Why aren't HR managers CEOs?

Times are changing, not the products, not the machines, but our human capital is our unique selling point. So why then is the most important function in a company not occupied by a HR-professional?

In this blog I want to open a new discussion. The highest functions in companies are often occupied with professionals who often have their specialization in a certain occupation, these are often specialities in: sales, productivity, the product itself, and sometimes even finances.

However, it is very rare that we see an HR professional on the highest seat of a company (read: never). Why is that? I would argue that HR has the most important role in a company in the 21st century and therefore it only seems natural that somebody with HR-affinity holds the highest office.  

The highest office – a brief history

Historically the highest functions in previous societies were either ranked by ‘birth right’ or age. A prince was born to be a king and a farmer’s son was born to be a farmer. Additionally, the elder brother (because in those times we are not even talking about equality between genders) often held the highest regard in the family.

When we transformed from a feudal society to a capitalist society our order of who holds the highest function and why also changed. Birth right and age made place for private property and capital. In the beginning of our capitalist society, it was the people who were most skilled in their profession (artisans, craftsmen and guildsmen) who held the highest offices in their organizations.

With the industrial revolution in full force, these professionals had to make place for the people who knew most about machines and production. After the second world war these mass-producing professionals had to make place for productivity professionals. Average output and efficiency became the drive of many companies to outperform the competition.

Shortly thereafter the golden age of capitalism required professionals who knew how to handle flows of money. The highest occupation became related to financial specialization. Fast forwarding to current day, the highest office is often related to specialization in terms of sales, productivity, the product itself or finance. CEO positions are, more often than not, occupied by somebody who has a technical skill.

What is important?

Let’s do a recap, what have we had so far; we picked our leaders based upon: birth right, age, artisanry, skills related to production, productivity, finance, sales and the product itself. Are we missing something? Well, I believe we do.

Now in the 21st century human capital seems to be the most important asset for most companies. The people who walk in our hallways, sell and produce our products, facilitate finance, logistics and purchasing, it’s the people who are the beating heart of an organisation. They are our unique selling points. That has not gone unnoticed. More and more companies are busy trying to retain and develop their talent, and more and more companies are started to provide the means of doing so. Especially in niche industries, any industry remotely dealing with software and industries which require specific skills (I think this captures our entire economy), employers know how important it is to retain and develop their talent.

From this I can only conclude one thing, the most important focus of our companies now should be the people working in them. This means that we need leaders and CEO’s who not only understand HR, but who are also proficient in the HR world.

Shifting focus

Why would you go through the trouble of finding a CEO who has a focus on HR? Why do we require such emphasis? Well, because every time before us also required change and new ideas based upon what was important at that time. Now we entered the era wherein the most important part of our company is based on our people and their, often irreplaceable, talents. Society is focussed on letting each and everybody develop their talent to maximise our output. Schools, universities, training centres, they all know the importance of a development focussed approach. Therefore, it is time that companies adopt the same focus, which requires the same type of leaders.

It is therefore important that our future CEOs not just understand a recruitment process, but that they are able to build up an entire talent acquisition strategy. That they are not only able to see the value of teambuilding exercises, but that they understand how to shape and create cultural change. That they are not only concerned with training their employees to stay up to date with technologies, but that they can shape trajectory and development plans to provide opportunities for growth.

In short, it does not suffice anymore that our leaders know and do the basics. It is time that HR takes its rightful place in the centre of a company whose main unique selling point is its people. It is time that we accept that the centre stage of our time belongs to HR and development, but that also means that it is time for our HR professionals to step up to the plate. It is not enough to stand in line and to ‘offer service when asked’, HR departments need to transform themselves from administrators to proactive managers.

We need to find value which we can contribute to our employers. Find cultural problems and solve them, develop training and development strategies and empower our co-workers to be co-champions. It is only by doing so that HR will be lifted to strategic importance and that we get leaders who understand and are proficient in the realm of HR.

In conclusion

For me it is only clear that the next generation of new leaders has a background in HR. We are broadly agreeing that our human capital is in the widest sense the most important aspect of our company. We are recruiting, coaching, training and developing our employees, but to truly stand out for our employees, HR needs to be lifted to strategic importance. Therefore, I believe that we need leaders who understand this importance and have the capabilities to do so.

