How can an HR professional climb to the top of the org chart? We asked 5 CEOs why so few HR executives are promoted into the CEO role and what skills and qualities HR professionals need to make the leap into the big chair.
Emera Utility Services
This Halifax-based utility services contractor has 300 employees.
A couple of years ago, Sarah MacDonald was growing increasingly concerned about the aging demographics at her company and finding the right talent to fill critical roles. As executive vice-president of HR at Emera, an energy and services company in Halifax, she saw a time bomb ticking away and felt something had to be done.
That’s when her boss suggested she run the company, so MacDonald became COO and president — and is now CEO — of Emera Utility Services, a construction company with about 300 employees and an Emera affiliate.
“I never set out to be CEO,” she says.
It’s a mindset shared by many HR professionals, who often strive to become an HR leader at a bigger organization or executive vice-president of HR but don’t consider the top role, says MacDonald, who is still executive vice-president of HR at Emera, which has 3,400 workers overall.
“People who gravitate to HR, not dissimilar to other specialists or subject matter experts, they think your specialty and business leader are two separate paths and they’ll always be divergent and they don’t think about it,” she says. “Oftentimes, especially with colleagues, they just don’t think about it until further along in their career and, by then, they’ve missed some opportunities to fill their skills and fill their toolbox.”
But making that move to the top can depend a lot on the kind of company you work for, she says.
“It’s key that you work for a company that treats human resources as a critical part of the business. You’ve got a lot of companies that think HR is a service and not a strategic partner. So you can have very busy, very successful HR leaders but they don’t get the exposure to the business, the board, the customers or deal-making — whatever it is that the business is in — so they never get a chance to be seen as a leader that way and they don’t learn and develop.”
There is also the perception women and HR people possess soft skills and aren’t tough enough to be leaders, says MacDonald.
“A lot of women go into HR, they’re attracted to that perceptive side of it and that can be a hindrance as well,” she says. “The con is (leaders) think HR isn’t tough enough but the pro is that they’re wrong.”
And an HR professional might not always be the best person for the job. For example, a struggling company might benefit from someone with a financial background while a company in growth mode might need a mergers and acquisitions specialist, says MacDonald.
“It’s not a con, necessarily, to have an HR executive go in, it’s just the timing — the timing may not be right for every company to have an HR leader.”
But if an HR executive is actually being considered for the CEO role, he most likely has been successful in his HR role, she says. So he will know about getting people behind HR initiatives, such as establishing the link between compensation and results. And he will know what makes people tick, what makes a company attractive to candidates and how to make sure employees understand their fit in a company, says MacDonald.
“If you’ve spent time doing that in your HR role, that’s a huge part of what a business needs,” says MacDonald. “Hiring and retaining the best people is every CEO’s job so if you’ve already come through the organization in an HR role, you often have been exposed to a lot more people than some financial people or business development people.”
To make that leap to the biggest office, HR people really need to understand the company and how it makes money or delivers the best service, says MacDonald. That means knowing where the cash comes from, what’s the return, are the customers happy and is the company growing, she says.
“Really start to understand the business side and get in there and help solve some of the issues that the business has, through HR solutions,” says MacDonald. “If you help the business resolve issues and grow and make money, which you can do — whether it’s negotiating with unions, whether it’s managing costs on the pension side — you’ll start changing the image of you just being an HR person only. It’s to get people thinking about you in a different way and more as a business person, not just a service person.”
President and CEO
BC Cancer Foundation
Based in Vancouver, the non-profit agency has 55 employees.
Douglas Nelson is unsure why there aren’t more HR professionals who move on to the CEO role but industry could make a difference, says the president and CEO of BC Cancer Foundation in Vancouver.
“One of the challenges in the not-for-profit sector is organizations tend to be quite small so people who are in the HR role can be very specifically focused on recruitment and other aspects of human resources and not be given a chance to set strategy and implement it, or are more internally focused,” he says.
At BC Cancer, the HR director sits on the executive committee and is quite involved in setting the strategy. There’s a real advantage to that, says Nelson, in asking: “How do we create culture internally that’s going to help us be successful externally?”
At an organization dedicated to research and helping people suffering from cancer, HR is integral to creating a performance culture, he says.
