perspective | chros to the rescue - korn ferry
TRANSCRIPT
Perspectives 1
CHROs to the
Perspectives
The pandemic and the purpose movement
triggered urgency among CEOs to get
the right CHRO in place—even if it means
going outside their industry. Our panel
discussion with some of the very top
CHROs in the fi eld.
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Perspectives 2
Certainly, the CHRO role has evolved greatly
as organizations push for more digital
transformations, cultural makeovers, and other
business shifts. COVID-19, of course, has only
increased that pressure. “CEOs need that
combination of prior experience and a fresh set
of eyes in their CHRO to help them anticipate,
adapt, and adopt talent strategies to changes in
their industry,” says Torrey Foster, vice chairman
and managing partner of Korn Ferry’s Consumer
Markets practice in North America. Even more
prized, he says, is a track record of using data and
analytics to train, deploy, and build a pipeline of
leadership talent from the inside.
But what do the actual CHROs who have just
joined top fi rms have to say about all that’s
happening? To get some answers, we spoke
with the CHROs of four of the biggest names—
McDonald’s, PepsiCo, Tyson Foods, and Walmart.
They all were appointed between 2018 and 2020
and came to their new industries with limited prior
experience or following a prolonged absence. The
following are excerpts from our conversations.
Over the last year, several of the biggest and
most recognizable companies in the world
have appointed new CHROs who have limited
experience in their new industries. While it’s
tempting to dismiss the pattern as no big deal—
to a degree, HR skills are industry agnostic,
right?—the reality is that it is a very big deal.
It isn’t common, after all, to see a CHRO move
from aerospace and defense to restaurants or
from a software company to a retailer. Against
the backdrop of the COVID-19 pandemic and the
purpose movement, the surprising new model not
only reinforces the elevated importance of the
CHRO function in the minds of CEOs and boards.
It also opens up previously blocked pathways for
C-suite talent to move into the CHRO position
and from it to other operational roles, including,
perhaps, CEO.
In his view, Doug Charles, president of Korn
Ferry’s Americas region and global consumer
operations, says the pandemic pushed and
stretched the demands on CHROs in a way never
before seen. “With so much on the line, CHROs
showed their strategic and tactical agility,” says
Charles. “Organizations that didn’t have the right
executive in the role were exposed.”
Once is an anomaly. Twice is a coincidence. Three times is a trend.A half dozen times or more, however, is the making of a paradigm shift—and that’s what the recruitment of chief human resources o� cers is currently undergoing.
What’s behind the trend of organizations recruiting outside CHROs with limited experience in their industry?
Heidi Capozzi Executive Vice President and
Global Chief People O� cer
at McDonald’s
I think there are a couple of dynamics at
play. One is that current sitting CHROs
demographically tend to skew older, so
there are more retirement-eligible folks
that could be impacting demand versus
supply. Another is CEO turnover: as new
CEOs seek to build their own people
and culture agenda, there’s a personal
element to whom they pick as CHRO.
Certainly, it’s someone who shares their
values and brings expertise in the areas
that support their future vision.
Perspectives 4
Perspectives 5
Ronald SchellekensExecutive Vice President and
Chief Human Resources O� cer
at PepsiCo
The CEO-CHRO relationship has defi nitely
been elevated, particularly in light of the
pandemic. There’s a new and greater
recognition among CEOs, executive
committees, and boards of the complexity
and impact of the CHRO role. We are
an integral part of the business and are
expected to have an opinion and provide
guidance on every part of it.
Perspectives 6
Donna MorrisExecutive Vice President
and Chief People O� cer
at Walmart
I’m thrilled this trend is happening. It’s
great to see so many talented CHROs
transitioning into new roles and sharing
their wealth of experience across
industries. This allows for a fresh set of
eyes and a di� erent fi lter to question
processes and systems. For Walmart,
for instance, my two decades of
experience in technology allows me
to look at issues through a new lens.
Johanna SöderströmExecutive Vice President and
Chief Human Resources O� cer
at Tyson Foods
Talent is increasingly being recognized
as driving the transformation agenda.
As a result, the CHRO role is now viewed
as a transformation and growth role,
and strategically minded CHROs who
have built people agendas to help solve
business issues and provided a competitive
advantage are in demand.
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Why did you decide toswitch industries?
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Morris: Walmart is an amazing company,
and I knew it would o� er the opportunity
to make an incredible impact, which was so
important for me. And that has absolutely
been the case over this past year. The role
Walmart has played to make an impact on
its associates, customers, and communities
around the world is second to none. While
I’m proud of my 18 years at Adobe, growing
the company from 3,200 employees to
25,000, and actively recruiting many
senior leaders, I am excited to have this
opportunity to learn about a new industry
and make positive contributions to a strong
company. Walmart is also a company in an
industry I resonate with, bringing together
my passions for both people and digital.
