2016 CHRO Summit

March 11 - 12, 2016
Orlando, Florida

CHRO Summit Sees Election of New Association Leadership, Explores Workplace of 2020

A historic 2016 CHRO Summit, in which the Association elected Dan Yager to be CEO and President, began with propitious words from HR Policy Chair Mirian Graddick-Weir, Executive Vice President, Human Resources, Merck & Co., Inc.: "With the challenges we and our companies face—both internal and external—I think we are going to see the value of our membership grow immensely over the next few years."  Yager's first address to the Association as CEO began by recognizing CEO Emeritus Jeff McGuiness for his longstanding and indispensable leadership, and specifically for "building an organization that has become a powerful combination of thought leadership, policy effectiveness and a demonstration of how collaboration of the nation's best companies can achieve progress."  Yager further noted that, moving forward, McGuiness will "continue to play a fundamental role in helping us achieve our health transformation goals as a key player in the Alliance and, yes, the Association."  As for the future of the organization, Yager pledged that under his leadership, the Association will remain firm in its commitment to "continue to make a great organization greater, just as we have done every year since the beginning of this organization."  The agenda for the rest of the Summit was equally ambitious.  Mara E. Swan, Chair of our Workplace 2020 Initiative and Executive Vice President, Global Strategy and Talent for ManpowerGroup and David A. Rodriguez, Vice Chair of the Workplace 2020 Initiative and Global Chief Human Resource Officer for Marriott International, Inc., joined Yager in leading a record number of Summit attendees in a discussion of the Association's Workplace 2020 Initiative and the future of the workplace.  Ellyn Shook, Chief Leadership and Human Resources Officer, Accenture, led an immersive panel on millennials, with five representatives from that generation giving the Association a hands-on experience with the inventive use of modern technology that millennials have spearheaded.

Workplace 2020 Panels Create Lively Discussions on the Future of the Workplace

Moderating an animated panel of employees of HR Policy member companies at our CHRO Summit, Ellyn Shook, Chief Leadership and Human Resources Officer, Accenture, led the Summit through an immersive dialogue on the millennial generation in the workforce, with innovations in technology and generational relationships highlighting the discussion.  With predictions that the new generation will compose 75 percent of the global workforce by 2025, Shook, whose company's workforce has 72 percent millennials, noted that at Accenture, "We are already living in the future, which has caused us to dramatically re-imagine our talent practices to attract, develop, and inspire top talent."  The panelists brought with them an optimistic view of the future of the workplace:

  • Ben Bring, Sports Medicine Fellow at Riverside Methodist Hospital, who was introduced by Johnni Beckel, Chief Human Resource Officer for OhioHealth, predicted that millennials will be "the most educated generation ever."

  • Jay Flores, STEM Ambassador for Rockwell Automation, who was introduced by Susan Schmitt, Senior Vice President, Human Resources for Rockwell Automation, Inc., commented that technology is different from twenty and even two years ago, a point that resonated with the other members of the panel, including Daniella Patrick, Talent Innovation Lab Product Manager for Accenture, who added, "Tech makes for a more personalized environment through the use of data."

  • The panelists also commented on the negative connotations of the term millennial, with Amy Mancilla, Leadership and Development Manager for United Parcel Service, introduced by Teri Plummer McClure, Chief Human Resources Officer for UPS, pointing out, "If you were to substitute pejorative terms assigned to millennials with any other group, it would be considered highly offensive."

  • According to the panelists, this did not dampen their desire to learn from previous generations in the workplace.  Jennifer Dray, Production and Distribution Planning Manager for Praxair, who was introduced by Karen Keegans, Chief Human Resources Officer for Praxair, Inc., related, "Traits millennials want to see in their leaders are vision, creativity, and relatability.  A good leader for millennials will also give us our purpose and the feeling of inclusion."

