A recent BlueSteps Executive Career Insider TweetChat featuring Pearson Partners’ CEO Keith Pearson and our team.
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It’s not easy today to find talented technology professionals at any level of the organization. That’s why many companies outsource technology projects such as basic coding and development of web, mobile, database and CRM platforms.
However, most major companies and nonprofits need in-house supervisors and managers who understand the information tec hnology (IT) field, managing outside suppliers, and keeping projects moving forward on schedule. That’s why savvy HR professionals attend technology job fairs, build partnerships with area colleges and universities, and have solid recruiting plans in place when an opening occurs.
But the most difficult challenge for most organizations is engaging a new chief technology officer (CTO), a strategic thinker who recognizes the importance of technology in advancing the company’s business goals over the long term.
If you are recruiting a senior technology executive for the C-suite, here are four open-ended questions that may help the decision-making process:
Because the technology field changes so quickly (compared to finance, marketing, legal and other disciplines), it’s important to have the candidate look forward rather than backward during the interview. That’s because a candidate’s career accomplishments may not be relevant to the current challenges facing your company. For instance, an executive who successfully managed the migration from a legacy system to a client-server platform in the 1990s or developed an e-commerce program in the early 2000s might not have extensive experience with today’s business intelligence and data mining tools.
But the most important issue to address during the recruiting and interviewing process is whether or not the CTO candidate has the imagination, skills and experience to harness the power of technology on behalf of the organization’s mission and vision.
As the U.S. economy continues to forge ahead, many companies are focusing on their growth opportunities in the New Year. That might mean acquiring a competitor, launching a new product line, opening new offices or obtaining a substantially larger line of credit. For many businesses, greater prosperity may be right around the corner.
But the senior leadership team (SLT) also needs to make risk management a priority for 2015. The nation’s economic recovery, now in its fifth year, won’t continue forever. As we’ve seen in recent headlines, companies face the risk of unexpected shocks to the global energy, political and financial sectors—which could dramatically change their revenue and profit expectations.
Here are four suggestions for building risk management into the corporate strategic plan:
In the event of a crisis, a company’s shareholders, employees, customers and the media will be paying very close attention. A prompt and effective response can create a positive impression, while a delayed or uncoordinated response can amplify the negative impact.
In any case, it’s essential for the SLT to understand the risks the organization faces as well as the growth opportunities. That kind of balanced outlook in the C-suite provides a solid foundation for long-term, sustainable success.
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As published in Direct Selling News November issue
When it comes to the U.S. working population, all age groups are not created equal. There are significant differences in the fundamental values and predominant work styles of different generations. That raises a wide range of talent-related issues for organizations, including how to attract, develop and retain executives at different stages of their careers. However, there is one overarching challenge today: finding and hiring executives in their mid-30s and 40s with the potential to become tomorrow’s CEOs, CFOs and other C-suite executives to lead organizations into the future.
Today, the U.S. talent pool is substantially larger at the top and the bottom of the working-age demographic groups than in the middle, according to a recent report from Pew Research Center, Generation X: America’s Neglected ‘Middle Child.’ The Pew report outlines the clear differences between the three generations now in the workforce.
By 2015, over one-third of our work force will be retiring.
At the top are the 77 million members of the baby boom generation, who are now in their 50s and 60s. In most organizations, the senior leadership team consists largely of boomers who have accumulated decades of on-the-job knowledge and experience, but are steadily leaving their careers behind. In fact, more than 10,000 baby boomers retire every single day. By 2015, over one-third of our work force will be retiring, according to a 2013 Social Security Administration report.
An even larger demographic group is now entering the nation’s workforce: the approximately 83 million millennials, including a large percentage now in their 20s and early 30s. Because these millennials are beginning their careers, few of them have developed the experience necessary for the responsibilities that come with a position in the C-suite.
In between these two generations are the 65 million Gen Xers, who range in age from 34 to 49. Gen X executives are in mid-career, developing skills and experience that can be groomed to prepare them to ascend to the C-suite. However, based on demographics, organizations will face a shortfall in talent in the next decade unless they make succession planning a top priority.
