Episode 448: How HR Prepares for the Role of CEO with Dr. Scott Cawood, CEO of WorldatWork

Scott Cawood: Welcome to the Workology Podcast, a podcast for the disruptive workplace leader. Join host Jessica Miller Merrill, founder of workology.com as she sits down and gets to the bottom of trends, tools and case studies for the business leader, HR and recruiting professional who is tired of the status quo. Now here's Jessica with this episode of Workology.

Jessica Miller Merrill: Welcome to the Workology Podcast sponsored by ace, the HR Exam and Upscale hr. These are two of the courses that we offer for certification, prep and recertification for HR leaders, and you can learn more about those over@workology.com this interview was recorded during World at Work Total Rewards Conference in San Antonio, Texas. I've met so many smart people during this conference and I'm thrilled to be able to highlight their expertise on this podcast. Today's conversation is both timely and, uh, necessary. As HR continues to navigate the increasing complexity from AI integration to shifting expectations at the executive level, there's a growing need for HR leaders to step beyond compliance and into true business leadership. And that's exactly where today's guest comes in. We're joined today by Scott Kwood, the CEO of World at Work, an organization long known for its leadership in total rewards and executive compensation. Scott is helping lead a bold evolution, one that challenges HR professionals to think bigger about their impact, their influence, and their role in driving business outcomes. So in this episode, we're going to be talking about the current state of human resources, why the profession must evolve to earn a stronger seat at the executive table, if you will, and how World at Work is positioning itself and its members for what's next. But before I introduce Scott, I do want to hear from you. Please comment podcast on my pinned Instagram post over at our Instagram account. It's at Workology Blog where you can ask questions, leave comments, and make suggestions for future guests. I want to hear from you, so let's go ahead and get to it. Today's guest is Scott Kwood, CEO of World at Work, a global nonprofit organization focused on advancing the Total Rewards profession through education, certification, and thought leadership. With a career that spans HR strategy, talent management, and executive leadership school, Scott brings a unique perspective on how organizations can align practices with business performance. His leadership is grounded in the belief that HR has the potential to directly influence organizational success, not just support it. Since joining World at Work, Scott has been instrumental in redefining the organization's direction with a focus on elevating the HR profession beyond traditional administrative and compliance functions. He is a strong advocate for building more business savvy HR leaders, professionals who understand Revenue strategy and the broader enterprise. Under his leadership, World at Work continues to leverage its deep roots in executive compensation to help HR leaders gain greater access to the C suite and boardroom conversations that shape the future of work. Scott, welcome to the Workology podcast.

Scott Cawood: I could not be more thrilled to be here. Thank you very much for having me.

Jessica Miller Merrill: Absolutely. And you've had a very diverse career leading up to your role at World of Work. Can you share a little bit about your background and the experiences that shaped your perspective on HR as a strategic business function?

Scott Cawood: Sure. I started my career in higher education. I was really fascinated with how people learn, especially outside traditional learning environments like a classroom. So I was an RA in college and we got to do programming and whatnot. And so I carried that for the first two years trying to find, figure out what works for the human brain and what doesn't. And I stumbled upon an organization called W.L. gore Associates, and it was my entree into corporate America. I took on a training and development role. But W.L. gore was different from most companies in that they had no job titles, no hierarchy. There was nothing like a boss. Nobody had a boss. You had a sponsor, uh, and their job was to help make you successful. So it was my first intro into this thing we call corporate America. And I fell in love with it. I fell in love with what it meant to be a part of an organization that didn't rely on hierarchy. It did shape me for maybe being a little bit anti hierarchical in my other roles afterwards. But it, um, but it taught me what was possible when good people, um, want to get somewhere and do the same thing, and when they care about stuff, it makes a big difference. And so that was my intro into the space years ago.

Jessica Miller Merrill: Wow, what an interesting space for you to be in. And in a way that, that ruined you. But that's kind of where my brain is going. Like it fundamentally probably shifted your perspective in leadership for sure.

Scott Cawood: You know, I have often actually said that, that it ruined me for most of rest of corporate America because it's traditional, top down, you have cascading goals from a, uh, CEO who's barking out orders. And that was just not the case at Gore. You were. No. The plants of manufacturing plants were only 250 people because nobody had a title. So you had to know everybody to know who's doing what. And we call them commitment areas. My commitment was in hr. My commitment was in manufacturing. So it was a very different look at, uh, coming from higher ed then to Gore. And then I went on to more Hierarchical organizations where I just wasn't quite as happy. Actually.

