Executive summary
Introduction:
The Leadership Readiness: Next Wave Study was conducted for SHRM India by Nine Dot Nine Media. It includes a survey of Chief Human Resources Officers (CHROs) in India and perspective to position C-suite leaders on the board.
The Leadership Readiness study considers 'The Board' as representing the highest level of business leadership. Based on this perception, respondents were asked to choose from multiple options to evaluate an organisation's readiness for CHRO leadership.
The study presents a picture of HR function readiness in taking up strategic leadership role at board level and at CEO level. Survey data suggests that only 22% of CHROs are willing to join the board, but only 9% believe they are ready. Interestingly, the survey reveals an optimistic peer assessment about CHROs’ leadership capabilities and their readiness to take up CEO level positions.
The Leadership Readiness: Next Wave Study was commissioned by SHRM India and continues its work of developing leadership capabilities among HR professionals. This in-depth research study aimed at developing a common industry vision not just for HR professionals but also for CXOs, and a cooperative approach to address the emerging leadership challenges for CHROs.
CEOs are increasingly looking to CHROs as strategic business partners
Businesses are making new demands on enterprises and their C-suite executives. In this rapidly changing business environment, people management has become one of topmost leadership issues, calling for a dynamic relationship among the entire executive "C" suite. Although not primus inter pares, CHROs are increasingly playing the front and critical roles, busy managing the most important aspect of a company, its people.
Since the past decade, HR has undergone a sea change. Until mid 90's, HR was looked as a support function. In the current scenario the HR function has to play a more strategic role in hiring, employee relations, resource allocation, resource management, training, talent management, performance management, compensation and rewards management, and leadership development. CHROs are therefore increasingly being looked upon to leverage organisational talent in a strategic fashion.
In addition to their operational contributions, CHROs are increasingly being asked to make strategic business contributions by providing inputs on corporate strategy and by associating their functions with the larger corporate goal of strategic differentiation. HR functions have to play a strategic role not just in guiding succession planning, knowledge retention, employer branding, corporate governance and other enterprise-wide initiatives. Therefore, CEOs are seeking CHROs as strategic business partners and change catalysts.
Objective of the study:
Given the increasing demand on the CHROs role, the survey sought answers to the following key questions:
• Are CHROs assuming top leadership positions at the board?
• How are CHROs taking on enhanced leadership position?
• Are CHROs being considered for CEO positions?
• Are organisations ready to have CHROs and C-suite executives on the board?
• What are the various perspective of C-suite leaders on the CHRO on the board?
• Identify and recognise best-practices
HR and the next level of leadership
The survey highlights the need for HR functions to become more integrated with the business. HR strategies should be linked to the business goals and objectives. In addition to their operational contributions, CHROs must be involved in providing strategic business inputs at corporate level and by associating their functions with the larger corporate goal of strategic differentiation.
Human resources practices have direct impact on general business performance. The success of strategic partnerships deepens HR's image, its credibility and enables them to be viewed as partners that can work with business leaders to form long-term strategies and plans. CHROs are therefore increasingly being sought for strategically leveraging organisational talent. This is a big 'ask', as it confers larger, and more varied responsibilities on the CHRO, a situation HR needs to address and equip to deal with newer challenges and demands of the business.
CHROs are keen to leave a lasting impact on their organisations. But as organisations become more networked and intra-dependent, CHROs like other business leaders need to anticipate and prepare for larger, newer emerging roles.
Research methodology
The results of The Leadership Readiness: Next Wave study are based on 80 individual responses from 79 companies comprising CEOs, CFOs, CIO/CTOs and HR Heads. The findings in this report are based on written responses to a detailed questionnaire. The survey population included a broad cross-section of C-level executives spanning over 15 different industries across India.
The sample size comprised large, medium-size and small companies. The majority of them belong to publicly-listed and privately-held companies. Interviews were also conducted with selected respondents. This provided significant opportunities for both qualitative and quantitative analysis.
For the study, large Indian companies are corporates with sales turnover of above Rs 1000 crore in the most recent accounting year; mid-sized Indian firms are companies with sales turnover between Rs 50 crore a
