Leadership Live - Bridging the Gap: CEOs and CHROs Driving Business Together

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We're back with another edition of Leadership Live. Thanks for joining us. My name is Steve Loewis and I'll be your host. You know, we bring on guests that have various different expertise in leadership and leadership. Sometimes it's hr, sometimes it's running a business, sometimes it's a combination of both. And, and today we've got a guest that actually has experience on both sides of the table. But today we want to have a bit of a different conversation for all my CEO friends out there, as well as for all my chro or heads of HR friends that are out there as well. And I know both of you are actually watching this. Jason Leoy is with me again. Jason, thank you for joining us.

My pleasure. Thank you.

This is, I think, our third time together. Yes, it is, give or take. For those of you that are watching for the first time, Jason Leoy is the Chief HR Officer for Dawn Foods here in Michigan. You've been there five or six years.

Now in that role. And I've been at dawn for 10.

Yeah, for 10 years. And I asked Jason specifically to come out and have this particular conversation. We've had other chats around leadership in general because you've got not just leadership on the HR side, but on the operations side in your. In your previous roles with GE and other places as well.

Right.

But. But we've got an interesting one today, and it's a topic that we've chatted quite a bit about. It's a topic that I see a lot online about. But I wanted to go right to the source on this one, and you're my source. So here's, here's kind of the question. What does a CEO really want and really need from their chro or head of hr? So let's think about that again. What does a CEO really want and really need from their chro, from their head of hr? And I've got my perspective on it. As a CEO, you've got your perspective. You're very close with your CEO and have gone back and forth on that and as well as from sitting in that role for so long. So I want to get your thoughts first. What does the CEO want from you?

Yeah, I think at the end of the day, what the CEO, what my CEO wants from me is not just to be a chro.

What do you mean by that?

She wants me to be a business leader. Right. She wants me to think like a business leader, not just like an HR person, you know, And I think that find that. Yeah, I think they want. She wants Me to understand the business, the P and L, the inflows. Outflows of what? Of how our business operates, how we make money, all the different elements that go into it from a people perspective. Right. And that's where the HR element comes in. And then also be, you know, her confidant, her, her. The person that she goes to, to work through various issues and then also someone that she knows is going to handle or to work with the leadership team and all the people around her. When you think about the board of directors and you think about her leadership team, kind of like a big old circle, to ensure that I understand the different elements of what's going on from a dynamics perspective in the organization. And that's what she's expecting out of me. And then all the while making sure the HR function operates right.

Do you think most CEOs want the same thing that she wants?

Do they want the same thing?

Yeah, I didn't say do they have it. Let's start with do you think, just based on your own experience, do you think most CEOs want what she wants?

I think they, they want it, but they don't know what they want. Some don't even know they want it. I think that's the best way to describe it because I think that like a CEO and the beauty of CEOs is that they are the ultimate executive in the business. They're running the business, you know, and by virtue of that position, they know, or they should know all the different elements of the business. Finance, sales, marketing, operations.

To a certain extent, to a certain.

They have to know enough to be dangerous in all those different aspects. Right.

Smell BS when BS is happening. That's as far as they need to know in most functions.

And they might have like different lines of expertise and some of the various, you know, but they know a lot about the business in different lines and the different functions within the business. And sometimes that clouds their judgment and saying, well, it's the people thing. I got the people right. I, you know, I need, I just need the chief, chief HR officer, my head of hr, just to do what I say, right? And I've seen that and I've heard that before. Not necessarily. I haven't heard that from my CEO. I've been, I've benefited from leaders that have not thought that way throughout my career. Not one of them has thought that way. And I'll go back to my first leader at some point in this conversation, but all my leaders throughout my entire career have never wanted that from me. I have Heard peers of mine suffer from that where they've had a leader, a CEO, a VP of whatever function or a plant manager, where you just do what I asked you to do and just run the people function and I don't need you to do anything else. Yeah, right. And I think that's where. When you get CEOs and they probably do that with all their different functions. Like, I just need you to run finance. I just need you to run it. I just need you to run this, that, or the other thing. When you, when you get, when you get so siloed, it becomes very dangerous because then you have people that don't understand how things are working against each other or with each other. Especially fair way of saying it.

