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BOOK EXCERPT

With numbers you can prove HR is valuable Add to ...

This excerpt is from The Real Deal on People – Straight Talk on How The CHRO Creates Business Value, by Les Dakens, reproduced with permission of Carswell, a division of Thomson Reuters Canada Limited.

When I was given the North American HR job at Heinz, in Pittsburgh, my new boss was the head of the North American unit, Bill Springer. When I first introduced myself to Bill, his first words to me were “I’m not convinced that we need this role but let’s move on. As a former finance guy, I view HR as a necessary evil.” Not an auspicious beginning. I told him that I was there to prove him wrong and, if I didn’t, then my tenure would be short. He smiled and said “you’re on!” Later, I learned that he respected guys with balls that stood up to him. That made me smile.

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Bill’s opinion was not to be taken lightly. He was the head of Heinz’s North American business, the largest and most profitable division in the company and we sold the famous Heinz ketchup brand which dominated the condiment market. Bill was the former CFO of this unit and had been promoted several years before my meeting with him. He reported to Tony O’Reilly, the charismatic Chairman and CEO for the HJ Heinz Company and it was Tony who gave Bill his telling nickname – the “Prince of cost control.”

Bill’s opinion about HR was not unique. In many ways it represented the norm amongst those executives who did not have a background in HR and sometimes even within the HR world itself – and in some quarters that is still true today. I had a lot to prove and I had set myself up for a really tough challenge, to prove to Bill and others like him that they were wrong about HR.

Bill’s job was to protect our brands, squeeze out costs and grow our business with a conservative mindset. Despite Bill’s concerns about the nature of my role, I felt it was my job to support not only his objectives, but also his strategies and his business philosophy. I was able to do that, but it didn’t happen by chance. I had to create a strategy of my own and execute it.

The secret to working successfully with Bill was to show a financial return for every HR initiative I proposed – not always an easy thing to do, as you may know – but not only did the pure discipline of calculating a cost/benefit return make me a better business person, it also gave Bill the confidence and the ammunition he needed to fully support my initiatives and give them the backing they needed to be adopted and to be successful.

My tenure with Bill lasted five years before he promoted his successor and took on a new role at Heinz, and since that first meeting in 1992, and throughout all that we went through together at Heinz, we have remained good friends and still occasionally golf together. I guess I wasn’t so evil after all. There’s more about my tenure at Heinz later in the book.

BUY OR SELL?

The Board of Directors was in a heated discussion about potential internal successors for the CEO role – they were divided. One faction was solidly behind the two mainstream candidates: the CFO and the EVP, Sales and Marketing. The other, more aggressive group argued that the dark horse in the race was John, another C-suite executive. They all liked working with John and felt he knew the business well and had great political connections within the federal government. After letting the debate go on for some time, the veteran chair of the Human Resources committee turned to me and asked “Les, as the CHRO what is your opinion of John as a viable CEO successor?”

I was surprised he asked me but I didn’t think long about my answer and said in an unintentionally loud voice: “I would sell my stock.”

Clearly this was not an answer they were expecting – the room went silent and John’s backers looked shocked. Naturally they wanted a more detailed answer, so I told them: “John is very bright and technically sound, however, he is a poor leader and his peers do not trust him. If he became CEO, I would sell my stock.”

Putting both the question and the answer in a context that the Board of Directors understood intimately was the key to ending the argument. Apparently the Board agreed with my assessment because John was no longer considered a viable candidate from that point on.

The moral of the story is that the role of the CHRO is to advocate the right talent for every critical role in the company, especially the C-suite. Asking the question, “Would you buy stock in the company if this person was put into the CEO role or any C-suite role?” puts the issue squarely into a value creation perspective.

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