Research Paper: How To Be Your CEO'S Valued Business Adviser

Improve your relationship with your CEO.

Posted Jun 02, 2017

In an earlier blog, we mapped out the “Journey” some Chief HR Officers took from being head of a business function to also being their CEO’s valued business partners.  (Stybel Peabody, 2017).

One problem with our research was that 100 percent of the CEOs we interviewed were male and 70 percent of the Chief HR Officers were female.  Might the sex of the Chief confound the results?

In this research project we extended our database to include Chief Legal Officers (General Counsels).  And 70 percent of this group were male.

We found no difference in theme. The sex of the Chief was not an issue.

This article thus picks up and expands the ideas of the earlier piece plus makes the results more appropriate for other function heads beyond Chief Legal Officers and Chief Human Resource Officers.

                                                         *

How can heads of business functions make the “Journey” to also be perceived as valued business advisers to their CEOs?

While the target reader is any business function head, we decided to focus on lessons learned by focusing on two business functions: legal and human resources.

There are certain business functions that are often perceived by CEOs as primarily cost centers.  They are often perceived as the places where good ideas go to die. Two prominent ones are Human Resources and Legal. Heads of these functions often complain that their opinions are sought only when needed.  Advice is accepted only grudgingly.

But a minority of function heads manage to also be perceived by their CEOs as valued business advisers.  The process of making this perceived transformation is called the “Journey.”

Is there a Journey road map that could be used by others?

We believe there is.

Research Procedure

The two authors plus our Atlanta partner Patrick Lynch (www.frontiergroupusa.com) first identified CEOs who regarded their CHROs or GCs as “valued business advisors” on a 10 point Likert Scale ranging from 0 (Never) to 10 (Always).  If the CEO rated one of these two function heads 8 or higher, they were included in the survey.  We also interviewed the selected Chief.  There were 13 pairs of interviews plus five additional interviews of Chiefs who had reputations as valued business advisers but their CEOs were no longer available to be interviewed.

The CEO questions were:                                                                            

1. When did you know your Chief had crossed the line from being perceived by you as head of the function to also being perceived as a valued business adviser?

2. What are your characteristics that allowed this to happen?

3. What are characteristics of the Chief’s business experience that allowed this to happen?

4. What about the Chief’s personal characteristics that allowed this to happen?

5. What are the industry characteristics that allowed this to happen?

6. What are the reporting relationships that allowed this to happen, e.g. CHRO reporting directly to the CEO versus reporting to a CAO or CFO?

7. Are there other CEOs who might be interested in participating in this confidential survey that will be turned into an article for publication?

8. What questions have I not asked that I should have asked?

The GC/CHRO questions were:

1. When did you know you had crossed the line from being perceived by your CEO as head of the function to also being perceived as a valued business adviser? 

2. What are the CEO’s characteristics that allowed this to happen?

3. What are characteristics of your business experience that allowed this to happen?

4. What are your personal characteristics that allowed this to happen?

5. What are the industry characteristics that allowed this to happen?

6. What are the reporting relationships that allowed this to happen, e.g. GC/CHRO reporting directly to the CEO versus reporting to a CAO or CFO?

7. What questions have I not asked that I should have asked?

Our interviews uncovered important themes around CEO Personality, physical space, how to help newly hired/newly promoted CEOs, and how to blur boundaries.

Matching Personality

The Big Five Personality factors are a well researched framework to understand human personality. (Barrick & Mount, 1991). The Big Five Personality Factors are:

Using the Big Five as a framework, it was observed that high levels of Openness to New Ideas was critical for both CEOs and their Chiefs.  If one or both parties lacked high levels (8 or higher on a 0-10 point scale) of Openness, the Journey will never begin.

Below is a GC’s tale about working with the CEO:

“I am wired not to leave a penny on the negotiation table.  (The CEO) pulled me aside and said that negotiation is not a blood sport.  He wanted people we deal with to walk away with a good impression of our company.  The goal is to pave the way for future work together and not to get the lowest price on every transaction.  Treat all people with decency and respect.  If it costs a few dollars, so be it.  We are in business for the long haul.  We are in the consumer products business.  You can’t stay still.  You’ve got to keep relationship options open because you don’t know what the future will hold.”

“I found myself redefining myself and my role as an attorney.

“As I look back, I thought I was being diligent as a lawyer.  I had transformed the legal department into the sales prevention department.  Now we were going to be called “how can we get it done within the law” department.”