Yeah, I don't know that all, all CEO, even the CEOs that do have them siloed like that. I don't think they all do it on purpose because they want it siloed. I think some of them. And this, this is my conversations with a lot of them from various sides, whether it's a, a $20 million company or, or whether it's a $750 million company. I think some of them are just used to. That's all they get.

Right.

Where the HR leader just knows hr. Where the finance leader wants just finance and doesn't want to cross over and doesn't look at anything broader than that, which I think is hurting the HR person and hurting that finance person.

I agree. I agree. And I think that's where sometimes they need. Okay, well, how do I ask more of.

Yeah. That presidents that don't know what more to expect from a chr on a column sometimes don't know what additional they should know exactly. If that makes sense.

I agree. I agree with that. Because I think that sometimes. See, the HR function sometimes gets a bad rap.

Well, sometimes.

A lot of times it gets a bad rap, unfortunately.

I would think, and I love hr. I've been in it a long time. You've been in it a long time. Unfortunately, I think too often it gets a bad rap.

And I think if you look at the way, if you look at the way we're trained. Right. If you look at the way a classical HR person is trained, and I'm not pointing out, you know, organizations or whatever, but we're very typically trained in a very functional way of operating. Right. For example, for example, if I go to get a certification in some thing, in some HR thing, I'm typically taught the comp and benefits and all the different elements of HR that I'm required to get. To get that certification. Right? And I've gotten those certifications before, and it taught me very narrowly the different aspects of HR I need to get to get that certification. Whereas I was actually better suited or better. Better trained in other elements of the business to make myself a better HR person in total, meaning I got the opportunity to run lean events at one of my companies. When I say lean events, I'm not talking about a lean event for hr.

You're talking about cross.

You're talking about a lean event in a machine, a machining area in a plant. Yeah, right. Where I got to understand, you know, product availability, delivery, you know, inventory, all that stuff. I got to understand all different aspects of what went on in that machining center to then flow into the assembly line, you know, because they used to assemble pieces of a. Of a broader machine that you would feed into an assembly line. So I got. I had to learn the business. I did. There was nothing HR in that project. Yeah, right. I was still doing the plan HR manager job, but I was also leading that event.

And so by default, you had to learn the business. You didn't have a choice.

No, you had to learn the business. And. But that was the expectation of that company. Like HR people, finance people, environmental health and safety people, anybody that was in the office, they were expected to lead events. It wasn't just me. It wasn't just hr. It was all. So you could. Anybody on the team beyond the manufacturing manager could still run pieces of that plant. Right. And that, to me, showed one. The organization had the courage to do that, you know, because it takes courage to say, okay, I'm going to open different aspects of our business up to people that may not be fully trained on how to run particular areas, but train them how to do it. And then. And then. And then what they're gonna. What they're gonna wind up afterward, wind up with afterwards is highly trained leaders, right, that happen to do HR or happen to do finance, specialize in a.

Function, but they know business in general.

They know business in general. And that, to me, is what. That. Those things, those experiences train me much better than any certification I ever got. Not that I'm. I'm. You know, I'm. I'm not denouncing my. My certification.

Yeah, I get it.

But it's like, it's the. When you. When you learn the business, you are much better, Much better suited for a leadership role down the line than just getting a certification in something. Right? And, you know, I go back to my first manager. You know, my first manager was a plant manager. He had a. He was a VP of manufacturing. You know, he had been a plant technician. He'd have every job in between. But then he was, you know, working as the rest of his career out in the last five years of his career, fixing broken plants. And, you know, he had a very tough reputation. He was a very difficult. He was a very difficult manager. Loved him to death, you know, and he was actually a mentor of mine for 10 years until he passed away. But he sat me down. I was right out of school, right out of graduate school, $40,000 in debt. He sat me down and said, listen, Jason, you can take all that HR crap you learn in school and throw it out the freaking window. He used other words.

