CEO or CHRO? Procter and Gamble's Top Brass Gets Human Resources.

"If you leave us our buildings and our brands but take away our people, the company will fail" - Richard "Red" Deupree, CEO, Proctor & Gamble, 1947

"Are we hiring the right people?" - A.G. Lafley, CEO Procter & Gamble, 2002

At its core, I've always believed human resources is all about (a) hiring the right people, (b) keeping them motivated, engaged, and productive and (c) developing them. Everything else is details. (which, incidentally, is why HR vendors who can clearly communicate how their offerings support one or more of these core functions tend to have greater success).

This was driven home to me in a recent story in Fortune Magazine on P&G.

Did you know that the office of P&G's global human resources officer is directly next to that of the CEO?

I didn't. This and other interesting HR facts are in the recent Fortune Magazine article titled CEO Swap: The $79 billion plan which gives a behind the scenes look at Procter & Gamble, where "A.G. Lafley and protégé Bob McDonald are navigating the sweet science of succession".

The article is part of a feature cover story on The Top Companies for leaders: 2009.

An excellent read.

Some other facts about P&G taken from the article:

- All executives who become general managers are evaluated every six months with what is called a GM Performance Scorecard. It is a two-page document, with one page of relevant financial measures and a second, equally important, assessing leadership and team-building abilities.

- All managers are reviewed not only by their bosses but also by lateral managers who have worked with them, as well as their own direct reports.

- Every February one entire board meeting is devoted to reviewing the high-level executives, with the goal of coming up with at least three potential candidates for each of the top 35 to 40 jobs.

- The company has a "Talent Portfolio" that contains the names of P&G's up-and-coming leaders, compared against one another over the past six years in both financial performance and the ability to lead and help others do the same. There are also lists of who is ready to be promoted next, who will be ready after the current assignment, and who will need more time. There are at least three possible candidates for each major job.


Moheet Nagrath, P&G's global human resources officer, says this about the binder (that's right, it's a binder - perhaps a sales opportunity for you talent management software vendors):

"Today I could show you the next generation of successors to current leaders, the generation after that, and the generation after that," says Nagrath. Those at the upper-left-hand side of one particular page are the people who have consistently outperformed. The people at the lower right are considered "at risk."

Read the article. It's fantastic. In just a few pages (and two excellent videos) former CEO A.G. Lafley and current CEO Bob McDonald teach us a lot about human resources, succession planning and even marketing.

After reading the article you get the sense these guys are not just Chief Executive Officers (CEOs) but also Chief Human Resource Officers (CHROs).