Even as the relative scarcity of Gen Xers creates talent gaps, it also creates new opportunities for farsighted organizations to remain close to their customers as consumer habits evolve. For example, giving Gen Xers a significant presence in the C-suite can spur the development of new sales and marketing strategies, including innovative tactics based on the growing confluence of digital, mobile and social media. It can also provide organizations with fresh ideas and perspectives on changing customer values, attitudes and behaviors.
Virtually all consumer and B2B markets are undergoing similar changes. Companies whose succession plans are aimed at moving Gen Xers into leadership roles are likely to have an edge on their competitors in serving their steadily evolving markets.
The different perspectives, viewpoints and motivators of each generation can often result in misunderstandings and missed opportunities—especially in the workplace—and can be a recipe for disaster. Yet for all the media focus on the differences between the work styles of boomers and millennials, Gen Xers have received far less attention. Company leaders should take into account the values, motivations and drivers for mid-career executives in this age band, because there are some distinct generational differences in their work styles and motivators.
As the Pew report observed, “In most of the ways we take stock of generations, Gen Xers are a low-slung, straight-line bridge between two noisy behemoths. From everything we know about them, Xers are savvy, skeptical and self-reliant; they’re not into preening or pampering.”
There are some common factors to consider in recruiting, hiring, developing and retaining these mid-career executives. In many cases, Gen Xers value freedom and autonomy to a greater extent than either the boomers or millennials. Like the boomers, they are hard workers while still valuing family and personal time, and like the millennials, they appreciate an enjoyable workplace along with flexible work hours and location. All three generations share the value of trust and respect.
Also common among Gen Xers is a desire for self-sufficiency. Having grown up during a time of corporate downsizing and economic and political instability, they can be less attached to their employers—particularly companies that fail to engage them on a personal level. That makes it imperative for recruiters to highlight the company’s highest values and point out opportunities for senior executives to become involved in community, charitable and other causes that can make a positive difference in the world. Once onboard, these Xers need to continue to feel personally engaged and enriched in order to feel satisfied in their career.
Fortunately, most companies have a readily available source of information about what drives Gen Xers today—their internal talent pool of managers and professionals in their late 30s and 40s. Online surveys, focus groups and individual interviews—as well as participation in various organizational activities—can provide invaluable insight into Gen Xers’ attitudes and behaviors and play a key role in developing an effective succession planning program.
One of the first steps in succession planning is to determine the size and skill level of the internal Gen X talent pool. Are there enough potential candidates at the mid-career level to replace the boomers in the company as they move into retirement? If the answer is no, then it’s time to begin a focused recruiting strategy to bring more Gen Xers into the organization. If your Gen X candidate pool is already sufficient, then you should be actively developing these young executives in order to retain them.
It’s vital to consider how to prepare these future leaders for spots in the C-suite, whether they are longtime veterans or new to the organization. This development process begins with having a clear picture of your company’s vision: how it can improve, how you can reach your customers better, how you can be invested more with your clients, etc.
Your succession plan might include the names of three Gen Xers who could become CFO in the next three to five years.
Consider pulling together a strategic committee with executives from different disciplines who are comfortable sharing and evaluating individual ideas in order to come up with an overall vision for the future. Thinking this through can help identify who on your team would be the best fit to drive the company toward those goals.
Next, you should create a formal succession plan with a reasonable level of detail. For example, your plan might include the names of three Gen Xers who could become CFO in the next three to five years. List their strengths that make them a capable successor to the role, and also list the areas that need to be developed in order to make them successful. Be sure to specify where there are gaps in your plan that identify external recruiting needs. You should update your plan on a regular basis to reflect changes in both your organization and external market factors, and monitor the progress of these rising stars in their annual or quarterly reviews.
Once you have a succession plan in place, you can start working with your Gen Xers to develop them to ascend in your organization. These development plans can include both formal and semiformal learning settings, such as one-on-one coaching or lunch-and-learn sessions with a small group. You could also arrange to bring in a guest speaker or consultant to lead a classroom session or two devoted to specific leadership skills, such as motivating others or providing constructive feedback.
