Learning from Business Simulation - HR Leaders could make Successful CEOs
Updated: Jul 14
How topical that two days after the Leena Nair news, one of my long-standing clients, who is a CEO, gave me a call and we set up a quick coffee.
When we met, he indicated that he was likely to move to a group role overseas in the new year and that he needed to create a proposal for his successor. We discussed the profiles of his direct reports and one or two external folks whom he had engaged with. He was sort of zeroing in on the CHRO to replace him. He asked for my view and I told him, in no uncertain terms, that I also felt the same way having worked with all the folks for almost 5 years now. He was speculating on how such a move might appear if he proposed it. Of course, I told him that it did not matter how it looked, but what mattered was if the individual had the key competencies needed, and could provide value and effectively operate as a steward.
That got me thinking about the hundreds of simulations I have run over the last decade or so. In many cases, I've found that teams with great people management skills performed exceptionally well in business simulations for developing and implementing strategies in a VUCA-type competitive market.
I've run industry-specific simulations for at least 12 different industries, as well as for different groups of senior executives. Some were solely for HR professionals, some were for financial professionals, and some were for cross-functional teams.
Invariably, for the exact same simulation, the HR community had higher average scores in terms of value creation. Looking for reasons beyond the obvious ones, I think:
Strong HR professionals are able to manage ambiguity: Market, competition, and growth scenarios are getting very muddled, thereby creating a lot of ambiguity. Somehow, I feel good HR people are able to cope with this ambiguity better.
The profession makes you adept at managing risk: Whether by training or sheer practice, capable HR professionals are able to comprehend inherent risk and are much better prepared for fallouts by way of alternate strategies
Making decisions using seemingly unconnected data points: Based on the kind of outcomes that they are expected to deliver, it seems to me that HR practitioners are able to connect seemingly disconnected data points and make sense of it, which can give a strong impetus to perceptual acuity
These days it is less about technology & capital but more about people, especially at the top levels where genuine value is created by empowering and reviewing high-performing teams.
So, I believe that capable HR leaders can be excellent Business Leaders; perhaps the only ones stopping them are themselves. They need to want it more!
What do you think??