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PM: You take up this job amid deepening concern about the double-dip recession, all set in train by the financial crisis of 2008. How have these events affected HR and awareness of the people dimension in business?Peter Cheese: These are very challenging times for -organisations, and we’re all operating with more uncertainty than in any of our professional lifetimes. But I’m a natural optimist: I tend to see the glass half full. There’s an immense opportunity to rethink how we do things. Most businesses have done a great deal to cut costs over the past few years – and many have cut back on HR in the process – but that’s not a sustainable long-term strategy. So, the challenge now is: how do we innovate to grow? In order to innovate, organisations need to be reasonably bold and take risks. And two crucial questions arise for business leaders. First, how do I ensure I’ve got the -capability and the skills in my organisation to innovate and grow? Second, am I creating the right environment for success – which we might call the business culture, leadership, attitudes and so on – to enable those people to give their best? They can only do this with HR’s input, so it’s a time of great opportunity. In the good times when everything was booming, people might have debated those “soft” issues about culture and organisation, but often when HR people put their ideas in front of the CEO the response was: “Yes, that’s interesting, but tell me what problem you’re solving.” Or: “Show me the numbers.” Now they are more likely to recognise these areas of their business are critical and want to engage in the debate and take action. Because of all of this challenge and opportunity, in fact, I’d say this is the most interesting and important time ever to be in HR.Another part of the current context is that many people seem to have a low level of trust in leaders, including business leaders. How do you account for this?You’re right, the bar for leaders – in terms of expectations about how they should behave and act – has never been higher. Trust is at the heart of this. And as recent CIPD research highlighted, trust takes a long time to earn and is easily broken. Recently, people’s belief in the trustworthiness of leaders generally has been quite damaged. If you’re my boss, I might think of you as being a good, trustworthy, authentic and open leader, but with every report in the media about breaches of trust – whether by politicians, business leaders, journalists or others – my level of challenge goes up a notch or two. So I want you to make it even clearer that you are somebody I can trust with the leadership of my organisation.One aspect of this, because there’s such a deep level of uncertainty, is that people need to feel a deep level of trust in those they are following. Of course, leaders can’t know everything and, especially in a time of uncertainty, things can’t be mapped out. That’s why we have the move towards “lean strategy” and “strategic execution”, where leaders say: this is the direction we’re going, but we’ve got to execute it fast, be agile and able to change course, because the context is almost certainly going to change. Pretty much the most important thing in any phase of change is trust. If I trust the top leadership and my line manager, then generally I’ll go with change, and if I don’t, I won’t. The CIPD has consistently urged a change in the focus of large companies from being concerned predominantly with short-term results and shareholder value, to a broader perspective that can be summed up as “the sustainable organisation” – one that delivers performance because it also takes into account employees, suppliers, local communities and the environment. Has this direction of change slowed down recently?Despite the tough times, I think there’s still a growing consciousness among business leaders that they’re not just there to optimise short-term profits. A lot of this has been sparked by the younger generation coming into work – the more socially aware “gen Ys” asking: “Apart from being a bunch of capitalists, what good do you do?” I witnessed this first-hand at Accenture, where I did a lot of graduate recruiting, and around the turn of the millennium the agenda started to change. To be frank, some of the early manifestations of “corporate social responsibility” were really paying lip service. But now boards are more aware that if a business interacts positively with the society in which it works then people are more likely to say this is a good business whose products or services they want to buy, or that they want to work for. And that will make it a more sustainable business in the long-term.One of the best examples is Unilever, which recognised that it played a massive part in the lives of some very poor and disadvantaged communities around the world, such as tea plantation workers in India, and has used pricing and sourcing to improve their lot. Now particularly under its new CEO, Paul Polman, Unilever has set some bold targets for itself on environmental sustainability too. These policies are integral to the strategic thinking of their business, not a peripheral activity. I worked with some big construction companies in India, where there’s obviously an enormous potential labour pool, but they couldn’t get enough skilled workers because they were all disappearing off to the Middle East to get paid three times more. So these firms decided to work with local communities, the state government and education professionals to build academies to train more people. This was good for