Jessica Miller Merrill: I've often said I'm, um, unemployable because I'm an entrepreneur. So I definitely appreciate and understand having been in a corporate environment for a really long time, moving to entrepreneurship, how that definitely shapes just how you, uh, lead others, communicate and expect to be a part of the conversation.

Scott Cawood: You know, I often have called myself, I'm unmanageable. I just, I'm just. I would hate to have to be the person responsible for managing me. Just not going to be a good experience. I just think I love living outside the proverbial box, right? So I don't even. I hate standardized processes and it World of work. I got rid of all the policies. We have practices. Here's generally what you should do to make a good decision. But these hard, fast rules, um, they're really. Were based on a time of production and manufacturing mentality 100 years ago. They don't necessarily apply to work as we think about it today.

Jessica Miller Merrill: So I'm just going to paint a picture for everyone who's listening because Scott's very colorful in, in his conversations, but also in his attire. So he's wearing a kind of a blue checkered striped, uh, jacket and a matching vest and bow tie. So it really is, it, it really does well with, I think, your personality for sure.

Scott Cawood: You know, it's, um. I, I was, you know, generally, I think people might know who I am, but one of the big World at Work events, but I was talking to a gentleman, this was at our sales comp event, and he's talking to me. We talked maybe 20, 30 minutes and finally he said, so what do you do at World at Work? And I said, oh, I'm. I'm the CEO. And he goes, oh, that's why you can get away dressing like that. And I was like, huh, huh. Wow. But, you know, he really didn't think people should probably dress that way. But for me, that's. I don't do it just because I'm the CEO. It's kind of. I don't. I mean, m. Men's clothes are kind of boring anyway, so when you can find something fun, why not? Why not do it? Let's live a little bit, people.

Jessica Miller Merrill: Generally speaking, uh, the brighter the color, the better for me. So not today, but I'm matching the weather here in San Antonio. So World at Work has been long known for its expertise in total rewards and executive compensation. How is that legacy shaping your strategy as you evolve the organization?

Scott Cawood: Today we have, um, you know, we just, we had a big birthday last year, we turned 70. And I always joke that it could be retirement age, but I'm putting us into startup mode. We're not, we're doing anything but retiring. And, uh, I think World of Work has developed some key capabilities as it relates to how adults learn. We can get a lot of information and skills into you pretty quickly. We've honed our skills on, you know, we have immersion programs and so you can spend four days with us and walk away. A completely different skill set regarding compensation and benefits and the things that are the backbone of your employer's experience. So we've gotten really good at how adults learn. I think now my hope is that we're going to basically build a bigger tent. We're going to bring more people into the tent because we know how we can work together to create a really premier ecosystem around the world, setting good standards for what great HR looks like. But ultimately the winners here should be the employees having a better work experience, which ultimately then benefits the organizations who will be more competitive and hopefully make a lot more money.

Jessica Miller Merrill: I think that's all, uh, wonderful. And employees win, organizations win. HR wins because they're in more of those conversations.

Scott Cawood: This does not have to be a difficult construct. Right. Work doesn't have to be that proverbial four letter word. And we're all about figuring out ways to really round out that employee experience so that both win. It isn't a competition and there's a lot of, uh, work to be done around the world. But I'm excited that we're in this space and I love being a part of World of Work.

Jessica Miller Merrill: So talk to us how this new direction for World of Work might look in practice and how it's going to better serve the modern HR leader.

Scott Cawood: So we, um, we like to think that if you want to be an okay HR person, that's fine. There's other HR associations for you to go to. But we really want to pick up those individuals who want to. I mean, y' all say it informally a lot in our workspace that we are people movers. We're going to move you from only having one skill here to two. We're going to move you from unemployed to employed, from director to vp, from VP to executive team member, maybe from executive team member to CEO. You know, I want people to move. I think movement is really healthy. And World at Work is designing more pathways for individuals who really want to be good at what they're doing and give back to the organizations that they're serving in the HR capacity. And I want to put more HR people in CEO roles. It's a skill set that you don't see that often. But really good HR people should be positioned for HR roles, uh, for senior roles like a CEO, but also in board seats. So I'm excited about working on that because nobody has cracked that proverbial puzzle. Right. We still have, have a lot of HR that sits in a compliance role or is not invited to that proverbial table. And I'm tired of it. I'm going to fix it, I'm going to change it.