Below is one CEO’s philosophy:

“One of my management philosophies is ‘Give employees enough rope to hang themselves…..or turn it into climbing ropes.’ I like to challenge colleagues at all levels to live up to their potential and to give them space, tools time to set clear, big objectives. When in doubt, trust.”

In describing a trusted CHRO this CEO said:

“(The CHRO) understood that just because something had been done a certain way in the past that does not necessarily mean it should be done that way in the future.  It was openness and ability to listen.”

Another CEO said this:

“The number one characteristic that is important for me: curiosity to learn beyond one’s comfort zone.  I keep telling my team that I expect each member of the team to understand what is going on in every function in the business.  (My GC) was curious to learn more and more about what is going on in the company.

“(My GC) has been an attorney but has taken the time to get exposure to how we do things in life cycle management and customer service.”

A GC said this of the CEO:

“All of the people who reported to (the CEO) would meet most Mondays. This was the Planning Committee.  It was clear that when you were at that table, you were expected to participate.  It would not be good form to just wait for your subject expertise to come up.

(CEO) had been CFO and VP Marketing.  (The CEO) well understood that rising in (functional) chimneys was not helpful in viewing the business.   When (the CEO) offered me the opportunity to run HR as well as Legal, I grabbed it even though I had done no work in the HR function.” 

A CHRO said of the CEO:

“(The CEO) is keenly interested in people’s capabilities and their development. (The CEO) values different perspectives.”

A General Counsel stated:

“I was curious about customer service and business development.  I wasn’t satisfied to be the corporate attorney.  I think what made a difference was that I truly was curious about the business.”

One CHRO said that the relationship success was based on the CEO’s openness:

“It was (the CEO’s) openness and ability to listen."   

Another General Counsel attributed success to curiosity: 

“I was never going to be the hand–wringing, cautious lawyer.  I was curious about the business.  I was curious about customer service and business development.  You’ve got to know the legal things.  But that should be assumed.  Beyond that, how curious are you about the business?  How open are you to want to learn things outside law?”

Implications:

If you are a job candidate consider asking this question of the CEOs current and former direct reports:

“On a scale of 0-10, how open to new ideas is this individual? 0 means “not open” and 10 means “very open.”

Make the following assumptions in interpreting the scores.

If the score is 8-10, it means “open to new ideas.”

If the score is 7, the person is neutral.

If the score is 0-6, it means closed-minded.

If you talk with five or more people and you get 40 percent or more giving the CEO “closed-minded” scores, take that as a warning that there will be no Journey for you. 

Remember, effective CEOs know how to be charming when it suits their interests.  Job interviews are like first dates. Do not accept what you hear in the interview. Check references and ask the Openness Question.

First Things First: Help Newly Hired/Newly Promoted CEOs

By Being the Board of Director Onboarding Mentor.

In six instances, the CHRO or the General Counsel was an incumbent.  All six began the relationship by helping their newly hired CEO by first helping the CEO grasp the dynamics of the Board of Directors. 

When asked why the CEO was so positive about the General Counsel, the first statement of this CEO was typical:

“(The GC) had been there for so long, (the GC) knew the Board quite well.  By giving me a sense of the ins and outs of this Board, (the GC) helped me avoid early missteps.  I would say that for the first two years, (the GC) was very helpful to me in understanding the dynamics of the Board.  (The GC) had historical perspective that I lacked.”

Implications:

GCs and CHROs are heads of functions who spend considerable time with Board members at the Committee or full Board level.  This provides them with a unique perspective to help newly hired CEOs.  After all, Boards hire and fire CEOs.  A Board onboarding program for newly hired CEOs will be appreciated and is a great way to begin the new relationship.

Once a relationship has begun from a Board of Director perspective, the CEO will see the Chief as a valuable adviser.  In two cases, the CEO asked the CHRO to sit in on Board meetings to provide the CEO a second opinion about the Board dynamics after the meeting.

Physical Presence and Access Availability

In a world that often celebrates telecommuting, one critical dimension for successful Journeys was physical presence. 

GCs and CHROs in our study often had offices adjacent to the CEO’s office. And close physical presence could make a big difference:

“My office was next to the CEO’s office. When he would come out to talk to another VP he would pass my open door. I always made a big point in keeping my door open. Sometimes the CEO would come in, sit down, and go over what he was planning to say. He would use me to rehearse his ideas and to get feedback before he made the journey down the hall to another VP. I do think my physical presence made a difference.”

