In 2015, an article published in Harvard Business Review introduced the G3. The G3 being a group comprising the CEO, the CFO, and the CHRO. It’s a concept I return to again and again because it makes so much sense, yet I rarely see it in action.
I usually find it more comfortable to build an argument through data-based argument and numbers - hence my appetite to develop Stratigens! However, to illustrate the point of the G3, I’d like to paint a picture of what I see as the future life of the CHRO.
How the CHRO of the future will work
In the G3 organisation the workforce will be a resource much like financials: “Deploying financial capital and human capital together is the key to success.” This will be thanks to the CHRO effectively using people as a profit centre. If what the authors of the HBR piece say is still accurate and 2% of the people in a business drive 98% of the impact, that’s going to make a huge difference!
The next major change I think we will see in HR is equal focus on internal and external factors. Even in HBR’s G3 organisation, there is still too much focus on internal factors (whether someone needs to develop a skill or be moved to another role).
The CHRO of the future will spend as much time on the external talent landscape as they spend looking internally (do we have the skill we need internally and if not, where are they externally, how do we engage with them?). In the organisation of the future this anecdotal information will become formalised and accessible to HR in the form of live data.
The crux of the G3 model is that HR is truly strategic “Rather than being seen as a supporting player brought in to implement decisions that have already been made, the CHRO will have a central part in corporate decision making”. The G3 CHRO’s performance will be measured by outputs closely linked to revenue, profit margin, brand recognition, or market share. HR can’t be strategic if it’s being measured only against its own processes! (attrition, retention, hiring metrics).
The CHRO of the G3 is also more future focused. The CHRO may: “…look not only at established competitors but also at non-traditional ones that could enter the market.” This type of data will become readily available and will become an integral part of decision making.
The Strategy Directors who have used Stratigens want depth, they want to understand what lies beneath, and the story the data is telling. HR needs to think the same and the CHRO of the future has a thirst for continuous knowledge and an inquiring mind.
The reliance on using strategy consultancies is ripe for change: “CEOs must learn to seek such analysis from their CHROs instead of defaulting to consultants.” With new tools, the CHRO can access the data and insight they need, own it, make the decisions and experience the results rather than relying on external strategy consultants.
Having said that, people who have worked in management consultancy, who have learnt to be objective when giving advice and have a breadth of experience, would make a great CHRO of the future!
I believe that the G3 should be fluid, each should be a successor to each other, each should have walked in the other’s shoes and there should be a thirst to understand what’s changing and how that will impact on the business and results. Cultivating this is something I’ll explore in a future post.
To illustrate what this looks like, take one of our clients. They invest heavily in internal mobility so that a senior leader may have been in the role of sales director, procurement lead, people director and finance director before they become a business unit lead, ensuring great depth in knowledge. Plus, to remain competitive from a people point of view, they continuously benchmark external talent against business-critical roles.
Underlying this is a recognition that people are the driving force in the business and should be central to strategic decision making. To quote the HBR authors, “Businesses don’t create value; people do.” This is at the core of what we believe, and exactly why we developed Stratigens.