How has ceo turnover changed

how has ceo turnover changed

Duff McCutcheon, HRPA, Special to Financial Post

Wednesday, Jun. 10, 2015

General Electric CEO Jack Welch Bloomberg files

Chief human resources officers, or CHROs, have the shortest shelf life in the C-suite.

“Forty-two percent stay less than two years in the role,” says Bill Conaty, co-author of The Talent Masters: Why smart leaders put people before numbers. “That’s an indictment of a role that’s supposed to expert in succession planning.”

According to Conaty, the reason for the high turnover is that many CHROs don’t have a background in human resources, and the reason many CHROs don’t have a background in human resources is the common misconception that anybody can do HR.

Conaty sought to dispel this idea during his tenure at General Electric, where he served as senior vice president of human resources under chief executive Jack Welch. In the beginning, Welch had little respect for human resources, referring to the department’s leadership program as the “picnics and benefits crowd.”

“I asked him what business function he felt had the best leadership program and he told me corporate audit — a select group that goes over the books at GE’s business units and acts almost like an outside consultant,” he recalls.

So Conaty changed HR’s leadership program to include three eight-month assignments in different business units and functions — including one rotation with corporate audit. “Everyone came to love these trainees because previously audit had just been

numbers wonks,” he says. “HR brought a human touch.”

Conaty also reports that the move to expose other teams to HR — and vice versa — bred internal credibility. “Someone who has spent some time in operations is going to be viewed more highly than someone who has only been in human resources — especially if they ever aspire to be a CHRO.”

What’s more, the results swayed Welch’s opinion about human resources, having since regarded it as GE’s most important department for the role it plays in anticipating business needs, attracting and developing talent and building a leadership pipeline to ensure long-term success.

Here are some bits of advice Conaty has for aspiring CHROs:

  • Find a critical fit with the CEO and CFO. “You have to work well with both functions. The CFO bring the numbers and the CHRO balances that out with the people side.”
  • Develop the trust of the entire senior management team — not just the CEO.
  • Have the courage and confidence to push back when you see things being done that run counter to the organization’s — and your own — values.
  • Never forget the human in human resources: “The best leaders balance a passion for the business with a compassion for people.”

Duff McCutcheon is a communications specialist with the Human Resources Professionals Association (HRPA), Canada’s largest HR association and the regulator of the HR profession in Ontario.


Category: Bank

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