Jessica Miller Merrill: So after we had our prep conversation for, for the podcast we have now, I asked, I did some props over on Chat GPT just because I was curious of the number of HR leaders that have moved into CEOs for like Fortune 500. And then the number is alarmingly low when you compare to even Chief Revenue officers, uh, or people in the sales role or um, even uh, folks in operations, uh, that are not HR professionals, which I thought, wow, that, I mean it was, was very clear that there is a gap that we really need to work towards.

Scott Cawood: Yeah. And the few cases where you've seen a, uh, HR lead move into a CEO role, there has been quite good success. So of the few that have done it, there's uh, a good success. You know, I never wanted to be a CEO. I was really happy being a chief HR officer. I loved it. I loved the balance, the tension that the business has with people. I loved managing that tension. And I could see, um, you know, what was possible for growth for the company through the people and what we did or didn't do. And um, we had a CEO at one point just decided he would made enough money. So he told us one day, hey, I'm moving to Asia for a while, so just take over the business. I don't want you to talk to me for another eight months. Somebody else can be, you know, can lead it. And so everybody voted who was going to be the new CEO. I didn't vote for me. Everybody else did. So I came back on Monday in a very different role. So that's how I even stumbled into this, uh, you know, president CEO role to begin with. Um, that was in a software firm. So now I'm at World at Work and it's more of my dream job. I can still keep my place, uh, in hr, but also be in this role of leadership. So. Which is nice.

Jessica Miller Merrill: So talk to us about why you think the gap exists where we don't have a Lot of heads of HR moving into that CEO role. And what do you believe needs to change to help close that?

Scott Cawood: Well, let me paint a scenario for you. Every year during a budget cycle, here's what happens. All the other functions give the cfo, whoever she is, they give a, uh, you know, here's what I want to spend and here's the return on that margin. Here's the margin return I'm going to get and everyone does it. And then they get to hr and all HR puts in is how many more maybe headcount they want or more what the cost of benefits increase are. But it's never typically attached with a, an ROI or some, um, some addition to the balance sheet other than making it worse. Right. So every other function is trying to say, hey, if we invest 100 grand here, we're going to get 200 back. With the exception of HR, HR rarely does that. So it's inevitable that the CFO looks at those numbers and says, you know what, I don't see any return there. I'm not giving the budget for you in hr. And HR needs to start, uh, approaching the conversations early on on what I'm going to advocate for and what I'm going to get a return on. And understand that in the world of people who need to give you access to things like money and better budgets, you've got to speak their language in a way that is really meaningful. You should expect them to pick up your language in hr. It's not a language that maybe most people understand. So I'm hoping that HR will be able to come into the conversations with a level understanding of what it takes to influence a business outcome and not just be on the receiving end of, no, I'm not going to give you more money jar. You're just going to be stuck with what you have. And there's so many things we could be doing. We teach a business acumen course that goes over everything HR needs to know about really going into a board meeting and hanging right and hanging with the board and understanding what's important. Because at the end of the day, businesses are here to make money and HR's agenda has to include that. They have to include the acceleration of that. No matter what we, what you say we're doing, uh, by the end of it, we still have to support the business growth.

Jessica Miller Merrill: I definitely think that HR doesn't always think the way that you're describing. I also think there's another challenge, which is that HR CEOs, executive leaders don't really understand exactly Everything that we do. And I don't think we do a fabulous job of communicating that, which is also probably part of the business acumen problem. Right. We're not in those meetings always to say, oh, we're involved in all these different areas of the business, and this is how it's impacting the business.

