What’s a CEO to Do? (Part 1)
A sneak peek into chapter two of Pam Wasley and Kristen McAlister’s new book The New Executive Search on what a CEO would do.
These are just a few examples of the millions of challenging business situations owners and CEOs are facing daily. A CEO is charged with developing strategies and executing them, all while trying to keep up with the competitive landscape, the evolving needs of the marketplace, and maintaining a company of talented people who want to work with you. Business models are constantly changing.
Where business once was ruled by five-year, three-year, and one-year plans, it is now condensed to nine-month, eighteen-month, and quarterly plans. Business leadership has become a real-time endeavor. One of the drivers for this is the increase in competition. While business owners used to list their competition as direct competitors, “competition” is now defined as anyone who can solve the client’s problem. They may not be solving it in the same way, but if a solution meets other criteria, such as being more cost-effective or faster, it is frequently seen as a better value. For example, the ride-sharing services are in direct competition with the taxi industry; the ride-sharing companies see any personally owned vehicle as competition, as well. Any option an individual has to get from point A to point B is competition at this point.
“Competition” is now defined as anyone who can solve the client’s problem.
Technology is helping to drive this real-time transformation in a number of ways, including more direct purchasing behaviors, with fewer intermediaries. FinTech (financial technology) is a great example, resulting in less time and cost savings for users of such tech, including automated smart contracts, financial robo- advisors, digital security software, and more. Blockchain is also fueling this trend by eliminating the need for third-party verification services, such as traditional banks.
One of the greatest competitive threats facing businesses over the next decade will be sourcing and leveraging talent: both the availability of those with necessary skills and the increased competition to attract those skills to your company.
It’s not a revelation to say employees no longer stay with organizations for ten, twenty, certainly not thirty years. And as much as people enjoy attributing this to the job-jumping nature of the millennial generation and their younger counterparts, they are far from the sole contributors to the shorter tenure of employees.
The nature of business itself over the past ten to fifteen years has been a driving force of this phenomenon as well. At the executive level, resumés with five- to ten-year tenures are becoming rarer. It is not uncommon to see two- to three-year employment periods. The top two reasons for this are M&A (the company was sold) and relocation (the company moved out-of-state, and the employee was not willing to relocate).
As the employee-employer relationship and availability of talent have evolved, companies need to reassess the skills of the talent they need. Instead of an IT professional to manage server equipment, they may need someone who can manage their cloud solution, for example.
The individuals with skill sets in high demand are evolving, too. How individuals want to work, when they want to work, and what they want to work on are forcing companies to adjust their business models to be less dependent on people, more focused on what needs to be accomplished and the skill sets necessary to do that.
Traditional Executive Staffing Options
The businesses described in the first chapter of the book are real businesses and had problems similar to many other businesses. Not having the expertise or bandwidth to address the situations themselves, these business owners and CEOs traditionally would have had the following options:
- Hire a full-time executive
- Bring in a consultant
- Promote from within the company
- Do nothing
Hiring a Full-Time Executive
When the company needs full-time leadership for the longer- term, this is the best option. The challenge is finding the right person. We could write an entire book (and we are) on finding the right executive, and we will provide some basic guidance in section 3. Unfortunately, we have talked to too many boards, business owners, and CEOs who have not found the right fit, and it cost the company in many ways. (If you are curious about the most common reasons bad hires happen, see the story at the end of this chapter.)
Stay tuned for part two of the chapter. To read The New Executive Search, click here to get a free eBook or buy it in paperback.