When in Rome, be yourself: Career advice from the experts
Explore career advice from IMD experts: align strengths with your purpose, play the long game, and make authentic, impactful choices....
Talent
What does it take for a CHRO to become CEO?
Spencer Stuart’s Stephen Patscot and Cathy Anterasian explain why the move from CHRO to CEO is so rare, and what it takes to make it work.
Rapid read:
- CHROs bring hands-on experience of dealing with a changing workforce, but also the skills to communicate in a crisis.
- Taking the first tentative step outside of HR can be challenging, and finding an opportunity often requires a senior champion within the organization.
- That so few CHROs set their sights on the role of CEO does not mean that they lack the potential for the job.
Appointing the CEO
Most companies appoint their CEOs from the ranks of COOs, CFOs or divisional CEO, Spencer Stuart research finds. And according to Steve Patscot, leader of Spencer Stuart’s Human Resources Practice in North America, it is rare for a CHRO to be sizing up the CEO’s chair: “I could count on one hand how many CHROs have told me they want to be the CEO.”
But some do make the leap. One prominent example is Leena Nair, who moved from CHRO of Unilever to CEO of Chanel in 2022. But Patscot stresses: “In the thousands of conversations I have with CHROs in a year, what’s next is usually, ‘I’m ready for a bigger role. I’m ready to do something totally different.’ Or, they want to go on a board.”
That so few CHROs set their sights on the role of CEO does not mean that they lack the potential for the job. Spencer Stuart’s experience is that some have the aptitude required to be a good CEO, the central question is whether they have the experience to prove it. So what would it take for a CHRO to build their track record beyond the HR function?
The CEO needs to motivate multidisciplinary, multifunctional teams. That's a little different than leading centers of excellence.
Building the proof
Any candidate for CEO needs a long list of professional attributes, from a history of P&L and strategy ownership to experience of capital allocation. As Cathy Anterasian, who co-leads CEO Succession Services for Spencer Stuart in North America, explains, many CHROs simply haven’t had the opportunity to develop these skills.
“Many CHROs have not had a career journey that has enabled them to develop those experiential and capability muscles that they would build from owning a P&L or enterprise strategy,” she says.
“The CEO needs to motivate multidisciplinary, multifunctional teams. That’s a little different than leading centers of excellence,” adds Anterasian. Another consideration is that, while CHROs may be exceptional at internal stakeholder management, many have not had the opportunity to work with external stakeholders.
Regardless of aptitude, experience is hugely important to reassure boards in relation to a role that is so visible to external stakeholders. “Investor confidence looks at track record and financial results,” points out Patscot. Appointing a CHRO who lacks experience of running a business area is a big risk to take.
Nor are candidates being assessed in isolation. “There’s competition,” Patscot stresses. Other candidates will have far more evidence of operational and strategic capability. So, how can a CHRO find a way to go toe to toe with ambitious COOs, business unit leaders and CFOs, with P&L experience under their belts?
We would advocate strongly for the CHRO rotation to be a more common part of the preparation for CEO readiness.
Treat CHRO as a rotation, rather than a destination
While career HR candidates may struggle to meet the criteria that boards require of a new CEO, those for whom HR experience is just one aspect of a varied career history are in a much better position. “We would advocate strongly for the CHRO rotation to be a more common part of the preparation for CEO readiness,” says Anterasian.
Take Mary Barra, CEO of General Motors, an often-cited example of a successful CHRO to CEO transition. Barra’s résumé includes roles in supply chain and product development, alongside her role as VP of global HR.
Similarly, Anne Mulcahy, the former CEO of Xerox, took on the CHRO role having previously worked in sales, eventually rising to CEO in 2001. She has been quoted as saying that the time she spent in HR bought her the credibility to push through painful but necessary changes as CEO.
The best boards don't just say they value HR; they deliberately build the P&L exposure that makes their HR leaders credible successors.
Take the plunge – but don’t be afraid to come back
Taking the first tentative step outside of HR can be challenging, and finding an opportunity often requires a senior champion within the organization. “The talent is there,” says Patscot. “What’s often missing is the sponsorship.”
When a CHRO struggles to make the leap, he argues, it often reflects a failure to provide the right development opportunities rather than lack of ability. “The best boards don’t just say they value HR; they deliberately build the P&L exposure that makes their HR leaders credible successors.”
What could this look like? A smaller business unit could serve as a testing ground to develop and test HR candidates’ potential in terms of developing strategy, external stakeholder relationships, and leading multidisciplinary teams. Anterasian has seen this approach work in practice – a CEO moved one CHRO to a smaller business unit, using this as a stepping-stone to a larger one, building the case for P&L capability.
But for any CHRO who attempts the move, it will be something of a leap into the unknown. An excellent HR leader will not necessarily transition well to running a business. As Patscot explains, a possible outcome is the realization that, “I’m a good business leader, but I’m a world-class HR person,” and a return to the people function with renewed focus.
Blended program
Organizational Learning in Action
Your learning strategy – a key driver of growth
Board service
One alternative avenue for CHROs looking for a new challenge is serving on a board. Boards are grappling with many workforce issues such as return to office, restructuring, and implementing AI tools, often without recent experience of dealing with these issues inside an organization.
CHROs bring hands-on experience of dealing with a changing workforce, but also the skills to communicate in a crisis, and improve the way that the board works together.
But while it’s important that CHROs with ambition and aptitude have a real path to the CEO role, the CEO title or board service should not be viewed as the ultimate measure of a CHRO’s success – CHRO is a destination in its own right.
“The CHRO is the one seat that shapes every other, influencing who leads, how the culture performs and whether the strategy is actually executable,” says Patscot. “That’s enormous enterprise value, and it doesn’t require ascending to the CEO chair to matter.”
Experts
Related
How elixir of longevity will alter life as we know it
Aging is now seen as a modifiable biological process. Longevity science is reshaping healthcare, careers, and society for longer, healthier lives....
Audio available
Globalization: the crisis of trust and how to solve it
In an I by IMD interview, Ros Taylor, author of The Future of Trust, explores how the nebulous nature of globalization has fractured trust in institutions and triggered a renewal of faith...
- Audio available
So, what are these AI skills?
As AI transforms industries, preparing young people for the future requires more than just mastering tools like ChatGPT. Success lies in developing deep knowledge, critical thinking, and the vision to understand how...
- Audio available
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.