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What Chief Executive Officers Want and Need from their Chief Human Resources Officer

Tjaart Kruger, Chief Executive Officer, Premier Foods, in conversation with the editor

by Tjaart Kruger

ED: What do you believe the key role of the Chief Human Resources Officer (CHRO) is?

TK: I believe that 80 per cent of the Chief Executive Officer’s (CEO) job is to do with people. Research has shown that the IRR (internal rate of return) on people is of the order of 35 per cent. People capital is by far the most important capital on the balance sheet. I do not believe the CHRO must manage the payroll – that should sit in Finance. The key role of the CHRO is to help me formulate the people agenda of the business, and develop and grow the right culture.

To take this further: when organisations fail to deliver on their promises, the most frequent explanation is that the strategy was wrong, but this is often not the case. Strategies most often fail because they are not executed well. No company can deliver results unless all leaders practise the discipline of execution – execution has to be part of the culture!
This means that the right people must focus on the right things at the right time.

The CHRO is key in understanding – to use an information technology analogy – that the organisation’s hardware, its strategy and structure, will not work without the necessary software, i.e., peoples’ beliefs and behaviours.

My simple view is that the strategic process defines ‘the why and the what’ of the business’s direction; the operations process provides the path, or the how; and the people process defines ‘who’ is going to get it there. The CHRO’s role is critical in the latter process.

Larry Bossidy, former Chairman of Honeywell, said that ‘the people process is more important than either the strategy or operations processes, because, to put it starkly and simply, if you do not get the people process right you will never fulfil the potential of your business’.

ED: What are the particular issues that the CHRO needs to deal with in an emerging market?

TK: The people issues in an emerging market are no different from those in a developed market – the challenges are merely greater. We are faced with low education levels, inadequate skills and competencies, and a need for systems and procedures to fill these gaps. In addition, in South Africa there are the imperatives of a transforming society, such as employment equity (EE) and broad-based black economic empowerment (BBBEE).

We need the right people with the right development. The more we develop people, the more they will be poached – which is fine, as long as we have a good talent pipeline in place. It is not only about the individual, but also about the collective, the team.

Another major challenge is the issue of ethical behaviour and practices in emerging markets – I would rather have someone with a sound value system than a competitive set of skills and competencies. Obviously I look for both!

At a practical level it is even more important in emerging markets to be clear about the roles and responsibilities needed to execute strategy, to have a well-designed operational blueprint or value chain structure, and to ensure structured collaboration between the people and the teams who execute the plan.

So, to repeat: the right organisational capability and skills and the right people focusing on the right things is needed!

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