Leading Differently: Leadership, Diversity, Board and Personal Effectiveness Lessons from CHROs

The Covid-19 pandemic, the social unrest and reinvigorated social justice movements following the murder of George Floyd, and the rising economic uncertainty and geopolitical risk each have important leadership implications, as outlined in RRA’s second annual Global Leadership Monitor. As consultants and recruiters for the C-suite, Russell Reynolds Associates has been closely monitoring these trends and advising leaders and teams through this tumultuous time. In the first half of 2022, we interviewed CHROs across sectors to better understand how the events of the past two years have impacted companies and their leaders.

The following are highlights from my conversation with Brad Pugh, the firm’s Atlanta Hub leader and senior member of the Human Resources Officers capability.

Harsonal Sachar: As we turned the page into 2020, what were your expectations for leadership and organizations entering the new decade?

Brad Pugh: Looking back, we were cautiously optimistic and referring to the decade as the “new Roaring Twenties.” Leadership was evolving in principle, and “authentic leadership” was top of mind. Digital transformation and the future of work were hot topics, and technology was creating new opportunities for how business models evolve and where work got done. All of this felt front and center, but still quite theoretical for many. Then the Covid-19 pandemic and the events following the murder of George Floyd shortly after led to a significant shift in leadership styles, moving quickly from theory to practice. Leaders moved from talking about a new way of leading, to learning it real-time during a time of crisis.

Harsonal Sachar: When the Covid-19 pandemic hit, what were some early signs that the way organizations were being led was changing?

Brad Pugh: Leaders were thrown into the deep end and while some thrived, others were exposed. Those who thrived acted decisively, setting an example for others in the organization. The CHRO of a large hospitality company shared that she decided early on that she would see her organization through the crisis – until they came out of it, or until the lights went out. She also talked to us about the importance not just of IQ and EQ, but what she called the CQ, or Crisis Quotient. This meant focusing on emergency priorities first, responding with speed, having an agile and learning mindset, and treating vulnerability as a superpower. In short, functioning in a highly ambiguous environment, and being okay not having all the answers. [For more insight on leading through a crisis, view our report on Leadership Through Uncertainty]

Harsonal Sachar: How did people lead their organizations differently in the months that followed?

Brad Pugh: Beyond being in crisis mode, there were some noticeable shifts in leadership styles. The CHRO of a large real estate company noted that working relationships became more personal—there was less of “Hope your weekend went well, here are the five things I need from you,” and much more of, “How are you feeling?” She also shared that leadership competencies that were once considered well-articulated were suddenly irrelevant; she revisited her company’s leadership model, which was designed in 2017, and found that they did not resonate at all in 2021 and needed to be refreshed.

Another CHRO, who leads a large hospitality company, shared their shift to a truly enterprise mindset. It was no longer “my budget, my team, my initiative,” and more of “our company, our talent.” The “leader” was now differentiated by galvanizing and inspirational qualities, vs. purely functional or commercial expertise. The best kind of leader could build followership while being transparent, rather than by claiming to have all the answers. It was these qualities that set strong leaders apart from others. [For more insights, view our report on the Three Dynamics Shaping Leadership for the Future]

Harsonal Sachar: There has been a lot of discussion about how cultures have eroded or survived during the last two years. What have you heard during your conversations with leaders?

Brad Pugh: After the deaths of George Floyd, Ahmaud Arbery here in Georgia, and Breonna Taylor, many people in the US, including leaders of companies, went on personal learning journeys which flowed into their professional lives. Overnight, the commitment to diversity, equity and inclusion went from intention to action; RRA research found that 75% of large companies in the US made some effort to call for racial justice. We saw organizations grab hold of the vision we had been articulating for years—a three-pronged, holistic strategy focused on the community, company, and customer.

The goals and ambitions set during this period stood the test of time, and organizational cultures have since shifted to become more committed to creating an inclusive and equitable environment, within and outside the walls of their company. The CHRO of a large financial services company noted the importance of increasing transparency, more frequent communication, and taking collective stances on important things during crises. They sent weekly updates and facilitated fireside chats with leaders, and their workforce appreciated this. Another CHRO, with a large, distributed workforce, mentioned psychological stamina, or a focus on self-care and care for others’ wellbeing. According to RRA research, the leadership competencies that support the wellbeing of employees are empathy and vulnerability, both of which rose to the top during the last two years.