Potential Gen X leaders may also be encouraged to take educational courses that broaden their knowledge and skills. In some cases, an executive coach can provide one-on-one leadership training—an important consideration before moving someone into the C-suite.
In many cases, you can deepen an executive’s commitment to the company by creating opportunities for Gen Xers to develop a higher profile both inside and outside the organization. That could include putting them on the podium at trade shows or business events, or launching a blog that aligns their personal and professional interests with those of the company.
Your succession plan might include the names of three Gen Xers who could become CFO in the next three to five years.
Another strategy for building leadership skills is rotating Gen Xers through different assignments or managerial positions. These “stretch assignments” can be an effective tactic for deepening executive engagement as well as providing opportunities for them to develop new skills. It can be a key step in succession planning because it prepares a subordinate to step into the shoes of the current leader if that senior executive takes on a new role.
As with any professional development program, it’s a good idea to have a before-and-after comparison to determine the impact of these career-expanding activities. Your subordinates—and their managers—could write a brief statement about how they see their current leadership skills. You can also complete a more formal baseline assessment, perhaps with the help of an outside consulting firm.
After the coaching, teaching, speaking engagement or stretch assignment, you can have your Gen Xers update their essays, and/or complete new formalized assessments. In any case, you’ll have gained new insight into their ability to lead—as well as your own teaching abilities—while contributing to the strength of your organization.
As a senior executive, you can put this insight to good use by continuing the ongoing process of training, coaching and mentoring your Gen Xers in leadership skills. Not only will you be giving them an opportunity to grow and progress in their careers—and support your own succession plan—you’ll also get an opportunity to examine your own skill set.
Succession planning should be a high priority for all sizes and scopes of organizations—local, regional, national and global. Finding the right Gen Xers and grooming them for C-level positions—while also developing the next generation to take their place—is instrumental to achieving long-term sustainability. The injection of fresh ideas and new leadership styles can propel your company forward and take advantage of today’s evolving market opportunities. As you focus on the urgent daily challenges, be sure to look to the future by developing an effective succession plan.
Judy Stubbs is vice president and a retained executive search consultant with Pearson Partners International. With previous experience as the chief human resources officer of Mary Kay Cosmetics, she has been helping her clients build strategic leadership teams for more than 25 years.
When bad things happen to good companies, it’s important to understand what went wrong. After all, every organization, like every individual, makes mistakes from time to time. Unless the error is so horrendous that it forces a business to close its doors, the best thing the senior leadership team can do is to conduct a post mortem to understand why the mistake occurred. Then, changes can be made to reduce the risk of a similar problem in the future.
Here are some good questions to consider when analyzing an organizational mistake:
One of the basic rules of life—for organizations as well as individuals—is that we tend to learn more from our mistakes than our successes. Therefore, successful and sustainable organizations make sure they take the time to learn from their errors, and take any needed corrective action in order to get back on the right course.
If you’re satisfied with your brand’s position in the marketplace, beware of becoming too complacent. You may not be paying enough attention to the competition or the changes within your customer market. Even if you have been able to establish your brand as a global leader, your task is far from done.
Just ask Adam Goldstein, president and chief operating officer of Royal Caribbean International in Miami. In a recent talk to business students at the University of Miami, Goldstein said, “By almost any measure our brand is phenomenal. But it’s a constant challenge to try to express what we do in a way that is truly reflective of the special experiences and memories we create for our guests.”
In other words, branding is like a corporate quality improvement initiative—an ongoing journey rather than a destination itself. With that in mind, here are four suggestions for increasing the value of your brand:
In any case, careful monitoring and analysis of a brand’s value is one of the primary ingredients for success in today’s business world.
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A recent Thomson Reuters study, “Mining the Metrics of Board Diversity,” revealed that of a sample of 4,100 companies worldwide, 59 percent had at least one woman on their board, and only 17 percent reported that their board was 20 percent female. It’s even worse in Texas, according to a recent study by The Board Connection, with only 10 percent of Texas Fortune 1000 companies having women on their boards. Those figures are only slightly more encouraging in Dallas, at 13 percent. Although adoption of policies and processes promoting gender diversity has been increasing, these data reveal how few corporate boards are truly gender diverse.
