Should CEOs lead, guide, or command HR functions?

The role of a Chief Executive Officer (CEO) in an organisation extends beyond strategic decision-making, and one crucial aspect involves overseeing the Human Resources (HR) function. There is ongoing debate about whether CEOs should lead, guide, or command HR functions. Each approach carries distinct implications for organisational culture, employee engagement, and overall performance.

The role of CEOs in representing HR

CEOs play a pivotal role in shaping the company’s vision, mission, and culture. Their involvement in HR can significantly impact the organisation’s success. HR functions include recruitment, training, development, performance management, and employee relations. Effective management of these areas ensures a motivated and productive workforce. 

The extent and manner of the CEO’s involvement in HR can influence how these functions align with the organisation’s strategic goals. 

As a good leader, the CEO should endeavour to foster resilience by fostering relationships with the HR team. According to Ginni Rometty, the former CEO of IBM, “The right relationships in your life, personal and professional, provide perspective and ideas which are essential for progress. Building a robust network—from friends and family to colleagues and industry peers—provides support and inspiration to maintain optimism and courage amid disruption." 

CEOs set the vision and direction of the company. HR hires, trains, and retains employees to help achieve that vision. Together, they can create a great company culture that attracts top talent, improves employee engagement, and drives business success.

CEOs leading HR Functions

When a CEO leads HR functions, they inspire and set the direction for HR policies and practices. Leading involves setting a vision for HR that aligns with the company’s overall strategy. The CEO articulates this vision, ensuring that HR policies support organisational goals. This approach fosters a sense of purpose among employees, as they see a clear link between their work and the company’s mission. 

Leading HR requires the CEO to be a role model in embodying the company’s values. "True leadership goes beyond assessment and decision-making. It requires earning trust and respect through honesty, humility, and genuine care for employees and stakeholders. Clear, consistent communication and a commitment to ethical treatment build confidence and loyalty," said JP Morgan Chase Chairman and CEO, Jamie Dimon.

By demonstrating commitment to diversity, inclusion, and employee development, the CEO can inspire the HR team to prioritise these areas. This approach can enhance employee morale and retention, as workers feel valued and supported.

CEOs guiding HR functions

Every CEO needs to be in some sense the chief HR person of his business. Guiding HR functions involves providing strategic direction without micromanaging. The CEO sets objectives and expectations for the HR team, empowering them to develop and implement policies that align with the company’s goals. 

For instance, Larry Bossidy was the CEO of Honeywell Inc. from 1999 to 2002. He drove HR function success through various initiatives. He recognised the importance of a strong leadership team. Bossidy implemented a rigorous selection process to identify and develop high-potential leaders. He created a culture of accountability by setting clear performance goals for each leader.

This approach enables HR professionals to use their expertise effectively while aligning with the organisation’s strategy.

CEO guidance keeps HR focused on key priorities. For example, if the CEO prioritises innovation, HR may focus on recruiting and training for creative thinking. This ensures HR initiatives are relevant and impactful. Jack Welch, former CEO of General Electric, made HR central to GE's success, emphasising its role in creating winning teams. 

Collaboration between the CEO and HR leaders is essential. Regular communication ensures HR strategies align with the company’s needs, and CEO guidance helps HR address complex issues effectively.

CEOs commanding HR functions

Commanding HR functions involves the CEO taking a more hands-on, directive approach. In this model, the CEO makes key decisions regarding HR policies and practices, with the HR team executing these directives. This approach can ensure swift decision-making and clear accountability.

Alan Guarino and Jim Newfrock assert that CEOs "must take action on something they have never seen done before: making HR strategic." They believe human resources is undergoing a significant transition, leading to improved talent decisions that will give companies a competitive edge.

Commanding HR functions can stifle creativity and autonomy, leading to low morale and reduced innovation. This approach can be perceived as overly authoritative, negatively impacting organisational culture. While effective in crises for quick, decisive action, long-term use may cause burnout and disengagement among HR staff.

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CEO x HR: Balancing the approaches

HR should have a strategic role. Without a strong CEO relationship, the HR team risks being seen as mere administrators. Effective HR initiatives require input and decision-making involvement. By sharing expertise at the executive level, HR can influence planning and strategy, positively impacting the company. CEOs often lack detailed workforce insights due to their responsibilities. HR can bridge this gap, providing valuable information that helps CEOs make better decisions for the company and employees.

CEOs play a crucial role in the success of HR functions within an organisation. Leading, guiding, and commanding offer unique advantages and challenges. The optimal approach depends on the organisation’s needs and circumstances. By balancing these approaches, CEOs ensure that HR functions effectively support the company’s strategic goals.

In stable periods, leading and guiding may foster a positive, innovative culture. During times of crisis, commanding may be necessary for quick, effective action. Effective communication and collaboration with HR leaders are crucial for determining the appropriate balance and driving the company’s success.

CEOs play a vital role in HR, balancing leading, guiding, and commanding based on organisational needs. Effective CEOs adapt their approach, fostering collaboration, innovation, and decisive action when needed. This balance ensures HR functions support strategic goals and cultivate a positive culture.