We frequently see situations in which workforce composition and talent deployment are "running behind" business strategy, sometimes by 24 months or more. This, of course, impedes strategy execution and causes frustration and dysfunction as organizational capabilities are out of sync with business strategy.
The CEO is primarily responsible for developing a coherent competitive strategy that defines the differentiating capabilities required to activate it, and sets the parameters of the business’ human capital strategy. The starting point is to define strategic workforce capabilities in terms of how a company’s strategy creates value. Where are the strategy drivers that culminate in successful company performance? What combination of capabilities most enable strategic differentiation? This means starting at the top with your strategy and working down through the organization to identify these essential capabilities and the most critical job roles responsible for their execution.
Once the connection between business strategy and workforce capability is fully established, CEOs and CHROs must drive the talent agenda. Without explicit, frequent CEO attention to the evolving talent requirements and organizational culture needed to accelerate strategy execution, an artificial separation between the workforce and the business creeps into the collective corporate mindset. This must be continuously addressed, and it is job #1 for CEOs in the talent-economy.
Specifically, this means that human capital reviews should be tightly integrated into business operating reviews, with the same amount of time and rigor allocated to each. Doing so sends a compelling message about the value that leadership places on their employees. It also signals to line executives that human capital is central to business success and that they are expected to lead and develop their people with the same rigor they apply to other factors.
In addition, CEOs need to ensure that CFOs view human capital as a key-value driver and central factor in the company’s ability to achieve outcomes that drive shareholder value. This begins to fall apart when human capital is seen as merely a cost to be managed.