Highly successful US retailer, Kohl’s, recently announced promotion of their President to CEO, duties until then held by their Chairman who now takes on direct responsibilities for… wait for it… HR, legal and real estate.
Industry observers correctly pointed out Kohl’s strong performance hardly suggests this is punishment for anything. It is exactly what the company says: great succession planning, keeping two strong performers growing. It’s even greater insight into what ensures the long term future of the organization – people!
You can bet the Chairman isn’t taking work away from the existing VP HR. The move is to give HR the top level, long term profile – and clout – it deserves.
This is a potentially visionary move in so many ways besides text-book succession planning it has to be copied by others. First it creates a logical separation between the roles of Chair and CEO, a fundamental under all the Sarbanes-Oxley accountability furor.
Second it separates the focus on shorter term, core objectives and the shorter term thinking that inevitably entails from longer term planning for growth and continued health. CEOs naturally tend to make personnel decisions with an eye to more immediate results. Separating that particular set of decisions reduces the tendency to judge mainly on immediate ups and downs in results and who can impact bonuses and instead takes into account the need to slowly rotate executives over time necessary to develop great leaders.
Third (and there are undoubtedly more potential benefits) it emphasizes team work among Board, Chair and CEO on these issues, exactly where more heads are better than one. It is notoriously hard for managers to select people for their own teams in isolation and promotions inevitably improve when more people are involved in the judgments. If the Chair is directly involved you can be sure others will aspire to be, too.
From a purely HR view, this is a huge step for an organization to maximize the value that it ought to be getting from this area of the business. You can be certain it will raise the profile of the VP HR, not lower it.
Now it only remains to be seen whether it will actually work. Moving toward broader team work isn’t a slam dunk. It takes patience and insight. You can be sure the learning challenge for everyone will be solid. But setting up the opportunity is an immense step forward.