One CHRO said that the company has an open office design:

“I sit right next to the CRO. Previously, the last HR head sat with her team in the HR section. HR still has its own section. Once I arrived, I said I wanted to change the arrangements. My office next to the CEO. 

“This arrangement makes it easy for the CEO to have spontaneous conversations with me about a range of business issues, and not just HR.   Had I been sitting with my HR team, the CEO would only come by to talk about HR issues.”

Another CHRO said:

"I was the next office over from [the CEO]. [The CEO] would just pop in and bounce ideas of all sorts, knowing it would remain confidential. When we moved to new offices, we designed it the same way: my office was next to [the CEO’s]."

Another GC said:

“My office was down the hall.  A 30 second walk.  It made all the difference. You are more approachable when you physically near the CEO.”

A CEO recounted:

“I was in the corner office.  The GC was in the office next to me.  To get to the CFO and to the COO I would pass the GC’s office and [the GC’s] door was always open. [The GC’s] back was to the window and facing the door.  As I passed the hall, I would look in and [the GC] would smile.  It would be natural that I would walk in and use [the GC] as a sounding board before I got to the CFO and the COO.”

And here is how the GC remembers the same interaction:

“At the end of the work day, [the CEO and I] were usually the last ones around.  [The CEO] would sit in my office and we would talk about various things that happened during the day.  [The CEO] would be comfortable sitting in my office talking about a variety of things.”

Implications:

When office space is being designed, do not be shy about expressing a strong desire to have an office next to the CEO. Other colleagues may make their case for why they should have an office next to the CEO. Remember this cliché’: “the squeaky gear gets greased!”

If your functional team is on another floor or in another building, you are going to miss critically important spontaneous “let me bounce an idea off you” events. Keep your team in place.  But do structure your calendar so that you are “spontaneously” occupying that empty conference room near the President’s office.  And keep the door open when you are in the room.  Try to “spontaneously” be available at the end of the business day when others have left.

Having your function colleagues near you may be convenient but not necessarily useful if your goal is to make the Journey from head of a business function to also being your CEO’s valued business adviser.

If you live in another city and are telecommuting, you have a problem. At best you may be seen as a competent functional head. You may never develop the close emotional ties required to become a valued business adviser unless the two of you do frequent travel together on business.

Emphasize Your Untraditional Experiences

Attorneys and HR executives tend to have career progressions that move in stereotypic patterns.  For HR: liberal arts degree and then move into an HR Specialist role (compensation, benefits, recruitment, organization development) followed by a move into an HR Generalist role.  Sometimes the person might have an MBA.  For General Counsels it is a liberal arts degree followed by a law degree followed by work with a law firm followed by in-house legal work.

The CEOs we spoke with were impressed when their Chiefs had non-traditional experiences.  One CEO said:

“Besides a law degree [the GC] has an engineering degree.  That’s unusual.  And since many of our customers are engineers, having a background like that is useful.”  

Another CEO was intrigued by the GC because the GC had been a U.S. Army Captain in a Mideast conflict situation.  He believed that the Army experience provided him insights into working with people from different perspectives and motivating teams under stress

A third CEO loved that the CHRO had once been a first line supervisor in a manufacturing operation.  The CEO believed this experience gave the CHRO unique credibility with the VP of Manufacturing.

One CHRO said the following:

“When I started my career, I didn’t have any HR training. That turned out to be good. I taught myself how to think about the business first and then how the HR issues related to the business.”

A GC said:

“I was never a pure legal technician.  I was comfortable being a legal generalist.  Plus I was truly interested in the business.  I thought it was a fascinating business.  I always asked questions outside my legal area.”

Implications:

There is a tendency to stereotype GCs and CHROs as people having deep specialist experience and lacking business vision.  Any experience you have had that might cut against that stereotype will be of value to you as a candidate and as an employee. 

This framework has interesting implications for HR leaders.  HR leaders who are at earlier phases in careers might request management development assignments in manufacturing operations, sales, marketing, or finance or accounting. A one year assignment in a different function will provide help broaden perspective and allow for competitive differentiation in the job market.  The trend within Human Resources, however, runs counter to this idea.  As one moves in an HR career, one is expected to deepen specialized knowledge through the acquisition of specialized certificates in HR areas. 

CHROs responsible for managing leadership development within the HR area should be sensitive to the fact that “deep” credentials of HR knowledge as measured by professional credentials may not be as valuable to CEOs as “wide” credentials coming from working in business areas outside HR.

