Why 30% of CEOs Avoid Their HR Leader (with Johnny C. Taylor, Jr.)

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Anita Grantham: Johnny, it's so good to be with you.

Johnny C. Johnny C. Taylor, Jr., SHRM-SCP, President & CEO (Taylor), Jr., SHRM Senior Certified Professional (SHRM-SCP), President & CEO: It is so great to be here. And I mean that, you know, I just love your work. I love what you stand for, so I'm really excited to be here.

Anita Grantham: Thank you. Well, we're talking about something that I know you and I are both passionate about. That I don't think we talk about enough. And that's this relationship, the relationship between the CEO and the chief HR officer, chief people officer, chief work officer. Whatever this role is. Talk to me about how you see that relationship in your world and organization at SHRM and then with all the wonderful companies you get to interact with.

Taylor: So, wow. I did not know that this topic, you were hitting the nail on the head here. I'm gonna tell you anecdotally something that happens.

So I'm at an event with about 50 CEOs of, call it the Fortune 250. So these are the big, big company CEOs, and for those who are listening, this applies to all CEO relationships. But this is my situation. So I'm sitting there and I'm giving them permission. I'm the HR speaker, and I said, I want you to be honest. What do you think about HR?

Anita Grantham: Oh, I love it.

Taylor: What do you think about your CHRO? And so I let them open up and talk. And so let me tell you what I, where we landed, and this is rough math, but it's pretty darn accurate. I asked the question, how many of you love your working relationship with your CHRO?

Then I asked the second question, how many of you tolerate your CHRO? How many of you don't like your CHRO? I mean, just literally would.

So the math goes this way. Ten % love, 60 % tolerate. Thirty % of this room said, I actually don't like the person at all. I don't even know why they're there. I avoid them. I was shocked.

And again, this wasn't scientific research validated, but I'm giving you real numbers in a group of people, and this was the sentiment and I think it represents, think about that ten % of them are in love. And you have been in that situation, and I have been in that situation that I knew this was like the right chemistry and we made magic.

Anita Grantham: Yes.

Taylor: And I've also worked in situations where we kind of tolerated each other. By the way, HR people, this is not like the CEO's always right. It's just, you know, that's what we just do our jobs and we do what we do. I've also had one instance in my career where I literally did not like being there and I'm convinced they didn't like me being there. Like it just is what it is.

But 30 %. So I asked, this is the part to just get to it. I said, so of the 30 % of you like, what's going on there? Why don't you just replace them?

Anita Grantham: Yeah, get 'em out.

Taylor: Right? And the answer was, I don't think it'll get any better.

Anita Grantham: Oh.

Taylor: It hurt me to my heart.

Anita Grantham: It hurts me too.

Taylor: Because you're saying that this is just what you think about HR, that it's never gonna be great. It's never gonna even be good to the point of me tolerating it. But this is a necessary evil. That math ten, 60, 30 is why this conversation is so important. We as HR professionals have to really look at the man or the woman in the mirror and say, so where am I? Ask that question. And then what am I gonna do about it?

So I remembered sitting down with the CEO for whom I was working. For those who don't know, I've been a Fortune 500 CHRO. I've been a CHRO of a division in a Fortune 500 company.

Anita Grantham: Mm-hmm.

Taylor: Paramount. Like I've done all of these jobs and I've been at small companies.

Anita Grantham: Yeah.

Taylor: Lending Tree, which was small when I started.

Anita Grantham: Yeah.

Taylor: And still was relatively small. I was at Blockbuster when it was small. So like I got the gamut of all of this.

Anita Grantham: You do.

Taylor: It was really interesting. So I asked him, I said, you know, what's going on there, and what can we do about it? And I think we have to engage in some serious introspection. 'Cause I don't actually think some of those CHROs are bad CHROs in the 30 %, I think they were misplaced.

Right. They were in an organization where no matter what they did, they would never be valued. I was in one of those before and I literally got to the point where I said, this is a Fortune 500 job, but guess what? They're 499 others.

Anita Grantham: Yes.