Ultimately, companies that invested in their company cultures when times were good were able to lean into them when times were tough, while companies with weaker cultures talked a lot about “preserving” culture. Several CHROs talked about their cultures being their currency, even when they made hard decisions. The reality is that leaders tend to have an overly positive view of the strengths and risks in their organizational culture. [For more insights, view our report Truth, Lies and Surveys: A New Methodology to Assess Culture]

Harsonal Sachar: In what ways has the dynamic between executives and the board changed in the last two years?

Brad Pugh: During the last two years, boards have leaned into the talent agenda, further elevating the role of the CHRO at the board level. The CHRO of a real estate company noted that they now present at every board meeting, focusing on internal topics along with external trends and their impact on the organization. Another CHRO observed that they have increased communications with the board to as often as once a week over the last two years, given the survival of the company was at stake. Topics like racial justice, reputational risk, and succession planning, became and continue to be a high priority for boards.

Looking ahead, boards may need a reset when it comes to working with management on such topics. One CHRO noted that boards may have become too involved in the operational aspects of the company over the last two years and may need a reset to come out of “crisis mode.” [For more insights, view our report Board Leadership and Performance in a Crisis]

It has also become evident that board effectiveness is a must-have for times of crisis, and companies that invested their time into building high-performing boards when times were good reaped the benefits during hard times. One CHRO noted that while their board was called upon more often, particularly in 2020, the role of the board had not changed. The board had always been effective at providing valuable advice regarding issues affecting the organization and collaborating seamlessly to arrive at solutions.

Harsonal Sachar: What is your view on the role technology has played in the way work gets done?

Brad Pugh: As a technologist by training and during my early career, this is particularly exciting to me. Organizations that embraced technology worked better and faster over the last two years. In the early days, small things made the difference, like getting the right collaboration tools and training people on how to use them. Zoom, Slack and Teams became our virtual offices overnight. The availability of such tools, coupled with the strong technology infrastructure such as high-speed internet bandwidth, set the tone for a productive workday, albeit a remote one.

Leaders needed to be sensitive though – different populations experienced the pandemic in their own unique ways, and leaders that recognized and addressed this got the most out of their workforces. It was one thing for a C-suite leader to take a Zoom call from Aspen, and quite another for a manager to take that call from a kitchen island with three children being homeschooled in the same room.

Companies that had a strong understanding of digital technology and how their business needed to transform and adapt for the future were better prepared than others. We called these “digitally enabled” organizations in our latest report on culture and hybrid work.

Leaders in todays’ world need to separate their personal experiences and preferences for how and where work gets done from what is right for the organization more broadly. A concerning finding in our research was that 84% of leaders who had a negative personal experience of hybrid work viewed it is a negative for the entire organization as well. Leader’s must seek counsel from their CHRO, who in many cases, walks the tightrope between a workforce that needs agency and flexibility, and a leadership team that wants everyone in the office.

Harsonal Sachar: What helped executives lead themselves and their teams more effectively during stressful times?

Brad Pugh: The stories that resonate with me most are from those leaders who chose to show up in a more informal, empathetic, and authentic way. One executive noted the colleagues became friends through this period, while another observed she was more likely to text someone, vs. communicating more formally previously. Team meetings went from conference rooms and six-person private room dinners to 20-person back yard barbeques and back porch one-on-one meetings.

Several others talked about the need for healthy boundaries as work and life melded together, and workloads increased. One CHRO who is a husband and father, talked about not taking calls 5-10 minutes before getting home to spend his evenings with his family, while another talked about blocking off time to do high priority work.

Harsonal Sachar: What advice would you give to newly appointed CHROs for the road ahead?

Brad Pugh: The keys to success are the same as in the past. First, know your business intimately – your financials, how products are produced, how customers buy and what they value. Next, know the talent, what are the critical roles, what are the skills, how does work get done and how effective are your leaders. Then, do great work – set your strategy based on the business goals, execute well, build and lead a great team, and build great relationships with your top team, your successors and the broader workforce. The past two years taught us to stay focused on financial goals, challenge ourselves to move faster, and stay attentive to the wellbeing of our workforces.

Authors

Harsonal Sachar leads Knowledge for Russell Reynolds Associates’ Human Resources Officers and Legal, Risk & Compliance Officers capabilities. She is based in Toronto.

Brad Pugh is a member of Russell Reynolds Associates’ Human Resources Officers capability. He is based in Atlanta.