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Human Resources
Feb 15, 2015

The Case For Hiring Chief Human Resources Officers As CEOs

Sponsored Content provided by Dave Hoff - Chief Operating Officer and Executive VP of Leadership Development, EASI Consult

It is with tongue in cheek that I happily write this column. As one who has grown up in and around Human Resources, I know that things have come a long way. To make my case, I am going to refer to an article published in the December 2014 Harvard Business Review by David Ulrich and Ellie Filler entitled, “Why Human Resources Officers Make Great CEOs.”

In the article, Ulrich and Filler report that that some organizations are coming to realize that CEO candidates who have some HR experience are the best prepared for the chief executive role.

Filler explains that the change has occurred over the last 15 years. From my own experience, that was about the same time that people in HR began to complain that they didn’t have “a seat at the table.” What they meant was that HR was not a member of the senior leadership team, and therefore could not directly impact critical business decisions. The response from the line organization at the time was, “If you thought like a business person and could contribute to senior management decisions in a significant way, then you would be ‘invited’ to the meetings.”

Over time, the perception that HR could not “add value” began to change, and we did see the Chief Human Resources Officer (CHRO) reporting directly to the CEO. 

But back to the article.

I have known Dr. Ulrich, who is a member of the University of Michigan’s faculty, since 1986; that was the year I invited him to address our senior management conference at Anheuser-Busch. The purpose of the conference was to expose our top 200 managers to emerging trends in several different areas. I don’t remember specifically what Ulrich spoke about, but I remember he made several of our folks uncomfortable, which probably meant he had done a good job. 

I do not know Ellie Filler, but I do know Korn Ferry. A few years ago, Korn Ferry bought Lominger, a leading consulting firm in the assessment and talent management field. I must admit that in the past I have said that executive search firms did a poor job of assessing candidates for jobs. Most of the executive search people have agreed with my characterization. Korn Ferry’s acquisition of Lominger filled that void in the search business (around assessment), and today its competitors are developing similar capabilities.

I offer that background to show it is safe to assume that Ulrich and Filler know what they’re talking about.

In the article, the researchers share assessment data that Korn Ferry has been collecting on C-suite candidates for more than 10 years. The data includes 14 aspects of leadership, which are grouped into three areas: 

  • Leadership style
  • Thinking style (how candidates approach situations in private)
  • Emotional competence (how candidates deal with ambiguity, pressure and risk-taking)
The researchers also looked at how much of these traits each of the C-suite candidates possessed and then compared the results. 

So whose traits were most similar to those of the CEO? The CHRO.

Ulrich and Filler suggest, based on the data, that organizations that are looking to fill CEO positions should consider CHROs. They say that former CHROs who are hired as CEOs know how to attract the right talent, create the right organization structure, and build the right culture to drive the strategy. 

The authors do have a few caveats:
  1. They suggest only looking at the very best CHRO performers.
     
  2. Candidates need only to do a tour in HR to get this perspective, not be a career HR person. 
     
  3. Candidates must have financial and technical skills. 
     
  4. Candidates must have experience with running profit and loss (P&L) statements.
The authors go on to cite specific companies like Nestle, Philip Morris and Deutsche Bank that put high-potential managers through a developmental rotation in HR. They also give specific examples from General Motors and Xerox where successful CEOs have spent time in HR. It is interesting to note that in the General Motors and Xerox examples, these individuals were both women. 
Some CEOs describe their CHRO as a member of the C-suite consiglieri. Others describe their relationship with the CEO/CHRO as that of a “sparring partner” for talent development, team composition and managing culture. So for an organization that really sees people and people development as critical to the success of the enterprise, it is not unusual to see this close relationship between CEO and CHRO. It is also a natural offshoot of this relationship that the Master will recommend the Coach as his or her successor.

EASI•Consult® works with Fortune 500 companies, government agencies, and mid-sized corporations to provide customized Talent Management solutions. EASI Consult’s specialties include individual assessment, online employment testing, survey research, competency modeling, leadership development, executive coaching, 360-degree feedback, online structured interviews, and EEO hiring compliance. The company is a leader in the field of providing accurate information about people through professional assessment. To learn more about EASI Consult, visit www.easiconsult.com, email [email protected] or call 800.922.EASI.

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