article | February 22, 2017
Do You Have the Right Talent to Lead Your Transformation?
Today’s article is a focused on how to select and retain the right talent for a transformation. If you would like help with this topic, visit The Studio, SBI’s multimillion dollar, one-of-a-kind, state-of-the-art executive briefing center. A visit to The Studio increases the probability of making your number because the sessions are built on the proven strength and stability of SBI, the industry leader in B2B sales and marketing.
I recently interviewed Sean O’Brien, the Chief Administrative Officer of PGi. The CAO title is becoming more prevalent in the C-Suite, and is used to describe an executive responsible for two or more functional areas. PGi is a global leader in collaboration software and services. Any time you want to connect with people that you are not present with, PGi is the glue to make that happen. Sean demonstrated how to select and retain the right talent for a transformation.
Sean describes how to evaluate talent, both existing and new. Take a step back and look at the existing executive team as if you’re looking at them for the first time. Sean states, “in many cases, the talents, the skills, the people that were responsible for getting you to where you are today are not necessarily the ones that are going to take you forward into the future most effectively.”
Talent strategy requires you to match the capabilities of the executive leadership team to the objectives and requirements in the corporate strategy. During a transformation, the talent of the C-Suite needs to be matched to the new skills required. It’s an opportunity to re-establish that you have the right people in the right roles to take your company through that critical transformation.
Why this topic? The revenue growth objective, during a transformation, is heavily dependent on having superstar executive talent. At times, the revenue growth strategy calls for a new set of competencies that the existing team does not possess. Mismatch talent and strategy and suffer from significant execution problems.
Sean is uniquely qualified to speak on this topic, and below you will find the questions and answers from our discussion. If you prefer to access an audio podcast of the full interview, listen here.
Sean, as a company goes through a transformation from one business model to another, how do you determine if you have the right executive team in place?
When a company is going through a significant transformation, especially in its core business model, in many ways, you really have to step back and take a fresh look at your executives like you’re looking at them for the first time and really evaluate the teams. Because the fact of the matter is, in many cases, the talents, the skills, the people that were responsible for getting you to where you are today are not necessarily the ones that are going to take you forward into the future most effectively. When we look at our executives, you also want to really give it some context. You want to look at market, look at your company, ask yourself questions like what stage of development is your organization? How is the organization performing against its financial and strategic goals and objectives? What are your current challenges? What does the market look like? Are there new competitive threats that you’re facing?
The answer to those questions will help you determine a lot about your executives. If you’re more established and successful, you might not need that certain change agent type executive that you might need if you’re caught with some challenges in your organizational structure or if you’re caught in the market that’s got some new competitive threats. For me, it’s an opportunity to reassess and reestablish that you have the right people in the right roles to take your company through that critical transformation.
If we assume that this analysis reveals some changes that are needed, how do you determine if you should hire to or train to, to close the gap?
That decision really hinges on a couple of factors. Really, what it gets down to for me, Greg, is it’s really a build or buy decision. When I’m looking at it, you have to identify, is it a deficiency in their skill-sets or maybe a specific professional experience that they’re lacking? If that’s the case, you may want to invest in training to fill that gap, but if the deficiency is elsewhere, like just in their general experience or even more to the point, or if it’s a work style or a mindset, you may want to consider going outside because it may be more cost-effective and time-effective to go out and source a new executive for that role.
The one thing that you need to keep in mind, it’s important to always understand when you’re talking about executives, it becomes really a matter of opportunity cost. There’s a cultural impact. There’s the [tone 00:05:41] from the top that’s so critically important when you’re going through a transformation. These are highly paid individuals, taking them out of the market, taking them out of their job to do skills-based training and things like that has a cost that’s very real to the organization. Taking a candid and a wholesome look at exactly what is that skills gap and how realistic is it to bridge is going to be a key determinant of whether it’s easier to build or to buy that executive talent.
How do you get the company’s leadership team comfortable with the disruption that change like this might cause?