“We have to have an organization that is really performance-focused so that we are measuring our outcomes and doing everything that we can to stretch every dollar we spend and raise significantly more money to support cancer research.”
When it comes to an HR person taking a leadership role, the challenge is having someone who is actively involved in the operations of the organization, he says.
“Most fundamental is the ability to support the strategy development, support the strategy implementation and help move the organization by providing solutions to challenges as we encounter them,” says Nelson. “HR professionals I’ve worked with in the past who focused on the rules or gatekeeping function really are caught in that HR box and will have a difficult time moving into a position of expanded responsibilities.”
Familiarity with operations is also important for an HR person, in asking, “What is the day-to-day business and how are we seeking to improve that, to raise more money and do it more efficiently?” he says.
Financial literacy and an understanding of how increasing costs in one area causes pressures in others are also vital skills for HR executives. In a fundraising organization, every staff position that is added needs to have a business case around it to justify spending that money. Since some positions are not focused on raising dollars, it’s a sophisticated process to put those plans together, says Nelson. So, HR is instrumental in helping line managers develop those strategies and set the plans.
“That’s another area where there’s an opportunity for human resources to demonstrate an expertise and strategic advantage within the organization,” he says.
In the not-for-profit sector, the challenge is getting that external exposure to the community, being out in front of groups and speaking with donors, says Nelson.
“(HR) would really need a concerted plan to get that exposure because, over the course of the year, the HR director doesn’t have that opportunity.”
President and CEO
Canada Science and Technology Museum Corporation
The Ottawa-based corporation has three museums – the Canada Agriculture Museum, the Canada Aviation and Space Museum, and the Canada Science and Technology Museum.
As president and CEO of the Canada Science and Technology Museum Corporation in Ottawa, Denise Amyot has plenty of advice when it comes to reaching the top, thanks to extensive HR experience.
Most recently, Amyot was senior vice-president of the leadership and talent management sector at the Canada Public Service Agency where she was responsible for leading and managing leadership development programs and developing policies for employees and executives. She also worked in several federal departments including Human Resources and Skills Development Canada.
Having led the museum corporation, which has about 250 employees and 330 volunteers, for two-and-a-half years, Amyot says there are several benefits to having an HR person become CEO. For one, you can finally implement what you’ve been preaching and do it much faster than before.
HR is all about talent management, succession planning, leadership development, culture change, coaching and mentoring and when a vice-president of HR becomes CEO, those issues are still part of her DNA, says Amyot.
“When you are the head of the HR shop, you work with all the branches, you don’t work in isolation, you’re used to multi-disciplines so it’s an advantage because when you go on to lead the company, guess what, you reach out to all the branches, you cannot work in isolation, teamwork is even more important than before.”
And as president and CEO, Amyot has high expectations for HR.
“When you are in HR, you want to grow people but when you’re CEO, you want to grow the organization so… you push the envelope all the time and that creates pressure on HR,” she says. “I expect all the management to be top-notch in HR because it’s so key for the success of an organization.”
An HR executive keen to climb should focus on networking and relationships, says Amyot.
“In order to succeed as a VP of HR, you needed everybody at the table and it’s the same thing for the CEO, you need to have all your team on board.”
It’s also a good idea for an HR person to take on a leadership role that has nothing to do with HR, such as a board position, so people see him in a different capacity, says Amyot.
Other character traits that should help in the CEO role include fearlessness (mistakes will be made), passion (to inspire and mobilize people) and acceptance you won’t know everything — there are many grey areas, she says.
President and CEO
Journey to Excellence
This Toronto-based company, specializing in executive performance management, has six employees.
Tony Martino’s path to CEO of Journey to Excellence, a Toronto consulting firm that works with business leaders to improve their personal and professional performance, has been anything but linear.
Over the course of his career, he has held executive positions in finance, business operations and human resources. At Xerox Canada, he spent four years as vice-president of HR, despite having no background in the field.
“I didn’t come up through the HR ranks,” he says. “I find a lot of HR executives have not really strayed from their HR roles in their career. But you have to really understand a business to take a leadership position.”
Senior HR professionals looking to move into the CEO role should work elsewhere within the company to gain a broader perspective, says Martino.
