Workforce Management, June 25, 2007

Copyright 2007 Crain Communications

All Rights Reserved

Workforce Management

June 25, 2007

SECTION: SPECIAL REPORT; Pg. 1

HEADLINE: Knowing it all: All-Around Players: Part 1 of 2;

For the next generation of HR chiefs to become the strategic players their companies need, they should be ready for years of mentoring, high-level training, stretch assignments and stints overseas.

BYLINE: Patrick J. Kiger

BODY:

Tomorrow's human resources chiefs may not even work in HR today. Many employers are looking outside the function for up-and-comers and giving them experience throughout the organization-and across the globe - to prepare them for the ever-more strategic role.

Shortly after Coca-Cola senior vice president and director of human resources Cynthia McCague hired Orlando Ashford as group director of corporate human resources and culture transformation, the two sat down for a series of frank discussions.

``I want to be you someday,'' Ashford told McCague. It was a bold statement, but he had a resume that justified his ambition. After earning a master's degree in industrial technology with a concentration in HR from Purdue in 1993, Ashford had amassed a dozen years of business experience, including stints in the change-management practices of Andersen Consulting (now Accenture) and Mercer Delta Consulting Group and executive posts at Ameritech and Motorola, where he rose to become vice president for global HR strategy and organizational development in December 2004. In some ways, Ashford, 38, was the prototype for a new generation of HR leaders-an executive fluent in the financial language spoken by the operational side of the business, better grounded in HR's role in business strategy than he was in the mundane nuts and bolts of compensation or benefits.

McCague wasn't taken aback by Ashford's desire to take her job. To the contrary, it was precisely what she wanted-that is, someday, when she was ready to spend her time indulging her passion for kayaking instead of reinventing the HR function at Coca-Cola to better support the company's strategic quest for sustainable growth. An important part of that reinvention was developing the same sort of back bench of rising talent that HR helped to create in other parts of the business. That's why she agreed to personally coach her possible successor.

``If your ambition is to sit in this chair, there are some things you are going to have to learn,'' McCague told Ashford during one of their meetings, which began when Ashford started with Coca-Cola in September 2005 and continued into 2006. ``My role is to be brutally honest with you about what you need to do.''

She proceeded to go through Ashford's potential strengths-his expertise in organizational development, strategy and leadership-and his weaknesses, particularly his lack of experience as a nuts-and-bolts HR generalist. ``We want to leverage your strengths,'' she told him. ``But at the same time, we're going to put you in roles where we're going to let you trip and stumble a bit.''

He would have to do some of that learning in an unfamiliar country as well. It was the only way to develop the cross-cultural outlook that running HR at a global company like Coca-Cola demanded. Together, they began to develop a plan for Ashford's ascendancy.

Academics, consultants and corporate HR executives have divergent ideas about how to develop HR leadership with strategic skills, but all agree that it's a process requiring years of careful effort. Some advocate the use of early-career outside rotations, in which HR leadership candidates are assigned to work in a non-HR position to develop business knowledge, while others advocate recruiting operationally savvy candidates from outside the function and teaching them HR skills.

Some experts advocate sending HR leadership candidates to the same midcareer programs in strategy and leadership as up-and-comers from finance or marketing. Others think it's a better idea to offer specially tailored training that analyzes business cases from an HR perspective. Most agree that in order to prepare for a future strategic role, would-be HR leaders need opportunities to develop relationships throughout the organization, whether those contacts come through work on cross-disciplinary task forces or via informal mentoring by non-HR executives.

And international experience is a must, as companies increasingly grapple with how to leverage HR across a global marketplace.

DEVELOPMENT OVERLOOKED

The Atlanta-based beverage maker and a few other companies-American Express and General Electric among them-that methodically develop future HR leaders to be strategic players unfortunately remain more the exception than the rule, experts say. Instead, there's a paradox at work.

While HR departments are focused on identifying and cultivating high-potential talent to eventually fill executive posts in the larger enterprise, seldom is the same attention-or resources-devoted to developing the next generation of top HR executives. Though there's little recent research on the subject, a 2000 study by HR consultants James W. Walker and William G. Stopper published in the journal Human Resource Planning found that only eight out of 100 companies did any succession planning in HR.

