All-Around HR Players Knowing It All

July 11, 2007
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 résumé 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. We recruit and develop great people for other functions, but we don't pay much attention to doing it for ourselves."
--Ed Lawler, director of the Center for Effective Organizations at the University of Southern California
and professor at
USC's Marshall School of Business

    "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."

"When you just have the [work] experience without debriefing, it's sort of like someone who goes out to the golf course each weekend but never gets any help from the pro."
--Peter Cappelli, director of the
Center for Human Resources at the University of Pennsylvania's
Wharton School of Business

    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."

Strategic learning
    Experts, consultants and corporate HR executives also say that training programs in strategy, leadership and financial knowledge and its applications are an important part of developing future HR leaders. Some companies provide their own internal leadership training programs, while others outsource the training to universities or consulting firms.

    Either way, most experts say that HR professionals should get training designed specifically for them and not just the same courses that future executives in other parts of the business receive. "You don’t want them just taking canned strategy courses," Cappelli says. "It has to be meaningful to what they’ll be doing."

    Coca-Cola has developed a specialized finance course that will be taken by HR directors of business units and eventually by their staff as well. "The training is linked to how they’re going to drive sustainable growth," director of human resources McCague explains. "They focus intently on the metrics that help us to win. And a key part of the program is learning to communicate. We want them not just to understand financial formulas and calculations and their relevance to HR, but to be able to help other people to understand it too."

    American Express has created Project Endeavor, a program that focuses on the application of finance and strategy to HR, using the company itself as the subject material. "There are a fair number of finance-professional courses out there, but we think this is better because it’s both HR- and American Express-specific," says Patricia McCulloch, the company’s vice president for HR capacity and development. "They toggle back and forth between the view of HR and how a business situation affects the company."

    Aon’s Adler describes a particularly effective HR leadership program developed by one major technology firm. "The key element is giving HR leaders role-playing situations that force them to stretch, to get out of their comfort zone," he says. "For example, imagine that I’m the chief executive of a country unit, and you’re my HR leader. We just found out that our largest client has a new CEO who comes from a firm where they used our main competitor’s services. He’s considering dumping us and he’s specifically asked that you come along to a meeting to explain to him how we’re going to maintain innovation by attracting the best scientists and engineers.

    "Now, most HR managers would gulp hard and feel their hearts palpitating if they were put in that kind of situation," Adler continues. "But that’s precisely the sort of thing that HR leaders are going to have to do a lot more frequently in the future, and the training helps prepare you for it."

"We ought to be assigning our best young HR leaders to the executives [outside HR] who are the best developers of talent. ... Have the executives include them in meetings." --James W. Walker, HR consultant

    It’s vital to tailor the training to the knowledge and skill set of each future HR executive, says Erickson of the Concours Institute. "We do an assessment upfront to understand whether you are strong in finance but weak in marketing, and then develop a customized curriculum based on that," she says. Another key element, she says, is follow-up with a personal coach who helps the leadership candidate apply the lessons learned to the actual experiences he or she is having at the company.

Coaching, stretching
    Orlando Ashford took a job offer from Coca-Cola in large part because of the company’s "70-20-10" approach to developing HR leaders, in which working experience within HR—including "stretch" assignments, where a candidate is challenged to learn new skills on the job—is expected to account for 70 percent of a candidate’s development. Coaching will contribute 20 percent, and the remaining 10 percent comes from specialized training.

    "I had talked to a lot of companies where all their development talk was about training," he explains. "They would tell me, ‘You can go to these great classes.’ That made me a little nervous. Experience and real-time coaching, which is what Coca-Cola does, is the big thing for me in terms of learning."

    Cappelli thinks that combining challenging work assignments with coaching is a powerful synergy. "When you just have experience without debriefing, it’s sort of like someone who goes out to the golf course each weekend but never gets any help from the pro," he says. "He’ll just keep whacking away without improving his game. You need to give people experience in a structured way—sort of, ‘Here’s what you should take away from this.’ That’s how they grow."

    Coke HR director McCague became Ashford’s coach, meeting with him regularly over breakfast or drinks to discuss what he needed to learn and how to get that knowledge. While McCague ultimately hoped to leverage Ashford’s background in organizational development and culture change, she also urged him to get a better grounding in what he affectionately calls "down and dirty" basic HR work. As a consequence, when one of Ashford’s HR generalist subordinates at the corporate HR center went to Asia for a three-month stretch assignment, Ashford took on the person’s workload in addition to his own job.

    But McCague isn’t the only one who coached Ashford. At one of their meetings, the two drew up a list of others in the company whose knowledge could be helpful, from chairman and chief executive E. Neville Isdell on down. McCague also made introductions. When Coke’s top African executive was in Atlanta, McCague scheduled a meeting between him and Ashford. As a result, Ashford has a growing list of contacts across the corporation to whom he can turn for advice.

    Consultant Walker is a big fan of mentoring influences from outside HR, and he urges companies to take it even further. "We ought to be assigning our best young HR leaders to the executives [outside HR] who are the best developers of talent. Get them out into the business units and have the executives include them in meetings. Or else you can assign them to work with smart people outside HR. Put them on project teams and task forces dealing with strategic issues, which usually involve all the things you need to learn to be a brighter executive someday."

    Coke, in fact, is in the process of setting up a cross-disciplinary task force for high-potential leadership candidates, including one of Ashford’s subordinates at the corporate HR center. "They’ll be working over a four- to five-month period on big thorny problems that the company faces," McCague says. Coca-Cola president and COO Muhtar Kent is considering a proposed agenda for the group.

    Increasingly, international experience is another requisite for future HR leaders. "Coca-Cola is a global company—we’re present in virtually every country in the world," McCague says. "It’s important for someone such as Orlando to develop cultural insights, to understand the differences of doing business in Russia and Saudi Arabia and Pakistan. Diversity will help him to build his skills so that he’ll be successful in any geography."

    For that reason, McCague approached Ashford after the Christmas holidays with an idea. "What do you think about Istanbul?" she asked. Ashford, as it turns out, had just bought a home in the Atlanta area. Even so, he readily agreed and is now in the process of becoming the HR director for the company’s Eurasia group, with responsibility for 47 countries—"a lot of ’stans," as he jokingly puts it. He’ll be reporting to an executive with a background in finance, to whom he’s already talked about ways that HR can be leveraged to drive business performance. "It’ll open me up, help me to change my paradigm," Ashford says.

Workforce Management, June 25, 2007, p. 1, 30-39 -- Subscribe Now!

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