Scott Cawood: If you, um, you know, what I like to do is, you know, there's that proverbial question, what keeps CEOs up at night? That some version of that. Just take a look at any of those lists. There are two things that always come at the very top of those lists for CEOs, and what worries them. It's growth and it's people. Do I have the talent to execute on all the plans that we have and do it quicker than my competitors? Well, if it's about people and growth all the time for CEOs, who's better to respond to that than HR? Right. You go in with the plan to understand we are. I can enable growth. Here's how I'm going to do it, here's the plan for it. And I can enable people. Right. That's. That should be really within their bandwag to do so. I think it's just a matter of, um, understanding. Traditional roles like COO and CFO are easily tapped because they understand the core business. It's just a matter of HR broadening its skills to speak. Not only speak the language, but understand what fundamentally drives a business. And they should be able to understand that there's no reason why HR shouldn't.

Jessica Miller Merrill: I agree. Well, uh, let's go ahead and take a reset here. This is Jessica Miller Merrill, and you're listening to the Workology podcast. It's powered by Ace the HR Exam and Upskill hr. Today I'm talking with Scott Kwood, CEO of World at Work, about the Total Rewards Conference and really HR and how we're going to grow into these amazing, powerful CEOs running businesses. So let's go ahead and get back to it from your perspective, Scott, what is the biggest misconception organizations still have about HR's role in maybe driving business performance?

Scott Cawood: I think because of the nature and the history of our profession, it's. You, um, know, it's been around quite a while. We've been here quite a while. It started in this personnel construct. I mean, it started really as a result of an organization years ago having a strike. And somebody had to be brought in to manage the strike. Right. Well, how do you do? Do you lock them out? Do you give them pay all this stuff blew up in an organization's face and they're like, we need somebody to manage all this, including the rehiring or firing in this case of. We had way before we had laws there. And that's really was the, was the birth of HR in the United States. And so you, you started from there. That's a place very different than where CFOs or COOs start. Right. And so you started from a very different place. And over the years, I think it has gone tremendous leaps forward. Right. That's been good. So I still think though, uh, you can look at HR as a compliance function. You can look at HR as saying no. You've seen HR say no a lot. HR needs to be an organization of yes, let's start with yes, and then maybe we'll get to know over time. But it's a yes. Let's try to make this work. And the more, um, control that an organization tries to impose on their employees, the more and then HR has to reinforce it. They kind of get a bad rap then for that's what their role is. It's to tell me what I can't do. And I think HR should really exist to tell me what I can do. Because at the end of the day, if the HR organization is performing like it should, it's helping the company perform at its best in whatever that means. So I'm hoping that we can reset this whole function and say, hey, we are just as capable of helping drive a business. In fact, we are going to manage the biggest asset, which is going to be your people. We spend a lot of money on people every year, every organization does. And I want to see a bigger return on that.

Jessica Miller Merrill: So with that in mind, what practical steps can HR leaders take to shift into being more strategic and revenue driven?

Scott Cawood: Let's just make sure they're comfortable with understanding the basic fundamentals of business. You know, get comfortable with the balance sheet, get comfortable with the margins. You know, there's a, um, little bit of a trick even in business school when we're in it. It's, you know, you like that, you like margins, right? We want to make a bit more as best we can. And so, uh, you know, you don't hear our HR talk a lot about margins. So understanding just the business economics of not only how the company's making money, but where it's, it's losing money. There are ways in which you can probably even give more benefits to your organization for less money. If you're getting, you know, strategic and thinking about it and just using that lens to drive performance. There are some other things that I think are important. You know, understand what's on the CEO and C Suite's agenda, understand what the board expectations are. If it's purely just about revenue, you know, accelerating revenue, then you can make decisions that a place you want to stay. But if it is, that is your job as well. You are equally held, you know, to make those revenue numbers. So there's not necessarily a massive gap between the HR agenda and the business agenda. You just want them to get intertwined more and let one feed off the other. And to date, you know, if HR operates in isolation, it's never going to win. It's never going to create the value that it could if it's not in the room, in the decisions and really working through that tension between the business and people, which is always going to exist. Right. So it's just a matter of can you take advantage of that and drive the business forward?

Jessica Miller Merrill: Interesting. I, I do think the business acumen piece is really, really huge. And um, as a business owner, for myself, I look at expenses, margins all the time. I didn't always think, but, uh, when you have a small team, you have to really start looking at what strategies are working, what drives the most revenue, what's the fastest path to get there. Um, and I'd like HR to maybe spend more time in those areas because it does make conversations easier with your boss or CEO or other business owners. Much easier when you understand those basics.