Manage Boundary Blurring Activities

The valued business advisers to CEOs we met were deliberate about their public persona within the company.  They did not want to be perceived as “just” the head of a legal function or “just” the head of human resources.  One CEO said this about the General Counsel:

“[My GC] is very keen on not being positioned as 'just' General Counsel.  At [the GC’s] insistence, we added 'business development' to the title.”

Another General Counsel volunteered to head Information Technology when the Chief Information Officer suddenly resigned.  Said the CEO:

“Suddenly we were without a CIO and we had to do a national search.  That was going to take time. [The GC] ran the IT group while we were doing the search. It took the entire summer to hire a new CIO. 

“[The GC] had a home in Atlanta but traveled weekly to Seattle to be with the IT team.  The Deputy General Counsel took over much of the GC role during this time but the GC really was wearing the GC and the CIO hats. 

“That experience helped me get comfortable with [the GC] as a solid business professional who was not afraid to step out of the legal role.  It showed me an attitude I admire: ‘do what needs to be done within the law to advance the business.'”

One CHRO had worked with the HR team to develop a management development program. The CHRO turned it into a SaaS that was offered to company customers as a product for sale. This was part of a deliberate strategy to show the CEO that the CHRO was not only the guardian of the risk or cost side of the Basic Accounting Equation. The CHRO wanted to be perceived as developing products that could add value to the company.

Another CHRO would routinely examine the balance sheet and income statements. This person would focus on one ratio or figure that has nothing to do with human capital. For example:

“I notice that the R&D cost or Revenue ratio has remained stable for the last years while I see that our biggest competitor is increasing that same ratio over the last three years. What does that mean for our future?”

GC’s and CHROs are often stereotyped as the corporate “Dr. No.”  The GCs in our survey tended to be deliberative about how often they voiced negative opinions/cautions in response to the ideas of others.  One CEO (an engineer) had informally calculated a number:

“60 percent is liability management and 40 percent is about asset enhancement with [my GC].”           

One CHRO said:

"I have asked to sit in on meetings that have nothing to do with HR. I want to learn about the business and be perceived as wanting to learn about the business. I want to be involved in the business and not just HR."

One CEO used the “bungee cord” as a framework to talk about why the CEO so valued the General Counsel:

“[My GC] plays a bungee role.  [The GC] Can be up on the bridge to survey the broad valley.  And then [the GC] dives in and deal with the technical legal matters.   And then the bungee comes back up to be strategic.

“All managers should do this. But few do it in practice. Most just view the world from their unique functional specialties and think they are doing an adequate job.  They are not.”

This idea was echoed by a CHRO:

“I have been in HR for over 20 years.  I think I learned from some of the best HR people in the business.  And what I learned was talk about the people perspective and talk about the business perspective.  You need to show you can do both.”

It is critical to understand the balance sheet and income statement beyond your own department if you are to be of value to the CEO.  One GC said:

“I have spoke to attorneys and heard, ‘I don’t do math...’  Do you know what CEOs and CFOs do? They do math! 

“I made sure I understood everything that was in the financial statement.

“I would ask other function leaders the ‘why’ behind the numbers I didn’t understand.  If I still didn’t understand, track down the people involved in the operations and ask them ‘why?

“Being perceived as interested in the numbers paid massive dividends.  I showed I understood the business at a deeper level than other people who usually do my job.”

A second GC focused on the same theme of aggressively seeking to blur specialty perceptions:

“I met with the CFO and ask him for a standing appointment for him to educate me about balance sheets and what is important to the business. I don’t want to be thought of as the best attorney in the room. I want to be thought of as a valued business adviser who happens to have expertise in law.

“I'd hop on a plane and go for visits to customers with sales people.  That was great.  I got to understand what customers were thinking and why.  Our customers are retail companies.  I would work at a retail store and encourage my lawyers to work at a store.

“Why is this so valuable?  It makes it easier as an attorney for me to advocate for our company.  Being perceived as doing this helps me with my CEO and Board relationships.

“I’m proud to say I'm the best student in the world.  

“I'm not the best lawyer in the world.  I hire the best lawyers!”

One CHRO thought that the relationship between this Chief and the CEO was cemented in the process of doing a search:

“It began when we were working on our first search.  I was helping (the CEO) find a General Manager.  I was spending less time on the job itself and more time trying to understand the business as a totality.  (The CEO) liked that approach.” 