Taylor: And you have to come to grips with that, that this just, this dog won't hunt, right? For any number of reasons. I am not gonna connect with this person. I'm not gonna be successful. And why should you remain in a situation where you work so hard, you give your everything to it and you're not valued?

So then which side of the fence does it lie on, Johnny? Is it we hear from CHROs, my CEO doesn't value me. The CEOs say, I just don't wanna work with this person. What is the impact to value that can be created by the organization when there's breakdown in this relationship?

Taylor: I mean, let me tell you, it's all wrong. You want to talk about a headwind? In a business, if the CHRO and the CEO are not compatible, if it's just not gonna work, and it's not just those two don't get along, it is a drag on the organization.

The CHRO, who should be your go-to player in the organization. You've been in those shops where I have been the go-to person, I had a CEO who just literally didn't do anything, even in their personal lives without my opinion. Right, right, right. And that's when you know it's going. Yeah. When it doesn't, however the organization feels it profoundly so. I'm the person who's, you know, and I'm CHRO, the keeper of the culture.

Anita Grantham: Yeah.

Taylor: And I don't even have a good relationship with the CEO. How can I keep this culture? I'm the person who's selling the organization to people. I'm inviting you to come work here, and I'm supposed- then you're not gonna do it. I'm the person that when the employee comes in and starts complaining about the culture here, if I actually agree with that person.

Right. Just think about, yeah, yeah. What I'm not doing from a value point of view, poor perspective. So it's really, I you ask that question, like I think ultimately it's the CHRO. Because let's just face it, the CEO is whomever he or she is going to be.

Anita Grantham: That's it.

Taylor: And only the board can fire them. So it doesn't matter what I think about them. So what I've gotta do though is not just when I run into someone who I'm not totally aligned with, I then have to use my persuasion skills. Yeah. I've gotta convince them of the value of what I do and my team. Mm-hmm. What we collectively do. And that then is incumbent upon us to make the business case.

Like, listen, we may not wanna spend the weekends hanging out together, but I'm really, really valuable to you. And what we do matters that is incumbent upon us. And once you've done that math though, once you've explained it and the person still doesn't get it. Then you leave. Have the courage to leave.

But I, the immediate answer is not, "I'm out." Or he or she doesn't get it. The CEO doesn't get it. They are the customer. Yes. Remember that line about

Anita Grantham: Yes.

Taylor: The customer's always right?

Anita Grantham: Yes. They're always right.

Taylor: They're always right. So you gotta figure out how to work with them. They don't have to actually- a friend of mine, this horrible accident, horrible situation buddy. He had an accident and she had an accident and ran into a tree. The funny thing is the tree wasn't going to give. The tree said, I've been here a hundred years, I'm not going anywhere. I'm staying here.

Anita Grantham: I'm staying here. My roots are deep.

Taylor: Your car's in trouble.

Anita Grantham: Yes.

Taylor: But you're in trouble. Yeah. The airbag deflates it. But that tree didn't move in many ways. That's what we as CHROs face is the CEO is who the CEO is and. Either I think I can convince them and persuade them and show them the value, or I can't. And if it's the latter, it's time for me to leave.

Anita Grantham: Yeah. That is the truth of it. That's the advice you and I give. Give. That's right. Most people in the role.

Taylor: That's right. It's time for you to go.

Anita Grantham: Time to go.

Taylor: Time to go.

Anita Grantham: So with your CEO hat on, how can I earn that with you? How can I be the weed next to the tree?

Taylor: That's right.

Anita Grantham: Or the flower.

Taylor: Or the flower. That's right. I use the flower. I talk about the three Cs now. First time I'm a lawyer, so everything is in threes. Uh, and I use alliteration a lot.

So starts with, and I've gotten this from a lot of CEOs and from my perspective, one, you need to be competent, more than competent. That's the first C as a CHRO.

Anita Grantham: Can I ask a question just about that?

Taylor: Right.

Anita Grantham: Is it EQ or IQ for you?

Taylor: It's both.

Anita Grantham: Okay.

Taylor: You gotta be smart. Yep. You need an IQ because the people, your business clients, your other clients, they're smart.