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In the last post, I discussed how culture eats strategy for breakfast, which is almost a well-accepted mantra in the business world. If I elaborate on that train of thought, then I believe we can almost certainly say that culture eats processes for lunch and dinner. Not only because processes are the consequence of a strategy, but also because we even look at the theoretic idea of a process versus the practical application of a process.

A strategy is an overarching plan for an organization on how to achieve its business goals. From the strategy, we derive tactical and operational plans and create processes to ensure that we achieve the goals of those plans as efficiently as possible.  

When we look at the general idea of a workplace, we see that the overarching framework for a lot of workplaces is very similar. People travel to an assigned geographical location, have a time that they start and finish, have colleagues they work together with, and collectively they work towards an objective. Apart from that, professions differ in a lot of different ways. A police officer has a distinctively different set of tasks and responsibilities than a receptionist or software developer. Still, they have a lot in common too. One major thing that most jobs have in common is that they must deal with a lot of ambiguity. Whether you ask a police officer, receptionist, or software developer what they do on a daily basis, a lot of the answers boil down to a variant of “every day brings new unforeseen challenges”. It is hard to describe daily activities as they can vary immensely. No day is the same. Still, each one of those people knows what is expected of them in various situations. They know how to behave, even when the situation is new to them.  

Structures & Processes

One way of dealing with this problem is to build processes that give people guidelines on how to act in different situations. These processes are good to show other organisations on how you intend to run your businesses. A prime example of this is ISO certifications. Huge amounts of documentation on how an organisation has set up its processes to be able to guarantee a certain level of standardization and quality. But even the detailed documentation of ISO certifications leaves room for interpretations and ambiguity and requires employees to be adaptive and creative. Do not get me wrong; ISO certification can be critical for organizations to improve both the quality and efficiency of their work. I merely argue that it is not the ultimate tool for guiding your employees in their everyday work. These are often sophisticated texts and process flows to guide individuals on how to deal with complex issues, hidden in manuals or quality support systems. Only a small proportion of people have read these manuals and to make matters worse the theory always slightly differs from reality. This means that we need to give our people more guidelines on how to act, even with ambiguity and ever-changing situations.

Culture to the rescue

This is where culture comes in. I have already extensively talked about how decision-making, culture, and empowerment are correlated here. But besides taking decisions, we also behave in a certain way as people. Our behaviours are shaped by motivations, that which drives us individually, and by what is acceptable in a group, that which drives us collectively. As I am not a psychologist, I will not speculate too much here on how individual motivations are shaped, but as an HR specialist, I can tell you that group behaviours form and are shaped by company culture. In other words, as a company we cannot determine the motivations of an individual person, however, we can influence the overarching culture of our organisation. The culture that we create will in turn influence group behaviours, which in turn will influence individual behaviours and decisions.  

By creating the right culture, we can create the right group behaviours which will provide guidelines for individuals on how to behave and make decisions. This is the set of guidelines that help people make consistent decisions despite ambiguity and ever-changing situations. A good example of this is the cultural value of Facebook “Move fast and break things”, which got adopted by a lot of small fast-growing companies. Why? Simple: these companies often lack the structure to properly guide their employees through their decision-making process. A company value like that shows your employees that they should not be afraid and wait too long with making decisions. They are rather encouraged to rely on their own strengths and “Move fast and break things” instead of “Going slow and steady”.  

Although I am not arguing that this is a good cultural value (Facebook had to roll back its original bold value), it is a clear guideline and message to people on how to act in unclear situations that demand adaptability and creativity. That is something that processes can never give your employees. Processes can only help you with the predictable, but culture can help you with the unpredictable – and remember it is the case for most jobs that “every day brings new unforeseen situations”.  

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The simple truth is that everybody is bias in some sort of way. This is not because we inherently want it to be that way, but the way we are brought up and the environment we are brought up in, gives us a certain perspective of the world. Our upbringing gives us certain values which we carry with us throughout our lives and we associate symbols with those values to identify whether or not somebody else cherishes the same kind of values. Biases in this sense are basically short-cuts to get to know somebody and what they represent. However, as with all things in life, taking short-cuts means involving risks. In this blog I will talk about the 6 most common recruitment biases and how they can affect your business negatively. In the conclusion you will find a link to how you can overcome these biases.  