``HR is kind of like the old story about the cobbler's children who don't have shoes,'' says Ed Lawler, director of the Center for Effective Organizations at the University of Southern California and a professor at the university's Marshall School of Business. ``We recruit and develop great people for other functions, but we don't pay much attention to doing it for ourselves. At too many companies, they wait until people are on board for 10 or 15 years before deciding that they need to develop them.''

Experts say that companies neglect the development of HR leaders at least in part because the top HR post, unlike other executive positions, generally isn't perceived as a steppingstone to running the company. For that matter, some businesses don't even see it as a job that requires specialized knowledge of HR to perform. About a quarter of top HR positions, Lawler notes, are filled by executives who come from outside the function.

``It's a solution that organizations have used when they've been frustrated by the inability of traditional HR leaders to function as business leaders,'' explains Seymour Adler, a senior vice president in the talent solutions practice of Aon Consulting. ``They'll say, `Let's get a business leader to run HR.' But it doesn't work so well. A lot of these outside executives see HR as a place where they're being parked until they move back into the real business, so they're not invested in HR's success. Beyond that, they may think that if they've been a good people manager in other roles, they'll be able to get away without having any technical grounding. But you have to be able to do HR to be strategic.''

Some companies try to strike that balance by getting younger high-potential candidates from other parts of the business to switch to HR, figuring it's easier for a person with business knowledge to learn HR rather than the other way around.

``When I meet people who really blow my socks off in terms of articulating the HR challenge, I almost invariably find that these people didn't grow up in HR,'' says Tammy Erickson, president of the Concours Institute, which offers HR leadership training. ``They started out in finance or marketing. I don't know if they're brilliant at compensation theory, but they know how to speak the language of business and put a financial hard edge to what they're saying. They're coming at things the way a businessperson would.

``If you grow up in HR, you're at a disadvantage unless you find a way to pick up the skills to do that.''

THE ROLE OF ROTATIONS

HR departments traditionally have rotated early-career professionals through different functional specialties as a way of developing well-rounded HR generalists. ``When I was at IBM, we rotated through compensation and benefits and employee training,'' consultant Stopper recalls. ``By the time you'd gone through all that, you had your kit of basic skills, and you were ready to take on a more strategic job.''

But others, such as Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School of Business, are skeptical about the value of traditional rotations. ``From a strategic standpoint, it's not clear that rotational assignments are always that useful,'' he says. ``Even if you learn a lot about each functional area, you may not necessarily understand how they work together, or how your function interfaces with the outside.''

But companies increasingly are broadening the experience by assigning HR professionals to work in positions outside of HR. In General Electric's HR Leadership Development Program, new or recent hires with master's degrees in HR or business go through three eight-month rotations-two in HR specialties and one in a line position with responsibilities unrelated to the field. American Express recently established a similar HR development rotation with an additional wrinkle: Program participants will be able to do one of their rotations in another country to gain international experience.

Outside rotations may also enable companies to make up for outsourcing's erosion of the functional areas that once were the primary training ground for HR talent. ``Some companies are now complaining about a gap in their HR career ladder,'' says Patrick Wright, director of Cornell University's Center for Advanced Human Resource Studies. ``They've got people who find their way to the top because two or three rungs above them have been stripped out by outsourcing. But if you have them spend year four or five in a business role, not only do they get a chance to learn about what the company does to make money, but you're also replacing some of those missing rungs. It's a way to turn a problem into an opportunity.''

One potential problem with outside rotations is that HR professionals' learning opportunities may be constrained because they are limited to jobs where there is a relatively low cost for failure. But Andrea Nunes, manager of HR development programs at GE, says the company's HR leadership candidates have shown a surprising ability to keep their heads above water.

``We don't put them in jobs that aren't realistic for them to accomplish. But even more important than the skill set is the ability to adjust to a new environment,'' she says. ``In 95 percent of the cases, they exceed expectations and even add value to the function they're performing. A lot of the time, you have the cross-functional leader trying to convince the HR person to change careers and go to work for them.''

GRAPHIC: Art Caption: info box: Workforce.com (see end of story)

Art Credit: Cynthia McCague, senior VP and director of HR for Coca-Cola, and Orlando Ashford, on right, group director of corporate HR and culture transformation * Cynthia McCague and Orlando Ashford * Ed Lawler, Center for Effective Organizations * Cynthia McCague, Coca-Cola

Art Credit: Stan Kaady (3) * Courtesy Ed Lawler