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Headhunting
a CEO is the most critical search in the corporate world. Finding
the man who could be the correct “face” of the company,
make tangible the vision of the Board, determine the company’s
performance and attract, retain and motivate the right sort of people.
For the company as well as the individual, it is the make or break
factor which can change their fortunes forever — for better
or for worse. For the headhunters it is a momentous task, always
stretching across several months, but more than anything it is the
sensitivity of the issue which makes the CEO hunt so critical. The
precautions, the risk factors, make it a vital covert operation.
For
the company and the candidate it is necessary that the recruitment
should be successful. Satish Doshi, managing director, Sampoorna
Computer People, believes that it is not necessary to get the greatest
candidate to join a client as they could disrupt the organisation
and leave due to sudden differences. It is more important to ensure
that a right-fit CEO candidate joins and makes a sustained positive
impact on the organisation.
 Executive
search companies are either approached by the owners or in case
of MNCs by the Asia Pacific HRD head. The local level HRD people
almost never come into the picture. The process is also different
from the normal hunting for a functional specialist where the focus
is more targeted and industry specific. “It is more complex
as the CEO is often the face of the company and embodies its values
and selling propositions. As all functional heads report to him,
the search process is focused on a number of leadership parameters—depending
on the strategic situation the company finds itself in,” says
Sonal Agrawal, director, Accord Group India, adding that while some
generic parameters are energy, expertise, edge and experience, sometimes
it also extends beyond the obvious industry parameters.
A
lot of background research goes into the search process, even before
approaching the candidate. While old data can be consulted for every
search, the current study needs to be exhaustive as the business
model, location, focus, etc., keeps changing. A thorough research
of the organisation’s expectations and the individual’s
aspirations and the ability to fit the role is done. “One has
to understand the candidate’s mind and has to be very cautious,”
warns Rajaram Agrawal, managing director, Talent Ahead. Evidently,
it is also not possible for any just headhunter to approach a CEO
with the offer of another job—the brand value of the executive
recruiter is important.
 Interestingly,
there are no CVs in the search, which only comes at the last stage
for record purposes. And what is the best way of approach? “People
who head companies are extremely sharp. Money may be important but
definitely is not a necessary condition to attract people to this
level for considering alternatives,” says Doshi. Consequently,
an independent understanding of the candidate’s convictions,
wish lists, dreams, personal issues, current status, etc, are more
important. It also makes a lot of difference if the candidate has
known and trusts the executive recruiter personally over an extended
time period. Sonal Agrawal feels that the approach is an art as
well as a science. “During the course of the search the important
aspects are to evaluate a person’s suitability for a particular
role which will involve in-depth interviews and analysis against
preset criteria. In the end a good consultant has to ensure that
the opportunity genuinely enhances a candidate’s stature. The
role is of paramount importance to the candidate followed by the
parentage of the firm and the monetary rewards,” she elaborates.
The
incentives for different people at this level are different, that
is why it is so necessary to understand the convictions of the candidate.
The compensation is usually decided by the company and the consultant
and will be based on market norms for target candidates as well
as the complexity of the assignment and the company’s ability
to pay. IT companies usually offer ESOPs and occasionally the company
may be flexible enough to structure a package which is suitable
to the personal needs of the incoming CEO. Pointing out that it
is not easy to lure a person at CEO level, NK Marwah, managing director,
Magna Services (India), agrees that all are matured professionals
and approach the matter cautiously. “One needs to have good
understanding of what would motivate the prospect to switch. The
headhunter has to understand the motivating factors and draw the
compatibility with USPs of the proposed assignment without exaggerating
or falsifying the facts. Overselling of either part would result
in early divorce.”
Executive
recruiters advise a package in line with the business objectives.
In start-ups where the CEO’s knowledge and name is critical
to the business, stock options with achievement-based increments
are recommended. For fast expansion and growth opportunity where
profits may take a back seat immediately, it is cash incentives
in short terms and ESOP or equity conversion in long term. According
to Marwah the biggest risk factor is confidentiality. The search
agency needs to be very careful. Yet another significant risk is
the compatibility of the person, his capability with the assignment
and culture of the organisation. Any mismatch could prove to be
fatal for both.
While
organisations do plan and prepare people at the next level for taking
the top role, in a fast changing economic environment the strengths
required by the CEO in the same company can vary with the times.
Doshi explains, “It may be the ability to successfully complete
a merger/acquisition, or the ability to cut costs/rightsizing, or
change the organisation strategy, or maybe exposure to key markets.
Depending on the key function of the company, requirement for the
new CEO arises.” He cites the case when an owner MD of a company
realised that though the organisation had grown well under him it
could move to the next level only if he moved out. The hunt consequently
began for a new incumbent, not an easy task of course since apart
from the fact that the candidate had to ensure the continuous pattern
of growth, he had to also spearhead new operations. An arduous search
and assessment followed. The final solution included senior position
for the spouse, relocation factor and clarity on freedom of operation.
The selected person went on to successfully head the company for
a decade.
Marwah
gives an interesting instance of search strategy for a reputed business
house for top level team including the CEO and COO for the new Greenfield
IT services project. The business house was entering IT services
business with a huge investment but without previous exposure. This
was a global search with package ranging from USD 150,000 to USD
300,000 (Rs 70 lakh to Rs 1.5 crore). 14 probable candidates were
selected who could fit the job, however the initial intelligence
suggested that any direct approach might lead to haemorrhage of
interest hence a hybrid strategy was designed. “We advertised
for the position costing Rs 15 lakh, mentioning all details including
salary USD 200K, fully aware that none of the prospects is likely
to apply. The purpose of the advertisement was to show our customer’s
vision, size of the project, intent to invest and pay, apart from
raising the curiosity of the prospects. Also, I personally sent
the advertisement cuttings to 14 pre-identified prospects and requested
them to recommend someone instead of asking their interest directly.
This was followed by a personal call to check the effect. Virtually
everyone responded but seven were found to have developed personal
interest and were curious to know more.” Eventually four were
shortlisted to meet the client after screening and discussions.
It
is a little known fact that headhunters always keep a strong backup
ready. If a person changes his mind or the old company is able to
retain him (for instance by giving choice overseas posting or an
alternate lucrative offer), the backup candidate is brought into
the picture. “In India we publish the joining only after a
person takes on the job, while in the West it is published at the
time of appointment. This time gap sometimes becomes critical,”
says Rajaram Agrawal.
A
vital decision both for the company as well as the individual, the
consultant plays a very significant role in building the common
platform. The whole process can vary from three to six months.
A
critical head hunt
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A wrong move might make or break the company and the individual
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CEOs are more visible but approaching
them is difficult
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It is a CV-less executive search
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The headhunter has to do 60 percent of the research work discreetly
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Confidentiality is the greatest risk factor
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