Söderström: While food is certainly
di� erent than chemicals, there are
similarities between Tyson and Dow that
made it easy to switch industries. Both are
manufacturing companies with massive
production facilities. Both have two distinct
employee cohorts—frontline workers
and o� ce employees—with di� erent HR
needs and experiences. Both are global
players. I felt Tyson was a great fi t for me
to use my skills and experience to help the
organization achieve what it has set out to
accomplish with its people agenda.
What advice do you have for CHROs who come into an industry that they have been out of for a while or are unfamiliar with?
Perspectives 10
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Capozzi: It’s one thing to bring great HR subject-matter
expertise to the table, but you have to understand the industry
and business to apply that expertise in the most relevant
and e� ective way. Anyone considering a move should have
a curiosity for the new and be very intentional about their
onboarding. One of the fi rst things I did when I got to
McDonald’s was don a uniform and get trained up to be a crew
member at one of our restaurants in Chicago. I spent over a
week there making Big Mac sandwiches, working the register
and the drive-thru line, cleaning up. I talked to restaurant crew
and got to see the day-to-day inner workings of the business.
Schellekens: You defi nitely need to get a sense of the
uniqueness and rhythm of the business. The worst thing you
can do is copy and paste a previous HR strategy and system
to a new organization. Even though this was my second stint
at PepsiCo, I had been out of the company for 16 years and
had never worked in the US, so I went in very consciously
saying this was like joining a new company and not the
same one I left. If I used old experiences and visions of
the past to interpret what PepsiCo is now, I’d set myself
up for failure. The same goes for anyone entering a new
industry. You need to be clear about your past experience
while appreciating the uniqueness, culture, and needs of
the new role and business. You may think you recognize
patterns based on previous experience and rush into
action faster than you should. My advice is that slightly
slower and right is better than quick and wrong.
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Morris: Sector matters less than cultural fi t. You
need to understand who you are going to work
for and with. How receptive the organization
and its leaders are to change directly relates to
how successful you will be able to integrate and
bring forward ideas. To be successful, CHROs
need to develop partnerships and interpersonal
connections; and if you don’t understand how you
will work together with other leaders in advance, it
could be a derailer.
Söderström: That’s part of the challenge: balancing
cultural fi t with your mandate. It takes a certain
amount of sensitivity and emotional intelligence
to understand what the culture is enabling and
hindering while also driving the changes the
company hired you to make. They did hire you for
your specifi c background and expertise. You need
to understand how to use the organization and its
leaders to enable change and bring people along.
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“It’s great to see so many talented CHROs transitioning into new roles and sharing their wealth of experience across industries.”—Donna Morris, Walmart
Perspectives 13
The Road Less TraveledThe pandemic, remote work, and purpose elevated CHROs’ visibility and
importance to business success. As the resumes of the four CHROs highlighted
in this piece show, the progression also created a paradigm shift whereby
organizations are increasingly willing to go outside their industry to get the
right executive for the role.
Heidi Capozzi
Donna Morris
From: Senior Vice President
of Human Resources
at Boeing
From: Chief Human Resources
O� cer and Executive
Vice President,
Employee Experience
at Adobe
To:
Executive Vice President
and Global Chief People
O� cer at McDonald’s
To:
Executive Vice President
and Chief People O� cer
at Walmart
Senior Vice President
Chief Human Resources
Perspectives 14Perspectives 1414141414Perspectives 14
Ronald Schellekens
Johanna Söderström
From: Chief Human Resources
O� cer, Group HR
Director at Vodafone
From: Senior Vice President and
Chief Human Resources
O� cer, Human Resources
and Aviation at Dow
To:
Executive Vice President
and Chief Human Resources
O� cer at PepsiCo
To:
Executive Vice President
and Chief Human
Resources O� cer
at Tyson Foods
Chief Human Resources
Senior Vice President and
Perspectives 15
This is a unique time period, of course—the pandemic, remote work, and diversity and inclusion issues. All of your new companies have essential and frontline workers. How did they help shape your approach to health, safety, and mental and emotional well-being last year?
Schellekens: PepsiCo is a company that is very
visible in our communities. More than 230,000 of
our 290,000 associates go out to our factories,
warehouses, and stores every day, and throughout
the pandemic, they have continued to serve our
consumers and communities when they needed
us most. Our frontline workers are our heroes,
and we realized very early on that we had to do
everything possible to keep them healthy and
safe. We also realized they have di� erent needs
than our o� ce workers due to the nature of their
jobs. So we focused on ensuring proper social
distancing in all of our facilities and the distribution
of PPE [personal protective equipment], including
donating PPE to fellow frontline workers around the
world. We also expanded benefi ts for associates
who were diagnosed with COVID-19 or had to care
for a sick family member. And because we know
our associates thrive when our communities thrive,
we also worked with The PepsiCo Foundation to
provide over 145 million meals to hungry families
impacted by COVID-19, with a special focus on
providing nutritious meals for students who usually
get meals through school.
