HR In The Boardroom: Tony Appleby of The Project Management Institute On Why And How HR Should Help Drive Company Decisions
An Interview With Rachel Kline
…HR’s role in performance management is vitally important in ensuring that employees at all levels of the organization are aligned with desired outcomes. HR can help drive company decisions by developing and implementing performance management systems that align employee goals with the company’s strategic objectives. By setting clear expectations and providing regular feedback, HR can help ensure that employees are contributing to the company’s success.
Most leaders don’t see how to employ HR as a strategic pillar of the business, and this leaves a lot of professionals feeling somewhat frustrated. In this interview series, we talk to HR professionals, business leaders, and anyone who is an authority on HR who can share what companies can gain by having HR in the boardroom and why and how HR should help drive company decisions. This time we had the pleasure of interviewing Tony Appleby.
Tony is Chair Emeritus of the Project Management Institute and regularly serves on the boards of directors for a range of companies. He is also the Executive Director of the Project Strategy Consulting Group where he assists organizations around the world with achieving their strategic goals and objectives, both in the boardroom and with their executive leadership teams. Tony is a Fellow of the Institute of Directors in the United Kingdom and a Fellow of the National Association of Corporate Directors in the United States.
Thank you so much for your time! I know that you are a very busy person. Before we drive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
My career journey has been a bit haphazard; I never purposefully planned to be where I am today. I originally intended to make engineering my path, but took a strong liking to project and program management, and then progressed into consulting and ended up in corporate governance. All this more by happenstance than anything else. But I have thoroughly enjoyed every stage along my journey and worked to be as excellent as I could possibly be at each point in my career. And looking back, the experiences and learning and expertise that I gained at every given point I have subsequently built upon as I progressed; no point in time was ever a waste. And I think that by purposefully building knowledge and understanding at every stage, by actively making the lives of my team and our stakeholders better every day along the way, that I am where I both want and need to be.
It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
When I transitioned from the military into civilian life, I honestly did not recognize that there was a different way of encouraging my staff to perform. My boss and mentor at the time took me aside and said, “Tony, yelling at folks and threatening to not approve their vacation time if they don’t make their deadline might work in the Army, but here you’ll need to build a whole new set of skills to make them perform.” And it’s funny to me because I really did not realize you couldn’t do that; I actually thought that was how you pushed people to excel. It made me stop and reflect that I had so much more to learn in order to be successful.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful for who helped get you to where you are? Can you share a story?
There are lots of people, of course, that have been instrumental in helping me along my journey. But one in particular does very much stand out. I had an instructor at school, Professor Cristofoli, who was pretty amazing at noting every student’s talents and picking one or another of those talents to focus on and help us develop. For me, he honed in on critical thinking and spent two consecutive semesters heavily encouraging me to improve how I examine problems and opportunities, evaluate situations and options, and explore alternative solutions through different lenses and perspectives. It’s been a life-long skill that has served me exceptionally well, especially during periods of crisis in my companies.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
That’s a pretty easy one. A good friend once said to me, “Making a plan is the simple part; planning to make it work is much harder.” And that’s so very true both in one’s personal life as much as it is in one’s professional life. Corporations make strategies all the time and research from multiple authoritative sources shows that roughly 70% of those strategies fail to meet their original intent. Success is all about execution and I have enjoyed helping organizations achieve their strategic goals and objectives through the same effective planning and mindful execution.
Thinking back on your own career, what would you tell your younger self?
I suspect it would be something that many of us would likely tell our younger selves: don’t sweat the small stuff and definitely stay focused on the more important things.
Let’s now move to the central part of our interview about HR. Why do you think HR deserves a place in the boardroom and in high-level decision-making? Can you help articulate how a company will gain from that?
Thank you. From my perspective, it’s less what I think and more what I know. The governance of talent management is an imperative to any high-performing board of directors. Strategies are enabled by people and having line-of-sight into the organization’s capabilities is crucial in the decision-making process of what can reasonably be accomplished with any strategic direction. As the board and company executives explore strategic options, its imperative to understand what talent will need to be developed or brought into the company if such does not already exist. That may affect timelines and will be a critical input, for example, if time-to-market is a part of the strategic thinking.
Equally important, rolling out a new strategy often encompasses a shift in corporate culture and HR is usually the best suited entity to help inform the decision-making process. And it is often HR that will take ownership of driving a culture change if the strategy dictates a need that. HR needs to be closely attuned and aligned with the strategy development process to help inform on people variables and factors that will help shape whether or not a strategic choice is viable and, ultimately, capable of achieving its goals and objectives.
Beyond strategy development, the execution and implementation of any given strategy usually has a significant people component. The HR function is usually the lead when it comes to learning and development, capability assessments, and recruiting. If HR is an ongoing partner in the strategy processes, it can better pivot and realign with any adjustments in real time, helping to support desired outcomes.
