The Increasing Importance of the Chief People Officer

The role and impact of the Chief People Officer (CPO) or Chief Human Resources Officer (CHRO) has continued to evolve since its emergence some two decades ago. Its origins marked a break from the traditional view of HR as primarily a tactical and administrative function to instead recognizing it as an indispensable part of the C-suite. That view has only grown as businesses face unprecedented challenges and historically tight talent pools. Here, we examine key aspects of the CPO role and why it’s now more important than ever.

A Primary Purpose of People

People power organizations. Realizing the full potential of that power requires putting the right people in the right roles for the right reasons. For the CPO, this means shaping and carrying out a strategic plan that unlocks that people potential via a high level of employee engagement.

Employee engagement itself has been a tough-to-define concept for many. Blessing White’s “X Model of Engagement” frames full engagement as the intersection where employees are getting everything they need and want from the organization and, at the same time, the organization is receiving maximum contribution from its employees.

A CPO advances this aim by listening to the needs and objectives of employees and the organization continuously and simultaneously, while also monitoring the market and other variables that may impact the organization’s ability to attract and retain talent moving forward. We saw this acutely throughout the pandemic in the way of new work models and creative strategies for accommodating work-life integration amid the unprecedented disruption.
We also see the CPO’s support of employee engagement through the development and deployment of foundational programs, practices, and processes that best address the collective needs noted above. This includes areas such as performance management, learning and development, career pathing, succession planning, and more.

An Enabler of Business Strategy

In a Harvard Business Review article, management consultant Ellie Filler positions the CPO as the person who “enables the business strategy.” The best CPOs are strategic thinkers that focus primarily on shaping the direction of their organization’s people-focused efforts while leaving tactical matters to their team and downstream managers.

The CPO’s executive-team presence is critical because people affect every function. The CPO listens to the challenges, concerns, needs, and opportunities of the broader leadership team and acts as a valued partner in helping them accomplish their objectives. Succeeding in this requires the CPO to have good working relationships, strong communication skills, high business involvement, operational savviness, and high emotional intelligence.

When John Bilbrey became CEO of Hershey, he brought on and forged a close working relationship with a CHRO whom he tasked heavily with carrying out, communicating, and reinforcing his vision for strengthening the company and its people. This played a pivotal role in the company’s soon-to-be-found success. Reuters reports that during Bilbrey’s five-year tenure as CEO, “Hershey doubled its market value to $20 billion, improved its profit margins, and increased its market share in the United States to 31.3 percent from 28.3 percent” while also diversifying its business.

A Culture Carrier and Brand Builder

Every business seeks to be an entity that people want to be associated with, want to work for, and want to grow alongside. How well an organization meets these measures depends largely on the strength of its organizational culture and brand. Culture starts with leadership articulating and establishing the values, expectations, and practices it wants the organization and its employees to be known for. The CPO acts as a key vehicle for carrying and embedding those cultural attributes across the business.

The CPO’s impact on culture manifests itself in myriad ways through how the organization approaches hiring processes, candidate profiles, development programs, communication practices, performance management and more. An important aspect of these collective components is how they work together to instill and reinforce desired behaviors across the organization so that they become the norm.

A CPO’s work in building a strong culture also goes hand-in hand with building a strong employer brand to attract new talent and retain existing employees. CareerArc found that “82% of people consider the company’s reputation and employer brand” before applying for a job. Meanwhile, PathMotion notes that 57% of candidates are unable to find “information about the role and what it’s like to work at your company.” This is a gap a CPO can fill.

Moving Business Forward

The challenges of attracting and retaining top talent and achieving full employee engagement are not going away for businesses. Finding a competitive advantage in how they cope with these challenges is why more and more organizations are recognizing the value of having a CPO or CHRO as part of their executive teams. An effective CPO serves as the trusted advisor and experienced leader needed to assess and bring about what the organization needs from a people perspective to meet today’s objectives and capitalize on tomorrow’s opportunities.

*This article was originally published in the Q3 2022 edition of Texas CEO Magazine.