Well, it really starts with a hard look and basically, an honest assessment of what the potential pitfalls are. From me experience, there’s never a perfect answer. Whenever you’re bringing in a new dynamic and whether it’s a new personal together or a person transitioning into a new role, it’s going to be imperfect because you’re dealing with … The extreme end, you may be dealing with satellite organizations or turf battles or things like that, or you’re just dealing with the fact that when people are involved, it gets complicated because most people are naturally reluctant to change.
The more time you spend upfront trying to foresee some of the potential pitfalls and to work a plan around it, I think the better off you’re going to be. In our case, I’ll give you an example. A couple of years back, we were looking at adding a new senior executive, chief information officer. They were going to be hired into a role that previously didn’t exist here at PGI, which was going to potentially be problematic for people who had been in various functions across our company for many years. The biggest consideration there was the potential cultural friction to your point of bringing in the new person.
In our case, the timing worked out well that we were able to sort to do a ‘try it before you buy it.’ We were to engage this gentleman in a consulting role in the advance of actually offering him a full-time job, which gave him an opportunity to get socialized, to get used to our climate and our culture. By the time that we actually were ready to offer him a full-time position, the teams that ultimately, we’re going to roll up to him really understood the caliber of person they were working with and the cultural impact was minimal.
The last thing I would say before I forget is I cannot overestimate the importance of communication. That communication element, giving the context to the rest of the leadership team to the rest of the company of why now? Why this role? Why this individual person is going to be so important? Because of you get in front of your people early and often by e-mails, by town hall meetings, whatever it is and help them put the pieces together to really understand the business rationale, the strategic rationale of why this change is being made, I think you’re going to find yourself with a much less disruptive impact of bringing someone on the team.
Over communicate and you’re right. That can’t be emphasized enough here, especially if you’re worried about this disruption in bringing in a new executive or new executive team during a transformation is highly disruptive. Explaining why now, why this person, why this role, et cetera is a very key thing.
How long does it take to fill an open executive position?
Well Greg, it really depends. For us, we’ve been super fortunate recently over the last few years. We haven’t had to go out and do an exhaustive 9 to 12 months’ search, but it has happened to us in the past. Sometimes, things align. Someone in your network or through a recruiting option comes forth that has exact experience and skills for the role that’s at hand. Other times, it can be more burdensome. The thing that I always try to focus on is, it’s much more important to fill the spot with the right person than it is to just get it filled, because while there’s a cost of vacancy in the senior leadership role, there is a very real cost to making a misstep. It’s important to be acting with urgency, but not in haste when making your decision.
When you source candidates, do you do it yourself? Do you use executive recruiters? What’s your preference?
We’ve successfully done both in the past. We tend to lean more on our own networks than on recruiters. I think when you talked earlier about the cultural impact, the cultural fit is so important and the more that you can lean on your own individual networks to identify people for personal and professional relationships, I think that’s a great starting point to making sure that it’s cultural fit. But at the same time, we’ve been very fortunate over the years working with a small set of executive recruiters that know us well, know our culture and know what it’s going to take to be successful in a role. It’s really been bold for us.
Let’s talk about working with executive recruiters because that’s something that our clients do a lot. From your perspective, what works well when working with these executive recruiters and what does not work so well? What advice would you give the audience in this regard?
I think you hit the nail in the head. There’s positives and negatives and I think the positives are clearly, executive recruiters, they can be very niche-focused. You can find a recruiter who specializes in sourcing technology executives. You can get that level of granularity which can save you a lot of time when you’re trying to source a very specific need within your organization. Their networks, especially at the C-level, they’re considerable. Their job is to keep them constantly refreshed.
For a company like ours, as PGI, one of the things that recruiters help us do is tell the story, because we’re not necessarily a household brand, but we’re very well-known in our industry when it comes to recruiting talent from outside which we’ve looked to do as we’ve gone through a transformation. They’d help us get candidates interested in the role. Now, the challenge is, to the other side of your question, the biggest challenge is nailing that cultural fit. Culture is something that’s … It’s impossible to really quantify or to express. You have to be inside the organization I believe to fully understand it because it’s really nuanced.
You can’t, as an outside agent, really speak with the same passion and level of understand of how would people come together with the products and the process to make whatever is special or unique about your culture, make that accurately and adequately convey to the candidate. A recruiter will never be as good at telling your story as an internal resource will be. But again, they bring so much value that for the right search, we will look to engage them accordingly.