From your experience, how can HR people and culture professionals ensure they’re involved in strategic planning processes?
In an optimal scenario, the CEO should be ensuring that both HR and culture have been invited to be participants in the strategic planning processes, from start to finish. But that is not always the case, unfortunately. If advising the CEO and other members of the executive leadership team of the value of those voices in the room doesn’t open the door, there might be opportunities to raise the notion with members of the board of directors without it being an overt run-around behind the CEO’s back, which is never a prudent thing to do. If the board of directors wants to have HR and culture staff participating in the strategic planning processes, they can direct the CEO accordingly. For example, it is common practice to have the senior HR leader dialoging with directors during compensation / remuneration committee meetings without the CEO present. It is an opportunity to highlight the importance of their expertise as a contribution to strategy planning and it allows directors the opportunity to determine the potential value themselves. Another avenue for contribution is working collaboratively alongside other departments within the organization to understand their priorities and how their work fits into the overall strategic plan. This can help the HR and culture staff to identify strategic alignment opportunities and ensure that their perspectives are included in the planning process.
A lot of folks believe that CHROs would make great CEOs, but often they’re overlooked. Why do you think that is?
As with other organizational functions that are often considered administrative or corporate support roles, there is, unfortunately, often a bias towards thinking of human resources as not possessing the requisite level of strategic acumen that other areas within the company might have. CHROs who have an interest in the CEO position would do well by demonstrating their abilities in the strategy formulation and execution processes, helping their peers recognize the strategic value they add and reducing that bias.
CHROs may also have limited experience with P&L considerations, which would likely be perceived as a disadvantage to their candidacy for a CEO role. By partnering with other functional areas within the company, the CHRO can gain exposure and awareness of how human resources plays a part in their success and build exposure to how P&L management occurs across different organizational functions. Participation in cross-functional teams, especially at the strategy level, and understanding financial metrics, industry knowledge, critical success factors, and key performance indicators can help the CHRO upskill and demonstrate suitability as a prospective CEO.
What skills can HR folks work on to become more effective business partners?
Some critical partnering competencies that come to mind include complex problem solving, organizational change management, strategic thinking, and business domain knowledge. Being proficient in these areas will enhance an HR professional’s ability to better support their peers across the organization. These skills enhance the ability to communicate, engage, and collaborate more effectively and support and contribute to the business’s goals and objectives.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important ways that HR can help drive company decisions? Please share a story or an example for each.
1 . First and foremost, as I mentioned earlier, having HR representation in support of strategy development and execution is an imperative for success. The board and the senior executives need insights into organizational capabilities to make informed decisions. This is also crucial for understanding investments in culture changes that may be needed to effectively execute a strategy. Evaluating M&A transactions, investing in digital transformations, and focusing on innovation are just three areas off the top of my mind where there is always a need to be well-informed about talent, both existing resources and future considerations.
By way of an example, in the early 2000s, IBM was facing significant financial challenges and needed to restructure its business to remain competitive. One key aspect of this restructuring was a focus on talent management and development, which involved significant investments in HR technology and training programs. IBM’s HR department developed a sophisticated system for tracking employee skills and competencies, which enabled the company to identify gaps in its talent pool and develop targeted training programs to address those gaps. Additionally, IBM implemented a “skills marketplace” that allowed employees to identify opportunities for development and advancement within the company. These HR initiatives helped IBM to better align its workforce with its strategic goals, enabling the company to respond more quickly to changing market conditions and to develop innovative new products and services. By investing in its employees, IBM was able to build a more agile and resilient organization that could thrive in a rapidly changing business environment.
2 . Human capital management is a foundational element of every business operating model and board oversight of the company’s talent pool is important to ensure that directors have assurance about workforce capability. In today’s continuously disruptive and evolving work environments, having a clear understanding about what is happening in the talent ecosystem is crucial. The remote work transition that occurred as a result of the Covid pandemic and that continues to persist has significant implications for business models. Attracting and retaining quality talent is driven by significantly different factors than they were ten — or even five — years ago. Embracing diversity and inclusiveness in meaningful and enduring ways within the company, something that the board needs to monitor, is important to not only healthy employees and a supporting culture aligned to strategy, but also has direct ties to employee engagement, consumer sentiment, and profitability.
At the Project Management Institute, we recognized the importance of human capital governance at the board level and adjusted the remit of our compensation committee — which has logical ties with HR already — to include talent oversight. I’ve noticed that the same is increasingly occurring in other companies, especially in the for-profit space, although some boards are placing the remit in other standing committees, such as the Governance, Risk, or Audit Committees. We want and need to be an employee of choice in the association space. And as we continue to invest in technology advancements, we need to build a work environment that is a differentiator for prospective employees in highly competitive fields, such as data analytics and artificial intelligence. Ensuring engagement with HR is critical to ensuring strategic success.
