36% of UK CEOs have a background in finance, it’s the most common route to the top job. But, just 8 years ago, the Financial Times published an article called “Why do so few CFOs become CEOs?” The main objection was that CFOs don’t have the right skill set for the top job: they were too conservative, they couldn’t think creatively, they didn’t have the soft skills you need to be a great CEO.
So what changed?
Well, finance started to be taken more seriously. It was no longer seen as a department of bookkeepers, but a strategic force within a business. It’s that same change that we’re seeing on the fringes of the HR world, in those brave pioneering companies that are realising the true potential of their people function.
Less than 5% of UK CEOs come from an HR background. HR is still seen by too many as an administrative function whose leaders don’t have what it takes to lead a whole business. But, research carried out by Ellie Filler and Dave Ulrich found that the CHRO is actually very suited to becoming a CEO. In fact, aside from the COO, it was the job function that mapped closest to CEOs when analysing 14 leadership traits.
So what makes a good CEO, and do HR leaders have the right skills for the job?
Well first and foremost, a CEO has to be a great leader. A high level of emotional intelligence and empathy will ensure they have a workforce that rallies behind their ideas. Your HR department is responsible for creating an engaged and motivated workforce, your HRD will have all the skills they need to lead a workforce, and to align a workforce to a company vision – that’s their day to day role.
CEOs are also the figurehead of corporate culture. They dictate cultural change, and people look to them to figure out what kind of company they’re working for. Your HRD is the person that takes the CEOs vision of what their company culture should be and turns it into a reality. No one is more in tune with your culture than your HRD because they’re the ones that have to get into the nitty gritty of what that culture actually does for your business; they’re the ones that have to deal with cultural problems, they’re the ones that know what’s working and what isn’t.
Plus, an integral part of being a great CEO is creating amazing successors, people who will pick up the torch you’ve lit and run with it. Who knows more about training people to reach their full potential than the person in charge of training and development in your company?
Now, of course, if your HR function hasn’t been given the opportunity to run strategically, then your HRD will not have the operational skills needed to lead your business. HRDs aren’t becoming CEOs, not because they lack the skills to lead, but because they’re not given a chance to gain business acumen in HR. By revolutionising your HR department, building a revenue generative, strategic driver for your business, you could simultaneously be creating your next CEO.