Does Your VP of HR Report To Your CEO?

A decade ago I didn’t pay much attention to the VP of HR position. Today, I view it as a key role if you are growing headcount at least 50% year over year and have more than 20 people in the company. And, title inflation notwithstanding, I prefer to call it “VP of People” since we are people after all, not “human resources” or “HRs”.

Over the past five years, I’ve had the privilege to work with a handful of amazing VPs of People. And, as several of our portfolio companies continue their incredible growth rates, I’ve been involved in recruiting a few new ones to these companies. I have three basic principles for each of them.

1. The VP of People must be part of the executive team and report to the CEO. Many companies that I’ve been involved in have viewed the VP of HR as “key recruiter and HR administrator.” This is not very useful and – in a startup that is growing quickly – dramatically under positions the VP of People as you’ll see in my next principle. If the CEO isn’t willing to have the VP of People on his executive team, I think it’s worth asking the question “why not – aren’t people the most important resource you are adding to your company?”

2. The VP of People is the go to person on the executive team for other executive team members. Every CEO I’ve ever worked with either pays too little attention or too much attention to the dynamics of the people on the executive team. This isn’t just the CEO to VP interactions – it’s the VP to VP interaction dynamics. When VP issues blow up, CEOs often lose huge chunks of time to trying to figure out how to manage through or mitigate the issues. The CEO often becomes camp counselor, parent, therapist, or bitching post. While this is a time sink, it’s also a huge emotional energy drain. The solution – the VP of People is responsible for this. The first stop of any VP – whether it is to talk about issues with another VP or the CEO – should be the VP of People. It’s the VP of People’s job to (a) help everyone work through the issues and (b) summarize what’s going on to the CEO. There will be cases where the CEO needs to get involved, but by having another executive in the mix, it focuses energy on solving the problems, rather than stacking up, or avoiding, issues.

3. The VP of People is responsible for helping everyone on the executive team, including the CEO, level up. Since I believe that life is one big video game, leveling up in your job should be the goal of everyone, especially executives in a company. This used to be called “professional development” but, like “HR”, I think it misses the broader point as I’m not just talking about professional development, but emotional, intellectual, and personal development.  There is no possible way a CEO can focus on this effectively across his team. The VP of People can do this assuming he is on the executive team and is a peer with the other executives.

If you are a CEO of a fast growing company with more than 20 people, do you have a VP of People?

  • Anonymous

    You’re describing my SVP People to a tee.  I’d add one other item to your list, as a distant fourth – the SVP People still has to run a world class HR function!

  • http://stevenhb.myopenid.com/ StevenHB

    VP of People sounds an awful lot like “Chief of Staff.”

    • http://www.feld.com bfeld

      Not really. Chief of Staff – which is a bizarre title – tends to be a
      COO type role.

  • http://twitter.com/LDEakman LD Eakman

    This is a good idea, especially with regard to an investment management firm.  As you guys well know, if you can take out all the extra noise the investing becomes a lot more fun.

  • http://profiles.google.com/ehauske Erich von Hauske

    I disagree with the second principle, IMHO the biggest source of friction between VPs in a growing company is about the vision, strategy and markets of a company, not personal issues, it may end becoming personal but in a professional team it usually starts with different perspectives of the company and the market.

    Maybe I misunderstood your point, but I simply can’t imagine a VP of People settling an argument between a VP of Engineering and a VP of Sales about creating a whole new product the VP of Sales found an adjacent market for.

    All this confusion is specially problematic if the company didn’t have an structured way of learning during the “discovery” phase and start to grow without a very strong and clear foundation. And in my (limited) experience that’s the common case.

    • http://www.feld.com bfeld

      Separate the two issues. I’m not saying that the CEO shouldn’t engage
      with his team, or settle disagreements around vision, strategy, and
      markets. In fact, that is exactly what the CEO and his team should be
      spending time on.

      However, I have many examples where there were interpersonal issues
      that had nothing to do with vision, strategy, markets, or execution.
      This is where the VP of People can help a lot.

      • http://profiles.google.com/ehauske Erich von Hauske

        Well, you have a LOT more experience than I do, so I’ll keep my eyes open to interpersonal issues that start from interpersonal differences/diversity (something that you want in team).

  • http://www.joaobelo.co.uk/ Joao Belo

    I often see COOs taking on this role. Don’t you think it makes sense for them to be doing so? I would see the COO role as the VP People you’ve described, with the added responsibility of managing key internal processes, infrastructure, etc.

    • http://www.feld.com bfeld

      There is rarely a real COO in young companies and even when there is
      the VP People role can sit along side them. I can’t imagine a COO that
      I’ve worked with that would be effective at both COO and VP People the
      way I think about VP of People.

      • http://www.joaobelo.co.uk/ Joao Belo

        Fair enough. I do think the VP People role you’ve describe is more and more relevant. An expert in Organisational Behaviour that also delivers on bringing high quality people on-board at the correct pace.

  • http://www.sixstringcpa.com Geoffrey

    Must say, I am grooving on that title “VP of People”

  • Allen Price

    As the former “VP of people” for three successful start-ups, former Human Capital consultant, and now CEO of my own start-up, I can’t agree more, Brad. As various times in my career, I have reported to the CEO, CFO, and Senior Counsel and I can tell you from personal experience that reporting anywhere other than to the CEO guarantees that the position is primarily administrative with a side order of toothless cheerleading. Reporting to the CEO and sitting on the executive team is the only way the people in that position can have any real effect on the culture and the emotional intelligence of the organization.

