CEOs Leading HR Strategy

Day 1 at #SHRM26, and I want to ask the room a question: Is your HR actually strategic, or just busy? Ask people what HR does, and you'll hear: "Hiring." "Payroll." "Handling complaints." "Planning the holiday party." But what HR actually does is far more structural and far more consequential. ↳ HR decides how performance is defined. ↳ How accountability is enforced. ↳ How leaders are developed. ↳ How incentives shape behavior. ↳ How conflict is handled before it becomes litigation. ↳ How values translate into everyday norms. In other words: HR designs the rules of the game. And the rules determine how the game is played. This is why forward-thinking organizations recognize HR as the infrastructure. So, leaders, here are 3 practical moves you can make this quarter to ensure your HR is a strategic lever: 1️⃣ Use HR's influence at the strategy level, not after decisions are made. If people's implications are an afterthought, execution will suffer. 2️⃣ Audit your incentives. What behaviors are you actually rewarding? Speed over collaboration? Individual wins over team outcomes? The system always signals what matters. 3️⃣ Redefine HR metrics. If you only measure time-to-hire and compliance rates, you'll get efficiency. If you measure leadership bench strength, engagement trends, and internal mobility, you'll build resilience. The CEOs I've seen build high-performing organizations don't ask, "What is HR doing?" They ask, "Are our people systems aligned with the company we're trying to become?" Because in the end, strategy sets direction, and HR determines whether the organization can actually deliver it; and this is not administrative work. It's architecture.

Delegating people strategy, performance management and engagement to your HR team is a BIG mistake! And here's why: Founders often believe they’re “done” once they’ve hired an HR Manager. They assume that person will magically take care of everything related to people: culture, performance, engagement, career development, even leadership issues. And that’s the trap. Here’s what I’ve seen over and over again with clients I’ve supported: ❌ 𝐌𝐲𝐭𝐡 #𝟏: 𝐇𝐑 𝐨𝐰𝐧𝐬 𝐏𝐞𝐨𝐩𝐥𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲. No!!! YOU do. People Strategy is not about policies or payroll. It’s about intentionally shaping the conditions in which performance, alignment, and culture can thrive. That’s your job as CEO. Not just in words, but in decisions. People follow the founder. Not the handbook! ❌ 𝐌𝐲𝐭𝐡 #𝟐: 𝐇𝐑 𝐝𝐫𝐢𝐯𝐞𝐬 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞. Nope. That’s the manager’s job. Performance is a relational dynamic. It lives in the weekly 1:1s, the feedback loops, the clarity of expectations. HR creates the systems (goal frameworks, career ladders, feedback tools) but it’s the manager who makes it real on the ground. If your managers are not spending time with their team, no system will save you. ❌ 𝐌𝐲𝐭𝐡 #𝟑: 𝐇𝐑 𝐰𝐢𝐥𝐥 𝐟𝐢𝐱 𝐲𝐨𝐮𝐫 𝐥𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩 𝐠𝐚𝐩𝐬. I see this one a lot: Founders (and execs) who avoid having tough conversations, thinking HR will “take care of it.” That’s how you end up with broken trust, disengaged teams, and HR teams stretched thin cleaning up what is actually a leadership issue. A founder once asked me why their team was “so passive.” Turns out… nobody was giving context, direction, or recognition. That’s not an HR failure. That’s a leadership blind spot. As someone who’s been building People Strategy with early-stage companies for over a decade, here’s what I tell every founder: 👉 HR is critical. But HR ≠ People Strategy. And HR ≠ Management. If you want to scale well: ✔️ You define the People Strategy ✔️ Managers drive the performance ✔️ HR builds the systems to support both And only when those 3 legs of the stool are strong do you get a company that’s built to last. #PeopleStrategy #HR #Founders #ScalingStartups #Leadership #PerformanceCulture -- I’m Anne Caron, I help leaders build people-first, high-performance cultures as they scale. Follow me for more on People Strategy, Conscious Leadership & Organisational Design.

HR: We’re updating the manuals and organizing team events. CEO: I don’t care about manuals or happy hours. HR: What should we focus on? CEO: Build a talent engine. I don’t want just job posts. HR: More strategic hiring? CEO: I want early signals on skill gaps. I want a clear view of our future leaders. HR: Got it. CEO: Use exit data to learn. Use performance data to grow. Build your high performers, and hold everyone to a higher standard. HR: So… less process, more performance? CEO: Exactly. Link talent to revenue. Make HR a growth function, not just a support role. The lesson? CEOs don’t want HR to manage people. They want HR to build teams that drive growth. It's about business impact now, not process excellence.

The CEO and CHRO should lose sleep over the same things. I’ve always believed the relationship between a CEO and CHRO is one of the most important partnerships in an organization. Not because HR owns people. Because people drive execution. The best CEO–CHRO partnerships I’ve seen weren’t centered on HR initiatives. They were centered on business outcomes. They asked questions like: Are we organized to execute our strategy? Do we have the leadership capability to scale? Where is organizational friction slowing us down? Are we developing the talent we need for tomorrow, not just filling today’s roles? Is our culture reinforcing the behaviors that drive performance? These aren’t “HR questions.” They’re business questions with people implications. When the CEO is focused on growth, the CHRO should be thinking about the talent, leadership, structure, and operating model required to support it. When the CEO is focused on profitability, the CHRO should be evaluating productivity, organizational effectiveness, and manager capability. When the CEO is focused on transformation, the CHRO should be helping the organization navigate change while maintaining trust and execution. The strongest CHROs don’t just understand people. They understand the business well enough to anticipate its people challenges before they become business problems. That’s why I believe the CEO and CHRO should lose sleep over the same things. Because when business strategy and people strategy are truly aligned, they’re really just two sides of the same conversation. #Leadership #PeopleStrategy #BusinessStrategy