Scott Cawood: And I'll add that too. At the same time, I think it's important that every executive team puts people on their agenda every single meeting. If they're meeting weekly for an executive team, we should have, uh, some issue around our people and what we're doing to engage them, to retain them. So it's not just the one way street where HR has to step up. It's also that the business has to understand the role, the pivotal role people play in your success. Um, you know, a CEO is a pretty powerful role in many ways, but it can't get anything done on its own. I can't do anything. I'm 100% reliant on the people in the organization to actually execute.

Jessica Miller Merrill: So.

Scott Cawood: And there's two things in business that have to happen all day long. You make a decision and you execute on it. This happens all day long, thousands of times, and the execution is really all up to the people. It doesn't, it very rarely does a CEO ever execute. Right. So remember that. That's, it's A piece of this puzzle too.

Jessica Miller Merrill: I really like this idea that we as HR should encourage a, ah, people conversation at every executive meeting. Not only like subliminally does that kind of plant the seed about people, and then I, as hr, am the leader of, of the people function. But then they're starting to have more organic conversations around people brainstorming different ideas and starting to understand, maybe we are too, how sales or, um, manufacturing or whatever is directly related to the people. Because sometimes those, um, they know it, but it doesn't always, it doesn't always feel right.

Scott Cawood: It's not top of mind. And I can guarantee your financials are on the agenda. So, damn it, put people there.

Jessica Miller Merrill: How can HR start thinking differently about their impact on the business? Is it just acumen? Is there another area?

Scott Cawood: There is another area. It's um, it's really making sure that they view their value equally to what they can really create and do and not deferring to other parts of the organization because they potentially have a different title or whatnot. And I like to look at things like, where does the top HR person report? Is it into the CEO? Is it into the coo? It also makes a difference. It also isn't the statement of how important the people element is in hr. Even in our intro, we talked a little bit about that proverbial seat at the table in an organization when you're spending 70% of your, know, annual revenue on people, between your benefits and your pay and everything else. I want to remind HR of a very simple construct. You don't need a seat at the table. You are the table. Right? You are the table. And don't ever lose that. It's a powerful positioning to influence the business. And I don't care if it takes you 90 conversations, you got to keep pushing it and keep having it. Get the people agenda on, um, the agenda of the executive team. And remember, if you can raise your, um, productivity in your workforce 8 or 9%, you've given a bigger gift than that CFO ever could in the margins that they're after because you're raising a very good, you know, productivity level across the organization. And that's where the win is. That's where the exciting stuff happens.

Jessica Miller Merrill: I think that's one of the most important parts of this and, and having conversations about the impact that you're making, even if it's in a small, like, test area or focus group, right, where you're like, we have been able to do maybe some cross training and we've been able to increase productivity by 10%. And this is what it is for that small department or that focus area in terms of sales and revenue. Imagine what the possibilities are if we were to make this organization wide or even just a region to, to see what happens next. And then suddenly HR is a revenue center, not a cost center, which is what we're really talking about here.

Scott Cawood: We are. Yeah, I love that framing. That's exactly it.

Jessica Miller Merrill: World of Work has historically had access to executive and board level conversations through compensation. How can HR leaders leverage Total Rewards as a gateway to maybe greater influence in the C suite?

Scott Cawood: Uh, if you have a good grasp of Total Rewards, you fundamentally understand business and the analytics that go along with it. Right. TR people are famous for spending a lot of time in spreadsheets, uh, because they're looking at everything from market M comp ratios to comp ratios to looking at all this system of data that they have to kind of manage and that inherently puts them closer to conversations that the executive team is having. So uh, one of it is, let's get there. Let's make sure you can pick up some of the technical skills that you need to be a good TR person because that's only going to make you a better HR person. And we have countless chief HR officers who get in the role and be like, wait a minute, I didn't know anything about executive comp. And we're like, okay, let's get you into our immersion program because we can catch you up very quickly. But they've never studied it. You know, sometimes HR people don't look at Komp and Bend as this sexy fun thing that it really is, because it really is and it gives you insights to the business and the people side of the business. If you actually learn these comp and bend skills because you're really doing, pulling all the levers that make me really want to engage or disengage. And there's a lot of power in that.