business and, thanks to making those strategic connections, also created lasting good for the community.Is that model appropriate in this country too? Does the business community need to take more responsibility for developing the skills of people coming into the UK workforce?Absolutely. We also have the paradox that there are a lot of unemployed people, yet we still have a lot of unfilled positions. We can’t solve problems to do with skills shortages if business just stands on the sidelines and points the finger at everybody else, especially educationalists – as, frankly, I think it has done in the past. We’ve got to roll our sleeves up and engage together and figure out what the joint agenda is, for example to improve the pipeline for STEM (science, technology, engineering and maths) skills. Also, despite their high levels of education, we still have problems with employability of some young people. Too many young people don’t understand enough about the world of work to be able to aspire to it – as opposed to what they see on TV about being a celebrity. The CIPD’s pilot mentoring scheme, which is bringing together HR professionals and young jobseekers in the West Midlands to provide some simple coaching on employability and interview skills is showing how much impact we can make for our communities. It’s important that we continue with this work. You’re best known for your work at the intersection of business strategy and talent management. How do you define talent management?I see talent management as involving everything from -recruitment to performance management, learning and -development, and succession planning – as distinct from the more operational side of HR covering employee administration, payroll and so on. Historically, talent was seen as the high potentials – people coming up on a fast track to the boardroom. But while this cohort is obviously important, it’s only a small proportion of the talent in the business. Too much focus on high fliers has led to not enough being done to build, grow, manage and develop everyone else. So I’ve argued that talent management needs to be -applied to the whole organisation. At the same time, it’s important to tailor and tune it to the needs of different talent pools. But while many organisations have moved towards this wider conception of talent, they’ve also been looking for more standardisation of the HR policies, systems, shared services etc, because making everything more homogenous is the easiest way to administer these things. The real challenge now is to understand the different -demographics, and tailor different propositions for different talent segments. I think, to borrow a notion from marketing, that “mass customisation” should be the eventual aim here – trying to understand everyone as an individual, not just as a member of a demographic group. There’s still a lot of self-questioning in HR about why the profession is not better represented at board level. What’s your view on this?When people talk about developing global leaders, it’s often said they need to get experience in this function or that geography, but it’s still quite rare for HR to be seen as part of that tour of duty. Well, of course, it should be – but sometimes HR has been seen as a bit separate.To be seen as a potential member of the top executive team, you’ve got to have the right capabilities, to be able to connect and engage with the broader business agenda, to ask where the organisation is going, and then what is my potential contribution, running this function or unit, to the business outcomes? To be frank, sometimes HR people haven’t had the tools or the confidence to articulate the value we’re creating. If we can’t, business leaders are going to get frustrated very quickly. CEOs are by nature numerate, commercially minded individuals – and that’s just as much the case in the public sector – so our ideas always need to be anchored in how we understand and can measure the value. If HR doesn’t have a seat at the boardroom table, we should have the confidence to challenge the CEO and say: these issues about skills, talent, innovation, engagement, -diversity are crucially important; this is what we need to be doing; this is why you need me at the table. Just as comp-anies need financial and marketing strategies, so they need a human capital strategy to support the business strategy. What are the important things for mid-level HR professionals to bear in mind when building relationships with line managers?Being a line manager is principally about working through others, getting others to work to a common objective, and a vital component of that is how they manage people both as individuals and as a team – obviously within policies and processes laid out by HR. But what are we doing to train line managers? Too often leadership development has been put in same box as talent management – that is, it only applies to the high potentials. Yet it’s the middle managers who actually do most of the managing and leading in an organisation. If the role of HR is to ensure we get the right people with the right skills in the right place at the right time, then the line manager is at the very epicentre of that process. In my experience, most organisations don’t do nearly enough middle management training. But I also think HR has often over-complicated things – and I’m aware this is a professional hazard of consultancy, too. When we write a clever process with lots of supporting documents, we sometimes forget who is the customer in all this. Line managers want clarity and simplicity, they don’t want a 58-page document