The external hire rate for CHRO is approaching 50%. And most organizations are treating that number as evidence of a pipeline problem. The pipeline is the problem — just not in the way anyone's diagnosing it today.
Hey there, senior leader, and welcome to the Talent Sherpa Podcast, where senior leaders come to rethink how human capital really works. I'm your host, Jackson Lynch, and today we're going to go somewhere that most HR conversations never quite reach.
Here's a pattern I keep seeing. An organization invests real money in developing their internal HR talent — programs, stretch assignments, leadership rotation, maybe a nine-box review or a succession slate. A CHRO seat opens. The names on the slate are good, and some of them are even strong. And somewhere in the evaluation process, the decision gets made to go external anyway.
The field noticed this. The diagnosis that followed was that internal pipelines weren't keeping pace with what the role demands. The context of business has changed, and what HR leaders needed a decade ago looks different from what the CHRO role requires today. It's a reasonable observation. I've made it.
The prescription that followed was also predictable: modernize the curricula, update the competency model, build better HR leaders faster.
Now, if you've ever watched a high-potential HR leader move through every level of your organization and plateau in a way that you couldn't quite explain once they reached the top — or if that may have happened to you — this episode is going to name the mechanism. And by the end of it, you're going to have a different way to read the talent data that's sitting right in front of you.
But before we begin, I want to take a second to say thank you. Big shout out this week to Tina from Pompano Beach, Florida. Tina, thank you for being a part of this community. And for everyone that's tuning in — whether you're joining us from Islington in London, which is where my daughter used to live, or in downtown Austin, Texas — I appreciate you being here.
And also, let's pause for maybe 30 seconds more. If you're new to the CHRO seat, I want you to think about what no one has explicitly told you yet — the real expectations, the unwritten rules, the definition of what success looks like from the board's perspective. One graduate enrolled in the CHRO Sherpa Academy exactly for that reason. She said, "I transitioned into the company's first CHRO role and needed help defining what success actually looks like." We built the CHRO Sherpa Academy to build that capability and close the gap fast. The seats are limited, and you can learn more at mytalentsherpa.com. If you get a chance, let's sit down and talk about whether this is the right time for you.
All right, let's dive in.
Here is the picture that most organizations are living right now. You have a development function. It identifies high potentials, runs programs, creates succession slates with names and boxes and readiness ratings and maybe even a color coding. There's always someone in the pipeline and the dashboard looks credible.
And then the seat opens. And most of the names are really good — legitimately good. These are people who know the business, they have credibility with their peers, they've been in the right rooms for a number of years. They've run talent reviews, managed through restructures, built programs that worked. And by the time their name is on a succession slate for the top job in HR, they have earned that consideration. The case for an internal promotion should be very straightforward.
And sometimes it still doesn't close.
The Talent Strategy Group reported that internal CHRO succession dropped from 73% to 53% in a single year. In 2024, nearly half of all CHRO appointments came from outside the organization. Dave Ulrich looked at that number and said the pipeline isn't keeping pace with what the world demands. And look, Dave's brilliant. He's left a lasting legacy on the human capital function. I just think that's off. And I shared that with him on LinkedIn to try to find some common ground where we could agree.
Because what I found is we all took that diagnosis and treated it as the big picture. And we prescribed better development — more prepared leaders, more current curricula, more equipping for the changing business context. And we did that for a couple of years, and the external hire rate kept climbing.
So here's where I think the conventional solution runs into trouble.
First trap is accepting the pace framing. When the diagnosis is that pipelines aren't keeping pace, the prescription is natural: modernize the content, accelerate the timeline, put AI into the curricula, add more exposure to business strategy — which by the way still feels very separate from being in the strategy. And you can execute all of that beautifully and still produce zero people ready for the CHRO seat. Because I think the gap's not in the quality of the development. It's in what the development was designed to produce at the end. A faster pipeline aimed at the wrong destination arrives wrong faster.
The second trap is measuring progress against functional criteria when the destination doesn't require it — it requires enterprise criteria. Your high-potential HR leaders are assessed on what you can observe inside HR: how they run the reviews, how they manage business partners, how they build and execute programs, whether they have a seat at the table. These are all — well, most of them are legitimate measures. But they tell you something about the person. What they don't tell you is whether that person has begun the shift the CHRO role actually demands.
The CHRO role is not a more senior version of the job someone is being elevated from. It's a different job with a different identity. The functional leader identity — the one that earned every promotion — is the same one that quietly caps impact once someone reaches the top. If your development system doesn't name that shift explicitly, the most well-developed person in your pipeline is going to arrive at the seat carrying an identity built for a different role. That's not a development failure. That is a design failure. And it's the distinction where the reframe lives.
So here's the shift, I think. The pipeline's working. Sit with that for a second.
The pipeline is, in fact, working. It is producing exactly what it was designed to produce: HR professionals who know the function cold, can run the talent review well, and have the credibility of a strong business partner. Ready for every role in HR — except for one.