Jessica Miller Merrill: I will say that as I teach, uh, certification prep for Sherman HRCI and I do find that Total Rewards and compensation is one of the weakest or the biggest opportunities for HR leaders in, in general. And I think, uh, for myself I want to frame it differently that this is an opportunity to understand the business. Uh, but HRCI in particular has a lot of total awards and comp questions depending upon the exam. Um, and it is really a benefit based on what you're saying here for HR generalists to really immerse themselves in that compensation total rewards process.

Scott Cawood: You know, and there's a, you know, we are Great friends with hrci. We love them. We were, they're a big partner of ours for this event and we're, we're doing a lot of really cool education together. I think too, um, there's a bigger play here. If all the skills that I think you need to really adopt AI and agility, you already have them. If you know total rewards, because you've dealt with a lot of spreadsheets, you've dealt with a lot of data, you've dealt with a lot of big pieces of information that have to be sorted. And so the how they learn that is how you're going to learn to use AI in a more effective way. So there's a lot of advantages of getting in the, uh, compound and reward space. So it's a fun place for us to be and I really want everyone to have a better skill at it. We can all be better at managing our financial relationships. Right. And this is a way to do that.

Jessica Miller Merrill: So looking ahead, what do you believe will define a successful HR leader over the next three to five years? And then how can professionals start to build those capabilities today?

Scott Cawood: I think it's keeping a clear view on where this thing we call work is going. You know, you don't have the same workforce that you had before COVID The one that went out is not the workforce that came back. And just being aware of these fundamental, and I would call them seismic changes. I mean, for example, work is no longer a place, right. That fundamentally changes how HR really interacts with their organization. So I think being aware of what's happening in the constructs of work and understanding that, um, you know, where the workforce is coming into work, even if they're working in other homes with a certain set of expectations that need to be met and accounted for. And just make sure you're saying, you know, aware of that. And the other piece for me is let's not, um, keep adding things into a system that already isn't working. You know, take agility, um, let's build agility into the system versus adding it on later. Whenever we add anything on, we add AI to a comp program, we add it to it. I would prefer to have you blow the thing up and start over and build it in, because we don't want you to have to clean it up later. And building it in, to me is a much better strategy for hr in whatever thing you're adding or doing, restart it, rebuild it. Even though it's a little bit more work, it'll serve you better in the long run.

Jessica Miller Merrill: In the long run, it'll be easier to manage, productivity will be better, and people have a clear understanding of what the heck is going on.

Scott Cawood: Yeah, and it's, you know, we're all so busy, it's easy to think adding it on will be the solution. It's a solution, but I'm not sure it's a good one.

Jessica Miller Merrill: Well, Scott, thank you so much for taking the time to chat with us here today. Where can people go to learn about you? And then World at Work, just, um,

Scott Cawood: your best spot is our website. We have a lot of great data out there. We just released a state of awards, uh, report, um, with the International Thought Leadership Group and hrci. We had a great one together. And just an interesting find out of that. You know, 70% of the people are happy with our compensation, but even 2/3 of those, even though they're happy with their comp, are still looking for a job somewhere. So we also need to question all the things that we think might be driving people's engagement. Um, because if you're satisfied with your pay, it doesn't necessarily mean that you're not still looking for a job somewhere. So come to world of work.org and check us out and, uh, let us know if we can be of help.

Jessica Miller Merrill: Amazing. Thank you, Scott, for, for taking the time to, to chat with us. And as we wrap up today's episode, it's clear that the future of HR isn't just about doing more. It's about thinking differently. From expanding influence in the boardroom to embracing technology with intention, HR leaders have the opportunity and also the responsibility to refine their role in the business. And organizations like World at Work are helping lead the charge by equipping HR professionals with tools, insights and mindset, which I think is the most important needed to really drive real impact. A big thank you to Scott for joining us today and sharing his perspective on where the profession is headed. If you enjoyed the conversation, be sure to subscribe to the Workology podcast. We will see you next time as we continue to explore the future of work and the people shaping it. Again, thank you for joining the Workology podcast. It's sponsored by Ace the HR Exam and Upscale HR Workology's learning platform for HR certification, recertification and manager training. You can also check out our new HR tech marketplace, marketplace.workology.com. this podcast is is for the disruptive workplace leader who's tired of the status quo. This is Jessica Miller Merrill. Until next time, visit workology.com to listen to all our episodes of the Workology podcast.