Last week, I sat down with my friend Hebba Youssef for a fireside chat with a room full of senior HR leaders - all of us navigating that complex, exhilarating, and sometimes tense relationship between the CEO and the CHRO. Hebba asked me a few toughies, the ones we’ve all probably felt in our bones but don’t always say out loud. Here they are - answers too! Why does the CEO-HR relationship get tense? Because we’re solving the same problem, just in different languages. CEOs speak in revenue, risk, and runway. HR leaders speak in culture, capacity, and connection. The goals align, but the translation fails. The best partnerships I’ve had were bilingual - where I could talk people strategy in business terms, and the CEO could see culture as a lever, not a line item. One CEO once told me: “Elaine, we don’t have a culture problem - we have a productivity problem.” My response: “We have the same problem. We’re just naming it differently.” When we reframed people data in business terms, everything clicked. The tension wasn’t personal - it was linguistic. What mistakes do HR leaders and CEOs make with each other? Let’s be honest - there’s plenty to go around. HR’s mistake: Waiting to be invited into strategy. We ask for permission instead of showing up with insight. Influence doesn’t come from a title; it comes from courage - and the data to back it up. CEOs’ mistake: Underestimating how much the “soft stuff” drives hard results. Culture, leadership, and engagement aren’t nice-to-haves - they’re performance drivers. Early in my career, I once asked for “a seat at the table.” A CEO said: “Bring me something that makes or saves money - and you’ll never have to ask again.” That single sentence changed how I spoke forever. Where do business and people strategy disconnect - and how do we bridge it? Strategy dies in translation when we measure different things. The business side measures numbers. HR measures emotions. Until we build shared metrics - connecting engagement, retention, and leadership to the P&L - we’ll keep missing each other. I’ve had CEOs say, “Fix morale.” And I’ve said, “We’re losing $2M in productivity due to burnout - let’s fix that.” That’s when heads nod, budgets move, and partnership happens. What I’ve learned from working with tough, brilliant CEOs: I’ve had the privilege - and the challenge - of working for CEOs who were visionary, demanding, and unrelenting in their pursuit of excellence. It wasn’t always easy. But it was always real. They taught me that being a CHRO means holding the line between business and humanity - knowing when to push, when to translate, and when to listen. It’s standing in the tension - with empathy and backbone in equal measure. When the CEO and CHRO truly partner - when trust and truth sit in the same room - the business doesn’t just perform better. It becomes better. That’s the work. That’s the privilege. And that’s why, even on the hard days, I wouldn’t trade this seat for anything.

In many boardrooms today, CEOs are dealing with: AI disrupting business models Critical capability gaps Talent shortages in key roles Pressure to prove ROI on every investment When they turn to #HR for strategic support, they often get: Compliance updates Headcount Reports Engagement Surveys But that’s not what keeps CEOs awake at 2 AM. What they really want from HR: -> Predict future skill gaps before growth slows -> Build #leadership pipelines early -> Make tough #talent decisions quickly -> Turn #workforce #data into business strategy -> Connect talent decisions directly to revenue and growth The shift is clear: HR is no longer expected to manage people processes. HR is expected to build the capability that wins the future. The HR leaders who own that mandate will shape strategy. The rest risk being worked around. Where do you see the biggest gap today — skills, AI readiness, or strategic influence?

If the head of HR reports to anyone but the CEO, don’t work there. I’ve been saying this for years: If HR reports to Finance, Legal, or Operations, it’s a red flag. Here’s why. When the CEO delegates HR upward instead of partnering directly, it tells you everything about how that company views its people. They see HR as an administrative cost — not a business driver. As a shield for “people problems” — not a strategic lever for performance. The best CEOs I know treat their CHRO like a true partner. They discuss talent the same way they discuss customers, product, and profit. Because they understand that performance starts — and ends — with people. If your HR leader doesn’t have the CEO’s ear, they can’t shape the culture, build accountability, or align performance to strategy. That’s why I’ll always believe that a CEO who hides HR under another function is creating risk and not managing it. We see the difference daily at Betterworks. When HR and business leaders partner directly, real-time performance enablement becomes a competitive advantage — not an HR project.

A company spends $200,000 a year on an HR leader. That HR leader keeps the company compliant, fills positions, handles employee issues, administers benefits, manages policies, and ensures payroll runs accurately. The CEO is happy. And they should be. The HR leader is doing exactly what they were hired and rewarded to do. But here's the question: What if that same HR leader could help reduce turnover by $500,000, improve workforce productivity by 5%, strengthen leadership capability, reduce labor costs, improve hiring quality, and support revenue growth? Would that create more value for the business? Many CEOs have long-tenured HR leaders who are exceptional tactical contributors. The challenge is that tactical success often becomes the ceiling for what leadership believes HR can contribute. Not because the HR leader lacks capability. Not because the CEO lacks vision. Because neither has been challenged to think differently. For years, the organization has measured HR by activity: positions filled, policies updated, employee issues resolved, and compliance maintained. The business rarely asks a different set of questions: How much turnover are we preventing? How much productivity are we gaining? How much leadership effectiveness are we creating? How much profit improvement is coming from workforce decisions? The reality is that most tactical HR leaders did not choose to remain tactical. Organizations often trained them that way by rewarding execution instead of business impact. That creates a tremendous opportunity. The answer is not necessarily replacing a trusted HR leader. The answer may be to help that leader develop strategic capabilities and to create new expectations tied to measurable business outcomes. No CEO would expect Finance to only process invoices and close the books. Eventually, they expect Finance to improve business performance. The same expectation should exist for HR. The larger your workforce investment, the more important it becomes. Is your HR leader managing people processes or helping improve business results?