Unlocking Opportunity in 2024: The Strategic CHRO’s Blueprint for Business Success

The Impact of Strategic CHROs

When surveyed, most CEOs and Boards agree that Chief Human Resources Officers (CHROs) contribute significantly to the success of an organisation, translating business strategy into a tangible people plan. These strategic leaders must collaborate with the CEO to build the leadership team, shape culture, drive engagement and innovation, lead talent attraction and retention, and ensure the business adopts a commercial compensation and rewards philosophy. Interestingly, however, this recognition does not always translate to the level of influence the CHRO has on determining a business’ strategic priorities and shaping its vision and values, which can vary greatly.

Recent research from Accenture underscores the transformative potential of strategic CHROs, who are adept at connecting data, technology, and people to drive collaboration and reinvention. As Julie Sweet, Accenture Chair & CEO, has said "You need to look at your CHRO as being a business leader who’s driving your growth and reinvention. And you need to empower them to follow through on that mandate."

As Indra Nooyi, former CEO of PepsiCo, famously said,

"Leadership is hard to define and good leadership even harder. But if you can get people to follow you to the ends of the earth, you are a great leader."

Similarly, a recent Deloitte report which considers the role of HR leadership in medium-sized businesses highlights the increasing shift from a traditional “back-office” role to a strategic partner in driving growth and business performance. The report identifies three key risks associated with neglecting HR’s role in the growth journey: struggles in attracting top talent, challenges in driving impactful performance, and difficulty preparing for the unexpected: “Without bringing HR along the growth journey and being thoughtful about 'what' HR is doing and 'how' it delivers services, organisations expose themselves to three key risks." This reinforces the critical need for organisations to prioritise the transformation of HR functions to fuel growth. The Deloitte report recommends refreshing the HR operating model to create credibility, capability, community, and capacity, noting that this enables HR to "give HR the license (that is, support) of the business to influence and engage on the most critical issues and initiatives."

In a recent report by BCG, nearly 7,000 business leaders from more than 100 markets across all industries highlighted the synergy between strategic CHROs and business performance. These strategic leaders, equipped with the right skills and connections, can drive positive organisational change and influence performance by accessing and creating talent in innovative ways.

Unlocking Opportunity for 2024

The imperative for businesses is clear: position the CHRO as a strategic leader and member of the executive, and transform the broader HR organisation into a strategic business partnering and enablement function. Accenture's Julie Sweet reinforces this call to action by stating, 

"Future success requires reinvention today. It all starts with connecting data, technology, and people—but it takes the right skills and environment for those connections to truly matter, both within the company and beyond."

At Odgers Berndtson, our global reach enables us to identify world-class leaders for your organisation. Every C-Suite leader must contribute to creating an environment that prioritises talent, enables limitless collaboration, and leverages data and technology for reinvention. By asking critical questions and embracing change, organisations can position themselves for growth and sustained success in an ever-evolving business landscape.

The journey to business success requires a holistic approach that integrates the visionary leadership of strategic CHROs with the transformative capabilities of HR functions. Now, more than ever is the moment for HR to lead the way, ensuring that growth, innovation, and reinvention are not just aspirations but integral components of an organisation’s DNA.

______________________________________________________

Dr Alistair Clark leads Odgers Berndtson’s Human Resources Practice in Australia and New Zealand, with responsibility for Chief Human Resources Officer and other senior People and Culture leadership appointments for the firm's clients across all industry sectors.