The Litmus Test for CEO’s Who Say They Value Their People



I have a simple test to see if CEOs practice what they preach. Does their Head of HR report directly to them or to someone else? If they report to the COO -- or even worse-- their CFO, it is a red flag.

If you’re a candidate, it's a great 15-second test to see if the business you are contemplating joining really cares about “its most important resource”. If you work in HR, it's the pass/fail question before you join the firm you are interviewing with.

So, let's dig in to this litmus test.

But before we begin, I have a question that I don’t know the answer to. If you look at all the businesses on the various “Best Company to Work For" lists, what percentage have their HR functions reporting to the top dog? I would love to know and wonder if this is even analyzed by the various companies compiling the data and awarding companies their designations.

Well, back to my main point for today. If a CEO truly believes their people are their most important asset, then it would naturally follow that their most senior HR executive would be a critical, if not most important staff member. Well, in some cases the argument might go that the CFO is the most important player on a senior executive’s team. Others may argue they are of equal importance. I would be okay with that last option along with the first.

I won’t bore you with my full theory on this except to say that you typically spend the most dollars in your budget on your people, and your company’s performance is typically dependent on your staff’s performance and creativity. Let’s not complicate this argument, it is a simple one.

I have personally headed HR at two major organizations where I reported directly and sat literally next to the CEO, and had complete 24x7 access. Both businesses made those "Best Company" lists and were people centric. My personal perspective is supported by what I have experienced and maybe I am biased.

But, so many companies that claim their folks are their most important asset don’t practice what they preach. I bet most of them do not have senior HR execs on their CEO’s hip.

So, what do you think and what is your perspective? Inquiring minds would like to know…and would love to see some data on this…. 



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