By Ron Thomas 

As captain of the organization, your role is to make bets on strategy as well as bigger bets on people to carry out that strategy. This is the understood dynamic, but the problem is with the reality of the people/strategy matrix.

On paper, that all makes sense. To grow it you need a strategy, to realize it you need the people. So here’s the question: Where is HR in this dynamic formula?

Price of Admission

If, as so many companies are prone to say, “People are our greatest asset,” then the assumption would seem to be that HR is the guider of that asset. So taking it a step further, knowing that this is what’s needed for organizational success, why are HR executives (or the CHROs) not invited into the inner sanctum? What is the price of admission? Finance, marketing, IT surely have a ticket, but in a lot of companies HR is on the outside looking in.

According to two recent studies by the Conference Board as well as PWC CEO Surveys, human capital was shown as either No. 1 or No. 2 for CEO’s concerns. (Small note: The Conference Board survey showed human capital as No. 2 with innovation being No. 1. — so how can we innovate without that most important asset?)

Again, why is the CHRO not one of the CEO’s most trusted advisors? It’s kind of like having a specific medical problem and turning to the family doctor. Normally in those circumstances your family doctor will refer you to a specialist who deals with your disorder every day — a specialist steeped in the knowledge of your ailment.

People-Driven Strategy

So if human capital/talent is the major determinate in reaching organizational goals, then the role of your top HR executive should be as the main trusted advisor to the CEO. And being the main trusted advisor does not mean having to go through the CFO or CAO — it means reporting directly to the CEO.

Talent has taken on such an importance in organizational life today. “A” talent will be the differentiator of great organizations in the future. Innovation, the elephant in the room, is driven by talent and not the other way around.

The lifeblood of successful organizations is going to be centered on attracting and retaining talent. For organizations to be winners in their market there must be a high level of talent within all levels of the organization.

Talent Determines Trajectory

When I worked at Martha Stewart as VP of HR during its infancy, we had an extraordinary level of talent within the organization. Recipes, design ideas, magazine stories, etc. were all created by an amazing group of talented individuals. Sure, Martha had the final say, but those ideas came through the stable of talent that we assembled.

The offshoot of having top talent is that when your organization becomes known as a talent marketplace, prospective employees are clamoring to get in. I noticed an article the other day about Yahoo getting 12,000 resumes per week. This is because they have taken a company that was on the ropes and made it hot again. With heat comes talent.

Sure, Yahoo has the strategy in place, but it is the people and the culture that will drive this company back to both profitability and stature. Out of that treasure trove of resumes will be game changers who could drive the disruptive innovation that all companies are thirsting for. Bringing in or nurturing top talent and creating a culture that thrives on challenges will always produce innovative ideas. Talent will be the key to the kingdom.

Let the Experts Be Experts

The CHRO’s domain of expertise is people, culture and the dynamics for building optimized workforces. We have distinctive knowledge and insight about the importance of an organization’s human capital, and how to situate that capital in a way that allows for the success of that organization’s strategy.

The human capital/talent dynamic is not only a critical business function in itself, but it is also directly connected with innovation, operational excellence and other challenges within the organization. People-driven strategies will create value for years to come, enabling your company to create a garden of talent within the confines of your own office that will yield a bountiful harvest over the long term.

But you have to let the gardener into the garden.

Ron Thomas is a Chief Human Resource & Administrative Officer currently based in Riyadh, Saudi Arabia. He was formerly Director, Talent and Human Resources Solutions at Buck Consultants (a Xerox Company) and is certified by the Human Capital Institute as a Master Human Capital Strategist (MHCS) and Strategic Workforce Planner (SWP). He’s also worked in senior HR roles with Martha Stewart Living and IBM. Ron serves on the Harvard Business Review Advisory Council, McKinsey Quarterly Executive Online Panel, and HCI’s Expert Advisory Council on Talent Management Strategy. Contact him at [email protected], or onTwitter and LinkedIn.

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