Confirmation bias

The confirmation bias is the idea that you have a certain idea about a candidate and you are trying to look for hints which ‘confirm’ that idea, while (actively) ignoring signals which might disprove that idea. Often it is linked to a first impression which is either positive or negative and after that you try to confirm that impression by looking for clues which indicate that the impression was correct. This can either be a positive idea about the candidate or a negative idea about the candidate. Both instances can actually be hurtful to the recruitment. For instance, if you have a certain negative idea about the candidate, the confirmation bias makes it that the candidate can hardly prove him- or herself otherwise. This way you can overlook qualities and miss out on good candidates, just because you are looking for the wrong clues. But a positive confirmation bias is also not good. Unfortunately, this implies that you know something positive about the candidate and are looking for ways to confirm your suspicion, ignoring all clues which might prove you wrong. This way you might send the wrong candidate through to technical interviews, or even worse; you might up hiring the wrong candidate. Do you want to learn more about the confirmation bias? Watch this short video on confirmation bias.  

Heuristic bias

The heuristic bias is a fancy way of saying: ‘judging a book by its cover’. It has strong similarities with the confirmation bias as it is based upon first impressions. In contrary to the confirmation bias, it does not look for extra clues and remains just one set image, which often involves physical appearance. This has the advantage that it does not get reinforced the way the confirmation bias does (by looking for clues), but it has the disadvantage that it is quite difficult to overcome the set image you have of a candidate. German scientists have looked into it and questioned 127 HR professionals who often make decisions about recruitment and promotion. They basically gave them pictures of individuals and the outcome was that the test candidates continuously underestimated the prestige of obese individuals and overestimated the prestige of the normal-weight individuals. The test candidates in this sense quite literally judged the content of an individual by his or her appearance. Read more about their research here.  

Halo and Horn effect

The halo and horn effect is the idea that you attribute certain traits to a person based upon some traits that you already know. Quite simply put you see a person either in an entire positive light (as a saint with an halo) or in an entire negative light (as a sinner with horns) based upon a couple of known traits. In this sense you might see an attractive candidate and assume that they are also successful and competent as well. That is the halo effect. On the other hand, you might find out that a candidate has had a criminal record in the past, which might make you assume that they are unsuccessful and incompetent. That is the horns effect.  

Similarity attraction bias

The similarity attraction bias has no fancy name, but it is a very important bias to be aware of as I believe that a lot of recruiters make this mistake. Simply put, the similarity attraction bias makes you more bias towards persons who are similar to you and your colleagues. This leads to more candidates further down the pipeline which are similar to the people that already work at the company. Now you might be thinking: well, what is the big deal? I need people who are similar because they work better together. Well, that myth has been debunked and it turns out, if you are looking to build quality teams, then you need to be aiming for diversity. That is why the similarity attraction bias is quite dangerous. Do you want to find out more common myths about the perfect workplace?

Conformity bias

Conformity bias is quite an interesting one and often happens when recruitment processes are hiring in teams. Firstly, I want to point out that every company should hire in teams. Why? Secondly, there are some dangers with hiring in teams as well, and the conformity bias is one of them. Basically, it revolves around the idea of peer pressure and that people suppress their true opinion about a candidate to conform to the general opinion of the panel. This often happens in groups which are too large for effective hiring (another lesson that Google teaches us: the magical number for hiring teams is four persons). It is important to address and apprehend this bias as each and every team member might prove to have crucial information as to why or why not you should hire a candidate. You need to be aware of these insights and not have them be suppressed just because everybody likes to adhere to the opinion of the team.  

Expectation anchor

Expectation anchor is the idea that you have first impression of a candidate or a first piece of information a candidate, and that you basically make decisions based upon those first impression or first piece of information. The idea is that we have a very difficult time to shake our idea of somebody once a first impression or idea is established and that we will make decisions based upon those impressions and ideas accordingly. It is very hard to sway somebody and their future actions from that first impression or piece of information, and can often lead to hasty and wrong decisions.  

In conclusion

Firstly, I would say that a lot of these biases overlap in terms of definitions and effects. The expectation anchor for example, is more or less intertwined with the halo effect. Secondly, I would argue that a lot of recruiters are unaware of their own biases and how to overcome them. I myself even find it hard to critically reflect on how I base my decisions and if they are bias-free, but there are solutions to solve these biases. Want to find out more? Get in touch with us and see how we can get your recruitment process bias-free, starting tomorrow.  

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