As we were doing all of this to protect our frontline
workers and communities from the pandemic,
we also faced a reckoning on racial inequality.
After some of the horrifi c incidents we witnessed
in 2020, we stepped up our dialogue with our
associates and our employee resource groups,
and we realized we needed to do a better job of
listening to them. There was real hurt, pain, and
anger, but also a lot of constructive dialogue.
Out of these conversations came our Racial
Equality Journey, a more than $500 million
commitment to our Black and Hispanic associates
and communities. This initiative has three pillars:
people, business, and communities. When it
comes to people, we are focusing on increasing
Black and Hispanic representation at PepsiCo
through recruitment, education, internships, and
apprenticeships. When it comes to business, we
are leveraging our scale and infl uence across
our suppliers and strategic partners to increase
Black and Hispanic representation and elevate
diverse voices. For communities, we’re working to
drive long-term change by addressing systemic
barriers to economic opportunity, with tools like
scholarships for community-college graduates to
help them earn four-year degrees. We still have a
lot of work to do, but this initiative is something I’m
very proud of.
Capozzi: At McDonald’s, there are over 2 million
individuals who work under the Arches, most
of them working in restaurants. Having the
opportunity to work in the restaurant during the
pandemic really allowed me to walk in their shoes.
It gives a di� erent lens to the work you are doing.
We also did a lot of listening. In appreciation of
our crew during the pandemic, many franchisees
o� ered enhanced compensation programs,
including bonuses. Last year, we provided
additional employee assistance and emotional
support counseling sessions for employees in
our corporate-owned restaurants in the US,
and later in the year, we piloted a program that
o� ered expanded access to backup eldercare
and childcare.
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We’ve also talked over the last year about
transparency and accountability around DEI
[diversity, equity, and inclusion]. We took
an important step forward this year as we
incorporated a human capital metric—inclusive
of driving our values, increasing representation of
women and underrepresented groups in leadership,
and strengthening our culture of inclusion—into the
incentive program for our senior executives.
Morris: What our 2.2 million frontline associates
did last year for the company, our customers, and
our communities was heroic and unprecedented.
I am absolutely blown away by the impactful
and meaningful work that happened across our
business. Our goal as a company is always to
support our greatest asset, which is our people.
We did that last year by launching a COVID-19
leave policy that the New York Times called “a
standard for the rest of the private sector.” We
paid out $2.8 billion in cash bonuses to frontline
workers as a form of gratitude. We pledged
$100 million over fi ve years to a new Center for
Racial Equality, and established four associate-led,
shared value networks focused on the US criminal
justice, education, fi nancial, and healthcare systems
to address racial equality. All of those things
happened because of what we saw and learned
from our frontline workers last year.
Söderström: The health and safety of our frontline
workers has been our top priority, and we’ve made
signifi cant progress. We’ve invested hundreds of
millions of dollars to transform our facilities with
protective measures. We hired our fi rst-ever chief
medical o� cer, who reports to me since health
and safety oversight has become part of my role.
We’ve also added 200 nurses and administrative
sta� , have been vaccinating thousands of team
members, and are piloting several free health
clinics this year for employees and their families.
In addition, we remain focused on creating career
development opportunities for our frontline
workers, launching an on-site program called
Upward Pathways that provides free training and
certifi cate courses. We also pledged $5 million
to fi ve di� erent organizations chosen by our
team members that are committed to advancing
diversity, equity, and inclusion.
Initiatives like these that resulted from the pandemic helped thrust CHROs into the public spotlight last year. Given that the issues of remote work, D&I, and employee well-being aren’t going away, how does being more visible create opportunities to elevate the role?
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“One of the fi rst things I did when I got to McDonald’s was don a uniform and get trained up to be a crew member at one of our restaurants in Chicago.” —Heidi Capozzi, McDonald’s
Söderström: Last year, our team gave more news
media interviews than any other function in the
company, as we shared the steps we’ve been taking
to protect our team members during the pandemic
and what we’re doing to promote a culture of
well-being and build a healthier workforce. People
and purpose are now on the table in a way they
never were before, and they elevate everything a
company takes on because of the impact they
have on communities.
Capozzi: The fact that our position is more public
is an opportunity. Now, everyone is listening. It’s
a chance for us all to step up and make more
progress and a greater di� erence. We need to
use this time to innovate around how to connect
people and ideas better, particularly inside our
own departments, because we can then fan that
out to the rest of the organization and the wider
CHRO community.