Following the panel discussion on millennials, Mara E. Swan, Chair of the Workplace 2020 Initiative, Vice Chair of the HR Policy Association, Executive Vice President, Global Strategy and Talent for ManpowerGroup, David A. Rodriguez, Vice Chair of the Workplace 2020 initiative and Global Chief Human Resource Officer for Marriott International, Inc., and Dan Yager, CEO and President of the Association, led a discussion of the Association's Workplace 2020 project.  Swan commented, "There is a dire need for both the government and our companies to respond to the always-evolving workplace needs, with an all-too-frequent fundamental lack of understanding of this in the halls of government."  Rodriguez walked through just a few of the changes he is already seeing at Marriott, emphasizing "the relevance of Workplace 2020 to our policies now and beyond is very clear."  The session then concluded with roundtable discussions, which will provide invaluable perspectives to the final product of the Association's Workplace 2020 initiative.

"Three Branches" of Health Care Triad Take on Ambitious Task of Creating Reform in U.S. Health Care Practice and Policy

Following the formal launch of the Health Transformation Alliance a little more than a month ago, the Association laid out at the CHRO Summit its approach in 2016 and beyond to changing the health care environment in the United States for the benefit of large employers and their employees.  Association CEO Emeritus Jeff McGuiness, who also serves as the President of the HTA, described the effective working relationship between the HR Policy Association, the American Health Policy Institute, and the Alliance, commending the work of Marc Reed, Chair of the Health Care Policy Committee, and Chief Administrative Officer, Verizon Communications, Inc., and of Kevin Cox, Chair of the Health Transformation Alliance, and Chief Human Resources Officer, American Express Company for their leadership in the success of an effective "triad."  "The theory is," commented McGuiness, "that you can come up with great ideas through our think tank, and you can create a favorable legislative and regulatory climate for those ideas through the lobbying arm of the Association, but you can't effect real change until you go out into the marketplace to contract for the future state."  Noting that the American Health Policy Institute was the first to study and publicize the impact of the so-called Cadillac Tax, thus laying the groundwork for its delay, Reed said, "When the Institute is issuing papers, or when AHPI CEO Tevi Troy is speaking in the press, people pay attention because the Institute has established a reputation for sharing statistics and research that come directly from us all as large employers.  It is your answers to the Institute and Association surveys that help create that credibility."  Kevin Cox gave a brief introduction to how the HTA is actively pursuing its "long term transformational goals and the near-term need for cost savings that will provide return on investment for our Members.  Our team, with the active engagement of each HTA Founder, is working around the clock to achieve both objectives."  Marty Gervasi, a Founder of the HTA and Executive Vice President of Human Resources for the Hartford Financial Services Group, Inc., commented that the HTA is the only practicable solution to the challenges employers are experiencing and will likely be increasingly experiencing moving forward.  Rob Andrews, CEO of the HTA, observed, "No one outside of the people in this room has the capability to change what is an onerous health care system for the good of large employers and their employees."

Activist Investors Panel Provides Insight into Strategy for Navigating New Challenge for CHROs

Shelly Carlin, Executive Vice President for the Center On Executive Compensation and the HR Policy Association, led a panel of experienced experts with diverse opinions in a discussion on the growing influence of activist investors, which she called "a phenomenon which has disrupted things in the C-Suite and has greatly influenced what the role of the CHRO is becoming."  Monique R. Herena, Chief Human Resources Officer for BNY Mellon, related her experience with the dangers of failing to communicate the Board's approach in the face of activist investors, saying "internally we believed we were doing what we needed to—but that wasn't clear to stakeholders."  Robert S. McAdam, Former Senior Vice President of Government and Community Affairs for Darden Restaurants, Inc., explained that because discussions with activists take place behind the scenes, "it is a constant battle to keep employees engaged and informed" and companies need to be careful if "employees are getting more information from the news than from the company."  Matthew Paull, Member of the Advisory Board for Pershing Square Capital Management, Member of the Board of Directors for Air Products and KapStone Paper, and Former Chief Financial Officer for McDonald's Corporation, noted, "Metrics is the key to strengthening the position at your company," adding that companies need to be more critical than an external critic would be about the alignment of pay, strategy and performance.  He related how Rich Floersch, Senior Advisor to the Center on Executive Compensation, positioned McDonald's Corporation into a more secure stance by balancing the relative values of growth and return metrics in the company's strategy.

