The People takeover

Why Talent and People professionals could and should be running businesses

In a (business) world lacking in diversity, there are very few businesses being run by professionals with a background in People Ops, HR or Recruitment.

This surprises me, because no-one knows more their companies better then the People department who unlike any other team, operate by maintaining constant contact with all parts of a company. The People team should understand the needs of their colleagues, know the most effective ways to communicate in order to motivate, empathise or discipline. No-one else knows the inner workings of your company better then your Recruiters. Every vacancy adds immediate business context, long term hiring plans are based on the strategic business direction and every successful hire gives your Recruiter a clearer, more defined picture of what works in your business.

So why are so many companies lacking People representation in the Leadership teams? Not too long ago (2015) Harvard Business Review publish this:

Which lead to hundreds of blogs along the lines of: Why your company needs a Chief People Officer (or CHRO). Yet, it’s still not commonplace (in the UK at least) to have this role within a leadership team. It’s not actually about having a C-level appointment but having the People team taking part in discussions that define strategy rather then reacting to it.

There are reasons why this may be so, with revenue and investment being the main driver. People strategy, HR processes and effectiveness of recruitment do not play a significant part of a VC’s due diligence when making investments. Maybe it shouldn’t either, on a Start-up scale it is something that can be fixed relatively quickly. But post-investment is a different story because employee engagement drives growth, profitability, customer satisfaction, less attrition, less mistakes and less absenteeism.

Employees who feel their voice is heard at work are nearly five-times (x4.6) more likely to feel empowered to perform their best work.

Gender diverse companies are 15 percent more likely to financially out-perform their peers. Ethnically diverse companies are 35 per cent more likely to do the same.

So say Gallup: https://www.gallup.com/workplace/236927/employee-engagement-drives-growth.aspx

And Salesforce.com and The McKinsey Global Institute: https://www.salesforce.com/blog/2018/02/why-equality-and-diversity-need-to-be-priorities

So with such direct financial and success-related outcomes People strategy suddenly becomes intrinsic to a business, especially Start-ups looking to reach escape velocity. I would go further and say that businesses that do not place People Ops within company Leadership or view People Ops as a luxury are at best naive and at worst negligent.

So with that in mind, I’m challenging all Recruiters, People Ops and HR professionals to start pushing for a seat at the table. Even better, get out and start new businesses, and I don’t mean Recruitment Agencies or HR Consultancies (fyi: nothing wrong with them!). There are so many companies that would benefit from People focused leadership, rather then old-fashioned management or worse an over-dominant Founder. That’s not to say Founders are not good leaders, but many lack basic leadership fundamentals, lack communication skills and lack the ability to build an effective team.

Here are three quick examples where if they had hired & empowered great People leadership, their worlds would look very different now. The first of which is very public but the following two will remain anonymous because they can and hopefully will turn things around.

1. There is a vacancy at WeWork as CEO/Founder Adam Neumann exits the business. There are unconfirmed rumours that Adam will invite all 2000 sacked employees for a final tequilla-fuelled party in his guitar shaped pool ( https://www.theguardian.com/business/2019/oct/15/wework-sack-staff-workers-adam-neumann) #toxicworkenvironment.
2. In the Tech & Travel sector there is “the CEO is a great guy but his emotional intelligence lets him down”, “ The company has a hard time celebrating the right achievements because performance expectations aren’t yet defined”, “He doesn’t know how to listen”, “ stop calling yourselves a start-up and blaming everything on growing pains. It’s embarrassing”
3. In the Financial area a very well known success story has internal detractors because it “Does not value emotional intelligence, has no females within senior management, unrealistic expectations with limited work-life balance and no real HR department. They struggle with office politics, with senior management setting the tone culturally.”

This last comment about office politics is interesting and reminds me of the great book from Ben Horowitz: “The Hard Thing About Hard Things”. Ben says:

1. Loose or adhoc performance management and compensation processes are highly vulnerable to political machinations.
2. Be careful of what you say [as a CEO] as everything can be turned into political cannon fodder.
3. Have formal, visible, defensible promotion processes to show merit in promotion decisions.
4. Be careful how you listen. Even listening to a grievance could be construed as your agreement.

There is no Founder School, but there are ways of continuously learning. Even better is to surround a Founder with a great team, and for the good of the company that must include People Ops.

Afterthought:

Many of the lessons I have learned especially over the last 3 years have been due to my CEO, Justin Floyd. Not only does Justin see the value in People strategy but he understands where his own abilities do and do not lie. Apart from putting People strategy at the front of the RedCloud business, he passed me many books including the above mentioned “The Hard Thing About Hard Things”. If you are interested in reading something more focused on toxic work cultures then one of his other gifts to me was: “Bad Blood” by John Carreyrou.