That's a success. The system did what you asked it to do. The design, however, was wrong. It was aimed at the wrong place. Because when your organization built the HR development architecture, the implicit destination was functional excellence. Every competency model, every nine-box calibration, every succession slate was built to manage progress towards that destination. Those are real outcomes with real value for every level in HR — except one.
The CHRO needs someone who has moved from optimizing HR outcomes to making business trade-offs through a talent lens — someone who can sit in an executive committee and be the person who names what the organization doesn't want to hear about its leadership, about its succession depth, about its capability risk. That person comes out of an environment deliberately built to develop enterprise judgment, where real ambiguity and real consequences shaped their thinking. Not a classroom.
Most organizations have never built that environment inside of HR.
So Ulrich named the symptom accurately: the pipeline is not, was not, and will continue not to keep pace. But the prescription — build better, faster, more current HR leaders — was aimed at a speed problem. The actual problem was directional. The external hire rate didn't keep climbing because the development was too slow. It kept climbing because the pipeline was pointed in the wrong direction, towards the wrong destination. That's the whole story from my view. And it's a design story, not a development story.
Now you may be wondering why I'm taking such a hard stance on this. The reality is I've built the careers of almost two dozen CHROs who have worked directly for me at some point in their career. And I think one of the reasons I've been able to do that for so many people is we built them as business leaders, not functional ones.
So let's talk about what the play should look like — because design is a decision, which means it can be revisited. And this is where I would start.
Play number one — you're going to guess this one. Audit the destination, not the program. Pull your current CHRO development track, your HR development track for any role. Read through the outcomes it was designed to produce, the competencies it builds, the criteria it measures progress against. Then write down separately what you would need to observe in someone to actually believe they were ready for the CHRO role at your company. Ignore the job description for a second. Look at your actual evidence threshold. Have that conversation with the chair of your comp committee, the chairperson of the board.
The gap between the two lists — what you're developing and what you would need to see demonstrated — that's the design problem right there. No amount of program improvement closes it. The destination has to change first.
Play number two: protect the roles that build enterprise judgment. Most organizations that have restructured in the last few years — which is roughly all of them — have eliminated the very roles that judgment develops: cross-functional scope with real accountability, decisions at the intersection of business strategy and people architecture, genuine ambiguity with real consequences attached. Identify what roles in your current structure are actually building that in your senior HR leaders. Write down the answer. If the list is short or empty, name that explicitly. You cannot develop enterprise altitude thinking in an environment designed for functional execution.
And look, I know we keep talking about this as it relates to the CHRO role, but think about it this way: every job ought to be building towards the top of that function. I really want every development conversation — at the level below that, and the level below that — to take on this same approach.
Which leads to play three. Make the identity shift explicit in the development conversation of anyone being considered for the CHRO job. It's not a competency to assess — it's a direct conversation with your high-potential HR leader about what actually changes between the role they're in and the role they're being developed towards.
What does that sound like? I talked to someone who reported to me who was thinking about growing into a CHRO role. And I said, "You've got to realize half the job has nothing to do with the function." Think about that for a second. Half the job has nothing to do with functional excellence. You've got to have that conversation with people. And most of them, in my experience, have never had it. They're preparing for a more complex version of what they already do — expecting an upgrade when the role requires a rebuild. Naming that early gives a capable person the actual picture before they arrive in the seat that requires a different identity than the one they've spent their entire career developing.
Play four: use the external hire rate as a design diagnostic. Every time your organization fills a senior HR leadership role from the outside, ask one question before the search debrief closes: what was the pipeline built to produce? Not "why didn't we develop the person?" What did the architecture actually aim at? That question points towards design. And design is a decision.
Now I recognize some of this is going to make you uncomfortable if you run HR development, because the honest answer might be that your pipeline is excellent at what it was designed to do — and what it was designed to do was aimed about two inches short of where the CHRO seat actually sits. That's not the worst starting point. The foundation is real; the adjustment is directional.
And if there's one thing I want you to carry out of this episode, I'd like it to be this: the external hire rate is a design signal. And the question worth asking is whether your development architecture was ever pointed at the destination the CHRO role really requires.
While you're thinking about that, let me thank you for spending some time with me today. I appreciate you being part of this community of senior leaders who want to rethink how human capital really works.
If you're thinking about how to apply some of this in your own situation, let me point you to a couple of resources. First, Propulsion AI — workforce intelligence for private equity. Their AI teammates surface workforce risk before the close and help leadership teams drive execution after. They translate strategy into individual accountability, coach managers to define roles by outcomes, and give every employee a clear line of sight to what good actually looks like. Designed for private equity deals, but honestly, I'd bring it into an existing operation today to get that same level of diagnostic when you can still act on it. Learn more at getpropulsion.ai.
And if you're heading into the CHRO seat for the first time — or close to it — that's exactly who I built this for. You can find me at mytalentsherpa.com. Everything's there, including the Substack at talentsherpa.substack.com.
That's it for today. Until next time — keep raising the bar, keep questioning the design behind your talent systems, and keep on climbing.
