Felix: Are there generational issues that contribute to that? In other words, could it be related to how long someone has been doing things a certain way?
Dean Stamoulis, managing director, global executive-assessment practice, Russell Reynolds: No, the key is the degree of volatility, which is unprecedented. Organizations need leaders who savor the ambiguity and really have a thirst for working through it.
Felix: Are you finding that boards are recognizing the changing leadership profile, or is it difficult for them to get their head around the issues?
Dutra: Not only are they recognizing it, but it’s becoming a critical retention issue. The top 10% of the talent is being pursued by multiple companies. You have to understand who your agile executives and high-potential people are and how to retain and motivate them.
A few years ago, I was doing work for a global transportation company, and the C-level people had all grown within the organization. They were both loyal and engaged. When new, younger executives were brought in, they were also engaged but not loyal — they could leave at any moment. With today’s executives, you should renew their contracts every year, with an understanding of what’s going to keep them engaged, productive, and motivated.
Felix: With everything not going back to the way it was before the recession, is this a time of fear and uncertainty about how to assess and establish the criteria for leadership?
Anterasian: I wouldn’t use those terms, but boards increasingly recognize that part of their risk-management responsibility is to maintain a consistent talent pipeline to the top. It’s actually one of their most important roles. Increasingly, new CEOs are coming from inside companies, and that trend is likely to continue. That puts pressure on boards, CEOs, and human-resources leaders to develop that internal pipeline.
Audience member Jason Johnson, managing partner of Johnson Executive, an Australian search firm: I’m a great believer in leadership consulting and its ability to align with executive search. But how do you manage the inherent conflicts? In Australia, we’ve had some significant incidents where executive-search practices were searching in organizations that were also clients of those firms’ leadership-assessment arms.
Greene: We keep the search and leadership-assessment databases separate. The search database is completely hands-off to anyone in leadership assessment. Secondly, while clients are asking us to make executives off-limits to our recruiters for two years after we assess them, we would not take out someone even five years after an assessment.
That presents a challenge: within any given sector there are only so many clients you can put off-limits before that whole sector starts to be off-limits to search.
Dutra: The conflicts are not too different from those that come with doing search only, because you have to pick the clients you’re going to be loyal to in each sector. The saving grace is for us is that the more we grow and the more we work with global companies, the more separate and even siloed the buyers are within the same client. We may work with a global organization that we mostly consult for in one part of the world and mostly do search for in another region.