He used a different F word.

Yeah, but you can throw it out the freaking window. And I'm like, well, what do you mean? Like, I just wasted all this money. He goes, no, no. He goes, you have to do four things for me. Know the business, know the people. Never let me get surprised. And by the way, you have to be able to run this plant. I'm like. I looked at him like, what are you talking about? I'm not an engineer. He goes, I don't care. My finance person, my HS person, everybody on my team can run this plant. I got six weeks of vacation.

He goes, somebody's got to be there.

Somebody's got to be running it, so you got to do it. And I'm like, once you do all those things, then you can do your HR thing. So to answer your first question at the front end, if I take his advice but apply at a more macro scale as his chief HR officer, that's exactly what my CEO expects out of me. She's never said it that way. I. I actually say that to my HR people. That's exactly what I say to every person that's on my team. Those are my expectations out of you. Now, not running the plant, because I'm not running a plant. But you have to do these. Know the people, know the business. And never let me get surprised, because if you have to do those three things, you have to know everything about the business.

So why do you think you've come up through the HR side? Why do you think there's so many that are so siloed that don't either the company hasn't put them in a role where they've got to learn the business, know the people, know all those, or. Or that's just the education that they've received. Like, why do you think this is happening? Because it's happening a lot, right? Because it's pushback. We receive. I hear a lot. I just give you an example. A couple months ago, I spoke at a conference west of the Mississippi, and it was a little bit of this conversation of what is, what does the leadership need from, from hr? And, and it was, here's some of the things you need to know about how a business runs, right? Return on investment, cash flow. And I had these HR leaders looking at me like, why the hell do I need to know this? And I actually got that question afterwards from a number of them because these are the four things that make up every business. No matter what business you're in anywhere in the world, you've got to know these four things. And I was flabbergast that they didn't even know some of these terminology and what, what it actually meant. What. Where is that coming from? I get it's happening, you just explained it, but where is that coming from?

I think it's a, honestly, it's, it's a, it's comfort. I think it's a comfort crisis in our function and within functions in general, whether it be hr, finance, whatever, any discipline. Any discipline. You're comfortable where you, where you know you have this knowledge, right? So where do people, where do people generally, where are people most generally the most comfortable? I am most comfortable where I have the most knowledge. I feel like I can contribute the most. I'm not comfortable in places that I don't have the knowledge or I don't have all the answers I have to learn. That to me is more of the rarity. Like people, the people that are comfortable being uncomfortable are generally going to be the ones that are more successful. Because if you think about, like, think about someone starting a business, right? Someone's starting a business. And I have to imagine you didn't know everything about recruiting when you started.

Not at all.

Right. You were uncomfortable. But you know what, you probably did a coup, did some research. You figured out, you know what, this is probably the right business to get into.

No, I was, I was using recruiters and realized how, how much money you're crappy they were and figured out there's a better way to do this and, and then stumbled into. That's how I got into.

Right, so you didn't know everything.

No.

Right. But you knew it was a business. You knew that you were spending money on it. You're like, and you knew that you could do it better, but you didn't know how you do it? Better not.

It's been.

There's a ton of uncomfort there, but you're probably comfortable in being uncomfortable to get that business to be successful. Now, if I, if I'm a HR person, I've been rewarded. I've been recognized, I've been trained, I've been certified. I've been educated in a certain discipline. I am very comfortable in that discipline. I've been, I'm a VP of HR. I'm making $200,000 a year, whatever, and I'm really happy and I'm comfortable and I'm rewarded. Why would I seek to make myself uncomfortable with trying to learn or put myself in scenarios where I don't know and I might look like a fool? And there's. No one's going to think you're a fool if you're trying to learn the business. Nobody is. If I went to my boss today and said, I want to learn these different aspects of the business, she would say, go, go do it. You know.

