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Strategic CHRO

Jeff Smith

Jeff Smith, CHRO of BlackRock, On Driving Diversity with Data and Stories

February 11, 2019

Jeff Smith, CHRO of BlackRock, On Driving Diversity with Data and Stories

For the next installment of our interview series with leaders who are transforming the role of the chief human resources officer, David Reimer, the CEO of The ExCo Group, and I sat down recently with Jeff Smith, Global Head of Human Resources at BlackRock. He shared smart insights about the unique challenges of the role, and how to make diversity part of a company’s fabric.

Reimer: How do you react when you hear the phrase “strategic CHRO?”

Smith: To me, it’s a very defensive, insecure phrase. People don’t say “strategic CEO” or “strategic CFO.” HR is operating from a long history of being thought of as a much more administrative function, so people spend a lot of time trying to justify it. I would never call myself a strategic CHRO.

What seems to get drilled into HR people’s heads is “know the business, know the business, know the business, you’re a businessperson, you’re a businessperson, you’re a businessperson.” And I completely disagree with that. I think you should lead as an HR person. You have expertise. You are exceptional at compensation. You are exceptional at talent assessment. You are exceptional as a provider of advice to the business.

The context is knowing your business, and I’m not in any way suggesting that it’s not really important. But focusing on it too much encourages a lot of HR people to try to be just like the businessperson they’re supporting. It promotes going native, and doing things within a business that do not stand up for the talent and culture agenda of the firm. You should start from a place where you have pride and belief in what you what you do – your expertise and the value you add to the company – instead of trying to be something else and defending what HR is and what it isn’t.

Reimer: CHROs have a lot of latitude to define the parameters of their own job, but sometimes the organization isn’t ready for them to be involved in new areas. What has been your learning curve?

Smith: The HR job, done well, is one of the hardest jobs there is. There’s an incredible amount of balancing that has to be done – protecting the firm from cultural risks to driving the strategic talent agenda to standing up and being courageous about pushing people to make difficult talent decisions.

“As a CHRO, you have to be very willing to have a bunch of people frustrated with you at any point in time and be able to work through that with a lot of resilience.”

And that last point can be challenging, particularly in companies that have driven a lot of success and built wealth and done great things for clients. There’s a lot of loyalty to employees, as there should be, but you also have to keep pushing a mindset that’s always asking, what is the talent we need for clients, and who are the people that are going to drive us to the future?

As a CHRO, you have to be very willing to have a bunch of people frustrated with you at any point in time and be able to work through that with a lot of resilience. And that’s why it’s so important to have a compass that is clearly communicated, so that it’s BlackRock’s agenda, rather than being seen as “my agenda” or HR’s agenda.

Bryant: What aspects of the job are you spending more time on now than in the past?

Smith: We’re focusing more deeply on diversity and inclusion, and all the things that will help keep diverse talent at BlackRock, including a sense of belonging and emotional ownership. We’re spending a lot of time with different executive committees across the firm, talking about the data that shows this works.

And we’ve augmented that with a more personal approach. We’re asking people to tell their stories and open up a lot more about who they are, with the belief that if you understand the people you’re working with, you’re going to appreciate diversity more. And that’s not just measurable diversities, but all diversities.

“If you understand the people you’re working with, you’re going to appreciate diversity more.”

So we’re approaching it from both a highly data-driven standpoint and an emotional standpoint, and continuing to talk about it not just as a scorecard. We’re big believers in being transparent on data, and shining a light where we and everyone else are on this topic because I think that creates accountability.

It creates a world where we can really have that dialogue, which I think is fantastic. But at the same time, if you don’t really focus on building your culture in a way that’s overtly focused on diversity, then it works temporarily but it’s not going to work for a long time.

One of the most important things we’ve done to foster that culture is to create something called the Human Capital Committee, made up of 50 highly respected leaders from across every region and business. If you look at the people who are promoted from within to our Global Executive Committee, pretty much all of them have been on the Human Capital Committee.

These people have created and driven the agenda. They have an offsite every year, we have meetings every month, and if we develop leadership programs, our top leaders on the Human Capital Committee sponsor them and act as ambassadors for these programs across the firm. It’s not something that HR is just cooking up in a lab, throwing across the transom and asking them to execute.

Reimer: If a CEO were to call you from another company and ask for your advice on how to hire a CHRO, what would you tell them?

Smith: I would spend time trying to push the CEO on what they really want and whether they really want change. Do they want somebody to come in and execute and administer an agenda that already exists or do they want somebody who’s going to change something? If it’s the first one, that’s a reasonably easy job to fill. On the second one, the CEO has to push for some evidence that the person is capable of being influential enough and resilient enough to drive the new agenda. That’s something I certainly look for when I’m hiring people.

Bryant: What are the X factor differences between the very best CHROs and everybody else?

Smith: I would say that they all have a deep vision and ambition for change. There’s no arrogance, but there is a confidence in their ability to do that.

Bryant: And where did that quality come from in you?

Smith: Probably from being incredibly frustrated in places where I could very easily see some pretty simple things that could be done to change and help an organization, or where I could see people who were just doing their jobs instead of really having a passion for driving real outcomes.

But you have to approach this job with patience, even though by nature I’m not a patient person. I think I exhibit patience. If you try to push things at the wrong time, when the environment around you isn’t going to accept it, it’s not going to be as effective as picking the right moment. I try to be thoughtful about what we are trying to do and the pace at which we’re trying to do it, even though I may feel deeply impatient at times.

Reimer: What were some important early influences for you?

Smith: I grew up playing sports. I didn’t do well in school, and almost every conversation I had with my parents was them saying to me, “You have a lot of potential. Maybe you should realize it.” I went to college on a soccer scholarship, and two years in, I had a 1.8 GPA and was put on academic probation.

I was assigned an advisor named Janet Barnes-Farrell who was incredibly instrumental in teaching me how to learn and study and be a little bit more disciplined. I had another professor, Max Allen, who taught a sensation and perception class. Even though I was one of 300 students, he came up to me one day when I was walking down the street and said, “You know you’re smart, right?”

His words just hit me, and after that, I decided to care and try harder. I did well, never got anything but an A, and got my PhD. The concepts of potential and development were very personal for me and probably helped lead me to this profession.

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