TREND #1:A Growing Scarcity of C-LevelExecutive Talent
In the U.S., as in many other developedcountries, the looming talent shortage in theskilled labor orce—up to the top levels o management--is well-publicized. Most expertsbelieve the current economic downturn issimply postponing the demographic realitiesat work here.Te National Bureau o Labor Statistics(NBLS) says a shortall o 10 million skilled workers is projected by 2010, and that thecoming shortage o executive talent will ac-celerate through 2030.RHR International reports claims that Amer-ica’s top 500 biggest companies will lose hal their senior managers within the next ve years.One probable impact o this demographicshit is on U.S. economic perormance. Ac-cording to Aon Consulting’s 2008 Benets &alent Survey o more than 1,100 organiza-tions, 56 percent o employers nationwideexperience a leadership shortage that impedestheir organization’s perormance, and 31 per-cent expect to have a shortage o leaders that will impede perormance in the next one toour years. Among the industries most aectedby this leadership shortage are healthcare (62percent cite a leadership shortage); proes-sional services (58 percent); and manuactur-ing (57 percent).Finding the time and resources to implementa solution to address the leadership develop-ment gap has been a major challenge or many organizations, and awareness o the problemisn’t limited to HR; as the studies cited abovesuggest, C-level executives themselves are very aware o the leadership gap. More alarming isthat some executives in the Aon survey saidthe problem is severely acute and acknowl-edged that it needs to be xed as soon as thenext 1 or 2 years.Tis looming problem can be traced to inter-nal upheaval among organizations, causingthem to push talent acquisition and manage-ment urther down a growing list o priori-ties. Within the HR department, constrainedresources have also hampered HR leaders toaddress the problem.Te internal upheaval is oten caused by external actors—i.e., market upheaval whichplays havoc with company strategy andrequires greater and more sudden shits indirection.Finally, although C-suite turnover had less-ened—perhaps surprisingly—between 2005and 2007, the current economic recession haschanged that. Te Wall Street Journal recently (January 13, 2009) headlined a piece, “CEOFirings On the Rise As Downturn GainsSteam.” Te article cited Spencer Stuart’sndings that 61 companies in the Standard &Poor’s index changed CEOs in 2008, up rom56 the previous year.“A storm is gathering. We’re going to seethe eects o current conditions within thenext 12 to 36 months as more baby boom-ers begin to retire. One o the things thosepeople take with them is a huge knowledgeand experience base that most companieshave not replaced.”
–Dean Bare, managing director, StantonChase International, Atlanta GA
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TREND #2:
Emergence of Highly Skilled Inter-im Practitioners Worldwide
Given the emerging talent gap at the top, where will companies nd the accomplishedproessionals to ll those jobs? Contrary topopular assumptions, much o the answer willcome not rom oreign workers oshore butrom the growing group o both GenX andBoomer executives who are choosing to work on an interim basis. As a recent report rom Epoch Partners, a rm
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specializing in interim executive placement,suggests, second careers and fexible work schedules are two elements o “the new way to work,” along with three others: increasingcompetition, more rapid cycles o innovation,and the need or just-in-time executive talent.Epoch also reports that less than one in vecompanies is well positioned to attract andretain top talent through traditional recruitingmethods. Tis need or non-traditional wayso sourcing talent is perhaps the main driverbehind the emergence o a “high growth mar-ketplace o accomplished proessionals.”Research by Redfash Inc. projects 60%growth in the numbers o top-level interimexecs this year and next. What kinds o assignments are typical orthese “hired guns,” as they are sometimestermed?Examples might include:
Opening a new division, region or country
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Launching a product or service
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Guiding a startup business through initial
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hurdles Managing operations through a merger,
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acquisition or successionurnaround and restructuring for trou-
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bled companies or divisions
Another way to look at the roles o interimexecutives is in terms o three stages o thebusiness cycle:Start-up:
New ventures
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Product development
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Rapid expansion
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Growth and Consolidation:
Integration
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Introduction of best practice
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Management of subsidiaries
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Mergers and Acquisitions
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Change/urnaround:
ransition
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Divestitures
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Restructuring
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Crisis
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For an interim CEO, any one o our dierentbut common scenarios might occur: An assignment rom a private company’s
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owner or board o directors or an indi-vidual or team that will bring signicantskills and experience or a set period o time. An assignment rom a public company’s
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board o directors as a temporary replace-ment with xed deliverables, usually including directing a permanent hireprocess. An assignment rom a private equity und
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to assist with or run a portolio company;many private equity rms have deepbenches o talented executives who havealready had considerable success on theirown, or with larger public companies, or with other portolio companies rom thesame und. An assignment rom a bankruptcy court
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or trustee acting on behal o an estate,shareholders or creditors or an indi-vidual or team to act as good stewardsin growth, maintenance, asset sale ordissolution.In the “new engagement marketplace,” as it’sbeen called, the key values are relevance, cost-eectiveness and business agility. In place o traditional employment security, a new kindo security is the norm, one based on provid-ing value to a variety o companies in dierentindustries.Te economic benets o variable personnelcosts play an important role here: interimexecutives are simply able to operate morecost eectively than their ull-time, xed-costcounterparts.Productivity also matters in a business land-
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