Meanwhile, the study, along with numerous others, showed that companies with women on their boards tend to outperform those without. So correlated is this increase in performance that the consulting firm Deloitte refers to as the Gender Dividend. Some sectors—including technology, industrials and consumer goods and services—are leading the way in board diversity. Since women make up over 70 percent of the global consumer base, it seems apparent that gender diversity on boards is key to driving profitability.
Like their male counterparts, women are often recruited to board positions by way of their industry connections. But, it’s important for companies to be sure they are recruiting diverse board members for the right reasons: not simply because a candidate is diverse, but because that individual’s skills, experiences and perspective fill a void in the organization’s leadership. By the same token, candidates who are invited to serve on a board should perform their own due diligence to ensure a good fit, such as by meeting with the company’s leaders as well as other board members.
As Bob Pearson pointed out in a Searchlight article on this topic back in 2009, some companies say that while they want women on their boards, C-level female executives can be hard to find. While that is less true today, there remains a dearth of women in the highest ranks in the Fortune 1000. In those cases, he suggested looking outside the C-suite, and recruiting female board members from the ranks of senior management—especially where specific functional expertise is required such as HR—and also in the not-for-profit, government and public sectors.
Promoting board diversity takes a concerted effort, as seats may not become available very often. Some companies employ board term limits as opportunities to increase a board’s diversity, replacing board members every few years in hopes of gaining fresh insight. Yet, some argue that these limits are actually damaging because it can take years for a director to learn enough about a company’s operations to become a truly effective contributor, and good directors are often termed out too soon.
To maximize the value of a diverse board, it’s important to get female board members actively contributing to the board as quickly as possible. Because many boards only meet a few times each year, some companies have established programs for one-on-one board member education about operations and finances, bringing together new board members with functional leaders throughout the organization.
Even with the right onboarding program, it can be difficult to make a mark as a new board member—and that’s especially true for women who are joining a traditionally male board. Recognizing this, some female board members take the initiative to invest extra time and effort into building relationships throughout the company and on the board. For example, by initiating visits with the company’s executives and facilities, a new board member can grow her understanding of the company while demonstrating the value that she brings to the table. During this learning period, listening is important, but only by speaking up can a new board member establish credibility, break through a board’s existing groupthink mentality and exemplify the value of diverse viewpoints.
Countries like France, the UK, Sweden and Australia are making great strides in promoting gender diversity on boards, in some cases driven by legislation. Some countries are easing into it with “comply or explain” regulation, imposing a soft quota for women on boards (such as 40 percent in France for companies over 500 employees), while requiring those who don’t meet the quota to explain in their annual reports. Others are finding more success in voluntary initiatives (such as the 30% Club in the UK). Many companies in the Americas are grappling with whether such quotas are effective. At Pearson Partners, we advise our clients that mandates and quotas aren’t effective, and they can create disharmony in the team effecting board dynamics. We would prefer seeing board gender diversity as an organic movement. Furthermore, we believe the market is a more effective force, largely by encouraging investment in companies with board diversity because of their superior performance—i.e. the Gender Dividend.
Looking to the future, a common theme resonated among our panelists: Companies worldwide are increasingly realizing the benefits of diverse perspectives on boards, and the availability of board seats for women is rapidly growing. Female executives should be making preparations now by building their skill sets, expanding their professional networks and becoming board-ready to seize these opportunities.
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Lisa Thompson, Managing Director, Professional Services 
Recently, Facebook launched one of the most publicized initial public offerings in history only to fall flat on its face, perhaps due to unrealistic expectations, bad market timing or the way the offering was handled. It’s certainly a cautionary tale for any company considering going public.
Last year, several expert panelists at one of Pearson Partners’ quarterly “Spotlight Breakfast” events took a close look at the best practices for taking a company public. They emphasized the importance of early planning—sometimes years before an IPO is even contemplated. That’s because it’s critical for a company to have the right systems, infrastructure and processes in place to meet the expectations of investors and analysts.
