Transforming HR – How a CEO did it
Guest Post by Les Hayman
Exactly a year ago, I had written a blogpost (CEO HR) on how the skills of a CEO are ideally suited to lead the HR function, especially in organizations that require a transformation of the HR function. I had argued that retiring CEOs should be given this charge and that they would add tremendous value. A few days ago, Les Hayman left a comment on that post about how he had been asked to take up the Global HR Head role at SAP when he was about to retire as CEO/Chairman SAP EMEA. I requested Les to share his journey and experiences with us and he immediately agreed. This is a Guest Post by Les. I am deeply grateful to him for taking the time to share his story. Read on…and be inspired!
After 35+ years of working in IT, mainly in management roles, when I finally tried to retire from large corporate life in 2003 I was asked to postpone my retirement and instead to take responsibility for HR at SAP.
It was an unusual move for me as my career had followed fairly traditional business lines, initially as a programmer, systems analyst and CIO. Then, apart from a 4 year stint in my own software business curtailed by a bout with cancer, I had moved to the vendor side of the industry in various national and global management roles, in companies such as Digital Equipment, Sun Microsystems, and finally SAP where through 1994-2003 I had been President/CEO of both Asia Pacific and also EMEA Regions.
I had been appointed to the SAP global board in 1999 and I believe that being asked to take the HR role may have had more to do with the board’s disappointment with previous global heads of HR, and the fact that I was a known quantity, rather than any serious belief that I was the right person for the job. It was sold to me based on the fact that I had shown a greater people focus than had other board members, and it was felt that the head of HR should be on the board anyway.
I took the role however because I believed I could make a difference. As CEO Asia Pacific I had driven HR initiatives that I considered critical to business success, and that I considered to be the role of the CEO anyway, such as management development programmes, mentoring, performance reviews, succession planning, and had moved these across to SAP EMEA when I moved, and I felt that I could globalise these programmes for the benefit of SAP.
It was the toughest assignment I could have given myself towards the end of my career.
When I had been running a business region and presented my business report at the monthly board meetings in Germany, I had the attention of all the board members. Now when I presented HR issues at the board meetings half the board members would be checking their emails. I realised that it would not be an easy task and started to understand some of the barriers that had been faced by previous heads of HR, who did not even have the benefit of a seat on the SAP board.
I started by reviewing what projects were currently underway in HR by having project owners come in a and present to me for 10 minutes each what it was that they were working on, and what impact they believed it would have on the business. We then met with all the board members and some senior business heads to determine their pain points. When we merged the two inputs we realised that more than 2/3 of what HR was working on were “nice to have” or “interesting to have”, rather than things that were critical to company success, so we scrapped those, added some new ones and began to focus the HR organisation on helping to solve the business issues.
I had long believed that a critical element of business success is the ability to have the right people in the right roles, and yet most managers are not very good either at promotion or recruitment (see http://leshayman.wordpress.com/2011/12/12/why-are-so-many-managers-so-bad-at-recruiting/ ), so we put major effort into upskilling managers in these areas beyond using “gut feel” as the major selection criteria. It is critical that you build a pool of recognised, well developed and prepared talent for the organisation, and that you identify and build future leadership. It is not an easy task but is critical, and most companies handle “hi potential” programmes badly. (see http://leshayman.wordpress.com/2010/07/26/congratulations-%e2%80%a6-you%e2%80%99re-a-high-potential-%e2%80%a6-here-is-your-tattoo/ ).
I also quickly realised that the majority of HR people spent a large amount of their time on admin tasks, rather than partnering and supporting the business units, so we built a shared service centre in Prague to remove as much as possible of the admin load and reorganised the HR organisation to more closely align with the business leaders.
Was I successful In changing the culture to see HR more clearly as a strategic partner and an asset to the business?
I think that in hindsight it changed me more than I changed SAP, and the lessons I learned have helped me in the board, coaching, teaching and consulting roles that I am now involved in.
How should I have measured my success ?
After I stepped out of the role in 2005 to go part time as the “SAP Ambassador” for a year before retiring from SAP in June 2006, another board member took responsibility for HR for 2 years before the new board decided to bring in an HR professional onto the board, who unfortunately only lasted a year. Since then the CFO has been also responsible for HR.
This does point to the fact that maybe my success was limited in that I have always believed in the idea of a lasting legacy as a key success measurement.
I did however learn some real lessons:
- Ultimately business success is not about products and/or services, it is all only about people, and people are the only true long term sustainable competitive advantage
- People join companies but leave managers so skill/capability of managers is critical to business success. Make sure that people development and growth is done well.
- Don’t try and turn HR people into business people. The young smart people I sent to MBA schools all left HR as soon as they finished. Make sure HR people do understand what the company does, why they do it, and how it is done.
- HR must transition from polite to police to partner to player to succeed. A partner helps to implement a strategy whereas a player helps to build the strategy. Big difference (see http://leshayman.wordpress.com/2010/08/26/hr-polite-to-police-to-partner-to-player/ )
- Give “Police” functions to F&A. They love policing functions as it is in their DNA and HR should not be seen as “getting in the way”.
- Admin side has to be perfect ….things like Payroll, onboarding, transfers, data management etc etc must work like clockwork before one can focus on being a partner or a player.
- Make managers responsible for their people … recruitment, talent and performance management, succession planning are management (not HR) issues, but HR must ensure that management have the tools, which must be easy to use, and that HR can then facilitate, advise, support.
- Disregard HR “projects du jour” … Engagement one year, succession next, performance reviews next etc., Focus specifically on what is hurting the business and disregard what the hR magazines tell you is this year’s area of focus.
- Business changes too quickly to allow projects that take more than 12 months to complete. Most should be kept under 3-6 months to show results. They can then be adjusted and enhanced as needed over time.
- One must invoke 70/20/10 rule for people development … 10% training, 20% mentoring/coaching and 70% on the job learning. Just sending everyone on 2 weeks training each year, as many companies do for example, is just a cop-out and doesn’t achieve much
- Driving behaviour through engagement, passion, culture (“the way we do things”) and values works better than through Policies and Procedures
- Driving innovation needs more than smart, well educated people, it also needs a culture that enables innovation to flourish and HR has a pivotal role to play in helping create this. (see http://leshayman.wordpress.com/2010/10/04/hr-%e2%80%a6-what%e2%80%99s-hr-got-to-do-with-innovation-isn%e2%80%99t-that-rd/ )
- The CEO – HR Disconnect: Understandable? Yes. Defensible? No. (chinagorman.com)
- What Every CEO Needs to Know About HR (businessweek.com)
- Human Resources