From HR to CEO

Adrian Tan, HR Influencer, asks why you never hear about HR chiefs becoming CEOs?

Within the realms for HR, there is one question that persistently caught me dumbfounded for words. And that is the number of (Singapore) CHROs that become CEOs.

For the longest time, I did not have an answer because no one naturally came to my mind. Are there even any CHROs that became CEO?

In the global context, yes.

There are a number of them that took over the top job at companies. People such as:

1. Lisa M. Weber – Former President of MetLife
2. Mary Barra – CEO of General Motors, who held HR roles before her CEO ascension.
3. Nigel Travis – CEO of Dunkin’ Brands Group (2009-Present), previously head of HR for Burger King.
4. Anne Mulcahy – CEO of Xerox (2001-2009), worked as vice president for human resources before becoming CEO.
5. Bernard Fontana – CEO of Areva (2015), was the CHRO of ArcelorMittal before becoming CEO.

So why can’t I immediately think of a single name in my local context?

There isn’t a study to show the percentage of CHROs that became CEOs versus other functions such as COO, CFO, or SVP of Sales.

However, it is generally understood that the path from CHRO to CEO is less common than from other executive roles that are traditionally seen as more directly tied to a company’s core business operations and financial performance, such as COO or CFO.

According to a 2019 study that studied the best path to becoming a CEO, the most common functions from which CEOs of Fortune 100 companies emerge are:

1. Operations: 25% of Fortune 100 CEOs began their careers in an operational role.
2. Finance: 22% of Fortune 100 CEOs started in finance-related functions.
3. Engineering: 17% of CEOs came from an engineering background.
4. Sales/Marketing: 13% had a sales or marketing background.
5. Accounting: 11% started in accounting.
6. Law: 7% of CEOs had a legal background.

Additionally, the roles of CFO, COO, and head of division are the most frequent stepping stones to the CEO role, with 66% of current Fortune 100 CEOs having held one of these three positions prior to becoming CEO.

The percentage of CHRO is so low that it did not warrant a mention by the author of the study.

Why are CHROs ignored for the top job?

Well, there are a few key reasons:

1. Skill Set Perception and Stereotyping: CHROs are often stereotyped as lacking the broad business acumen and strategic vision required for the CEO role.
2. Limited P&L Experience: Many CHROs do not have direct experience managing profit and loss (P&L), which is a critical skill for CEOs who need to drive business growth and manage overall profitability.
3. Limited Exposure to External Stakeholders: CHROs typically focus on internal stakeholders and may have less experience dealing with external parties such as investors, customers, and regulatory bodies, which is essential for CEOs.
4. Strategic Leadership Versus Operational Focus: The CHRO role is often more operational and focused on human resources management, while the CEO role requires a strategic and visionary approach to lead the company.
5. Succession Planning and Organisational Culture: Boards and committees often prioritise candidates with traditional leadership experiences in operations or sales for CEO roles, potentially overlooking CHROs.

It’s also important to note that only 1% of CHROs specifically aspire to become CEOs, indicating a motivation gap that may also contribute to the rarity of this transition.

Despite all these challenges, there is a growing recognition of the strategic value that HR leaders can bring to the CEO role, especially as companies increasingly prioritise talent management and organisational culture as key components of business success.

Especially so in the age of commoditised AI. 

What can CHROs do about it?

To address these challenges and increase the likelihood of CHROs transitioning to CEO roles, several strategies can be employed:

• Diversifying Skill Sets: CHROs could seek opportunities to broaden their skill sets beyond HR, such as engaging in cross-functional projects or pursuing executive education in finance or strategy.
• Enhancing Business Acumen: Gaining exposure to external stakeholders and aligning HR initiatives with strategic objectives can help CHROs demonstrate their understanding of business drivers and revenue strategies.
• Embracing Strategic Leadership: Focusing on high-level strategic initiatives within their role and demonstrating the ability to communicate effectively with external stakeholders can position CHROs as credible candidates for the CEO role.

Moreover, the role of the CHRO in CEO succession planning is crucial, as they play a pivotal role in establishing a succession planning process, identifying and monitoring CEO successor candidates, and ensuring a smooth transition. 

This involvement in succession planning underscores the strategic importance of the CHRO role and its potential as a stepping stone to the CEO position.

But ultimately, it all has to begin with the motivation to become a CEO. And that would come from knowing that although it is rare, it is not impossible.

So how many Singapore CHROs became CEOs? 

According to my LinkedIn search, the answer is two. Vincent Tan, the CEO at Comfort Driving School who started with them as a VP, Group HR before becoming their COO and, now, their CEO. The other CEO is Wei-Lyn Loh, the CEO at Asia Capital Re. She was their Head of HR before becoming their Chief Corporate Officer, COO and finally CEO.

I do know of one CHRO who is currently a COO. Perhaps the number would grow to three soon. But in a country with 186 CHROs (again, my LinkedIn search), two or three appears to be less than a drop in the ocean.

While the path from CHRO to CEO is less common, it is not insurmountable. By collectively addressing perceptions, gaining business exposure, and embracing strategic leadership, HR professionals can position themselves as credible candidates for the CEO role. 

Don’t underestimate the power of the CHRO: with the right skills and experience, they could be the next generation of visionary CEOs.

And it may help me to be less dumbfounded when I am asked the same question in the near future.