A significant indicator of a chief human resources officer’s perceived ineffectiveness is a change in the CEO, a factor beyond the CHRO’s control.
The quality of the relationship between the CHRO and the CEO is the most crucial determinant of how a CHRO’s performance is assessed. Research indicates that a leadership transition in the CEO position results in nearly seven out of ten CHROs eventually being replaced, according to Rosanna Trasatti, a leadership and effectiveness expert and CEO of Eleva Executive Leadership Advisory. Trasatti addressed attendees at the Fortune Workplace Innovation Summit in California.
Trasatti observed that while it may seem typical for a new CEO to reconfigure the senior team, insights from a study on CHRO performance factors over more than a decade were disconcerting.
“No other C-suite leader’s perceived performance had anywhere near the same level of dependency on the CEO,” Trasatti stated.
Another factor distinguishing a high-performing CHRO from an underperformer is the presence of cumbersome processes and administrative bottlenecks in HR functions, described by Trasatti as “noise and inefficiency.”
“Those CHROs were significantly more likely to be rated ineffective and exited,” she said.
Additionally, only 11.8% of C-level roles among S&P 100 companies are occupied by women, yet 72% of CHROs are women.
Trasatti explained that CHROs, many of whom are women, face unique vulnerabilities compared to other C-suite leaders. Their success heavily relies on a strong relationship with the CEO and efficient administrative operations. The gender dynamics add another layer—CHROs need to ensure everything is in order to be viewed as effective.
Despite these challenges, there are ways to mitigate failure risks, Trasatti stated. Research shows that CHROs can succeed by developing business and financial acumen and linking HR metrics to business outcomes.
Trasatti outlined four factors for CHRO success based on over a decade of research:
Think like an investor: Develop financial fluency, understand how the CEO aims to drive shareholder value, and articulate how HR strategies can influence financial results.
Lead like a CEO: Focus on commercial acumen and consider the entire business rather than individual functions.
Measure what matters: Create data-driven insights that predict outcomes. For example, connect employee engagement scores to key business areas or sales acceleration.
- Lead from the front: High-performing CHROs are seen as change agents. Consider how systems can mobilize cultural or business iterations.
This summary is based on a story originally featured on Fortune.com.
