HR 3.0 & How boards are looking at HR

Listen to our recent episode with L. David Kingsley , Chief People Officer at Illumio.

We talked about how boards are looking at HR, the evolution from HR 1.0 to 3.0 in the last few years, and having the numeracy required for the CHRO role.

Read the highlights below. ??

1. The evolution from HR 1.0 to HR 3.0 ??

David says that we've evolved through three major phases in HR that he likes to call HR 1.0, 2.0, and 3.0.

1??.0?? In 1.0, which spans from 2013 to 2020, everyone was chasing the next hire. Companies like Google and Meta wooed talent with perks like nap pods and unlimited avocados. We used to call our companies 'families,' which he says is misleading. Companies are built to deliver value, not to act as surrogate families.

2??.0?? Then came HR 2.0, triggered by the pandemic. Initially, we thought it'd be a short-term hiccup. But then remote work became the norm, forcing us all to adapt. The barriers to switching jobs dissolved, resulting in shorter tenures and a talent-first approach.

3??.0?? Now, we're in HR 3.0. With COVID mostly behind us, companies are becoming more fiscally cautious. Employees are realizing they're not part of a family but a business equation. Many are now seeing themselves as part of the gig economy, contributing their knowledge on a contract basis. David says the nature of work and leadership is changing, shaped by the pandemic and economic pressures. To stay competitive, he says that we need to adapt, focusing on things like quicker onboarding and productivity.

2. "Crockpot management" is no longer an option for boards ??????

In the past, board members could afford a 'set it and forget it' approach, which he calls "crockpot management". That's no longer the case. Now, they're more like chefs—actively managing, adjusting, and taking responsibility for guiding companies.

Unlike before, when capital was easily accessible, today's leaders face tighter constraints. VC's are telling CEOs, "Don't come back to the well anytime soon."

This demands more active and timely engagement from board members. CEOs are seeking serious input to navigate the ever-changing scenarios they face.

The role of the board has shifted. It’s not just about safeguarding shareholder interests anymore. Board members are now more active counselors, helping CEOs make informed decisions based on past experiences.

In this new landscape, timeliness is key. If a CEO sends out a question to the board and doesn’t hear back within 36 hours, they're going to start nudging for feedback.

3. How boards are thinking about HR ??

"In the military, we refer to strategic planning as 'preparation of the battlefield.' In corporate boardrooms, it's called 'optionality.' What CEOs and boards want is a clear assessment of the organization and multiple strategic options."

Take the "span of control" as an example. He says that a few years ago, the mindset was that you’re only a real leader if you manage leaders who, in turn, manage others. But we're now moving towards what he'd call "the great flattening", questioning the need for so many layers.

Why? First, it's costly. Second, too many layers slow down decision-making. In military terms, he says you get stuck navigating through "the iron majors", reducing agility.

So, it’s not just about layoffs; it's about reprioritizing and redeploying resources.

4. Modern CHROs bring numeracy to the table ??

What excites David right now is the reinvigoration of HR—being a key player at the table in helping to run profit-driven companies who are driving value for both shareholders and stakeholders. LDK says these CPOs bring not just organizational expertise but also financial literacy, or "numeracy", to the table. He says they're actively engaging in critical discussions with other CXOs and board members, and they have a unique opportunity to shape the company's future and to redefine workforces.

David's definition of a Modern People Leader ??

"The modern people leader is the leader who knows that they are never fully finished learning."

The career advice David would give to his 22-year-old self ??

"First, don't try to do everything alone; you can't carry all the weight yourself. Second, being the smartest guy in the room isn't what adds value. And lastly, go to bed."

Go listen to the full episode: Apple | Spotify

See you next week!

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