Here at Otravida we know the importance of selecting the right leaders for your business. After all, look at the effect Steve Jobs’ return had on Apple. The former CEO’s homecoming in 1997 inspired the organisation to become one of the largest in the world and made his face one of the most recognisable on the planet. However, a change in leadership can also negatively impact a business which is why it’s so important to understand how they choose their future leaders.
You only have to look at the latest news reports to see a timely example of poor succession planning. The Co-Operative Group recently accepted the resignation of CEO, Euan Sutherland after just over nine months in charge. Sutherland felt his job was “impossible” due to the board’s reluctance to change the style of governance that it’s used in its 170-year history. His resignation raises an awful lot of questions; not least why the Co-Op would hire a leader who fundamentally disagreed with the way the organisation is run? It’s obviously crucial to bring in someone with fresh, innovative ideas, but it’s even more important to ensure this doesn’t come at the expense of company culture and values. In perhaps a more extreme example, the recent resignation of Mozilla’s CEO highlights just how damaging an individual’s views can be to a brands reputation.
Sometimes, recruiting leaders from different backgrounds can benefit an organisation, with notable examples in the sporting world. Mark Warburton, the Brentford manager who has led the West London side to the top of League One, is a former currency trader who sacrificed up to 90% of his earnings to follow his dream. His fresh thinking has led to a turnaround in fortunes for the side and helped them to a 19-game unbeaten run earlier in the season. Another example is Nicola Cortese, the former Southampton Chief Executive and an ex-banker. At the time of Cortese’s arrival, the club were in the third tier of English football, however his innovative leadership has helped the side to climb up the League and develop a new wave of English talent. While both of these leaders come from radically different backgrounds to the majority of football managers, care was taken to ensure they could both work well in the new environment and agreed with the existing company values, something the Co-Op certainly didn’t achieve
So what should organisations do? Be adventurous and look for alternative leadership options or stick with the less risky choice and take on someone with a track record in your industry? Advances are constantly being made that can create openings for your company and sometimes fresh thinking is the best way to seize these opportunities. At the same time, you have to consider the effect a new leader with different methods can have. This could disrupt what’s worked in the past and in the longer term could affect both morale and productivity, potentially harming the business in the long run.
It’s obviously difficult to find the perfect leader for your business, particularly in a crowded market where job moves are becoming increasingly regular. It might, therefore, make sense to hire internally. After all, the candidate will already have a good knowledge of the organisation and you’ll know whether they’re a good cultural fit. And if you’re hoping for ‘business-as-usual’ to continue then recruiting from the inside may be a viable option.
However, looking internally for your next leader can also create its own challenges. An existing employee may be concerned about making decisions that upset their peer group, potentially affecting their ability to lead authentically. And in the modern world most businesses have to diversify and find new areas to branch into to be successful. This will require someone from the outside, with a fresh perspective on your business and an understanding of how the markets operate outside of your organisation. Otherwise you risk appointing someone who’ll just keep business ticking over, rather than driving it forward.
It goes without saying that the combination of technical ability and personal skills is still incredibly important to a successful business leader. And it’s probably safe to say that no one would get to this level without possessing at least some of these competencies. However this can all be discarded if the individual isn’t a good fit for the company. Euan Sutherland has a hefty track record after working for companies like Coca-Cola, Currys, Superdrug, Mars and Matalan but this wasn’t enough to ensure he was a good fit. Companies need to look past the impressive experience and drill down into the values and beliefs of the individual to see if they really are a good match, otherwise they risk running into the same problems as the Co-Op.
Do you think company culture plays a big part in the selection of future leaders? Let us know by commenting below.
Darren Timmins is Head of Otravida Search, an executive search and selection organisation delivering bespoke and agile talent solutions.