But would it be shocking to a lot of CEOs? I think it would be. If the head of HR or anybody on the team came to an exec and said, I want to go learn the business because of the kind of the general perspective that needs to change within HR. I think most CEOs would be shocked.

I think they'd be shocked, but I think they would also. I think most CEOs would be, they would welcome that because.

Agreed with that.

Because any CEO or any leader that's worth their salt is, is okay with their people being learning humans. Right? With I want to continue to learn. I want to continue to be better. If it's, if it's, if the, if the man, if what I get out of that is a better HR person, a better finance person or better whatever person, all the better.

Yeah. There's no downside.

There's no, there's no downside.

So you bring up a good point, though. If they're, they don't know the business, that's why they're uncomfortable. And at some point in their HR career of trying to learn the business, why aren't we doing a better job of teaching in the business early on, even in college, for example? Why are we missing the boat there?

Again, I think what it goes to is what's rewarded.

Okay.

Right. What are educators rewarded for? They're rewarded for studying, researching, teaching this functional discipline. Right. They're not rewarded for now, the best programs that are out there or the best education you can get out there. Are the ones that incorporate the different elements that you need to know. I benefited from some very, very learned people along the way that were not purists in their function, meaning they had been business leaders, but they happened to go back to school, get a PhD and come back and teach. Like my. One of my favorite professors out there was. He was the head of the un, the electrical workers union in the Northeast, and retired. Got his PhD and taught labor relations at our school. And he would open up saying, I'm teaching you how to deal with people like me. Right, right. And. But you, you already got me. You got me because now I know that you're not just a teacher, you're not just a professor, you're someone else that's actually been around the block. Right. And I've also had other teachers or professors that have had similar experiences. They're not just pure, you know, academics, they were practitioners too.

Yeah, that makes sense. I know. One of the things I hear from CEOs a lot and had these conversations and roundtables and all of that is, is my head. Sometimes it's the head of hr, sometimes it's the staff is they view me, the CEO, as an ATM machine as opposed to let's make the business case for the things that we do. You and I've had this conversation a number of times about looking at things from the business side of stuff. And that's something that's often lacking from a chro. Talk about that a little bit.

Yeah.

So unfortunately, I think too often it gets a bad rap.

And I think if you look at the way here, I'll put it into, you know, good examples. Like if I come up with a leadership program, let's just use a very generic word, right. A leadership program. And I go to my CEO now, this is a non business oriented chro.

Okay.

I go to you and I say, hey, we need to do a leadership program because it's good for our leaders and we need to build capability and you know, and take our leadership to the next level.

I'm going to say, how much is it going to cost me?

It's going to cost $200,000.

That's a lot of money.

Well, it's what we need to do.

See the interaction here?

Yeah. It's not right.

So for anybody who's watching this, see, there's a stalemate on the ATM machine at this particular point.

And typically that's what happens. Now frame it up a different way. We've just gone through our succession planning process. We know we've Got succession gaps. We know we've actually placed people in very senior roles, like VP roles or C suite roles, and used outside firms. Right. We've had to go on the outside. So you're spending, let's say you're spending 3, $400,000 in search firm fees, which you, you can do pretty easily.

Yeah. Oh, yeah.

You get a couple big VP roles right there, C suite roll here or there. I mean, you're talking big bucks real fast.

Yeah.

