Why isn't the Head of HR becoming our new CEO?
Can HR Executives become CEO’s and lead companies?
When an organisation is preparing to select its next CEO it is very likely that candidates, both internal and external, will have a background in almost any profession except HR. We admit we have no hard evidence to support this assertion but over our many combined years in business we have observed that not only do very few HR people end up running organisations, but that HR leaders are rarely even considered as a serious candidates.
Why is this?
HR has an unrivalled view across the organisation and regularly deals with serious and complex issues that have an impact at all levels. Decisions about people are fundamental to the success and wellbeing of an organisation but, despite these qualities, it is usually the accountant, lawyer, salesman, or operations person who lands the top job.
Unlike these traditional business functions the HR profession is a relatively modern one, and has struggled for some time to be clear about its role. Starting as essentially an administrative function, it has found it difficult to shake off that reputation as the demands of modern business practice changed. HR instead has continued to hold its place in many organisations as guardians of policy and process whilst standing aside from the commercial hurly burly of business life - establishing credibility through a form of risk management advisors with commercial neutrality.
What can HR Executives do to be more relevant to C-suite roles?
So what is it about these other functions that make them more suitable for running a business that HR seems to lack? There is a plethora of research identifying the characteristics of the successful CEO and various publications to touting the “secret sauce” including those from the likes of Forbes or ICAS or the Harvard Business Review but fundamentally, we suspect there are 3 traits that HR professionals can focus on developing to be taken seriously as viable candidates for the top job.
Confidence in the true value of HR
There is a sense that HR practitioners in an organisation are there on sufferance, not quite ‘a necessary evil’ but certainly something that needs to be tolerated. Don’t be the HR leader who is complicit in sustaining this poor perception by not being able to articulate what it is you do, the tangible impact you can have, and the measurable value you bring to the organisation.
Don’t be apologetic about HR – many new entrants to the profession see HR as an agent of change and actively pursue an agenda in which they are initiating change rather than simply coping with it.
And stop whining about being under-represented at board level. Trust me, if your senior colleagues think you can bring value to the table you’ll be asked to join at the earliest opportunity.
Commerciality beyond HR budget management
Whether we like it or not HR is not seen as a commercial function – it earns no revenue and typically makes no direct contribution to the bottom line outside of cutting staff costs. How many times have we heard HR professionals talking about “the business” as if the aims and objectives of the organisation were something totally separate to the things they were involved with. To run a business you need to understand the business model, what you do or make and how you sell it, and how to organise the company to deliver those objectives.
Spend some time understanding balance sheets and P&L reports and the stories behind the numbers. Get to grips with the terminology of business and ask questions of those who can help you. Understand what it is your business does, how it makes its money, where the pressure points are for price, and get a few simple ratios under your belt. Talk like a business leader rather than a HR leader, and people will take you much more seriously.
Strategy beyond the bounds of the HR people agenda
Most people don’t have jobs, in HR or anywhere else, where they feel they can have a real impact on the strategic direction of the company. But "being strategic" isn’t just about making an impact at board level. It is also about understanding how what you say and do impacts the ability of others to do their jobs, and the overall impact on the success of the business.
If, as an HRBP, a manager comes to you looking for help with a problem he probably doesn’t want you to quote the rule book to him; he can look that up on-line. He wants you to help him find a solution to his problem that doesn’t break the rules but gets him what he wants.
If, as a HRVP a business executive happens to mention in passing that sales figures are down, she probably doesn’t want you to automatically roll out capability training or revamp sales reward structures. She might not actually know the cause to be addressed, and could really use you as an educated sounding board to pinpoint the real problem, which might for instance actually lie in issues with the supply chain reliability.
What else could I do as a HR executive, to secure the CEO role?
If you EVER get the opportunity to take up a secondment in a Business Ops role, take it, whether it is to cover in another corporate function, sales, supply chain, production, whatever. Don’t wait for these kinds of offers, but actively seek them out. It will enhance your credibility with executive peers, who will see that you can “walk the talk”. It will very likely change the way you think and speak to be more like a business person who just happens to have specialist HR knowledge. And that might be the thing that gets you into CEO contention. At the very least, I’ll bet it changes your focus on what is really important for HR teams to deliver value.
Build a strong and genuine relationship with your CEO, and seek formal mentoring from that person. If it happens, you’ll be accessing very different thinking to that you’re used to in your regular HR day job, you’ll potentially raise in the esteem of other functional peers (or at least raise curiosity), and you’ll have the chance to raise your profile to Board members. It might just get you into contention for the top job and at a minimum, you’ll have honed your C-suite skills.
Develop your numeracy. Become the “go to” person who immediately knows the real people data that makes the company tick, to the point that significant business changes are not made without your input or sign-off. As a simple example of this - be the one person who can instantly access the makeup of your current workforce, with the “who, where, what they do, what they cost, what they earn, tenure served, retirements pending, and what business critical knowledge or critical external relationships (customers, suppliers, media) they may have”. Right now that data is spread across business divisions, finance, payroll, and HR but if you want to be the CEO contender that stands out, you’ll draw interest if you know the detail to each of the people levers that pose risk and opportunity for the company as a whole.
Finally, in whatever you do as a HR leader, you need to help your team to recognise that HR is supposed to be a constituent part of the business, and so must act together with colleagues from other functions to the benefit of the organisation as a whole. After all, this is a fundamental aspect of what good CEOs do……
About the Author
Tracey Thompson is well regarded within the industry for her ability to source and engage high performance HR talent. Over many years she has built a well deserved reputation for her uncanny ability to access proverbial “purple squirrel” HR specialists and as a result, is looked to as a global sourcing subject matter expert.