Your next CEO may be chosen by the CHRO

Logan Roy likely didn’t consult his CHRO before choosing his successor (don’t worry, no spoilers here), but maybe he should have.

While consulting with HR may not be the first thing that comes to mind when thinking about succession planning, Dan Kaplan, senior partner at Korn Ferry’s CHRO practice, told HR Brew that CHROs are integral to the process, especially when it comes to choosing a new CEO. No one, he said, is better equipped to identify the internal or external talent with the leadership and cultural qualities needed to take a business into the future.

Crystal ball. Succession planning is one of the CHRO’s biggest responsibilities and an undertaking that can take years, Kaplan said. As the stewards of an organization’s culture, CHROs can anticipate both the business and cultural needs and transformations that may come with a new CEO.

They’re also prepared for various what-ifs and understand what the company currently needs from a leader and what it will need. “You’re almost not looking at the individual; you’re looking at, what is the job going to be in five years?” he said. This may require looking outside the organization. “The best heads of HR, parallel with their efforts to develop the internal candidates, are also looking at the external market,” Kaplan said, adding that a good HR leader should be able to look at internal and external talent, and pinpoint who the emerging leaders are, “who maybe won’t be the next CEO, but might be the one after that.”

Personality hires. CEOs, Logan Roy or otherwise, may go wrong if they try to find successors in their mirror images. If he’d asked Kaplan, he would have recommended looking beyond apparent personality traits to who can be groomed for the top job. Companies can get wrapped up in trying to replicate a successful CEO and the board may want to go in the opposite direction. “HR’s job is to make sure that the pendulum doesn’t swing too hard,” he said.

“You are looking for someone that can manage the softer skills—the people and the culture,” said Jalie Cohen, group senior VP of HR for the Americas at Adecco. CHROs, she said, need to look at who can influence and lead the heartbeat of the company: its employees.

Leaders shouldn’t expect candidates to understand the job before they’re in it, added Kaplan. After the CHRO works with the board to identify potential successors, they can start grooming and testing. “You want to be putting them in roles that stretch and challenge them in accordance with where the organization will be in five years.”

In the loop. HR should keep the company’s board up to date throughout the succession process, Cohen and Kaplan each explained.
The CHRO should be in regular communication with board members, Kaplan said, as they are responsible for making the final decision. “The best ones [CHROs] are having these conversations weekly,” he said, because the CEO plan ultimately depends on the state of the business, which is likely changing quickly.

Most CHROs will also engage with external partners at some point in the process. Many consulting firms have succession-planning arms, explained Kaplan, that can help the CHRO vet candidates’ backgrounds, including “extensive” background checks. They can also lean on search firms that help manage and organize the process.

Once a decision has been made, employees should have ample time—ideally, at least a year—to get comfortable with the new CEO before they take over. Employees “care about ‘What's in it for me? How does this change impact me? What can we expect? What is this person’s leadership style?’” Cohen explained. “Oftentimes people focus on what they’re looking to change, [but] people are looking for stability.”

Formula unknown. Cohen said that choosing a CEO is never as formulaic as 1 + 1 = 2. It’s an agile process that frequently takes years and involves several unknowns, so CHROs are constantly helping their businesses plan for their future leaders.

The bottom line: Waystar Royco’s CHRO would have picked Connor Roy.—KP

Do you work in HR or have information about your HR department we should know? Email [email protected] or DM @Kris10Parisi on Twitter. For completely confidential conversations, ask Kristen for her number on Signal.