The economy is growing, technology and other disruptions are proliferating, and the roles of CEOs are getting more demanding. So board members must do a better job of hiring for the C-suite, with a broader list of criteria and a longer-term horizon in mind.
That’s how Clarke Murphy feels about things, anyway. And by signing up for his approach to C-suite recruitment and succession planning, boards of directors are validating the approach being advanced by the CEO of Russell Reynolds Associates, one of the globe’s leading executive-search firms.
Russell Reynolds recently has been changing its search process to adapt to and lead this new reality, Murphy said.
“We’re conducting deeper succession processes for the entire C-suite and actually the entire organization,” he told Corporate Board Member. “We’re helping boards make succession a governance priority, not just the realm of the CEO as it has been. Boards now are focusing on CEO succession and are becoming equal partners with CEOs on C-suite succession.”
Before the Great Recession, Murphy said, his firm, the entire executive-search industry, and their clients generally assessed CEO candidates as strong if they could bring superior performance in particular ways. “You had the visionary, for instance, or the cost-cutter,” he said.
“We’re conducting deeper succession processes for the entire C-suite.” – clarke murphy
But now, Murphy explained, “We’re advising our clients that they need to assess their CEO candidates on multiple levels, to determine whether they’re going to be able to succeed in a world of rapid change rather than the more one-dimensional approaches of old.
“Now we’re really focused on adaptability and the breadth of someone’s capabilities rather than on a single dimension. We think CEOs need to be disruptive to a certain level and, equally, pragmatic. We believe that being able to do both lowers the risk of a disappointment. We are helping clients pick people who are best suited to a changing world.”
At the same time, Russell Reynolds is helping its client boards get more involved in the corporate succession process, in part to do a better job of identifying internal candidates who are multi-dimensional – and then more effectively preparing them for potential future C-suite assignments.
“So we might have a boards client who says, ‘We’ve got three years to determine our CEO’s successor and eight candidates who might fit the bill. Can you benchmark whether all eight are good candidates, or identify the three or four who are, and figure out what else they should be doing experientially right now to help develop them in the next few years?’”
Such a scenario, Murphy said, helps the board “look at chess pieces further down the road rather than just looking at people and saying whether they’re in the succession process or not and, six or nine months from now, are they ready to be the next CEO.”
Boards also are applying a longer and broader succession horizon to their own ranks because of how much turbulence the director position has come to involve at many companies, he said. “We’ll hear, ‘There are three directors retiring in the next 18 months. What competencies do we need in the next directors to make sure we do the best job of governance?’”