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vol. 4, no. 1 - January/February 2008 the bottom line Corporations Demand More Than Ever from CEOs By Cary Morill High-caliber executive leadership is crucial to a company’s success in today’s increasingly complex and global business environment. The quest for a new CEO has become an infinitely more exacting and complicated endeavor. Rapid technological advances, increased competitive pressures, globalization and growing economic and cost constraints have given birth to a new model company and the profile of the CEO required to lead this company has changed accordingly. Finding the right CEO with the appropriate mix of professional and personal qualifications will be one of the most difficult challenges facing organizations in the upcoming decade. Today’s corporation is a leaner, more flexible organization oriented towards third-party partnerships, alliances and contingent relationships. Mergers and acquisitions, corporate restructurings, global expansion and abbreviated product/market lifecycles require companies to identify and respond to new opportunities more rapidly and more effectively than the competition, and to do so with significantly fewer resources—in some instances downsizing has reduced staff by as much as 50%. The stakes are higher, and companies, concerned with long-term viability, demand a new breed of CEO, one who keeps constant vigil on customer needs, market trends and corporate performance, and moves quickly to recast corporate mission, strategy, product spectrum and culture to ensure competitive advantage and continued growth. The CEO’s task used to be clear and indisputable: Chart the company’s course and provide the vision and leadership necessary to enhance its competitive position and achieve maximum growth and profitability. In short, bring to the market the right products at the right time and the right price. Today, competitive pressures and fewer people to do the job allow little margin for error, and the human resource—people—has emerged as a major strategic weapon and one of the key sustainable competitive advantages a company can possess. No longer is it sufficient merely to formulate and drive the company’s mission, today’s CEO also must formulate and drive the global architecture of the organization at home and abroad. We have watched organizational culture move beyond the confines of the human resources department and into the executive office. Today's CEO must be multidimensional, as much coach and human resources guru as leader and visionary, creating, shaping and maintaining a competitive corporate culture, and adding a critical dimension to an already complex role. As the founder and CEO of U.S. health care informatics company so aptly put it, “Where once I focused on strategy and direction almost exclusively, today I spend 25% to 30% of my time building a culture that fosters professional growth and satisfaction and puts the right people in the right jobs globally to ensure we meet our goals.” A strong culture that provides challenge and growth for employees is as integral to success as an aggressive mission and a targeted strategy. Hiring a CEO has become a far more difficult and complex undertaking. There are fewer CEOs with the requisite qualifications and experience and companies are fighting back to keep the good ones. A much broader constituency —employees, customers, strategic partners, board of directors, shareholders and institutional investors—now must be satisfied. We have seen the demand for strong shareholder return increasingly drive the search process, as we have seen mutual fund companies, wielding the power to dump under-performing companies and plummet stocks by as much as 30%, influence the choice. With pressure to find the right person and the imperative to provide value to the unit holders, the board has become more proactive, with the entire board, rather than one or two members, directly involved. While this greater involvement affords a more balanced power structure, the net result can be a greatly protracted search process. Mistakes are costly, so specifications are tighter, expectations are higher, reference checking more rigorous and consensus more difficult to achieve. While each search assignment is unique, there is an overall desired profile that we find increasingly common to most CEO searches whether the client is public or private, large or small. Companies want as CEOs those individuals who have successfully managed a company through a complete business cycle, through periods of high-growth ramp-up and downsizing, who have successfully positioned and grown a company on a global basis, who are as comfortable addressing technology or manufacturing issues as they are marketing or customer issues, and who have assumed a leadership role in effecting positive cultural change within an organization. Even knowledge of the company’s industry, once so critical a determining factor, now often takes a back seat to the need for strong and participative leadership. In short, the CEO of today is a well-rounded leader and manager actively involved in and influencing all aspects of the organization, from strategy to culture to day-to-day management. Cary Morrill is vice president of Boston OakBridge, Inc.

vol. 4, no. 1 - January/February 2008

the bottom line

Corporations Demand More Than Ever from CEOs

By Cary Morill

High-caliber executive leadership is crucial to a company’s success in today’s increasingly complex and global business environment. The quest for a new CEO has become an infinitely more exacting and complicated endeavor. Rapid technological advances, increased competitive pressures, globalization and growing economic and cost constraints have given birth to a new model company and the profile of the CEO required to lead this company has changed accordingly. Finding the right CEO with the appropriate mix of professional and personal qualifications will be one of the most difficult challenges facing organizations in the upcoming decade.

