Finally—it has happened. The offer for the HR director job has arrived, or maybe the long-awaited transfer into HR management has materialized.
There could be many procedures and policies to learn, not to mention new languages spoken by your boss and other members of the C-suite. These executives often speak a lingo specific to their role, and anyone climbing or aiming to climb the corporate hierarchy must become fluent in multiple tongues. For instance, knowing how to communicate with three key C-suite executives—the corporate counsel and the chief financial and transformation officers—is critical for HR professionals.
Purposeful, clear communication is especially important now as business grows ever more complicated and crossed wires can have major consequences. Just ask Sabrina Osborne, SHRM-CP, vice president of human resources at Durham, N.C.-based Humacyte, a biotech company.
Osborne was concerned because job candidates consistently sought compensation beyond what the biotech company was budgeting, and hiring top talent was critical to its mission. Humacyte was still offering startup salaries, though its head count had tripled in 18 months to roughly 115 employees. (Osborne says that startups often pay the bare minimum to fill the position and then supplement the salary with stock options and the excitement of being on the ground floor of a new operation. Those salaries have typically not been benchmarked against what other, more mature companies pay their employees and need to be examined as a firm grows.)
Osborne wanted to hire a firm to benchmark Humacyte’s salaries against the competition but thought the CFO might not want to spend the money. Her presentation lobbying for a benchmark study included the expected return on investment—a big data point for CFOs—by determining how much high turnover would cost the company. The CFO greenlighted the study.
“If you use their terminology with them, you’re more of a peer and advisor,” Osborne says.
Basic definitions are just a quick online search away. A more in-depth understanding of the terminology means HR executives can explain how their department policies affect the overall business. The chief financial officer will likely listen to ideas more intently if the ideas come with explanations of how a plan will affect earnings. HR executives will undoubtedly ingratiate themselves to the corporate counsel by outlining the legal ramifications of a proposed new program.
“Your level of learning depends on how effective you want to be,” says Sheryl Simmons, SHRM-CP, chief human resources officer of Maestro Health, a Chicago-based health and benefits firm. “You can’t fool [C-suite executives]. If I’m only pretending, I’ve shot my credibility. Then how are they going to trust me?”
The first step in developing meaningful communications with the C-suite is understanding how the company makes money, according to Brian Kropp, group vice president and head of the HR practice at Gartner Research, a Stamford, Conn.-based research and advisory firm.
That goes beyond just knowing what the company does to comprehending how it completes its mission. What are the company’s biggest costs? What is the market for the product or service, and what factors may affect it? How is the product or service marketed? Who are the company’s biggest competitors and customers? What type of specialized employees are most critical to its success?
That knowledge will be the foundation of a business vocabulary that will broaden as an HR professional’s understanding of C-suite roles deepens.
“You need to know what the business is trying to accomplish,” Kropp says. “That’s going to enhance your ability to do your job.”
The following guidance on how to communicate with your company’s chief transformation officer, corporate counsel and chief financial officer can help make the difference between success and failure in a new job.
The Chief Transformation Officer
Before HR professionals can develop a strategy for communicating with the CTO, they must first ask that person a critical question: What exactly is your role?
It’s not a silly inquiry. The CTO title has made inroads into corporate America only in the last five or six years and is nowhere near as common or defined as most other C-suite positions. CTOs in the past initially were brought in to solve a specific problem and left after the solution’s completion. Now companies evolve so rapidly that they’re keeping CTOs on board to navigate the quickly morphing business environment, according to Jim Hemerling, a senior partner at the Boston Consulting Group.
The title still means different things at different organizations. Generally, however, CTOs partner with CEOs to develop a vision for the company’s future and work to organize the company to achieve it. Hemerling says HR plays an important role in the transformation, as it helps find and cultivate the talent to execute the plan. Those on the transformation team not only have to be expert in their professions but also need to have flexible, dynamic personalities that can both promote and adapt to change. Teams typically consist of individuals from different disciplines such as sales, production and finance, so members must be comfortable working outside a professional silo in a more diverse group.
HR “needs to be involved and at the table to shape the transformation agenda,” Hemerling says. “Many of the initiatives are dependent on people and their capability to execute.”