    And thanks for replacing the tired and misguided “most important asset” line by calling employees a company’s “most important resource”: people aren’t assets. Assets are purchased and depreciate but people, when treated right, grow in value. Your employees are more like your IP. Treat ‘em like human beings and they’ll pay you back many times over.

    BTW, while I’m plenty busy getting my own company off the ground, I’m a firm “pay it forward” advocate and I’m always happy to help fellow entrepreneurs talk through their “people issues”.

  • http://twitter.com/OpenSesameNow OpenSesame

    Thank you for your strong argument for putting the VP-People at the c-suite level. Your people are an asset as valuable as your technology, infrastructure, patents, funding, etc. – and hiring a great VP of people creates a positive company culture, boosts productivity, improves retention, etc. Further, making professional/personal development and growth a priority reinforces that culture.  

  • http://www.nelking.com nelking

     Many startups view HR as a road block to their momentum just based on past experiences.  Compliance is a small part of the job. A great VP of People is critical when the CEO or other execs can no longer interview every new hire and you can’t easily remember all the new team members’ names.  A good VP of People manages the human part of the growth engine.  A good one gets the business and adds value. 

    I do think the timing of the position has more to do with the leadership experience of the overall founding team. Some need it earlier in their growth others can wait a little longer. 

    • http://hirethoughts.blogspot.com Donna Brewington White

      “A good VP of People manages the human part of the growth engine.” 

      Well said.

  • http://www.logicalconsensus.com Lucas Dailey

    I agree with this completely, but could you add the “Culture” portfolio into VP of People role? They might not always overlap but they are so integrally mixed.

    Incidentally I prefer VP of Talent. My inner economist prefers HR, but I go with VP of Talent because VP of People feels a little bit traffic-cop-esque.

    Either way, I see the CEO roll being so dominated by recruiting that the VP of Talent needs to be possibly the closest relationship. At least in firms growing at the rates you outlined.

    • http://www.feld.com bfeld

      Good suggestions. I think culture is an important part of this,
      although I believe that the CEO has to set and reinforce the tone on
      culture (although the VP of People can certainly help a lot). I
      struggle with VP of Talent although I’ve heard that used a few times.

  • http://www.missi.com/ Peter Beddows

    Excellent call Brad: Really good suggestion thoughtfully explained.

    Have frequently been struck by how often business leadership appears to believe their brand of “product technology” is their ace in the hole while being oblivious to the fact that without the “people” in the business who have developed and are implementing that technology, they have nothing: We are not yet at a stage where Robots can be autonomous or auto-creative or even basically innovative.

    The business and technology knowledgeable people in a company are, today, still that company’s greatest asset ~ assuming, of course, that those people have been skilfully and respectively selected for their capabilities and team compatibility: Who better to ensure that than a VP of People/Talent – title after the “VP” component not half as important as the principle behind the idea and the executive level of the role and responsibility executed.

    Naturally, conventional HR functions – very necessary as employment numbers grow to deal with benefits and the myriad of current day legal and basic employment related issues, also would report to this position.

    You also make a strong point in your third principle that “There is no possible way a CEO can focus on (all of) this effectively across his team. The VP of People can do this assuming he is on the executive team and is a peer with the other executives” In that latter context, this role can also support the CEO in developing culture as well as reinforcing adherence to the business’s mission across all areas of the company.

    BTW: reminds me of my first meeting with Peter Drucker when he declared, and I paraphrase, “Literally millions of words have been written about motivation but probably the least understood and effectively applied factor in deploying people in business actually is how to motivate”. Even today, many “HR” Departments operate more as if Dilbert’s Catbert is in charge. Having a people/talent/resource management responsibility at the c-level most likely would also help avoid, or at least mitigate against, a business, in the course of growing, lose its early stage high-level of universal motivation and appeal, instead helping foster a continuation of, and building upon, that initial enthusiasm stage across all departments and employees.

  • George Roberts

    Brad,

    I agree completely with your thoughts on this and am in the middle of one of our companies recruiting a VP of HR to report to the CEO. I would not want to have it any other way.

    In my experience people are the only strategic asset a company has. They build the products, market and sell the products, install and/or teach clients about the products and take care of the customers.

    Not having that key executive team member report to the CEO and at the table for all strategic discussions is a major organizational mistake. They are there for the CEO, there for the management team and there for the company employees.

    I spent over 20 years as an operational software executive and in my last role managed an organization of 2,000 people and HR was at the table every day with myself and the management team.

    Thanks for sharing your thoughts on what is an overlooked area that is critical to the success of technology companies.

  • http://www.plugandplayegypt.com Roham Gharegozlou

    Great suggestion and comprehensive explanation. I (being too young) had never considered this as important but you convinced me. I just shot off an email to a company we’re working with that is expanding rapidly and pointed them to exactly this blog post. Thanks for sharing. 

  • http://hirethoughts.blogspot.com Donna Brewington White

    Really refreshing viewpoint, Brad.

    Interesting…if you had suggested that a company of 20 people had a VP of HR as that role is often described and utilized it would have seemed like overkill.  But your description changes the role and its value, as well as the timing of bringing someone in.  

    Also, I don’t think that the value of this person’s role in helping to develop and promote culture can be emphasized enough. I know that in an earlier comment you said that the CEO “has to set and reinforce the tone” with regard to culture and of course that’s true — majorly true — but this person really can be the one who does the painstaking work of cultivating and assessing the culture (one client called this role “Chief Culture Keeper”) — and the sooner this starts in a company’s existence, the better.