Senior Executive and Board Movement Update : The Enormous Lost Opportunity
I write this as a student of corporate Australian leadership, concerned by the enormous lost opportunity of not capturing the very best local and global capability.
Over the last financial year, we witnessed across the ASX-listed companies:
88 Chair appointments
472 Non-Executive Director appointments
101 Chief Executive Officer appointments
THE QUESTION IS …..ARE ORGANISATIONS GETTING THE VERY BEST?
We’ve all read somewhere leaders should surround themselves with the very best they can.
I may sound a little flippant, but as a Search professional one is staggered at the senior executive capability that is not being identified, targeted and engaged. Secondly one is also somewhat surprised why mediocre performance at times and at the top is being accepted and not dismissed.
Yet the catch cry at ad nauseum is high performance, innovation and collaboration.
As a professional working across the C-Level and Board appointments, I am in a privileged position to understand the market in far greater depth than most, I am also privy to the processes undertaken to attract the very best.
I certainly appreciate efficiency and cost drivers, however I also look at the reputational damage and lost opportunity being created by less than optimal practices. The ability or willingness to conduct strategic hiring processes has noticeably dissipated over the last five years.
Top executives are normally happy and busy in their work, and have to be targeted and engaged in a sophisticated manner. The process is detailed, complex and the journey of extracting them from one organisation to another will undoubtedly have its twists and turns. This is where confidentiality, trust, judgement and experience come into their own.
ASX BOARDS
If we look at some Boardroom practices, such as “lets bounce ideas around amongst us and go to our network,” it’s fairly obvious that this has its limitations and is far from an exhaustive process. More concerning is the duty to the investors, both institutional and retail seeking returns and expecting comprehensive methodologies are adopted to acquire the best. Unfortunately, this go to our network philosophy, is more prevalent than one would think. It is not to say that this process should not be undertaken but if the Board is genuinely seeking to appoint the best then it must be undertaken as part of a comprehensive search process to capture those known and unknown. It is worth examining the composition of the Australian ASX Boards particularly the recent well publicised calamities where Boards were arguably not fit for purpose. I will let you be the judge of these and the processes and practices that you may have seen. The amount of high potential directors that have not been considered, investigated or pursued is truly staggering.
Consider the number of Chief Executive Officers (CEOs) in recent times who stuck around too long. There were CEO changes well and truly overdue that everyone in the market knew except, presumably the board presiding. Those Chairs in my opinion need to be looked at, the Board members names consigned to memory for being ineffectual. Hiring and firing the CEO is their no.1 role and as such should be held accountable, that is their judgement put under scrutiny for their current Board and future Board portfolio. One needs to examine what is the Board composition, what are the individual Director backgrounds, what demonstrable value do they bring, does their backgrounds and perceived value align to the future strategy? Why did the Board and Chair fail to replace the non performing CEO’s, what was their succession planning strategy, how are organisations left with limited internals for consideration? How much opportunity did that Board squander? Why was average performance permitted for so long?
ASX EXECUTIVE TEAMS
If we examine some of the recent processes in executive appointments we have seen the rise of the internal recruitment teams. These are people onsite, employed or outsourced representing organisations to acquire the senior leadership, those that drive the organisation, set the tone and deliver the results. Surely, the investment, focus and strategic process must be directed to capturing the very best executives. No.!!! Instead, analysis of how much may have been saved vs brand damage, senior candidates first and last impression, lack of independence and questionable experience to operate at the top end is for many acceptable. For the most part it is amateur hour. It is not about cost saved but the opportunity the top class executives create for an organisation which far surpasses cost.
Internal recruitment teams most certainly have a role to play, at low to mid-level recruitment. However it appears that a sizeable number have overstepped their mark, and the irreversible damage is extraordinary. Firstly, relying heavily on LinkedIn and other platforms is hardly expansive, in depth or appropriate. Not everyone has a LinkedIn profile nor are they are going to apply for advertised roles ..the top executives tend to be exceptionally busy. They also require and expect counsel, independence and a deep appreciation of the fuller market, not just the company an internal recruiter is representing.
The number of top-class individuals not being examined or considered by corporate Australia is enormous. Good people maybe disguised in different titles, adjacent industry markets or off shore locations. The approach to the very best has to be thought through and calculated. The old saying “ You don’t get a second chance at a first impression,” captures it so well. Sadly, the number of discussions I have with senior executives approached in a haphazard manner, during work hours, blunt and ill-informed or calls never returned by internal recruitment teams is shocking and leaves a permanent reminder to those poorly engaged.
So well done to those who saved a few bucks, you didn’t hire the best, you were never going to get the best or at least put yourself in a position to appoint the best. The emphasis and investment placed on getting the best will be reflected in company performance. It is as simple as that. Look at the Top 50 ASX and some of the lacklustre results that have been permitted for so long and the methodologies to attract the game changers.
The rhetoric is strong on high performance, the methodologies and approaches I beg to differ. The people function and the acquiring of talent needs to be reviewed. Too many ticks not enough questions. Cost vs Opportunity should be questioned – unfortunately those being questioned don’t know the answers.
POINTS TO REFLECT ON
The Lost Opportunity of not getting Top Talent is enormous. It sets the tone for weak leadership.
Ask a senior executive your greatest regret – Not firing someone. So why persist with mediocrity?
Ask a successful senior executive the essence of their success in business – The people.
Are you surrounding yourself with the best? Are your Board Directors value creators, are your executives game changers?
WHATS NEXT?
Moving forward into what I believe will be an even greater period of disruption you have no choice but to raise the bar. The requirements of leadership, in terms of transformative depth and pedigree is significantly different to only a few years back.
If you want the best, if you are fine to be challenged, if you want no stone left unturned contact myself or my colleagues at Blenheim Partners.
13 YEARS in and a track record of 100% success at Board and C- Level search…. I’m pretty certain our competitors can’t say that.
Please note we are a retained search firm.
Gregory W. Robinson
Managing Partner