So let's say for sake of an argument, I said let's say we just spent $500,000 on placing like seven or eight VPs and maybe a C suite leader. Right. Probably a little bit less than that for 500,000. But anyway, let's say we just spent 500,000 and I want to put together a leadership development program for the people that have been identified as ready now or ready in the very short term, successors for those exact roles that we just filled. That, you know, that leadership program costs $200,000. Right. And I say, I gave the same pitch. And I say, hey, we need to put together this leadership development program. And I've identified the exact audience that we need to target for this leadership program. It's the 10 to 12 ready now or ready in very short order, successors for other VP roles and other C suite roles. And we need to put this leadership program together because we identified gaps in their capability that this program fits so that we can have those people ready to take those jobs when they become open, so that we can avoid paying the $500,000 we just spent on all those roles being filled from the outside. And also, by the way, you're not adding in all the other costs associated with onboarding people that are not going to be successful because someone hired from the outside is probably not going to be successful. Successful. And so let's say, you know, we've spent over $500,000 on that and I'm gonna, I'm gonna put this leadership program together for $200,000 and those people will be ready in one year.

Now you've made a business case for it. You're saved me $300,000 is what you're gonna do. Exactly. Yeah.

And probably more than that.

Right.

Because if you had to take all those other, you know, other costs associated. But that's just one very easy example. I mean, recruiting is another example. You know, recruiting is like, if you can bring recruiting in house for most of your jobs and not using fee, not using external agencies and a whole bunch of other stuff, you can Generally make a business case for that most of the time. And that's a fairly easy business case to make and. Or increasing wages on your direct labor force. Right. And that was a really key one not too long ago in Covid. I've talked to many people that were in the same boat where they couldn't fill roles. Right. They couldn't fill jobs. And I talked to. I talked to two HR leaders and I also experienced it myself where they were having a very tough time filling frontline roles post Covid. And therefore they were saying no to business. Right.

Because they couldn't staff turning away revenue because you didn't have the staff to actually support the revenue. Yeah.

Turning away millions of dollars of revenue because you didn't have the staff to support going out and getting that sale because you had. You had to tell your sales people to say no.

Yeah.

Which you never want to do. So you have HR leader A saying, we need to increase wages because we can't hire staff.

It's going to cost me more money.

Right. Plan manager going to say, cost me way too much money. I can't do it. I'm being held to an OPEX standard. I can't do it. Y HR leader B says, look, we can't staff the lines. We are way out of. We are way out of market in our wages in this area. We need to increase our wages by 15 to 20%. It's going to cost us, let's say, $100,000. But you know what? That hundred thousand dollars in cost, if we can staff our lines and keep our lines running, we will be able to get that 2 million, 3 million, $4 million in sales we just walked away from. It's going to pay back like that.

And then some.

Yeah. And then some. And that's a business. And that's the same business case that we made and it was approved. And as a result, we were able to staff our lines, get that business and take away business from the competition.

But you have to understand the business in order to make that case.

Right.

And that's. That's one of the challenges.

Like you have to even just understand that you're walking away from business.

Yeah, yeah.

Right.

But you have to know how the business works. You have to understand the impact of it and be able to present it in a way that makes financial business sense, not just people sense.

Right.

You got to have both.

Right, Exactly.

That's a big deal. So taking all that into consideration, if you had your CEO sitting on one side and you had. Or a bunch of CEOs on one side and you had a bunch of heads of HR on the other side. How would you bring them together? What would you do? How would you facilitate that conversation so that the CEO could articulate what they want or they don't know what they want, and you got to get that out of them. And. And you have a bunch of heads of HR trying to figure out what the CEO really needs. Like, how would you. How would you bring them together, and how would you get them to have that conversation?

Yeah. So first off, you know, it's interesting because I always. I always start with the mindset of I want to hear what the business wants first. Like, I'm going to ask that side first.

Sure.

Even if I'm the HR person, I'm not going to ask the HR people first because they run the business.

Okay.

They. They are the run. They are the operator. They are the chief executives of the business. This is a function, and they need to understand what these folks are looking for.

But. But if they don't know, then I.

Will give them scenarios like we just talked about.

Okay?

Right. Say, what if this scenario goes this direction? And let's play out the conversation. Which would you rather have? Would you rather have the ATM conversation, or would you have the. And that. And you're probably gonna get a whole bunch of.