This From the Vault article was originally published on CLOmedia.com in June 201o.
It goes without saying that the most important relationship a CLO has is with the CEO. After all, how the CEO defines, embraces and supports the role of the CLO will determine how much impact the CLO can have in the company and whether the role will be fulfilling.
At one end of the spectrum, the CEO may view the CLO essentially as a C-level training director, responsible for guiding learning and development programs throughout the company and ensuring that employees have the skills needed to perform at high levels. In the eyes of the CEO, the CLO may also be the executor of special projects, essentially serving as an internal consultant and a trusted advisor.
At the other end of the spectrum, the CEO may view the CLO as a strategic business partner, an ally in the implementation of core business strategies or large-scale transformation programs. In this case, the CLO will also be an enterprise change agent, leveraging knowledge and alternative leadership and organizational models to enhance the company’s position in its industry and markets — a model pioneered in the late ’90s by companies such as Motorola and Unilever.
Without a doubt, the latter scenario provides the more fulfilling view of the CLO role, but it may not be the most common. This is partly because the role is still evolving and partly because however the role is defined, it must be synchronized with the board and other C-suite executives who may perceive some of the CLO’s functions and responsibilities as intruding on their domains. In fact, as boards play an increasingly large role in areas such as succession planning and leadership development, it is more and more common for the CLO to facilitate some of these discussions. Consequently, the first challenge CLOs face in establishing a successful CEO relationship is ensuring that both they and the CEO agree on what their role entails and what they are expected to accomplish for the company.
Defining the CLO Role
Clarity of role is important for any executive reporting to the CEO, but it’s especially important when the role can cut across the entire organization and have a significant impact on the creation and execution of strategy, succession planning and the identification of leadership competencies. Driving clarity around the CLO role is also more critical since it is a relatively new position and therefore subject to multiple interpretations — unlike more traditional roles such as those of CIO and CFO, where most people can easily define scope and boundaries.
When CLOs and CEOs don’t have a shared understanding of the role and clear agreement on what authority the CLO has, the result is typically mutual frustration and dissatisfaction. There may be inefficiencies because of duplicate work or work gaps, as well as confusion among other senior executives that leads to dissension and criticism, justified or not. Worse, the company may miss the opportunity to leverage learning to enhance performance and customer and market impact.
It helps to have the CEO and CLO agree on a vision of success and performance metrics. What would success look like — for the CEO, for the CLO and for the company at large? What about success for the executives the CLO works with? For employees and customers? Other important questions about the role are:
1. What is the key mission of the CLO?
2. What are the priorities, particularly from the CEO’s perspective?
3. What is in and out of the scope of the role, succession planning, leadership assessment and development, talent and performance management, enterprise learning and executive education, and talent acquisition? What about knowledge development, management and sharing?
4. Which decisions is the CLO responsible and accountable for; an advisor or influencer on; or merely informed about?
5. What communication responsibilities does the CLO have with the board, other C-suite executives, employees, customers or other external stakeholders?
The CEO and CLO also need to ensure that their conclusions are in alignment with and understood by board members, people throughout the company and line executives on whose functions the CLO will perhaps have a strong influence.
Finally, the CEO and CLO must discuss and agree on performance metrics and resource requirements. For the top priorities, what is the expected ROI? What is the CLO’s business plan, and what will be required to accomplish it?
A common derailer of a healthy CLO-CEO relationship is when the CEO or the board does not view the CLO’s role as strategic. If the CLO is perceived as a glorified training director, he or she will never have the power to have meaningful impact. Consider the case of Steve Kerr, who was the learning leader at GE when Jack Welch was CEO. Kerr is widely viewed as one of the world’s first CLOs. He and Welch invented that title together — and in terms of the strategic role learning could and should play in the company and what Welch wanted his CLO to accomplish, there was no disagreement.
Another common pitfall occurs if the CLO’s responsibilities overlap those of other senior executives, particularly the CHRO and occasionally the CIO. In its early incarnations, the CLO typically reported to the CHRO, who would then report to the CEO.
