Hiring Your Next CEO
In an article titled International Recruitment firms getting out of comfort zones to find right fit for their clients (The Economic Times dated 25 April 2014), business journalists Sreeradha D Basu and Anumeha Chaturvedi wrote about the challenges that executive search firms in India are increasingly facing while fulfilling the needs of their clients. The challenges were described as “unusual”, prompting these executive search firms to venture outside their “comfort zones” in order to fulfil their clients’ needs for senior- or leadership-level hiring.
After speaking with some of “the country’s leading headhunters”, the journalists discovered that, for executive search firms in India at the moment, “tricky mandates are par for the course. More so in a slow economy, when the challenging jobs crop up more often than other times.” This included “Identifying crisis managers, convincing CXOs to take big fixed pay cuts, getting senior leaders to join new-gen or little-known firms, or scouting for people to fill unusual roles…”
Or, perhaps, hiring “a ‘chief monetisation officer’, a fancy title for a person who needed to figure out all possible revenue streams through which the company could make money” by an e-commerce company. Or“a mandate from a US financial services company for their office in western India. They wanted a CEO who would keep timings of 6 pm in the evening to 12 midnight.” It looks like hiring a CEO today is far more bewildering that it ever was.
Reflecting this sentiment, the article states, “Headhunters say that while hiring at senior levels continues to be steady, the requirements have changed and evolved in keeping with the challenging business environment. Softer skills, a greater emphasis on ethics and accountability; a global outlook; the ability to work in a demanding environment and steer the company through a difficult period are all qualities that are gaining more importance.”
Maybe there is a purpose in pointing out these idiosyncrasies the Indian corporate/business marketplace is in at the moment. Maybe Indian corporate organisations and businesses today are demanding much more from their CEOs than they did before. In fact, The Economic Times article actually quotes a senior partner of one of the leading executive search firms as saying, “Companies are looking for CXOs who are a lot more creative and innovative and can deal strongly with lean patches. These requirements were not as pronounced in the last few years.”
Now, a couple of questions nag at our heels: One, if we, at executive search firms in India, have to do justice to our jobs in tandem with this changing and challenging recruitment scenario, which strategies do we adopt to find success? And two, are there any universal guiding principles which are, and which will remain, stable through these evolving times – principles from which we can learn and practise our profession? In our search for answers, we turned to Harvard Business Review – one of the revered publications of business management.
A year ago, the Harvard Business Review published an excellent article on the mandate that we, at executive search firms, work on every day. The article, titled Ten Essential Tips for Hiring Your Next CEOand dated 4 December 2013, was co-authored by three of the masters of modern management: Ram Charan, Dennis Carey and Michael Useem. In their article, these three masters offered ten pointers or essential tips, which together, presented a near-perfect solution to every organisation’s worry of hiring the right candidate as its next CEO.
In short, these essential tips were boiled down to the following:
- Remember that people set strategy.
- Implement an evaluation methodology.
- Include in the current CEO’s evaluation an assessment of how well the company is building a succession plan for the next generation of company leaders.
- Place the board leader in charge.
- Retain a high-performing chief executive, but also work to keep capable successors.
- Seek candid comparative data on inside CEO candidates from those who had worked with all of them.
- Make direct contact with both sources and candidates to verify information.
- Review outside consultants carefully to prevent conflicts of interest.
- Maintain confidentiality.
- Embed succession planning in corporate culture.
Lest you think this is the perfect solution to your next CEO hiring, the three masters have added a corollary at the end of their ten essential tips to remind us that ‘things’ can still be subjective. In their own words,“When determining suitability to be CEO, companies will want to remind themselves of an obvious premise: No candidate is perfect. The goal is to understand the relative trade-offs among the candidates’ strengths and weaknesses, and to ensure that the prospects’ deficits are not in areas that are especially critical for company performance. The fate of the enterprise depends upon it.”
Indeed so. As the CEO is responsible for the success of the organisation, finding the right candidate, or person, to fill in the role of the CEO is critical. For the organisation and its Board, the stakes are high as a wrong selection can be disastrous for the organisation and its stakeholders. The selection parameters and processes, therefore, have to be thorough and scientific – with the best minds and practices deployed to achieve the near-perfect solution Ram Charan, Dennis Carey and Michael Useem talked about in their Harvard Business Review article.
That kind of discipline and rigour, or even the time for search and implementation, are sometimes difficult to find within an organisation. Besides, the pool of talent within the organisation from which the next CEO can be selected may be ‘inadequate’ “when determining suitability to be CEO”. Even if the organisation’s internal team has been entrusted with the task of locating possible CEO candidates externally from the marketplace, how will they find these candidates (apart from their competitors) and approach them for talks on possible job offers? A tiny slip-up can breach the protocols of confidentiality and jeopardise the organisation’s reputation.
In such situations, retaining the services of executive search firms come in useful. We not only possess the scientific rigour, the resources, the network, the industry knowledge, the market intelligence and experienced consultants in our teams to manage and fulfil specific requests for CEO-level hiring mandates in relatively shorter timeframes, but we also take care to maintain utmost discretion with our clients (the organisations who retain us for our expertise) and the candidates we interact with to keep matters confidential. It’s our commitment to the very nature of our business.
So, when you’re hiring your next CEO, give us a call.