Why the CPO needs to be both an insider and an outsider
The chief people officer's (CPO) job is to lead the development and realisation of a company's human resources (HR) strategy. It sounds straightforward, but in practice, whether Group CPO/CHRO or Regional CHRO of a multinational, it is one of the widest reaching, most challenging roles in an organisation.
Leading HR strategy today means creating competitive advantage through talent and culture. The role calls for perspective — something that leaders in other parts of an organisation sometimes lack. As a cultural custodian, the CPO must be able to empathise with everyone from the CEO to the recent graduate. They must be able to bring the outside in, staying on top of external business and cultural trends and identifying their potential impact on the organisation before other executives do. Crucially, they must also keep their own organisation's culture at arm's length and avoid succumbing to “groupthink” and “not invented here” syndrome.
One APAC based CHRO I recently spoke with stressed this duality in the role, being a voice and sometimes advocate for employees to the leadership team, and that there is no other position that has this explicit responsibility. The CHRO has to protect the company while safeguarding the employees.
As a member of the executive committee, the CPO therefore is something of a wild card. While they do need to be collaborative, a big part of their worth lies in offering up new ideas, encouraging unfamiliar thought processes — and sometimes telling other executives what they might not want to hear. They represent the voice of 'the people' to the top levels of the organisation.
As one CPO we interviewed put it: "The more native you become, the less value you can create in the role."
Being able to speak freely in a large, or even relatively small, organisation requires trust and support as well as a solid understanding of everything that happens within the business. The CPO can appear as a floating entity, answerable to everyone yet having no direct boss. This makes relationships and network building particularly important. The CPO’s relationship with the Board and nominations committee is all the more important for this reason.
A new CPO has two key tasks: to learn about and analyse the business and form a productive relationship with the CEO. The two are linked: after a period of acclimatisation, the CEO will expect an original take on the company and will want to see an understanding of the strategic and commercial business agenda underpinned by data. If the CPO does this early on, they will have the best basis for building trust and showing themselves to be a proactive solution provider, even when their observations may be critical.
The CPO also needs to win over the CFO and general counsel, both of whom can see the HR function as a financial and operational risk. To the former, it is important to show the value that a people-related strategy can deliver and begin to link people and financial metrics. The latter will want to see alignment between people strategy and legal governance. All three, including the CEO, will appreciate the CPO's ability to act as a sounding board — one that is both insightful and non-threatening.
CPOs we spoke with felt that it is possible to simultaneously have strong inside relationships and retain an “outside perspective”. Key to this is to have a sounding board in the form of a peer network. This might comprise other CPOs who can offer advice on important issues. It should also include people at different levels within the organisation. By assessing the roles that have disproportionate impact on the company, a CPO can over time build an invaluable network to draw upon for information and insight — a personal Board, so to speak. Maintaining informal communication channels from which to source unrefined first-hand feedback is critically important: it provides a window on culture as people experience it day to day and guards against what one CPO describes as "ivory tower syndrome".
This helps make the CPO arguably the best-placed person in an organisation to deliver an outside-in view to the Board and serve as an adviser to its members. Boards are taking an increasingly active role in shaping culture, and value independent perspectives that show understanding of issues on the ground, especially those with a bearing on ESG. In this capacity, the CPO treads a delicate line between the executive committee and the board while having the duty to remain impartial and diplomatic.
As with executive relationships, trust is the currency that the CPO must build up over time.
Ultimately, the CPO needs both a strong backbone and thick skin to succeed as they play the dual role of insider and outsider. Advancing their agenda, which must be in the interests of both the organisation and its employees, requires the courage to put a stake in the ground, raise unpopular topics and push back on demands that are out of step with the overarching purpose. Degrees of resistance and friction are part of the territory, and 'fitting in' entirely is not an option if the CPO is to make good on the reason for their appointment — which is to make a positive difference.