Currently there are a number of different organizational models, including one in which both the CHRO and CLO report directly to the CEO, with the CHRO more focused on human resources operations and the CLO more focused on capability and leadership development. With the advent of the CLO role, learning has become more of a strategic driver of competitive advantage and market value, so it has migrated to the CLO’s list of responsibilities.
Regarding work scope and boundaries, should the CLO role include talent assessment, which is a critical precursor to formulating a talent development strategy? What about succession planning? Recruiting of top talent? Other aspects of talent management? In companies that grew through mergers and acquisitions, multiple organizational models may coexist, creating internal confusion when defining organizational and decision-making boundaries. In this case, it becomes even more critical to drive clarity around roles and responsibilities and define whether CLO-related processes will be standardized by business unit.
The most disappointing relationship pitfall — at least from the CLO’s perspective — occurs when the CEO doesn’t devote the time and attention to top-priority projects related to leadership development. The CEO’s presence would send an important signal and give developing leaders in those programs access to the CEO and the opportunity to learn more about how he or she thinks about the business. CEOs who delegate even the most important leadership development projects to the CLO distance themselves from one of the CLO’s primary areas of organizational impact and create the impression — intentionally or unintentionally — that it’s not that important to them or, by extension, to the organization. Of course, CLOs also can distance themselves from the CEO and the board if they become involved too late in strategic issues such as acquisitions, large-scale change projects and top leadership recruiting.
Building a Fruitful Relationship
Building a fruitful relationship with the CEO, as well as with the board and other C-suite executives, involves some commonsense steps as well as a specific mindset. Developing a shared perspective on the CLO role is the first step. After laying that foundation, however, it’s important to synchronize this understanding with other C-suite leaders as well as line managers and others in the company whose responsibilities and performance will be affected and whose cooperation is essential for the CLO to succeed.
In good relationships of any kind, people negotiate and accept roles and boundaries and openly communicate their understanding so that neither person is blindsided by unspoken assumptions or expectations. It’s especially important to reach clear agreement with the CHRO and any other C-suite executives whose roles and responsibilities may overlap those of the CLO. This is where the potential for friction and conflict is greatest, so it’s essential to nip any issues in the bud. Few CEOs have much tolerance for turf wars.
These foundational steps are crucial to building a fruitful relationship with the CEO, but even more important for CLOs is to think of themselves as the CEO’s partner, coach and adviser on performance. To do this, they have to think like a CEO. They have to appreciate that leadership and talent development is not an end in itself. Rather, it is a means to an end — and that end is organizational performance.
The CLOs who have the best relationships with their CEOs are those who think strategically about how aligned organization strategy, focused leadership development, and effective talent management can enhance the bottom line; build organizational capability and address organizational weaknesses; improve product performance and strengthen competitive advantage; increase customer satisfaction and loyalty; retain top talent; and enhance innovation. The relationship between strategy execution and the CLO mission has to be clearly articulated and broadcast to the entire organization.
The highest-performing CLOs have effective relationships with their CEOs because they make the CEO’s job easier. They help the chief executive build the talent and capability required to effectively execute corporate strategy. They help drive share price in the right direction by enhancing corporate performance and growing the organization’s ability to create stronger customer relationships. And they accomplish this in an area the CEO may or may not fully appreciate or even comprehend.
Most CEOs have not been HR or learning directors earlier in their careers. As such, they will certainly appreciate the role learning and development plays in an organization, but they may not understand the strategic value learning can provide. A CLO who can demonstrate this can turn the CEO into a hero, and there’s no better way to build a strong relationship than to help the CEO deliver exceptional performance.
David Vance is the executive director for the Center for Talent Reporting, founding and former president of Caterpillar University and author of “The Business of Learning.” To comment, please email editor@CLOmedia.com.Filed under: StrategyTagged with: business strategy, CEO, CLO, partnership