, and the CHRO. Besides, a CHRO should be considered as much a value adder as the CFO, instead of being treated as a supporting player. Many CEOs still commit the mistake of hiring CHROs only to implement the policies that have already been made, rather than giving them a central role in corporate decision making. Any business would benefit from the better management of not just its financial resources but also its human resources. All the companies which have acted on their commitment to the people side of their businesses have grown by leaps and bounds.

The CHROs need to become true partners to the CEOs just like the CFOs did, especially in the last decade, by raising and allocating financial resources and leading the business. They need to build and assign talent, especially the key people and work to unleash the organization’s energy. In short, a CHRO’s strategic focus needs to be on building culture and facilitating an environment that enables the best possible way of working.

In a nutshell, managing human capital must be accorded the same priority that managing financial capital came to have in the 1980s, when the era of the “super CFO” and serious competitive restructuring began.

What are some of the most effective culture-building steps you’ve personally seen?

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