Charting New Horizons with the Chief People Officer
By Brandon Roselius, Senior Associate at WestCap
Historically, human resources leaders were tasked with overseeing hiring, performance reviews, managing payroll and benefits, and protecting the company through compliance. The past decade has seen the emergence of a new role in the industry: the Chief People Officer (CPO), a title that suggests innovation and recognizes the importance of talent to the success of organizations. But too often, the change is purely semantic. Most companies still view the CPO as a role that’s predominantly operational and reactive.
The best CPOs do more than handle talent acquisition, compensation and performance — they’re strategic leaders and advisors to the CEO who help determine whether a company achieves its business goals, from launching innovative products to surpassing sales targets. Particularly in the growth phase, companies should view the CPO as one of the most critical executives at the company. Today’s CPO is a critical partner in setting the strategic direction of the company.
What Defines a Great CPO
Business strategies can’t succeed without the right talent. CPOs possess a deep understanding of people — their potential, their motivations and their performance. Typically, growth-stage technology companies devote 60% to 80% of their budgets to their workforces, as expenses like wages and insurance make up the bulk of fixed costs. As a result, getting hiring and retention wrong can have significant consequences. If CPOs do the minimum or function reactively, companies won’t have the people they need to accomplish their goals as well or as quickly. Great CPOs build teams to oversee HR basics so they can focus on higher-value results.
Here are the characteristics that standout CPOs share:
They raise the bar on exceptional talent.
Regardless of how tight the labor market is, top performers are always in short supply. As companies grow, hiring and coaching become more decentralized. Strategic people leaders empower all teams — from tech to sales to finance — to recognize top performers in their fields, reward those that rise to the top and coach out those that aren’t excelling. One way they can do this is through “scorecards” that detail key attributes for roles, which can be technical, strategic or cultural, based on an organization’s values and needs. Scorecards can help standardize and scale the acquisition of outstanding talent and ensure that new hires are a good fit. Attracting top-tier talent becomes a virtuous cycle, as people naturally seek to work with fellow top performers.
They align the organization to achieve business goals.
Forward-thinking people leaders know how to pull the levers at their disposal — from hiring to compensation to coaching to incentives — to operationalize business strategies. They learn and understand the business as well as the CEO and know what it takes to drive growth, improve margins and serve customers. They can assess whether the right talent is in place, mobilize teams, incentivize desired behaviors, evaluate performance and course correct. A strong CPO can look across the entire organization and enable teams to deliver on objectives efficiently and successfully. Without this leadership, every team is hampered in its ability to accomplish goals effectively.
They serve as a strategic advisor to the CEO.
Visionary CPOs can act as partners and guides to CEOs. Based on their strong understanding of the business through the lens of people, they help CEOs think through big-picture strategy and understand the options they have to achieve their vision. They call out how organizational or people-oriented gaps might impact business strategy. And they not only rectify issues when they come up, but also see problems coming in advance, communicate them to the CEO and resolve them independently. When CEOs lack clarity or face pressures from internal and external stakeholders, the CPO is there to keep the CEO grounded on mission-critical issues and projects. Having a strong CPO as a trusted Number Two can elevate the CEO’s ability to execute and focus on high-level priorities instead of putting out fires.
Embracing a Strategic CPO
Founders that cling to an antiquated view of the CPO do so at their peril. An organization with cohesive talent, appropriate rewards and effective performance management may appear well-run, but that’s just a good CPO. A great CPO is a strategic leader who advises the CEO, ensures that an organization fulfills its business goals and empowers others to be “people leaders” as well.
Having the right CPO is integral to whether a company thrives or even survives. That’s why at WestCap, we’ve brought together and built a community of stellar CPOs across our portfolio companies and beyond. When one of our founders needs a great people leader, we help them find the right person based on their business needs and goals and provide them with the tools and resources to succeed.
