Financial Crisis Puts Leadership in Spotlight, CEOs in Demand
Facing a slowing economy, a growing number of companies will be navigating the downturn under new leadership. Whether it’s a company choosing new leadership to guide it through the turmoil or a CEO finding a more secure position, the current recession is contributing to higher CEO turnover. In fact, recent data from Liberum, a research firm focusing principally on management intelligence, issued a statement saying it expects executive turnover numbers to increase as we head into winter. The firm also notes the Obama administration may also portend for more change at the top of many corporations that continue to fail to perform.
Amid the trend, A.E. Feldman reports demand for CEOs is on the rise. The jobs opening up include opportunities for Chief Executives with proven records of running infrastructure companies, particularly water, waste water, alternative energy and green technology.
On its website, Liberum says a change in CEO often leads to a modification of the business strategy. The firm adds that such turnover will have significant implications (good or bad) for the business…and shareholders. According to Liberum’s Management Change Database, a total of 164 CEO related changes occurred in October. Among the C-level management change statistics, the top industry sectors for turnover were Energy, Drugs/Biotech and Banking. More than half 52% or 850 of those management changes were new hires from outside the firm.
Liberum also notes that new CEOs will bring new skills and typically a new direction. In keeping with that conclusion, Fortune recently outlined how the fallout from the financial crisis could breed a new type of corporate leader. The report argues this period of financial chaos hold the potential for something positive: a long overdue change in the type of corporate leadership we value as a society.
The leadership approach of “visionaries” who believed they could singlehandedly control their firms’ destiny has failed, according to Fortune. The report cites a recent study from Harvard’s Center for Public Leadership, which finds that confidence in business leaders has seen a more dramatic decline than that of any other group - even politicians or the media. And as confidence in the old style of leadership fades, a new model is emerging, states Fortune. The report quotes Jim Collins, author of Good to Great, as suggesting that legislative - not executive - skills are gaining value. Collins adds that top CEOs will be those who are able to create the conditions for things to get done rather than hand down orders.
Anticipated government regulations will undoubtedly help define the role of the CEO. Fortune quotes David Gergen, the political expert and Director of the Center for Public Leadership at Harvard, as saying, The CEO of the future is going to have to be someone who deals well with government.” The report concludes that in today’s economic climate, CEOs cannot fully control their destinies “in a world of competing entities, ranging from regulatory agencies to angry shareholders, from consumers to foreign powers.”
Other qualities expected of the “new breed” of CEO include the ability to look beyond the short term to the horizon and inspire employees amid a prolonged economic slump, says Fortune. The report also contends CEOs of the future will have to be comfortable asking for help and admitting what they don’t understand. Lastly, Chief Execs must have the courage to deviate from the strategic plan when faced with “the unthinkable.”
It is seemingly a new era for the CEO. Fortune quotes Collins as predicting, “It will be a time of spectacular opportunity for the right leaders.”
Are you a CEO? If you want to grow your career or your company’s bottom line, contact A.E. Feldman’s President, Mitch Feldman now. Find out more about CEO jobs today!
