The (Uncomfortable) Seat at the (Rotating) Table
Believe me, I know…you’re sick and tired of yet another “seat at the table” discussion focused on HR’s need to be more strategic in their organization. I predicted that 2008 would end with HR still not gaining that elusive chair, but for the sake of argument, let’s assume they did. Yes readers, the Chief Human Resources Officer (CHRO) has finally arrived and is ready to roll up her sleeves and provide highly strategic value. What happens next?
Enjoying the coveted view, she looks around and likely sees the CEO, CFO, COO, CIO, CMO and perhaps other executives discussing the current and future state of the business. Given the significant influence that each executive exerts, what happens when the individual personalities change? Put another way, how does C-level tenure impact one’s ability to drive value?
- CEO: A 2007 Harvard Law School study shows that a “manager CEO” of a S&P 500 firm averages 5.5. years of tenure. Crist Associates’ 2007 Volatility Report also shows the majority of CEOs with less than 5 years of service.
- CFO: Crist has CFOs at just over 5 years and on the rise. However, SOX compliance is still having a negative impact on longevity.
- COO: Chief Operating Officer tenure is shrinking to just under 3 years, with the total number of Fortune and S&P 500 COOs diminishing at a perilous rate.
- CIO: According to the 2008 State of the CIO poll results, a Chief Information Officer’s average time in seat is about 4.4 years, down from 5.1 years in the prior period.
- CMO: Spencer Stuart’s annual study shows Chief Marketing Officers at a mere 26.8 months, which is actually up from 23.2 months in the prior year.
Right. So your COO and CMO will survive less than three years. Your CIO is about four and a half and your CFO and CEO less than five and a half. Suddenly it hits you - one of your most important tasks now that you have a seat at the table is to focus on a succession plan for those in the C-suite.
This is an uncomfortable realization, yet an item that is often overlooked, even by market-leading organizations. What’s perhaps more uncomfortable is the assessment of your own C-level survival, with Workforce Magazine’s analysis (and Corsello’s math) putting an average CHRO in seat for approximately 3.1 years.
If all this executive rotation has your head spinning, grab some ginger pills, put on the motion sickness patch, stay calm, and let’s try and keep the conversation going.
July 23rd, 2008 at 6:24 pm
Unsurprising that the CMO and CHRO have among the lowest tenures these days - two roles that have become scapegoats for poor company performance. Are also the two functions that have become the most “tactical” and non-strategic in recent years. The CFO and CIO are also getting increasingly squeezed as firms seek to slash costs further and restructure themselves globally. I point to firms such as Nike, which are slimming down their reliance on many of their support functions and focusing on developing talent that is core to their business.
July 24th, 2008 at 6:33 am
As you stated that CMOs and CHROs are becoming “the most ‘tactical’ and non-strategic in recent years”, it made me wonder whether this is due to a lack of perceived/real performance on behalf of these two leadership functions. Or, perhaps the transactional nature of much of their respective workloads has created a commoditization challenge. Great comments Phil.