Today’s corporation is a leaner, more flexible organization oriented towards third-party partnerships, alliances and contingent relationships. Mergers and acquisitions, corporate restructurings, global expansion and abbreviated product/market lifecycles require companies to identify and respond to new opportunities more rapidly and more effectively than the competition, and to do so with significantly fewer resources—in some instances downsizing has reduced staff by as much as 50%. The stakes are higher, and companies, concerned with long-term viability, demand a new breed of CEO, one who keeps constant vigil on customer needs, market trends and corporate performance, and moves quickly to recast corporate mission, strategy, product spectrum and culture to ensure competitive advantage and continued growth.

The CEO’s task used to be clear and indisputable: Chart the company’s course and provide the vision and leadership necessary to enhance its competitive position and achieve maximum growth and profitability. In short, bring to the market the right products at the right time and the right price. Today, competitive pressures and fewer people to do the job allow little margin for error, and the human resource—people—has emerged as a major strategic weapon and one of the key sustainable competitive advantages a company can possess. No longer is it sufficient merely to formulate and drive the company’s mission, today’s CEO also must formulate and drive the global architecture of the organization at home and abroad. We have watched organizational culture move beyond the confines of the human resources department and into the executive office.

Today's CEO must be multidimensional, as much coach and human resources guru as leader and visionary, creating, shaping and maintaining a competitive corporate culture, and adding a critical dimension to an already complex role. As the founder and CEO of U.S. health care informatics company so aptly put it, “Where once I focused on strategy and direction almost exclusively, today I spend 25% to 30% of my time building a culture that fosters professional growth and satisfaction and puts the right people in the right jobs globally to ensure we meet our goals.” A strong culture that provides challenge and growth for employees is as integral to success as an aggressive mission and a targeted strategy.

Hiring a CEO has become a far more difficult and complex undertaking. There are fewer CEOs with the requisite qualifications and experience and companies are fighting back to keep the good ones. A much broader constituency —employees, customers, strategic partners, board of directors, shareholders and institutional investors—now must be satisfied. We have seen the demand for strong shareholder return increasingly drive the search process, as we have seen mutual fund companies, wielding the power to dump under-performing companies and plummet stocks by as much as 30%, influence the choice.

With pressure to find the right person and the imperative to provide value to the unit holders, the board has become more proactive, with the entire board, rather than one or two members, directly involved. While this greater involvement affords a more balanced power structure, the net result can be a greatly protracted search process. Mistakes are costly, so specifications are tighter, expectations are higher, reference checking more rigorous and consensus more difficult to achieve.

While each search assignment is unique, there is an overall desired profile that we find increasingly common to most CEO searches whether the client is public or private, large or small. Companies want as CEOs those individuals who have successfully managed a company through a complete business cycle, through periods of high-growth ramp-up and downsizing, who have successfully positioned and grown a company on a global basis, who are as comfortable addressing technology or manufacturing issues as they are marketing or customer issues, and who have assumed a leadership role in effecting positive cultural change within an organization. Even knowledge of the company’s industry, once so critical a determining factor, now often takes a back seat to the need for strong and participative leadership. In short, the CEO of today is a well-rounded leader and manager actively involved in and influencing all aspects of the organization, from strategy to culture to day-to-day management.

Cary Morrill is vice president of Boston OakBridge, Inc.

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