How Executive Search Is Becoming More Like the Auto Industry
Businesses are discovering a new executive search option to supplement their leadership and execute their business strategies similar to leasing a car.
This is an excerpt from our new book The Executive Search where we break down the interim executive option.
The two of us—Pamela and Kristen—make a great business team partially because we have very little, other than core values, in common. That means that together, we see nearly every angle, every perspective, every facet of a problem from opposite perspectives, and because of our polar opposite approaches to nearly everything, one of us is nearly always able to identify opportunities, threats, gaps, and challenges the other hadn’t.
Our opposing perspectives extend beyond business. Pam wants it done yesterday; Kristen wants to think it through and test first. Pam loves to hike; Kristen sees no point in walking up the mountain when you can run up it. Pam likes to lease her cars so she can get a new one every three years; Kristen thinks that makes absolutely no sense and prefers to buy and keep a car for twelve or more years, and wringing every last cent out of it.
And yet sometimes, what doesn’t make sense to one person or at one time changes. Sometimes a situation dictates a sensible course of action. This was the case when Kristen found, much to her own surprise and despite her natural inclinations, leasing a car actually made a lot of sense after all.
Kristen Remembers When Leasing Suddenly Made Sense
Sitting in rush hour traffic starting a three-hour commute from San Francisco to Monterey Bay, the endless stream of taillights weren’t the only red lights I saw. My dashboard Check Engine light was on, yet again, and I had no idea what it could be this time. My car had served me well for thirteen years, but at five months pregnant, I knew it was time to trade it in.
Both my husband and Pamela had been telling me this for the past couple of months. They knew that as much as I loved the car, it was no longer practical, and likely no longer safe. They thought the prospect of a new car would excite me, but it was a dreaded decision. With our first baby on the way, our active lifestyle, and no idea where the Marine Corps was going to send us next, I faced too many unknowns to decide and commit to a car for the long term.
I preferred to own cars. But in this instance, there was a strong case to be made for leasing a car for the next three years, until I figured out a few other pieces of the puzzle. As much as it pained me at the time, looking back now, that was the best decision I could have made.
In a discussion recently with a CEO regarding talent, I was reminded of my experience. I realized after years of co-owning Cerius Executives how similar the model of interim management is to the process of deciding whether to buy or lease a car. My curiosity was piqued, and I did a little research.
The most recent statistics show that 28 percent of new cars on the roads in the United States today are leased. With the contingent workforce now accounting for approximately one- third of the U.S. workforce, it is not difficult to draw parallels between these two pools of short-term, non-owned, needs- based solutions.
Getting More for Less Money
The one area where the two situations differ is the total cost. Unlike a car lease, you can upgrade and get a higher caliber of talent for less money when bringing in an interim executive to a business on a part- time or temporary basis. Rather than committing to a full-time fixed salary, plus bonuses/profit sharing, plus benefits, plus allowances (such as options on a car), interim staffing on a part-time or temporary basis only takes a comparatively small bite out of the total budget, since you are using the services for a shorter period of time.
“…higher- caliber of talent for less money when bringing in an interim executive to a business on a part-time or temporary basis.”
We usually see interim executives invest more time up front, at the start of assignments. As time goes on, their daily involvement is needed less and less. As their knowledge and experience are transferred and implemented throughout the enterprise, we expect to see less ongoing need for the executive’s services.
- Total cost over 2.5 years: $196,100
- Return on investment (ROI) for year one: $2,400,000 added to EBITDA
A full-time president for this company would have cost an average of $450k per year.There’s No Crystal Ball: Mitigating Risk
When I decided to lease a vehicle, my biggest concern was picking the right car for my growing family’s needs while balancing my own preferences. I was taking a risk either way. But with the lease, I was able to minimize the risk and put my mind at ease. It was only for three years, after all—not the usual decade or more that I keep a car.
Organizations and the business environment are changing at a more rapid rate than they have in past decades. Business owners are no longer looking at the calendar; they are looking at their watch. That is how quickly customer base preferences are changing. With that, the needs of the organization are changing, including talent and expertise needs.
Any opportunity to embrace a more flexible, scalable talent model helps mitigate the risks of too much, too little, or not the right kind.
When I turned in my leased car, I pulled up to the dealership, handed in the keys, signed a piece of paper, and walked away. It was that simple. (Of course, I also had the choice to convert my lease to a purchase and keep the vehicle. It was great to have so many options.)
In North America, it still seems a little novel to many business owners that great executive talent is available under similar terms.
Like the auto industry, executive search is evolving.
On the day I started driving to Monterey Bay, I never imagined I’d trade in the lifelong habit of owning, maintaining, fixing, and driving a vehicle into the ground. But times change. Driving off the lot with a freshly leased vehicle I could hand back in at the end of the term with no hassle was an innovation in the way I manage my transportation needs. In the same way, businesses are discovering a new executive search option to supplement their leadership and execute their business strategies.
To read The New Executive Search, click here to get the free eBook or buy it in paperback.