The importance and value of CHROs and CPOs to organisational success has substantially risen in recent years. Now is an ideal time for CHROs and CPOs to think about how they can contribute as a CEO. To be seriously considered, ensure you are equipped with these four ‘must-have’ skills.

Today, organisations are arguably more people-centric than they have ever been in history. Company culture and employee wellbeing are now fundamental tenets of company health. 

Challenges such as inflation, economic uncertainty and the pandemic presented a medley of challenges for organisations, not least the ones that involved employees, such as health and safety standards, hybrid work and employee engagement, to name just a few.

All of these elements, playing out through the heartbeat of organisations, are the core responsibility and remit of the Chief Human Resources Officer (CHRO) or Chief People Officer (CPO). Recent advancements in people analytics, and the dire need to drive attraction and retention, along with diversity, equity and inclusion, make this role an absolutely critical component of the C-suite. But that’s not to say that HR leaders need to stay inside their HR box.

While there is no catch-all concrete data on which functional areas CEOs were in prior to them becoming a CEO, anecdotally, we can see that it’s often the Chief Financial Officer or the Chief Operating Officer who gets tapped for the job.

The HR function has very rapidly transitioned from a mostly administrative role to a central strategic one, and HR professionals have become trusted advisors to CEOs in major corporations.  

So why not put them in line to be the successor to your next CEO?

Some major brands are already putting former HR leaders into the CEO role. General Motors (Mary Barra) and Chanel (Leena Nair) are just two of many examples.

It’s to be expected that top-tier CHROs and CPOs feel they have the requisite skill sets to lead organisations into the future of work. They understand the employee mindset and have a strategic comprehension of how to build a conducive environment that enables passions to take tangible shape into products, services, efficiencies and client satisfaction.  

But before stepping up, HR leaders first need to ensure they have enough experience in certain areas in order to set themselves up for success as a CEO.

The four must-have skills of a CEO

There are four ‘must-haves’ for CHROs and CPOs to become considered for the CEO role. These suggestions have been selected as useful for all industries and organisations, although there would also be additional action points required in certain industries. 

1. Accountability for a P&L

A key component to both consideration and success as a CEO is demonstrating responsibility for a profit and loss statement. Almost always, especially in the commercial sector, CEO candidates will have a deep understanding of business models: how the business makes money, how it garners a profit and how it sustains that profitability over time.

This also clues them into potential financial risks that could be on the horizon that should be avoided. It’s the difference between being a budget holder and a financial forecaster.

“Many leaders are exceptional at what they do, but are siloed in their skills, expertise and outlook.”

CHROs and CPOs don’t traditionally have the opportunity to hone this skill set. They can gain this experience by taking on additional responsibilities such as leading a business unit, or serving on the company’s executive committee. 

Developing a deep understanding of the company’s business strategy and financials is paramount. Additional competencies can also be gained through executive training and development, such as an MBA or other postgraduate finance degree.  

2. Multi-faceted executive experience

Many leaders are exceptional at what they do, but are siloed in their skills, expertise and outlook. CHROs and CPOs looking to become CEOs need to have a considerable level of multi-faceted executive experience throughout their careers, which showcases their mettle and ability to think beyond traditional departmental boundaries.

In particular, those with cross-functional experience and/or international exposure will be favoured for CEO consideration. CHROs and CPOs who have led other functional departments – such as sales, operations or finance – are ideal. 

Even if a portion of an additional department’s responsibilities has been under HR’s purview, this will be incredibly advantageous. Additionally, managing teams and aligning strategy across different geographies and cultures will be seen as extremely relevant to any potential CEO appointment.   

3. Big-picture vision

Long-term, strategic thinking is an essential ingredient for CEOs’ success. As leaders, they have an ability to envision the future of the business, and make short-term decisions that benefit the organisation over longer timeframes. 

Part of this decision-making comes from top-tier experience, and part of it comes from having an intimate knowledge of the company’s competitive stature in the marketplace, and a vision for what can be achieved.

For CHROs and CPOs, it’s important to establish your own informed and considered vision for the organisation, and how you will lead as CEO. Communicate this clearly and effectively. 

To establish this vision, actively seek out learning opportunities within the business. Participation as an active member of the Board is ideal, as it will enable access to big-picture strategic challenges and opportunities, as well as provide insights around the priorities of other functional leaders (the CFO, COO, etc.). 

More broadly, develop a thorough understanding of your key industry trends and emerging technologies. Developing a digital-centric mindset to solve challenges is also beneficial.

4. A supercharged professional network

Navigating complex challenges and driving business growth is the hallmark of CEOs, yet they are only as good as the network they have around them. 

Having the support of not only the senior executive team, but the broader management structure and employee base is an imperative for success. The current focus on company culture means that successful CEOs have to foster positive, collaborative and transparent working environments.

CHROs and CPOs usually excel at this, and tend to have more experience than CFOs or COOs. They are, as their title implies, ‘people people’. They usually have very well-established company networks and strong relationships with stakeholders, the board of directors, other executives and, of course, employees. Establishing even stronger strategic ties, both internally and externally (think: investors, government, media), is prudent.

If you’d like some tips for how you can do this, check out HRM’s article on the power mapping method.

Cindy Yang is Managing Partner, Korea; Bob Bellano is a Senior Partner in the Los Angeles and Newport Beach offices; and  Fernando Zavala is Managing Partner, Iberia at NGS Global, an executive search and leadership advisory firm.

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