Implications:

When in a conversation, consider saying, “If I put on my business hat, this is how I react to your idea…” Then say, “When I put on my HR (Legal) hat, this is how I react to your idea…”

The symbolism of saying you wear two hats communicates that you understand that the needs of the business and the needs of the function might not always be in total harmony. For example, HR has a mandate to ensure that HR policies be equitably administered. On the other hand, there might be business reasons why the business might take a calculated risk in violating its own policies. 

Give yourself permission to spout contradictory opinions as long as you make it clear which hat you are wearing.        

Another suggestion is to aggressively lobby for responsibility expansion beyond your functional area of expertise:

“One of the reasons I was attracted to work for (this company) was that would be in charge of law and business development.”

Reporting Relationships 

In no case in our sample did a valued business adviser NOT report directly to the CEO. As one CEO said:

 “[Reporting to the CEO] is essential.  If you are filtered by someone else, you can’t be a genuine contributor.”

Implications:

When there is a conflict between the CEO’s words and the organization chart, believe the chart. If being a valued business adviser to the CEO is important to you, be prepared to walk away from opportunities where you do not directly report to the CEO.

Managing Dual Loyalties

General Counsels are unique in that they are officers of the court and officers of the corporation. Dual loyalty is inherent to the GC role but it may not be top of mind for business colleagues.

If all goes well, the dual loyalty issue may never rise to the level of it being a problem.  But it is wise to sometime remind your C-Suite colleagues that the dual loyalty issue exists so it does not come as a surprise at the worst possible moment:

Said one GC:

“You are an officer of the court. You are part of the management team.  There may come a time when you have to be prepared to break off from your colleagues at work.  On one hand, you can’t be effective if you constantly talk about this issue. 

“If you fail to talk about the issue, your colleagues and your CEO may feel betrayed when you raise the issue during times of crisis.”

Implications:

There is an old cliché’ that is valid despite it being a cliché: “the best time to ask the bank for a loan is when you don’t need one; the worst time to ask for a loan is when you do need one.”

Applying this concept to the dual loyalty issue for General Counsels, the worst time to make the CEO and your peers sensitive to the issue is when the need for such a reminder arises.  Emotions will run high since everyone is on edge.  On the other hand, the best time to remind the CEO and your colleagues about the dual loyalty issue is when there is no crisis at hand.

A convenient, low drama way of doing this is to comment upon some current news article involving a corporation that may or may not have violated a law.  You can give an innocuous comment about the substance of the case while slipping in a brief reflection of how difficult this must have been for the company General Counsel since GCs are both officers of the court and officers of the corporation.

Summary and Conclusions

The Journey from head of a business function to also being the CEO’s valued business adviser can be exciting and rewarding. This research has been a conversation with those CHROs and GCs that have made a successful Journey.

Below are some landmarks to guide you on your Journey:

If the CEO is not open to new ideas, avoid working for this person; learn how to blur functional boundaries; help newly hired or newly promoted CEOs manage their Boards of Directors; emphasize your non-traditional background, be forceful in where your office is in relation to the CEO’s office; use the “wearing my hat” framework to express conflicting opinions from a business and a specialty area. 

We want to thank the following individuals for their assistance with this research:

John Bruce

Mark Britton

John Blyzinsky

Arthur Buckland

John Bruce

Paige Cochran

Bradley Delizia

Fabio Esposito

Karla Jarvis

Laura Kaster

Josh King

Liz Gottung

Kenneth Cutshaw

Jennifer Pristera

Ann McNamara

Thomas Miller

Richard Moran

Sherri Nadeau

Randy Patterson

Jennifer Prestira

Ralph Sheridan

Robert Somerville

Meg Newman

Meg Snyder

Paul Stoner

Danielle Stirbisky

They worked or work at the following companies:

Avvo, Inc.

American Airlines, Inc.

American Science & Engineering

BlueLinx, Inc.

CP Clare,Inc.

Elemica, Inc.

Garden City Group, Inc.

HD Supply, Inc.

Kimberly-Clark, Inc.

Resilient, an IBM Company

Rockport Group, Inc.

Solid Scape, Inc.

YP.com

References

Barrick, M. R., & Mount, M. K. (1991). The big five personality dimensions and job performance: a meta‐analysis. Personnel Psychology, 44(1), 1-26.

Stybel, L. & Peabody, M.. (2017) “From Function Head to CEO’s Valued Adviser.”  Psychologytoday.com.  https://www.psychologytoday.com/blog/platform-success/201702/function-head-ceos-valued-adviser99999