The Pathway For CHROs To Rise As CEOs

Bijender Vats Oct 04, 2024

A modern CEO is expected to possess high EI, an ability to lead diverse teams & a commitment to building a people-centred organisation, and these qualities are closely aligned with the skills CHROs develop over the course of their careers

The role of HR has transformed, moving beyond a single archetype. Today, HR is central to guiding organisations through change, with modern chief human resource officers (CHROs) driving innovation to adapt HR functions. Instead of the traditional three-pillar model, there's a shift toward flexible teams that can be rapidly deployed to address urgent challenges. As a result, the CHRO’s role has become increasingly complex and multifaceted.

In today’s fast-evolving business landscape, where people-centric leadership is paramount, CHROs are uniquely positioned to ascend to the role of CEO. As the modern workplace becomes more intricate, the strategic and leadership skills honed by CHROs—such as talent management, cultural stewardship and change navigation—are now crucial for addressing broader business challenges. Their deep understanding of organisational dynamics, combined with a focus on employee engagement and development, equips CHROs to drive HR functions and overarching business strategy, making them strong candidates for top leadership roles, including CEO.

The Future of CHROs: More Than Just HR Leaders

The future of the CHRO role lies in its ability to contribute directly to business outcomes. As the business world embraces digital transformation, evolving work cultures and diversity, equity and inclusion (DEI) initiatives, CHROs are increasingly being called upon to play a strategic role in business planning and execution. Employees have expressed a clear desire for new management styles, particularly in the age of hybrid work and a predominantly millennial workforce. Consequently, organisations are rethinking their leadership strategies to adapt to these changing expectations.

This shift from managing HR processes to driving business strategy highlights the growing importance of CHROs in C-suite discussions. According to a Harvard Business Review study, about 40 per cent of Fortune 100 companies now have CHROs on their executive boards. The rising significance of human capital management, corporate culture, and talent strategies places CHROs in a unique position to understand the broader workings of a company. As businesses adapt to hybrid work models, new technologies, and the gig economy, CHROs are becoming integral to aligning talent strategies with long-term business goals. These capabilities make the future of CHROs promising, opening doors to higher leadership positions, including the CEO role.

The Path from CHRO to CEO: Breaking the Stereotype

Historically, the CEO role has been dominated by individuals with backgrounds in finance, operations or product development. While these areas remain critical to business success, the demands of modern leadership have evolved. In today’s era of constant disruption, transformation and technological change, CEOs need far more than just financial acumen. They must be agile leaders who understand the importance of organisational culture, employee engagement and talent strategy as drivers of innovation and long-term success.

The modern CEO is expected to possess not only strong business and operational expertise but also high emotional intelligence, an ability to inspire and lead diverse teams, and a deep commitment to building a resilient, people-centred organisation. These qualities are closely aligned with the skills CHROs develop over the course of their careers.

CHROs are instrumental in creating and maintaining company cultures that align with corporate values, especially in today’s environment where employee well-being, purpose and work-life balance are critical. In the high-pressure work environment, organisations face complex people challenges—ranging from managing global stakeholders to understanding local workplace cultures. The traditional stereotype of the CEO is being redefined, with CHROs breaking through, bringing a people-first approach to leadership that meets the modern needs of business, making the CHRO-to-CEO transition more relevant—and essential—than ever before.

What It Takes: How CHROs Can Position Themselves as Viable CEO Candidates

CHROs are uniquely equipped to handle the complexities of today’s workforce, excelling in talent management, change leadership, and fostering inclusive environments that support DEI. However, to make the leap to the CEO role, CHROs must continually evolve and broaden their business acumen.

Strategic Vision: CHROs must expand their understanding of financial management, operations, and market strategy to transition into the CEO mantle.

Operational Understanding: While CHROs excel in people management, they must immerse themselves in day-to-day operations, gaining a holistic view of the organisation to make informed, well-rounded decisions.

Financial Acumen: Understanding and managing the financial health of the company is critical. CHROs must deepen their financial knowledge by working closely with the CFO, interpreting financial statements, budgeting, and evaluating the ROI of strategic decisions.

Data-Driven Decision Making: CHROs should leverage HR data to predict trends and inform business strategies, demonstrating an ability to drive organisational change with a data-driven approach.

Adaptability and Change Management: CEOs must lead their companies through periods of change—whether due to economic shifts or technological disruption. CHROs, already skilled in managing organisational change, can apply these principles at a larger scale.

Building and Sustaining Culture: CHROs have the expertise to cultivate a purpose-driven organisational culture. As CEOs, they can build engagement and innovation by fostering a strong, inclusive culture aligned with the company’s mission.

Leveraging the Power of HR Soft Skills to Be an Effective CEO

CHROs can leverage their soft skills—such as emotional intelligence, communication, and relationship-building—to become highly respected CEOs, particularly in today’s complex and rapidly changing business environment.

Emotional Intelligence: CHROs possess high emotional intelligence, enabling them as CEOs to navigate sensitive situations, understand employee concerns and cultivate a positive corporate culture.

Communication and Influence: Transparent communication is key for CEOs. By clearly articulating vision and strategy, CHROs can foster alignment and motivation across the organisation, ensuring teams are united in pursuing business goals.

Relationship Building: CHROs excel at building strong relationships within an organisation. This ability to foster collaboration and inclusivity can create a more cohesive and cooperative work environment, essential for long-term success.

Cultural Stewardship: CHROs are skilled at nurturing organisational culture. Their focus on employee well-being and development as CEOs can lead to higher engagement, loyalty and productivity, serving as a cornerstone of competitive advantage.

The "HUMAN" in HR can be a game-changer when CHROs become CEOs, as they bring a people-first perspective to leadership, ensuring that talent, culture, and employee well-being are prioritised alongside business objectives. With their deep understanding of human capital and emotional intelligence, CHROs are uniquely positioned to lead organisations through change, creating resilient, adaptive companies that thrive in today’s complex business landscape.