Talent
J&J's Longtime CHRO: HR is about Value Creation
Peter Fasolo, Johnson & Johnson's longtime CHRO, believes HR is not about HR. It is about linking people practices to the value a company is trying to create. That belief shaped how he built J&J's people data science team, reorganized the HR function, and ran two CEO successions.
In this episode, Peter Fasolo joins host Joelle Emerson to talk about how J&J's Credo guides leaders through hard trade-offs, what connecting HR data to business outcomes revealed about hiring and turnover, and why he moved much of the HR function into global shared services. He also gets into what a well-run CEO succession looks like, what private equity taught him about value creation, and the story CHROs should be telling employees about AI.
Key Takeaways
Peter Fasolo spent 14 years leading HR at Johnson & Johnson, supporting three CEOs. Before that he was one of the first chief talent officers in private equity, building the talent function at KKR. Today he is a Senior Advisor at TowerBrook, where he leads the firm's human resources practice, and a Professor of the Practice at Boston University's Institute for Leadership and Work, which he previously directed.
J&J's Credo is an "and" statement. Written by the founder's son more than 80 years ago, it puts patients, doctors, and nurses first, then employees, then communities, and holds that if the company gets those right, shareholders will do just fine. Peter points out that every paragraph is linked by the word "and," because the document is about trade-offs. J&J runs Credo sessions built on real cases, and leaders often reach different conclusions: "There are no right or wrong answers. There is simply a guidepost."
Tie people data to business outcomes. Over his time at J&J, Peter's team grew from a small group of I-O psychologists into a data science capability that joined performance, pay, succession, and P&L data around the individual, then moved from describing what was happening to predicting it. Every business unit HR lead could see who they were hiring and promoting and how that linked to the outcomes their leaders cared about.
College hires overtook experienced hires. When business leaders slowed college recruiting to hire people who could deliver results faster, Peter's team tested the assumption. Experienced hires performed better for the first 18 months, he says; after that the lines crossed, and college hires performed better, stayed longer, and were promoted more. The early advantage was what he calls a "sugar high."
Turnover was about more than pay. When turnover in China ran above the market rate, managers asked to pay more. The analysis found three drivers: a low compa-ratio, a manager who turned over frequently, and not attending training. J&J addressed all three, and regrettable turnover dropped. "Managers leave fingerprints every single day," Peter says, on who they hire, promote, pay, and assign work to.
Reward HR for outcomes, not process. Peter harmonized J&J's processes into one way to hire, promote, manage performance, and pay, enabled them with technology, and moved close to 60% of HR's resources into global shared services alongside finance, technology, and procurement. A smaller corporate group sets strategy, and business unit HR partners work with general managers.
Don't lead a transformation alone. His lessons: bring other functions with you, get CEO and board alignment, start small with pilots and scale what works, listen to employees along the way, and put managers at the center, because the whole system depends on them setting goals, coaching, and developing people.
CEO succession is a bet on judgment. J&J ran succession collaboratively between the CEO, the CHRO, and the board. The steps: paint the future the next CEO will face, build a profile across strategic, operational, and personal attributes such as character under stress, scan inside and outside, assess deeply, and ask candidates to write down their first 90 days. Then the board decides, because it is "predicting someone's judgment in situations that they have not faced before."
Private equity teaches focus. At KKR, Peter learned to start from the investment thesis, a time-bound roadmap of value drivers, and link people practices directly to it. He brought 100-day plans and playbooks back to J&J's acquisitions, along with a reminder that "companies are bigger than their balance sheets. Values matter. Culture matters."
HR is not about HR. CHROs earn a seat in strategy formation by being commercially savvy: knowing how the company makes money, studying competitors and customers, and spending time with the CFO and on the shop floor. Peter went out with a sales rep every quarter until the day he left. As AI takes over transactional HR work, "when the tides go out and you're left standing, you have to be in the value creation space."
Give employees an investment model. The CHROs Peter sees doing this well know the skills and proficiency levels in their workforce, map the skills future jobs require, and close the gaps through training, gig assignments, and projects. That shifts the conversation from fear of job loss to staying competitive, whether people stay or go.
Chapters
[00:00] Introduction
[01:32] Meet Peter Fasolo
[02:57] J&J's Credo and the power of "and"
[05:46] When the Credo shapes a hard decision
[09:36] Building a people data science team
[13:18] Why college hires outperform after 18 months
[15:16] What actually drives turnover
[18:26] Moving HR into global shared services
[22:49] How to lead a major HR transformation
[26:34] What a well-run CEO succession looks like
[31:16] What private equity taught him about HR
[35:04] How CHROs earn a seat in strategy
[39:29] The AI story CHROs should be telling
[43:50] Lightning round
[47:00] Closing thoughts
Show Links
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