Firms seeking leaders who can walk the walk
The prime quality that companies and their boards of directors look for when hiring senior executives is the ability to lead and motivate others, according to a global survey of 1,270 business leaders conducted by executive search firm IIC Partners.
In the Global Succession Planning Study 2014, respondents were asked to state the three most desirable attributes of a senior executive. A total of 68 per cent cited a preference for someone who could motivate and inspire others. A strong ability to manage change – at 51 per cent – was next on the checklist, while 46 per cent selected the ability to identify and develop talent. Only 26 per cent cited consistent high performance in their top three.
“The art of inspiring and motivating people is clearly a great gift that senior management should possess,” says Giuseppe Milito, managing partner of Stones International, a member of IIC Partners. “It’s important to know how to talk to, listen to, and influence people.”
He admits, however, that the desirability of these qualities varies between hirers. “If you are in a financial institution then, of course, the ability to inspire others is important. But a client of ours trying to hire a top executive will often primarily look at their network of contacts and ability to achieve results.”
Professor Chris Doran, adjunct associate professor in the Hong Kong University of Science and Technology’s Department of Management, says that being seen to walk the walk is a significant form of leadership.
“Inspiring and motivating your people takes more than a charismatic pep talk. You have to inspire them with the confidence that you are equipped to make good decisions and lead them in the right direction,” he says.
Doran believes that getting to the top doesn’t just depend on innate talent. A good EMBA programme, for instance, can provide the hard skills – such as finance and marketing – that can help inspire the confidence of would-be senior executives and give them an understanding of the latest research on leadership and motivation.
IIC’s study also looked at the composition of senior management teams. When filling positions at senior level, companies have two options: internal promotion and external recruitment. “Until a few years ago, it was very common for HR departments to work mainly on compensation and benefits [for external hires], but more companies are talking about training and development,” Milito says. “Of course, when you get to the top level of management, you want people who’ve been exposed to different environments. If someone has only been exposed to your firm’s culture then this guy may be your best ambassador within the company, but won’t necessarily have the open-mindedness and vision required.”
For external appointments, there is pressure to hit the ground running. “The natural tendency is to hire senior executives who can immediately drive your company towards success,” Milito says. “The fact that these days, data on what your competitors are doing, and how well they’re doing it, is so readily available, leads to a sense of: ‘We need to be doing as well as them,’” Milito says.
If an executive is moving across industries, the challenge becomes even greater. “Positions such as head of HR and head of finance are usually transferrable, but if you’re hiring at the very top you want someone who, on day one, understands how the industry works,” Milito says. “If you’re moving from FMCG to luxury goods, you need to understand such things as the difference in how distribution at store level works. If you come from a big organisation where you have the power to, say, impose the condition that your detergent must be at the entrance to the supermarket, this can take some getting used to.”
The need for companies to survive and flourish in an ever more volatile business environment is also highlighted in the IIC Partners survey. “Change is the only constant thing at the moment,” Milito says. “One of the key challenges businesses are facing is how fast business changes and industry borders are blurring. For example, [Alibaba investment fund] Yu’e Bao has taken only nine months to reach US$80billion in deposits, shaking up the deposit business in China from a totally unexpected direction.
“In previous decades, ‘senior management talent’ meant executives with proven performance in their area of experience. Today’s only certainty is change. The definition of senior management talent means people who can learn fast and shed old ways of thinking.”
However, even once top talent has been identified, it is not always the employer who offers the biggest compensation package who seals the deal.
“Sometimes I contact a CEO of a company to see if they are interested in moving to the same position with a larger company, but they tell me money isn’t everything,” Milito says. “Company culture can be very important – if you are part of the decision-making process, if you know that your input is valued, that you are respected and trusted, this can be more important than financial rewards.”