The Best CEO Candidates Are A Stone's Throw Away (Spoiler Alert: Top Talent Officers)
Updated: Sep 19, 2022
(revised from a previously published version)
Did you think that old issue of the Harvard Business Review (HBR) - in the ‘Idea Watch’ section, entitled: ‘Why Chief Human Resources Officer Make Great CEOS - Really!’ – was a breakthrough article? For a few brief seconds, I did. Then I read on.
With each line, I thought about my own decades of experience in business and HR leadership. Having cut my teeth in a GE/GE Capital owned business, I was truly blessed to be part of a conglomerate known for cultivating top business leaders and talent around the globe. It literally propelled me - with a robust toolkit in hand - to every other subsequent progressive opportunity, including the one I hold now as CEO of my own firm.
I’ve always been a business leader first. HR leader second. I crave the nutrients found in business strategy. I ask questions. I challenge. I learn and apply those learnings – daily. Working within the box of HR was, to me, the equivalent of literally working in a box. I have tons of ideas. Not only can I read a P&L statement, I was expected to hold the responsibility of managing one along with my executive team members. And, why not?
So, when I read in the HBR article that ‘new research recognizes leadership potential that’s waiting to be tapped’ – I was like, what the heck? New research? While the terrain may not be spilling over with top Talent Officers poised and ready for the top seat, it is certainly rich with those ready, willing and able to be groomed. Some of my former colleagues have even become disillusioned because the researchers haven’t quite caught up to a glaring fact: many business and HR leaders make the best CEOs. That’s hardly news.
As Bernard Fontana, CEO of Holcim, shared in the HBR article – ‘leadership is about transforming an institution, and if you want to have a sustainable transformation, you need to develop leaders who will continue the journey after you. HR is an essential part of that kind of generative leadership.’ Sadly, he also acknowledged that, while more boards should consider hiring CHROs as CEOS, it’s still quite rare.
Now, let’s look at it a little differently. How many CEOs do you know of who, after a vaunted career journey, have found themselves on the unemployment line (or at least at the end of their golden parachute)? And, what are some of the most common reasons for that?
A four-year study by LeadershipIQ.com interviewed 1,087 board members from 286 public, private, business and healthcare organizations that fired, or otherwise forced out, their chief executive to understand the same question. Thirty-one percent of the respondents cited ‘mismanaging change’ as a reason for ousting the CEO. Most pointed to “a failure on the CEO’s part to properly motivate employees and managers, and more specifically, to adequately sell the need to change course. Another 27% of respondents cited ‘tolerating poor performers’ as their reason. Board members shared that when CEOs allowed an obvious low performer to linger (without any improvement or discipline), it destroyed the CEO’s credibility and made it politically difficult for them to hold others accountable. Thank goodness most of us know CEOs who are the very opposite of this profile.
Back to the study - does any of it sound familiar? Who might be best positioned with the right tools, tested mettle and straight-up experience in, and leading through, the trenches? Your top Talent Officer, that’s who.
So, I dare say that an old HBR article - and even older thinking - has no new discoveries about CHROs. There is simply nothing ‘provocative' about prescribing this transition. It's overdue and should be viewed as a key prescription. And, as for that one word at the end of the title on the cover page, with its well-intentioned exclamation point – ‘Really’ – I’d replace it with two others - ‘Of Course!’