Anita Grantham: They are.

Taylor: Right. So if you don't know your business, if you don't understand, you're gonna fail. So it's EQ and IQ. Mm-hmm. You also need to understand the body of work. That is HR.

Anita Grantham: That's your business.

Taylor: Right?

Anita Grantham: Yes.

Taylor: This is, we're supposed to be the people experts in the room. Mm-hmm. And if you don't actually understand this now, that doesn't mean you, I loved you talking the other day, this morning about people doing rotations.

Yeah. But you've gotta know HR. Yeah. That's like coming to see a lawyer and that lawyer doesn't know the law.

Right. Now, there are hundreds of different types of specialties in the law, but I need some comfort that when I'm in a room, my general counsel is the smartest person about the law.

Yes.

Taylor: You must be the smartest person in the room around the business table when it comes to people. Mm-hmm. Mm-hmm. Now everyone thinks they know people, but you have to prove that you're the smartest person. So competence in HR. Mm-hmm. Second. You've got to be literally the confidant. Yes. To your CEO. So gotta be really competent. And then that person has to be your go-to, but they have to trust you.

They've gotta come to you and say, this is how I'm actually feeling about that person on this team. Mm-hmm. They've to trust you. They, I mean, I, as I said, my CEO used to tell me about what's going on in his marriage more than I wanted to know.

Anita Grantham: Oh, I've heard it all.

Taylor: All right. But it impacted him at work.

Yeah, it did. So I was the person who helped him. I was his, uh, Wendy from Billions. If anyone wants

Anita Grantham: That is the job though.

Taylor: That's the job.

Anita Grantham: It is.

Taylor: It is the job. Help get the most outta people, and help manage that CEO — all that comes with him or her.

Anita Grantham: I talked to a CEO last week. They're using AI for it. Yeah. Say treat me like I'm Wendy.

Taylor: That's right.

Anita Grantham: And give me that advice.

Taylor: That's right. Yeah. Isn't that something? It's amazing. So, so, but that requires a level of trust. It does. I have to trust you implicitly. I can't think you're the HR police. Yeah. And so if I come tell you how I really feel about something that will be used against me at another time, you see, as a former lawyer, what I know is that I, if, if my client, the CEO comes and tells me something, it's locked.

It can't go anywhere because of attorney-client privilege. That's right. There is no such thing officially for HR people. So as a result, I as a CEO, if I don't trust you, I'm not gonna tell you everything. I'm not gonna tell you what I'm going through. I'm not gonna tell you what I'm thinking because it will be used or can be used against me later.

So you have got to build the successful CHRO. To answer your question, must be the confidant to the CEO about everything.

Anita Grantham: Yep.

Taylor: And the third area is courage.

Anita Grantham: Yes.

Taylor: Uh, it's it. You gotta be competent. You must be the smartest person in the room when it comes to people. You must be the confidant to your CEO and you've gotta have courage.

And you've done it times when you walk in and no matter what, you're like, listen, that's not the right place to go. It just isn't. And the willingness. And the courage. But here's the deal. You cannot be courageous in your job if you're not competent and if you're not the confidant. Right.

Anita Grantham: It's true.

Taylor: The courage

Anita Grantham: can't. You have to have all of them.

Taylor: Right. You need all three. That, to me is the secret sauce. And as a sitting CEO, and I've now been one for 16 years in different settings for profit and nonprofits.

Anita Grantham: Yes.

Taylor: When I have a CHRO who checks all three of those boxes, we are cooking with grease, as we say in the south, right?

Anita Grantham: It's so good.

Taylor: Life is good. Yes. But two of three. One of three. Doesn't work. And so back to that, remember I talked about the ten, 60, 30? Yes. When a person has one of those three, they're in the 30 box.

Anita Grantham: Yes.

Taylor: When they have two of the three, they're in the middle, 60 %. When they have three of the three, they're part of that ten %. And boy, I am at my best as a CEO. Yes. When I have that CHRO.

Anita Grantham: It's magic. It's pure magic.

Taylor: Yes.