For example, it’s important to have robust management reporting, budgeting and costing systems to meet analyst expectations right out of the gate. Once a company is public, resources must be dedicated to fulfilling the company’s obligation to its shareholders as well as compliance with Sarbanes-Oxley and other government regulations and financial reporting requirements. Of course, the management team must have the right focus and the skills to lead a company in the public sector.
Since going public is expensive—about $5 million to prepare a small company for an IPO, and about $2 million a year thereafter—an IPO needs to be done for the right reasons, such as financing a long-term growth plan, rather than seeking a quick infusion of cash. Market timing is also important because it’s difficult to succeed with an IPO if investors are feeling bearish. If all the internal reporting and control processes are in place, an IPO can be delayed until market conditions improve.
Finally, a company that’s considering going public should focus less on the price of shares and more on making effective decisions. This may be one of the reasons for the problems surrounding the Facebook IPO, although it may take time to determine just what went wrong. In any case, a private company should prepare the groundwork, develop solid corporate governance practices and have a strong story to tell potential investors. That’s the best recipe for a successful IPO.
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For companies seeking confident, skilled leaders, women can have a tremendous impact on the bottom line. Although almost half of the workforce is composed of women, comparatively few occupy the elite jobs at the top of the corporate hierarchy. However, the percentage of women leaders in the workforce is growing, thanks in part to companies that have learned the value of women’s influence, knowledge and contributions.
Pearson Partners’ Q2 2012 Spotlight Series event highlighted the current state of the female workforce, as well as ways that some companies are cultivating corporate cultures that advance women to leadership roles.
Our esteemed panel members included:
Angela Barrie of i4cp kicked off this quarter’s breakfast by bringing the group up-to-date on current statistics relating to women in the workforce. According to i4cp’s research, the U.S. workforce consists of 47 percent women, and of those, 51 percent are in a management or professional occupation. Of private businesses, 40 percent are woman-owned. Within the Fortune 500, however, women account for only 14 percent of executive-level roles, 16 percent of board seats and 4 percent of chief executive officers. A scant 7 percent of the top earners within the Fortune 500 are women, and just 9 percent of America’s chief information officer jobs are held by women.
Despite recent advances in pay equity, full-time female employees still earn only 77 percent of the income of full-time male employees, according to a study based on the U.S. Census. At 10 years past college graduation, on average, women earn just 69 percent of their male peers’ income.
Yet, women’s contributions and thought leadership can have a tremendous impact on a company’s bottom line. Ms. Barrie cited a Catalyst study that found Fortune 500 companies with three or more women on the board gain a significant performance advantage over those with fewer women, including a 73 percent return on sales, an 83 percent return on equity and a 112 percent return on invested capital.
It has been said that leaving women out of any decision means losing half of the thought leadership needed to make the best move. Because people are naturally attracted to those most like themselves, women leaders tend to cultivate women-friendly corporate cultures. By the same token, young people growing up today see women in leadership roles and expect that to be the norm once they enter the workforce.
One starting point for building a corporate culture that embraces women leaders: be sure that your internal organization mirrors and values both the culture your clients have and that which they would want you to have. Creating a corporate culture that allows and encourages women to excel starts at the top, with the visible and active support of the chief executive officer and his or her leadership team. It is important to understand the difference between mentoring a woman leader and sponsoring that leader. While mentors and sponsors both can provide counsel and guidance to emerging leaders, a sponsor will put his or her own career on the line to help women advance within the organization.
By setting measureable targets and holding people accountable by tying those targets to compensation, a company’s leaders can demonstrate their commitment to advancing women. Companies that allow women the flexibility to succeed in their work and still meet family demands help women achieve a balance of both. For jobs that require travel, it’s important for women with families to have strong support at home.
From Pearson Partners’ viewpoint, there is a vast market of highly qualified and skilled female leaders waiting to be tapped, and many of our clients are welcoming women into top positions and benefitting from their perspective and talents. The qualities companies are looking for in a woman leader are the same as those that make any leader great: confidence; a willingness to take risks; the desire to lead; and an ability to influence others, both within and beyond her own command and control structure.