Perspectives 20Perspectives 20
It’s interesting that you mention the wider CHRO community. One of the things we’ve heard from other functional roles during the pandemic is how much even competitors relied on each other for support, to share best practices, and just connect with each other. Was that the case for CHROs as well?
Perspectives 21
“Last year, our team gave more news media interviews than any other function in the company.”—Johanna Söderström, Tyson Foods
Schellekens: Absolutely. Certainly for me and my
fellow CHROs at IBM and MasterCard. We are all
in the same vicinity, so it was like helping out your
neighbor. We all consulted with each other on
things like o� ce reopening playbooks. We wanted
to help each other out. Institutions like Gartner
and HR executive networks also quickly linked the
various CHROs together to share best practices.
Söderström: Same thing with Donna and me.
We both started our new jobs within months of
each other. So we both were newly relocated
to Arkansas, in new jobs in new industries, amid
the pandemic. It has been great to have a CHRO
network to bounce things o� and learn together.
Morris: Johanna and I had a prior connection
from sitting on the board of the Society of Human
Resource Management as well. It was fortunate to
be able to connect a few times to compare notes
on what we were going through, for sure. As a
member of the HR50, we’ve also had subgroups
sharing best practices. Accenture, under the
leadership of Ellyn Shook, has been so generous
with that, for instance. I think the pandemic has
absolutely strengthened the CHRO community—
we all had a common focus on the well-being
of our workforce.
Capozzi: In this job, you often face new challenges,
di� cult decisions, and issues that can’t be
discussed with just anyone. Having a network of
CHROs to call on for advice has been incredibly
helpful. This was true before the pandemic, and
it certainly was a source of support during the
pandemic. Even as it relates to switching industries,
I know I’ve turned to CHROs in the restaurant and
retail business who have been very open to sharing
best practices.
Getting back to the position being more visible, it’s no secret that CHROs have one of the shortest average C-suite tenures, down to a current average of 3.7 years from 5 years in 2016. CHROs also rank at the low end of C-suite positions in terms of succession planning. How much do those two data points play into the switching industries trend and organizations trying to upgrade or realign the position with business objectives?
Morris: On the tenure topic, I’m actually not sure
given the pace of change that it’s a good idea to
have a CHRO in the job for more than a decade.
I question how objective someone who has been
in the seat that long can be when they built
everything. If the role is a catalyst for change, that
becomes hard when you are in a fi xed position. I’m
not sure four years is right, but I’m not sure 10 or 18
years, like I put in at Adobe, is right anymore either.
Given the global demands of the role now, I’m not
surprised though that an average tour of duty is
three to fi ve years.
Capozzi: On the succession side of the equation,
we spend a lot of time helping other leaders plan
succession pipelines for their functional areas. In
reality, CHRO succession should be a model for
how it is done in other positions. We should be
using ourselves to experiment and pilot ideas to
improve succession management.
Schellekens: There’s no question that boards and
CEOs are turning to CHROs to help them drive
the business agenda. And if they don’t have the
right person in the role to do that, they are going
to go out and get the right person, which plays
into the tenure and succession issues. No matter
the industry, certain aspects of the role are always
transferable. What companies are looking for are
CHROs who can establish deliverables around an
organization and people agenda to meet their
business priorities.
Perspectives 23
“The worst thing you can do is copy and paste an old HR strategy and system to a new organization.” —Ronald Schellekens, PepsiCo
Perspectives 24Perspectives 24
CHROs haven’t historically been considered potential CEO successor candidates, partly because of the lack of operational and P&L responsibility. But if the issues of the last year aren’t going away, and if CHROs are being held accountable for delivering on a business agenda, then does that mean there could be a path to the CEO position for CHROs?
Perspectives 25
Söderström: I could see a path opening up
sometime in the future depending on your career
path and experience. We are at a point in time
where CHROs are expected to step up and lead in
a broader space than before. With purpose, culture,
strategy, and other people agenda topics becoming
part of everyday C-suite conversations, CHROs are
core business enablers and value creators.
Schellekens: Although HR is more integrated with
the business and plays a much larger role, I don’t
think we are quite at that point yet. I think there’s
a value to moving HR executives into operating
roles so that they can understand other elements of
the business and to be on the receiving end of HR
policies and practices and see what has an impact
and what doesn’t. But when it comes to most CEO
roles, it’s critical to have a deep understanding
of the consumer and how to run end-to-end
businesses at scale.
Morris: I’ll put it this way, the function has a lot
of runway to make a sustainable impact on an
organization, whether as CHROs or in another
leadership position.
Perspectives 26
Perspectives
© 2021 Korn Ferry. All rights reserved.
For more information, contact:
Doug Charles at [email protected]
Torrey Foster at [email protected]
Daniel Rubin at [email protected]
Sheila O’Grady at [email protected]
Thomas Wrobleski at [email protected]
Christian Hasenoehrl at [email protected]
George [email protected]