setting out the performance management process, or a system that is too complicated to work in any sort of intuitive way. It’s maybe not surprising that a recent CIPD survey showed only a small proportion of managers thought there was any value in the performance management process. So we’ve sometimes lost sight of the fact that the critical role of HR is enabling and supporting good practice across an organisation. Of course, extending talent management, introducing flexible working practices, and so on, introduce another layer of complexity on top of what we’ve been -doing -traditionally, so it’s going to get even harder, and we need to think very carefully about how we can enable managers to do all this in the most effective way in an increasingly complex and diverse environment.Leading a global businessOne short sentence in an hour-long interview with Peter Cheese perhaps explains in a nutshell why he was the CIPD’s choice for the role of chief executive. We were discussing how Accenture’s Talent and Organisation Performance Consulting Practice – of which he was global managing partner from 2002 to 2009 – had grown, by the time he left, to employ 3,000 consultants and turn over $1 billion a year. It did so, he said simply, “by focusing on the business value of HR”.Consulting businesses are great at inventing long complicated job titles, he admits, “but essentially we were the part of Accenture that worked with clients around the world to develop their organisations and people”. Accenture as a whole is the world’s largest consulting firm, and its clients are said to include 96 of the Fortune Global 100 companies. Under his leadership, what had formerly been the change management practice widened out to embrace HR, talent management, strategy and leadership. In this role, Cheese was, in effect, the managing director of a significant global business. The job included “building the skills and capabilities of the organisation, thought leadership, marketing and getting out to meet people we wanted to work with”. These are all items he intends to focus on at the CIPD, too. Cheese went into consulting straight from university, where he’d studied organisational and industrial psychology. He joined what was then the consulting division of Arthur Andersen, which became Andersen Consulting in the mid-1980s and was renamed Accenture in 2000. He stayed 30 years, but says “it wasn’t like working for one company all that time, because we went through such massive change and growth”.Consulting “is an incredibly privileged thing to do”, he says, because even young consultants get the opportunity to work with senior people in a wide range of organisations, industries and professional areas. “I’ve worked on everything from sales and marketing to finance and HR, from implementing ERPs [enterprise resource planning systems] to developing strategy and outsourcing back office work,” he adds. He has also had opportunities “to connect with most of the academic gurus or thought leaders in our field”, both in the US and Britain.In 2009, Cheese decided that seven years leading Accenture’s talent and organisation practice was enough. Like all global executives, he hadn’t seen as much of his family as he would have liked – in his case, his wife and three daughters. “It was an immensely demanding role,” he says. “I was literally on a plane every week, usually to another continent” because the focus had moved to emerging markets, particularly in Asia and Latin America. It was time to move on, but staying at Accenture “would have meant moving out of the HR/talent management space”.Instead, he embarked on what he calls the “plural” or portfolio stage of his career, which has had three main strands. One has been consulting work, as chairman of 3C Associates, and via his own personal company Ockham Consulting, and as a non-executive director of Change Track Research and iGlobal Fitness. All these roles he has now given up to focus on the CIPD job.The second strand has been his work in the public domain, as chairman of the Institute of Leadership and Management (which he has stepped down from), and as a member of the board of Junior Achievement Young Enterprise (JA-YE) Europe, a charity that encourages entrepreneurial talent in young people, and of the Council of City & Guilds (both of which he will continue with). He says he has greatly enjoyed widening his experience by getting involved in this type of public policy work – another precursor of his CIPD role. The third strand has been teaching and public speaking, often at the annual conferences of HR associations around the world. He can certainly expect more of that. He’ll also remain an executive fellow at London Business School, where he has close links.The CIPD role came up at the right time for Cheese, not only because he had widened his experience in all these ways, but because “I was beginning to miss the structure of being in a big job in a significant organisation”. It offers “an amazing opportunity for me to bring together lots of things I’ve been working on with HR teams and communities for a long time”, he says.One aspect of his consultancy experience he may be especially thankful for. “You get so used to appreciating the big picture, knowing that lots of different dynamics are going on, and trying to distil it into something reasonably clear,” he says. “That’s a classic consultancy approach. It becomes almost instinctive. It requires an ability to see through the smoke and fog to what’s really going on, what’s most important.” That will be a crucial capability for the CIPD in the uncertain times ahead.