‘If you use their terminology with them, you’re more of a peer
Sabrina Osborne, SHRM-CP
Many CTOs are proponents of the “lean management” approach to running companies, and HR professionals working with them should understand the concept to communicate effectively, experts say. This method changes management’s focus from optimizing individual technologies, assets and departments to perfecting the flow of products and services throughout the company. Its proponents believe that the approach will eliminate waste while creating higher-quality, lower-cost products. The idea has been around for centuries but became more broadly known when Toyota adopted it after World War II, according to the Lean Enterprise Institute, a Cambridge, Mass., nonprofit that promotes the methodology. Lean’s popularity grew after the 1990 publication of The Machine That Changed the World, a book that detailed Toyota’s process.
Lean managers have a unique lingo that may be confusing to many, as the words come from the Japanese language. They speak about the “gemba,” which is where customer value is created. For manufacturing firms it’s the factory floor, for example. Meanwhile, “kaizen” refers to the small steps taken to achieve a goal.
Dr. Lucy Xenophon, chief transformation officer at Mount Sinai St. Luke’s in New York City, says she avoids using lean lingo and doesn’t expect fluency in it from the HR department. She does want HR to appreciate that she’s using lean concepts to turn around the institution she joined four years ago.
Effective communication starts with HR “really listening to what it is that I need,” she says.
Xenophon was looking for an industrial engineer who would act as a facilitator for her team. “I didn’t just need an industrial engineer,” she says. “I needed someone who can teach lean to a housekeeper with limited literacy and then turn around and coach the president of the hospital [in lean thinking].”
To better explain her requirements, Xenophon invited the two HR professionals charged with finding candidates for a detailed conversation about lean and the position. They sat in the “lean lab,” a room lined with process maps and huddle boards—tools used in the lean philosophy to help visualize workflow.
She thought learning more about the concept and seeing the space would help the HR professionals find suitable candidates. It took nine months, but eventually Xenophon hired an engineer.
“HR has a hard job” in finding lean-trained industrial engineers, she says. “But I know they exist around the country.”
Do’s and Don’ts for Communicating with C-Suite Executives
- Ask their preferred method and frequency of communication.
- Be mindful of their time. Stick to the allotted meeting schedule and have a specific agenda.
- Pay attention to executives’ personalities. Some may enjoy swapping personal stories and spending a bit of time discussing a movie or new restaurant, which can help create a bond. Keep such conversations short and nonpolitical. Cut the small talk if someone is all business.
- Bring data or studies to back up ideas and suggestions.
- Request feedback. It will help determine if you and your colleagues understand each other and eliminate problems down the road.
Blindside executives by proposing big ideas with no notice.
For example, don’t present options for a new vacation policy without ever having broached why the current one needs updating. Introduce the topic and set a time to discuss it further.
Propose a half-baked plan. Do your research and due diligence.
Pretend to understand an unfamiliar term or subject for fear of looking naive. It’s impossible to make a meaningful contribution to a discussion without fully comprehending the topic. Plus, if discovered, the ruse could ruin your credibility.
Leaders in the C-suite typically discuss how to drive increases in certain areas, whether in sales, profits, customers, market share or all of the above. Except for the corporate counsel, that is. That person talks of lowering, limiting and, if possible, eliminating certain areas—specifically risk and liability.
“We protect the downside,” says Hilary Rapkin, chief legal officer at WEX Inc., a South Portland, Maine-based provider of corporate payment systems and solutions.
Employee relations can be a hotbed of potential problems, including sexual-harassment claims, wrongful termination suits and onsite injuries. That’s why human resources executives and the legal team work together closely to create detailed employee handbooks and codes of conduct, so what is and is not acceptable workplace behavior is clearly presented. Employee training sessions are jointly developed to reinforce those messages and customized to address issues in certain jobs.
“You really want to work on the training, because it saves problems later,” says Betsy Dellinger, senior vice president and general counsel at Park Place Technologies, a Cleveland-based data center maintenance provider.
Legal counsels say they don’t expect HR professionals to have a detailed knowledge of employment law, though they should at least understand the basics of critical legislation. For example, HR professionals should be familiar with the Worker Adjustment and Retraining Notification Act, or WARN Act. It requires companies with 100 or more employees to provide 60 calendar days of notice before plant closings or layoffs. Rapkin says HR personnel should alert legal staff to any actions that fall under the WARN Act so lawyers can take the necessary steps to comply.
Legal counsels do, however, expect HR professionals to keep abreast of legal changes through reading, continuing education and attending conferences. Dellinger says she regularly speaks with the HR team at Park Place about common issues. It can also help if HR staffers develop individual specialties, giving them in-depth knowledge about issues such as disability, sexual harassment or ageism. That deeper expertise will help HR better partner with the legal department.
