As an executive recruiter and adviser focusing on the key roles of CEO, CFO and CIO, our clients consistently express the objective to recruit a leader who has in large part performed in a very similar capacity before. This desire for "been there done that" executives begs the question, "Why is it that few companies choose to project talented leaders to the next level, and when should someone expect to get their first shot?"
While it is completely understandable to seek leaders who have done it before, at some point someone gave these leaders their first shot. So why is it that companies continually seek the "been there done that" leader? First of all, it's simply lower risk to recruit a CFO, for example, who has done it before; one of the most common requirements in nearly all of our public company CFO searches is having previous public company CFO experience. The risk of assessment is lower and the risks associated with the transition and responsibilities as a corporate officer are mitigated. Secondly, the short term orientation in most companies requires an immediate impact with limited time to develop a leader. As a result, the experienced leader can hit the ground running and the new leader can lead with limited oversight from the Board or the CEO. Finally, these are extremely difficult times and the stakes are high. In what is arguably a buyer's market for talent in the most trying of times, why would you hire and project a talent over someone who has already proven they can handle the job?
These are the drivers behind the emphasis on "been there done that" executives, but when does it make sense to take a risk and give someone their first shot? Clearly, the best time is when you have invested the time and energy in developing a talent and you've worked with them for many years. I would argue that this is the most overlooked answer today. Companies know the strengths and weaknesses of their existing succession candidates, but they choose to go outside rather than promote from within. This can be a mistake and a costly one, but companies do it over and over again; sending a signal to the organization that leaders must leave to ascend while the company takes a risk on someone they really don't know.
But clearly the more difficult challenge is recruiting someone from the outside and projecting them to the next level. In addition to assessing the challenges in your current environment and examing why a candidate has not been given the opportunity to ascend in their previous company, we suggest looking closely for three key attributes. Aside from the compelling personal qualities and leadership skills that any talent must have to be considered for the next level, the "groundswell effect" must be evident. Basically, the leader should have a groundswell of support from key mentors and people who have followed or been developed by this key leader. When other key leaders are consistently supportive and entrust their careers with someone, this is a key indicator of future success. Secondly, the leader should have led in a fairly autonomous organization, where he or she had direct responsibility for making an impact and can point to the successes and failures associated with the challenge over time. Finally, the leader should be battle-tested evidenced by taking on very difficult challenges. These situations are sometimes difficult to assess, but the learning curve is steep and the ability to handle the challenges in a new role at the next level won't be quite so daunting.
While today's environment has placed a renewed emphasis on "been there done that" executives, the cycle will shift and soon we will be back in a market for talent where the supply fails to meet the demand. This will coincide with the retirement of a generation of leaders, and the companies who understand how to project talents will win. Let us know your thoughts and experiences and how you assess the ability of key leaders to ascend to the next level.