“A lot of times as CEO you may have to take actions stemming from financial difficulties,” he says. “If you don’t have that wide experience, you may have a narrower view. Your focus may be on employees only without balancing the rest of the business.”
However, intimate knowledge of employees and employee engagement can be one of the greatest strengths for HR professionals moving into CEO roles. They have a different perspective on talent management, hiring and succession planning, he says.
To transfer those skills to success in the corner office, HR executives need the ability to create a culture of accountability by enabling an organization to deliver on its goals. They also have to demonstrate their ability to engage and motivate employees and bring the right people in, especially on leadership teams, says Martino.
“You need to demonstrate in team meetings that you’re having a business discussion, not an HR discussion. People have to see you’re bringing value to the table,” he says. “You have to show that you can step back and look at the bigger picture — you’re not just suggesting another employee engagement survey.”
After holding a variety of senior roles, Martino’s perspective on HR issues didn’t alter with his move to CEO, he says. However, he is more acutely aware of potential weaknesses, especially in his secondary role as a CEO group leader at CEO Global Network — a leadership development organization that works with company heads.
“It’s amazing to me how many companies have challenges with a clear line to the succession planning process,” he says, citing other top issues such as leadership development and employee engagement. “You need to know how you can make sure you have people in key jobs but also keep them moving along and how to make sure you have employees who feel committed.”
HR professionals should do whatever they can to expand their professional experience by building networks, inside and outside the company, that offer a different focus or strategy, says Martino. For example, join a local board of trade.
“Do anything that will take you outside of your comfort zone,” he says.
Sunshine Coast Credit Union
A full-service financial institution based in Gibsons, B.C., with 110 employees serving members in Gibsons, Sechelt and Madeira Park in British Columbia.
Senior HR professionals may not have the profit-and-loss experience traditionally called for in a CEO but they harness another skill increasingly valued in leaders — the power to engage employees, says Shelly McDade, CEO of Sunshine Coast Credit Union based in Gibsons, B.C.
“They have a complete and total understanding of how pivotal people are to the culture of the organization,” she says. “Employee engagement is a competitive advantage today and a CEO with a strong HR background may have the skill set and strategic capability to generate income through that understanding.”
HR professionals, like their colleagues in marketing, are often overlooked for the corner office because they lack experience in driving revenue, she says. While they’re given budgets to invest in people and marketing to improve the company, they’re not directly accountable for the revenue they generate.
“So, if they’ve spent their career in HR, they often have HR-coloured glasses,” says McDade. “They need to understand how they can generate market relevance.”
A senior HR professional with his eyes on the top job needs a firm understanding of all the roles within an organization and should vie “long and hard for cross-functional roles” when they come along, says McDade.
In the past, while working on the operations side of another credit union, McDade spent three months in HR after the departure of the vice-president of human resources.
“It was a real eye-opener for me,” she says. “But it helped me to understand the complexities.”
That experience has impacted her style as CEO. McDade has been involved in several mergers and alliances in the past and, although it’s not a scenario she’s had to deal with yet as CEO, she says her HR experience would see her approach the process differently. The initial focus would be merging cultures; it would then shift to merging processes and balance sheets.
“I’ve realized you won’t get the value of that transaction if you don’t have the people on board,” she says.
However, anyone entering a CEO role needs to have strong financial literacy and be a good strategist — someone who can think ahead three, five or 10 years. Finally, an HR professional needs to “develop a compelling style” on the climb up, says McDade.
“You’ve got to find a way that people want to follow you,” she says. “Are you connected to the workforce? Do you do what you say you’re going to do? Are you a visionary? Can you communicate? Do you take criticism?”
This is especially true when it comes to engaging generation Y — one of the most worrying HR issues she faces as CEO — along with how to support and motivate a multi-generational workforce.
“How will I differentiate myself in the future? It’s not going to be about the services or products we sell. It’s about the quality of advice from our people,” says McDade. “So I need to know how to keep them engaged because that shows through to the customers.”
Networking with peers, and asking for brutally honest feedback at times, helped McDade become CEO and would be an asset for senior HR professionals hoping to land the position too.
“I’ve met a few HR professionals who definitely have the capacity to be CEOs but they haven’t put themselves out there,” she says. “You have to.”