Does that mean that you tend to use the same recruiter? Because at some point, they really know you. They know your culture and they really know the story, or is it better to maybe have multiple relationships with a variety of different recruiters?
We do. We do tend to go back to same recruiters for the very reason you mentioned. For us, the more they understand us and who we are as an organization, what it’s going to take to be a success, the better they are at doing their job. That’s more efficient for them, more efficient for us, but we have, especially as we’ve gone through this transformation in our own business model, we have opened our network of executive recruiters as we’d look to bring in new types of talent that just weren’t even in our vernacular two or three or four years ago. We tend to lean on a few close partners in that regard, but we’re also open to expanding beyond that as the need dictates.
As a rule of thumb, do you think it’s best working with kind of the big mega recruiters because of their vast reach or do you think it’s best working with some of the smaller boutique recruiters?
It really depends. For us, at the executive level, I think getting a niche-focused from a recruiter is critically important. A lot of times that happens at the smaller boutique firms. For a general recruitment efforts, clearly, there are a lot of benefits for a global company like ours to have a global partner that has scale and cast a very wide net. I think it depends. In the executive side, it tends to be the more specialist, niche-focused firms that we tend to devolve to.
Sean, transformations can be difficult, to say the least. How do you make sure that the newly recruited executive does not quit early due to buyer’s remorse?
That is a great question. For us, it’s critically important that any new hire, in particular an executive sticks. I’d go back to an earlier answer. I think communications is going to be key to this part of the equations as well, Greg. Really, letting the executive, the incoming executive really understand very clearly the roles or responsibilities, the expectations, the various success factors that are going to make this job a success. I think that’s critically important, as is just full transparency. It’s difficult enough bringing a new person into your company, but when you’re going to a transformation, you really needed to be full disclosure, works and all because once they get in, the cost of them not sticking is very, very high. You really want to be extra careful.
If you’re in the position to do the try it before you buy it route that I just mentioned a minute ago, with our CIO, it doesn’t always align due to the timing doesn’t always work out, but if you’re in a position where you can have that walk before you run approach, we found a lot of success in that regard as well.
Describe for me how you onboard an executive?
For us, there’s not really a one size fits all approach. I’ll tell you, recently, we’ve launched a program that has been very successful for us. We call it the high touched executive orientation where we basically take one of the people in my team, HR professional and we assign them to a new executive hire. They basically handhold them through the entire process, going through all logistics and all the paperwork and all the stuff involved with getting onboarded into the systems. Working with them their first few days in the office to answer any questions to help guide them internally to make sure that they’re creating the linkages of who they need to be connected with.
For us, we’ve had some mixed reviews, but they’ve been certainly weighted toward positive with this new one-on-one approach. Fortunately for us, we haven’t had so many new executives come in that we haven’t been able to give them that high level of personal touch. I would encourage any organization that has the bandwidth and the bench to follow that type of approach. I think they’ll be very successful with it.
How do you make sure that you don’t have a brain drain when a change like this occurs?
That’s a really important question, Greg and one that I’ve had some personal experience with her at PGI. Listen, any time an executive departs, there’s a risk. What we found is the nature of the executive’s departure really plays a big role. For example, if they’re retiring, we found that the risk is much less, especially if they’re well-liked, well-admired. That can be a rallying point for their employees and the next executive to really carry on their vision or their legacy, so to speak. If the executive is leaving for a role at a different firm, it gets trickier. Clearly, in many states, you’re allowed to have NDAs, non-competes, things like that, that can put some contractual barriers between you and a brain drain.
What I found is the most important tool you have to combat employee exits is really, again, going back to communicating with them. Communicating with them about the opportunity that comes with this executive’s departure, what that means for their individual circumstances, their pay, their career path and find whatever that warm blanket is to wrap around those employees. Whether it’s money, bigger opportunities, new incentives. In some cases, it may just be recognition and praise, but demonstrate to the employees that they are valued, that they have a critical role in the success of the business going forward, even with this executive’s departure. I think you’re going to really minimize your risk.
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A Business Strategy Consulting Company
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