In my 30 years as an Executive Director, Non-Exec Director, CEO and Management Consultant, I have seen very few HR Directors ascend to the apex of the organization – conversely, I have seen other professions take the lions share, mainly from a finance background. Few HR professionals become CEOs, and the more common result is for the best HR execs to move on to a similar job in a larger organization. This article looks at why more HR stars don’t become CEOs and how more might succeed in the future.
My own experience of who gets which top job is supported by research in Management Today magazine – “given that HR leaders combine specialist people skills with broader commercial experience, you would think that they make ideal candidates for the role. Yet few become CEOs. We know that half of the world’s chief execs come from just three key backgrounds (finance, op’s and marketing) whilst the remaining 50% come from 23 backgrounds, ranging from legal to IT and strategy. Only 5% of those CEOs are accounted for by HR directors.”
As a HR professional myself, I am one of a relatively small number of CEOs who took the route to the top from HR, and as such I have sought to advise my HR colleagues who get the feeling that they are “always a bridesmaid, never a bride”. My own impression is that decision makers (in our case Mayors and Councillors) are not so exposed to the internal HR workings of the Council and they often see the HR function as necessary but not critical to the corporate mosaic of the Council. While this view is misguided, it strikes me that it is for the HR profession to both position itself more strategically and to bang its drum more loudly.
In response to the question why don’t more top HR execs become CEOs, the old clichés spring to mind – ‘HR isn’t strategic enough’ or ‘HR doesn’t have enough broad-based business acumen’. I personally don’t buy this line of reasoning at all. In fact, in recent decades the HR function has become more integral to business success. Let me give a few examples:
Developing ‘Talent Strategy’ – is viewed as a prime determinant of corporate success, with intellectual and human capital being viewed as increasingly important. US academic Jim Collins puts it this way – “Get the right people on the bus” and “First who, then what.” In other words, get the right people in the right places – the right talent strategy, the right team dynamics, the right culture and you have strong foundations for success. It is of course Chief HR Officers who are at the heart of creating and delivering on an organization’s talent strategy.
Acquiring ‘Soft Skills’ – modern corporate leaders must demonstrate the full gamut of soft skills including, empathy, outstanding communication, and the ability to deliver constructively critical feedback. These soft skills are of course attributes that have traditionally been the cornerstone of the HR function.
Creating ‘Corporate Culture’ – organizational success depends almost as much on how things get done, as to what gets done. Creating the building blocks for the development of an important corporate culture is very much within the experience and skill-set of HR professionals.
Promoting ‘Diversity and Equality’ – legal requirements and modern corporate ethics place significant priority in ensuring that equalities are properly prioritized. The HR profession has historically a proud record in being at the forefront of this agenda.
So, what can the HR profession and indeed individual HR Directors do to promote both the function and their roles:
Think like a corporate animal – HR professionals should view themselves as business managers and continually ask ‘how can I add value to the Council’s objectives.’ This will mean thinking less narrowly about HR as a personnel type function, but rather as a key player in enabling the organization reach its corporate goals.
Seek to ensure that HR reports directly to the CEO and sits at the top table – As a CEO, I personally have always had the HR manager reporting directly to me. I recall having several Finance and Corporate Services Directors resent my ‘take-over’ of ‘their’ HR function. However, for me the CEO’s primary leadership role is about directing ‘change management’ within the organization and HR is integral to this process. I also take the view that the Chief HR Officer should have a place at the management team table. HR needs to demonstrate to CEOs that they really are indispensable and that their reach goes way beyond that of traditional personnel management.
Get Qualified and Experienced – HR professionals are usually well qualified within their discipline, but how many go and study for an MBA? A business degree provides knowledge of all the main corporate disciplines. And, HR professionals should be the first to volunteer to be seconded into any cross-discipline project teams. Here they will both pick up a broader range of skills by rubbing shoulders with secondees from other professional backgrounds, and at the same time get themselves noticed as corporate team players.
Tough though it is to reach the top, the future is far from bleak for HR directors. Times really are changing. Slowly but surely the perception of the HR department as a back-office largely administrative function is being altered. Filler and Ulrich writing in Harvard Business Review argue that there has in recent years been a “dramatic change with HR Chiefs (increasingly) reporting directly to the CEO, serving as the CEO’s key adviser, and making frequent presentations to the board. And when companies search for new CHROs, many now focus on higher-level leadership abilities and strategy implementation skills. This role is gaining importance like never before…. It’s moved away from a support or administrative function to become much more of a game changer and the person who enables the business strategy.”
The Fuller and Ulrich research concludes that “the executive whose traits were most similar to those of the CEO was the Chief HR Officer. This finding is very counterintuitive—nobody would have predicted it,” So, the good news is that HR Directors have much of the ‘raw material’ needed to get to the top. However, I believe that (as I suggested above) additional broadening of the skill base is required – finance/marketing and corporate strategy for example. Fuller and Ulrich conclude: “The challenge for CHROs is to…acquire sufficient technical and financial skills, in early education and in career steps along the way, if succession to CEO is a desired outcome.”
Over the course of my career, I have concluded that the business of leadership revolves around ‘change management’. Transforming organizations, continually looking for new and better ways of improving service quality and reducing operating costs. For transformation to be sustainable, we need leaders who have skill-sets which so many able HR Chief Officers already possess. It is my hope that more HR professionals will take up the challenge of becoming a CEO.
The future of HR may be as a springboard to Director and ultimately CEO roles. For this to happen HR professionals need to display their aptitude for talent and culture management, a skill-set that separates them from other candidates. That said, these attributes form only part of what makes an effective CEO. So, HR professionals need to also demonstrate their corporate credentials, their MBA, the seconded corporate roles and job rotations undertaken – it is these types of commitments that will provide evidence to a Council interviewing panel that an HR Director is indeed ready to take on the role of CEO.
Will Taylor is currently GM Corporate at Far North District Council NZ. By profession he is a writer, consultant and public speaker. He is a former HR Director, Council CEO and management consultant with extensive local government experience in the UK, Australia and across South East Asia.