3 . Next, I would say that HR’s role in performance management is vitally important in ensuring that employees at all levels of the organization are aligned with desired outcomes. HR can help drive company decisions by developing and implementing performance management systems that align employee goals with the company’s strategic objectives. By setting clear expectations and providing regular feedback, HR can help ensure that employees are contributing to the company’s success.
Take Adobe, for example. In 2012, Adobe implemented a new performance management system that eliminated traditional annual performance reviews and instead focused on ongoing feedback and coaching. The system, called “Check-In,” was designed to provide employees with regular feedback from managers and peers, and to encourage ongoing conversations about performance and development. Adobe’s HR department worked closely with the company’s IT department to develop a new online platform for managing performance data and tracking employee progress. The platform provided managers with real-time data on employee performance and enabled them to provide feedback and coaching in a more timely and effective manner. As a result of these initiatives, Adobe saw significant improvements in employee engagement, retention, and productivity. According to the company’s own metrics, employee engagement increased by 30%, voluntary attrition decreased by 30%, and revenue per employee increased by 25%.
4 . HR also plays an important role in organizational design and development. HR can help drive company decisions by designing and developing effective organizational structures and processes that support the company’s strategic goals. By understanding the company’s business model and objectives, HR can help design an organizational structure that supports growth, innovation, and agility.
Think of Google back in 2011, when it underwent a major organizational redesign aimed at improving collaboration, innovation, and agility. The redesign, which involved moving away from a traditional functional structure to a more matrix-based model, was a key part of the company’s strategy to compete in a rapidly changing business environment. To support the redesign, Google’s HR department played a critical role in developing new human resource policies, processes, and practices that were more aligned with the company’s strategic goals. HR led the way with leadership development initiatives, talent management redesign, performance management similar to what I mentioned earlier, and oversight of a huge communications and organizational change management campaign. HR’s role in adoption of the new business model was a critical element necessary for Google’s success of its strategy.
5 . Okay, lastly, I think it’s important to underscore HR’s role in talent recruitment and development. I touched on both of these, and I know that we all recognize that it’s something HR does. But I want to reinforce the importance of it, particularly when we’re examining it through the lens of supporting company decisions and strategies. By understanding the company’s business objectives and culture, HR can develop effective recruitment strategies and employee retention programs that align with the company’s overall goals.
Let’s expand on this just a little. By understanding the company’s business objectives, HR can align its people strategies and practices to support the achievement of those objectives. For example, if the company’s objective is to expand into new markets, HR can focus on recruitment strategies to attract talent with the skills and experience needed to support that expansion. Similarly, if the company’s objective is to increase profitability, HR can focus on developing compensation and incentive programs that motivate employees to achieve that objective. By understanding the company’s culture, HR can ensure that its people strategies and practices are aligned with and support the desired culture. Say, for example, if the company values innovation and risk-taking, HR can develop programs that encourage and reward employees for taking risks and generating new ideas. Conversely, if the company values collaboration and teamwork, HR can develop programs that encourage and reward employees for working effectively with others.
Can you share 3 or 4 of the most common mistakes you have seen businesses make when faced with hard decisions? What should one keep in mind to avoid that?
There are several that come to mind. Not valuing the importance of diversity is first on my list because I see leadership teams huddle together all the time when challenged with making tough calls. The captains need to call their lieutenants to the table, because increased perspectives almost always yield better outcomes. Secondly, relying on gut instincts and making hasty decisions is a bad idea. Even if the clock is ticking, evaluating options through a data-driven process is more vital than shaving a few hours off the timetable. Lastly, cutting corners which can have lasting impacts that no company wants. If, for example, it turns a blind eye and makes an unethical choice, the fallout and damage to reputation and trust may never be fully recovered. Having a decision-making framework that is employed by senior leaders who frequently have to make tough calls is the single most effective way that I have witnessed to navigate challenging waters. Nearly every single high-performing organization I know has a framework that they pull out and use on a regular basis.
We are very blessed to have some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world whom you would love to have a private lunch with, and why? He or she might just see this.
Wow. That’s an interesting question. To be honest, anyone who could find me a short work gig — pro bono is fine, too — in Antarctica would be wonderful. I’ve worked on six continents and I think it would be kind of cool to be able to say that I’ve worked on all seven.
How can our readers further follow your work?
They can find me and follow me on LinkedIn. I always welcome the opportunity to have a dialogue with my connections there.
Thank you so much for sharing these important insights. We wish you continued success and good health!
Thank you for allowing me the opportunity to share.