Anita Grantham: Can you share an example when you've had that magic and you were in conflict. Or you had a significant situation that tested both of you?

Taylor: Hmm. Yes. Yes. So I have to protect the innocent, remember, lockbox, protect We are, I won't. We're in a lockbox. I won't use names. We are, we're in a lockbox. Won't use. Right. And, and so, um, I was the CEO and I had an emp. The CHRO comes into me. I fully trusted this person. I won't even given gender. No. Trying to protect everyone. Again, that's that confidant nature. It is. So the person comes in, my CHRO comes to me and says, we have someone, there's been an, uh, one of your senior executives, very productive, has been accused of inappropriate behavior in the workplace.

And, um, the CHRO's recommendation was to terminate him.

Anita Grantham: Mm-hmm.

Taylor: And I just, had they done the investigation?

Anita Grantham: Had they done the investigation?

Taylor: Uh, yes. And what, what happened, this is interesting. We kinda disagreed about the severity. You know, we've been there, right?

Anita Grantham: We've been there

Taylor: where, you know, there, there's the thing, A, you did this, which is no question. And then there's this middle gray area where it was wrong. What he engaged in was absolutely inappropriate. And I'll tell you, I could just be very transparent about this much: dating a subordinate. Tough one.

Anita Grantham: Tough one. But it happens all the time. It

Taylor: happens all the time. And so people shouldn't live. And that was the thing I was on the CEO side saying, are you serious? Yeah, I'm gonna lose two really good people over this. And that's not good math. It's just not

No.

Taylor: You're telling me both people are really talented and, and no one feels forced in it. And I know some of you, I know if anyone's listening, the traditional HR people are gonna be like, Johnny, that's an easy one. You don't date, uh, Coldplay. Like, they're gonna go on and on and on, right? But stop as the CEO, you're telling me that I'm going to lose a star for a consensual, a fully consensual situation that frankly we didn't even know what was going on and we wouldn't know if some nosy employee hadn't told us.

Anita Grantham: Right?

Taylor: So how do we fix this versus the easy answer, which is fire, both of them, or at a minimum fire, my senior person. We had a tussle over that, me and my CHRO. And because I trusted the CHRO, we could talk honestly. Yeah. And I was like, are you serious? You think this will hurt the business? I said, have you talked to the employee?

Does any part of this? Does she feel like she was forced to do this? Is she mm-hmm. Frankly, in love with her. Like, let's just talk about

Anita Grantham: this, talk about all the things.

Taylor: All of the factors. And she said, yes, but this is a bad example. I said, no, this was the answer. Uh, but our policy says, I said, well, how about changing the policy? If we know people are dating at work anyway?

Anita Grantham: Right.

Taylor: And guess what? It works. Sometimes Barack and Michelle.

Anita Grantham: Yes.

Taylor: They're examples of the Obama's. They are, they worked at the same law firm. She was senior to him. Yeah. Blah, blah, blah. They dated, it's a great example. Blah, blah. Yeah. And so when it works, it works.

Yes.

Taylor: So if everybody's fine, what's it me? I'm gonna fire two talented people because of this? No, I'm not doing that. No. So we had a tension. We solved it and we resolved, and like, let's ensure that there's no legal risk. That the person, we got everybody to come in and sign and say, yeah, I like dating this person and blah, blah, blah. Right?

Anita Grantham: I don't feel harassed.

Taylor: We don't feel harassed. I'm not being held hostage. None that everything's good. I've not, uh, done given this person higher increases or bonuses over other people, and we're gonna monitor that going forward, by the way. But I'm gonna continue to let them work together.

Anita Grantham: That's amazing.

Taylor: That's what I wanted as a CEO. Yeah. And my CHRO had to evolve with me to understand why that was the right decision under those circumstances. Yeah. Neither of them was married. You know, there were things, any bit of factors could have, any single factor could have changed the outcome of the decision. Yes. But for us, the easy answer for that CHRO was, "Fire him."

Anita Grantham: Well, it often is the easiest.

Taylor: Yes.

Anita Grantham: It takes the least amount of thought. It follows the policy. It stays within guide rails

Taylor: and no courage.