Dellinger says it’s critical that HR doesn’t dump legal concerns into her lap without offering any insights or help on how to solve them. “I don’t want people coming to me and saying, ‘Here’s a problem,’ ” she says. “I want ‘Here’s a concern and how can we work to address it?’ Come with a collaborative attitude and some potential solutions.”
HR professionals say their interactions with corporate counsel tend to be longer and more involved than meetings with other C-suite executives. That’s because they’re often dealing with problems complicated by employees’ emotions and well-being. Experts say that in such situations, it’s especially important for HR to bring any relevant documentation to the legal team so members fully understand the background and context. Allegations of wrongful dismissal or sexual harassment often come with long histories.
Such cases also can come with large payouts. In 2017, it cost an average of $160,000 for a company to settle an employee lawsuit, according to Hiscox, a Hamilton, Bermuda-based business insurer. That doesn’t count the cost and time of the 76 percent of lawsuits that are investigated without resulting in a payoff.
If there’s a problem, Rapkin wants to know about it immediately. “I don’t need anybody to sugarcoat it,” she says. “Be direct and tell me quickly.” The sooner she understands the circumstances, the sooner she can begin assessing the potential impact on the company.
The Chief Financial Officer
Human resource executives in every industry should be prepared to answer the same question when presenting ideas to the chief financial officer: What does this mean for the organization’s bottom line?
CFOs are the stewards of their company’s money and view most everything through a financial lens.
Their work requires them to carefully compute figures as they comply with myriad financial rules and regulations that increase exponentially in publicly traded companies. Precision, codification and data are sacrosanct to CFOs, and it’s in HR’s best interest to remember that when speaking with them.
Be concise during meetings with the CFO, as he or she will appreciate exactitude.
Remember that CFOs aren’t focused on handling employee relations, nor is it their responsibility. That means they might view some employee benefits as expenses lacking tangible value. Likewise, they may fail to understand how what they view as an inconsequential change could impact employees. Lining up studies and data that demonstrate a program’s worth, or its harm, can be enormously helpful for influencing the CFO.
‘I don’t want people coming to me and saying, “Here’s a problem.” I want “Here’s a concern and how can we work to address it?” ’
Osborne believes it’s critical that HR professionals learn financial terminology to be a productive team member, otherwise they find themselves trying to crack a code of acronyms. She learned terms such as EBITDA (earnings before interest, taxes, depreciation and amortization, which is an indicator of a business’s profitability), FP&A (financial planning and analysis, a process for compiling and analyzing a long-term strategy) and P&Ls (profit and loss statements, which summarize revenues, costs and expenses during a specific period and are an indicator of a company’s progress). But HR professionals stress that their understanding must go beyond just definitions.
Simmons at Maestro Health says that understanding EBITDA will help HR when discussing issues such as whether to give employees unlimited paid time off versus a specified amount of vacation and sick time. She notes that companies need to carry unused vacation time on their balance sheets as an expense, and that expense could affect earnings.
Simmons adds that HR professionals aspiring to top leadership roles need to understand financial terms to manage department budgets and design benefit packages. “How relevant do you want to be?” she asks.
Of course, CFOs value HR professionals who understand their world. But for some CFOs, the HR executives’ window into employees’ lives helps them refine their actions.
Tony Tricarichi, chief financial officer of Park Place Technologies, says he believed that his idea to pay employees every other Friday instead of twice a month was a great way to save the company money without causing any ripple effects in the organization. Then an HR colleague at the Cleveland-based provider of data center maintenance told him that hourly employees often schedule their bill payments around when they receive their checks, and the switch could affect their finances.
“I didn’t even think of that,” Tricarichi says. “And it was a very sensitive issue.” HR led a series of meetings with employees to prepare them for the change, aiming to avoid any confusion within the ranks. “[The HR staffers] were very considerate of the employees,” he says.
Tricarichi says HR’s input was invaluable because, as much as CFOs want to save money, they don’t want their actions to roil the workforce, hurting the company in other ways. According to the Work Institute, a Franklin, Tenn.-based consulting firm, voluntary turnover is estimated to cost companies $600 million in 2019—or about $15,000 per employee.
Theresa Agovino is the workplace editor for SHRM.
Illustration by Pete Ryan.