Hiring the right person into a key leadership role is self-evidently crucial. What makes a person ‘right’ is a combination of factors and all of them must be thought about when you are embarking on a search for your new CEO, CFO, COO and so on. You might be surprised how often this doesn’t happen.
At risk of stating the obvious, the fact that someone has done something before and held the right job title, doesn’t necessarily mean they’re any good at it. Most people can name a time when they shook their head and asked why on earth a particular person was hired. The moral of the story? Don’t hire CVs, hire people. Sometimes that means taking a risk with transferable skills or appointing the new hire up a level. Certainly, it means taking references and doing due diligence and not relying on superficial knowledge and appearance. For a cautionary tale about what happens when we’re deceived by appearances, read about The Warren Harding Error (in this case the job being the US Presidency), recently made famous by Malcolm Gladwell in his book ‘Blink”.
People talk about ‘fit’ and ‘culture’ all the time, without necessarily thinking through what they really mean. Fit means so much more than ‘fitting in’, than having a good relationship with the staff, the rest of the board or the shareholders.
Fit covers a range of issues. Attitude to risk in the context of the trading strategy of a shipowning business was a key ‘fit’ factor for one of Spinnaker’s CEO searches. Our client was a highly successful multinational whose name immediately drew interest from a top-quality line-up of CEO and COO candidates. As the search progressed they started to realise that their corporate culture would struggle to absorb the change that the trading strategy they admired in some of their competitors would require.
This meant abandoning their interest in some of the shortlisted candidates they had previously been excited about. They had the good sense to reframe their ambitions in line with their culture and attitude to risk, understanding that who and what they had initially set out to hire would bring them into conflict pretty quickly.
Attitude towards pay and bonuses is a crucial issue to get out in the open at the outset. Executive salaries and total compensation in shipowning and shipmanagement (and the related service industries – insurance, shipbroking, industry bodies and so on) vary so Enormously (The capital ‘E’ being deliberate here!), as does the proportion of base pay and bonus, that it’s crucial not to be too embarrassed or too naïve to deal with it up front. If this sounds obvious, that’s because it is, but many boards start the process with a “let’s see” approach rather than taking advice, setting a budget and making clear their policy towards variable pay and long-term incentives. We will always try to get clarity on these issues; it makes presentation of the opportunity to prospective candidates much more compelling and avoids a lot of wasted time and invested emotion down the line.
None of this is to say that one can’t use a search assignment as a learning curve. One of our clients expressly set out to recruit a board member from a sector outside their core business in order to bring on board (quite literally) new knowledge and skillsets. They were honest about the fact that they didn’t fully understand the pay structure in what was quite an opaque sector so the shortlisting process was used to benchmark the role and set the budget, leading to a very successful outcome.
If you’re planning an executive hire, give Teresa Peacock a call for advice and support on +44 (0) 1702 480 142
“Before anything else, preparation is the key to success”
Alexander Graham Bell