Panel Explores How Talent and Compensation Work Together During Times of Corporate Strategic Change

Pam Kimmet, HR Policy Vice Chair, Center On Executive Compensation Chair and Senior Vice President, Human Resources, Coca-Cola Enterprises, led a discussion of how talent and compensation are used to drive value creation for shareholders in mergers, spin-offs and turnarounds, stating that there is "no established playbook or 'checklist' … for how to appropriately address these kinds of unique situations."  During the panel, Tracy Keogh, Association Director and Executive Vice President, Human Resources of HP Inc., the printers and systems company created when Hewlett-Packard was split into two, explained how the company's board was instrumental in its talent assessment, which led to promoting most of the new senior leadership team of the new company from within.  This enabled the company to reinforce a pay for performance culture and also ensure that pay was commensurate with the new company's size, in light of a new peer group.  Scott Weisberg, Chief People Officer, The Wendy's Company, discussed the changes required in the company's multi-year turnaround, stating that the Board brought in a seasoned CEO to lead the effort, and that Mr. Weisberg helped recruit a new executive team to execute the change, while also reframing the compensation program to reinforce the turnaround effort and helping the board plan for the CEO's succession.  Summarizing the distinct talent needs, Charlie Tharp, the Center On Executive Compensation's Senior Advisor for Research and Practice, noted that in a spin, companies need multiple versions of talent to recreate the roles in the new company, while it may be necessary to bring in a leader to jumpstart a turnaround who may not run the company long-term.  Ms. Kimmet explained the challenges in identifying talent early on when merging three companies headquartered in three countries with three very distinct cultures, as well as the change in governance and pay perspectives that will result when the new company is established in the UK with multiple exchange listings.  This led Tim Bartl, Center On Executive Compensation Chief Executive Officer to note that the governance and compensation policies that large global investors and the proxy advisors apply to a company headquartered abroad or traded on a foreign exchange may be different from their U.S. policies.  As a result "companies should minimize surprises by identifying these differences as their pay arrangements and disclosures are being developed."

Political Experts Shed Light on Presidential Race in Lively Panel on Politics and Policy

The 2016 Summit featured a panel of top political experts commenting on a presidential race of an unprecedented nature in American politics and examining what the outcomes could mean for HR strategy.  As predicted during last year's Summit political panel, the 2016 election has indeed been a "change" election, though the panel agreed that the great extent to which this election represents a sea change in American politics was greatly underestimated.

  • CNN commentator and presidential race veteran Paul Begala noted that this election could be a "test of democracy" as a possibly brokered Republican convention nears, recalling the 1968 Democratic primary, when Hubert Humphrey was chosen over Eugene McCarthy, though he did not enter a single primary.

  • Nina Easton, FORTUNE Magazine's Washington Senior Editor and columnist, attributed the political unrest to three factors: the middle class becoming a minority in the United States, manufacturing in the United States failing to stage a renaissance, and the startlingly high mortality rates of middle class whites.

  • Nicolle Wallace, a top GOP strategist and political analyst for MSNBC, argued, "It is indeed possible for Donald Trump to put together a winning coalition of voters this November," a theory which was met with agreement by both Begala and Easton.  "The real test," continued Wallace, "Will be understanding what is 'Trumpism'," and what informs his policymaking.

  • In the Saturday morning breakfast speech, Washington Post columnist Kathleen Parker offered a rearview perspective, saying, "President Obama is a big contrast to a lot of the guys who are running for president, maybe a good contrast, but he wasn't yet ready to be president in 2008."

  

Saturday Morning Thought Leader David Ignatius Gives Global Perspective to Domestic Policy and Politics

International expert, bestselling author and award winning Washington Post columnist David Ignatius gave his thoughts Saturday on economic and military developments both in the United States and around the globe.  “The trend that concerns me more than any other for companies like yours,” he related, “is the noise against free trade.”  Ignatius went on to describe the trade positions of the leading candidates on both sides of the political spectrum, discerning that it is improbable that a pro-trade president will sit in office come November.  Another area Ignatius considered centered on the concept of “political decay,” a term coined by the political philosopher Francis Fukuyama to describe the process by which older institutional structures fail to meet the needs of a changing world.  Both Europe and the Middle East, Ignatius argued, are undergoing political decay, to the point where Brussels may in the future see a decline in the influence it now holds.  The United States is undergoing the same process, a symptom of which can be found in the widespread discontent of the voting public.  In all of these developments, he encouraged that leaders “think about the next steps” alongside the short term perspective.