Anita Grantham: No courage. That is the biggest thing.

Taylor: That's right.

Anita Grantham: And what is right for the business.

Taylor: That's right. That's right. No, totally. That's, that's the big question mark.

Anita Grantham: Yes.

Taylor: All of our, you know, don't use, I've learned policies to, to, to as sort of a tool to make your job easy. The policies, there are some rules, there's some guidelines, there's some places you cannot get outside of this box. If you're harassing someone, if there's some force, you know? Right. Anything like that, there's no room for, that's not great.

But here are two people who decided to, and as I said, there are a number of examples. Heck, historically, a number of CEO's wives were once their EAs, Right?

Anita Grantham: It's true. It's, it's true. I, I'm like, yes.

Taylor: So what was happening anyway, and then, then it's especially acute, if you will, with the younger workers.

Anita Grantham: Yes.

Taylor: Who do you think they're gonna know?

Anita Grantham: Well and they don't have anywhere else to meet people, right? Yeah.

Taylor: Proximity matters. We know there's a proximity bias. Yes. So I'm spending all day with these people. Now, we could argue that's good or bad and some people have like, do I think it's a good idea? Probably not. But if you two can figure it out.

Yeah. And HR, your role is not to break up the relationship. No. Your role is to make sure the company is protected, that the company is aware of it. We have a rule now at SHRM as part of our policy Date who you want to date. Everyone. But what you must do, is the two of you have to go to HR.

Anita Grantham: Be transparent.

Taylor: Be transparent. Sign off that says, I'm not being harassed, I'm not expecting anything special favorites, dah dah, dah, dah, dah. Right. And if you break up and you break up at my office and all hell breaks loose, then both of you're gone then. Yes. Right. You're just saying that's the policy that's realistic versus people shouldn't date at work.

How dumb is that, in my opinion?

Anita Grantham: Yes, this example is so useful. So talk about confidence with this. Yes. In that example, your CHRO wasn't going out to the rest of the executive team and saying, well, Johnny was really on the fence about this. Right. You know, he really debated this. I'm not sure. You can't take it out of the circle of trust.

Taylor: You can't.

Anita Grantham: Ever.

Taylor: Trust, and that's why it's a circle.

Anita Grantham: It is.

Taylor: There's no off ramps. Right. There's no exit. Yeah. It's better stay in here.

Anita Grantham: Yeah.

Taylor: When you have that you, it's magic. When you have that trust and it's not one way trust, it's not the C and that's right. It's two ways. 'cause the flip side is we're human beings too. As CHROs we are. And there are times when you're gonna come to your CEO and say, listen. I, I made a bad judgment call. I'm not doing this. I'm doing like, there are ways, this has to be pastor penitent, um, attorney, client, whatever. It has to be a box.

Anita Grantham: It does.

Taylor: And here's what's really interesting about it. It's gotta be a box that lasts past the moment. So I worked, and I'm gonna be really careful here, I worked for someone who as their CHRO. So you're gonna be able to figure it out. 'cause I've, but I've had a lot of jobs over the time who held a very personal secret. And, um, I saw it, I knew it. Um, none of my business, right?

Mm-hmm. I, I'm not stupid, right?

Right.

Taylor: But because of our relationship, I kept it absolutely till the, I mean, I never released it. Subsequently, this person told the world.

Mm.

Taylor: And I got calls. Now this is decade or so later, people you must have known. I said, "What?" That was my answer. "What?" What? Because even after I left, because other CEOs are watching you to see.

Anita Grantham: They are.

Taylor: Right. Can you, you left your last company. Do you go into market and tell everyone all the secrets you knew from that CEO? That's horrible. It's horrible HR and when we do that, we lose trust. Not only your trust with that CEO, which you may say doesn't matter 'cause you don't work for that person anymore, but it harms the HR, the reputation of the profession.

Yes. When people think that we would take stuff later and put it out there. How many cases have you investigated over your career at former companies that you could now go, you don't work there anymore. You could go out in the street and say, yeah, I investigated this case and this was going on and she stole this.

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