The Best Executive Search Approach for Successful CEO Hiring

The best Executive Search approach to succed

The vast majority of new CEOs still come from within organizations: in 2020, 77% of new S&P 500 CEOs were internal Promotions. Identifying where CEO successors come from within the company allows us to be extra careful at our executive search for certain roles, because by doing it we might be hiring our future CEO.

Where in the company CEOs are most likely to come from?

How do we guarantee we are choosing the best possible candidates?

How to find the best search executive firm to do it?

First: where do most CEOs come from?

According to studies, the most promising candidates in your company may not be precisely where you expect.

Chart showing why CEOs come from withing the company

Chief operating officers accounted for 38% of new CEOs in the S&P 500. Division heads were only two percentage points behind them, at 36%. Chief financial officers were next, at 9%. CFOs appeal to boards that want to ensure continuity, because they often serve as the right hand to the CEO.

Leapfrog candidates with the least significant representation in the study accounted for roughly 5% of new chief executives.

What is newsworthy is that the last common choice, the leapfrogs, had the highest share of CEOs in the top quartile of performance: 41%. Former division heads and COOs were next, at 27% and 25%, while the share of CFOs in the top quartile of performers was only 8%.

“Leapfrog CEOs” leaders appointed from one level below C-suited officers or division heads, with titles such as senior vice president and general manager, have the best odds to steering their firms into the top quartile performers.

Now we know where our future CEO is most likely to come from: how do we succeed at hiring executive search?

In a world in which finding the right candidates is a major factor in success and it is getting harder and harder every time because companies currently face an unprecedented number of change challenges and opportunities. At the same time, more companies than ever are now drawing from the same executive talent pool, which in itself has evolved and has fundamentally changing needs. As we have seen, the priorities and consequently the profiles of today’s executives have changed, and it is key that businesses recognize and acknowledge these changes in order to attract and retain the best executive talent.

Here is a generalist approach on how to perform an executive search:

  • Always understand what specific skills are critical for the role and use them to focus your recruitment process all the way
  • Keep an organized schedule for the process; set timelines and be prepared for unforeseen changes that may come up throughout the process.
  • Make sure the interviewing process is being kept focused and conducted naturally
  • Maintain open, clear, and respectful communication with candidates during the entire process.

One of the most important parts of this exercise is choosing your Executive Search Partner wisely, because an executive search firm can help you design a process that will effectively assess the candidates’ ability to embrace your mission and build upon the current success, ensuring they are ready from day one. 

Here is a helpful checklist your Executive Search team should have:

  1. Extensive expertise in your industry.
  2. Proven track record of representing companies with professionalism.
  3. Strong Executive Search strategy.
  4. A transparent talent search process.

If you want to find out more about our executive search services and how they can benefit your business, contact our Executive Search Firm Zavala Civitas, which is specialized in executive search in China. Click here.

Zavala Civitas executive search methodology for China country

Bibliography

Harvard Business Review. Jan-Feb 2022. Web.https://www.forbes.com/sites/edwardsegal/2022/01/13/outside-ceo-candidates-outperform-in-house-choices-new-study/

Executive Search in Mexico: Leading Sectors Shaping Demand 

Over the last few years, Mexico swiftly garnered international investment, earning it the title of one of the fastest-growing countries in capturing global foreign direct investments.   This scenario creates new talent opportunities.  Most Executive Search firms in Mexico have modified their approach from simply filling highest roles in an organization to competing for the extremely limited pool of qualified executive talent for all roles in all sectors.  The demand isn’t even  It is very much concentrated.  Where Demand is Actually Growing  Mexico’s hiring executive pressure is unequal across all sectors. Some sectors are faster and are pulling talent from other sectors. Manufacturing is the clearest example.  With nearshoring, Mexico is becoming a strategically important center for the supply chain for North America. This is due to the fact that international companies are relocating and/or expanding their operations in Mexico. This is supported by McKinsey & Company.  The growth of a business is dependent on its leadership. Companies are in need of quickly scalable plant directors, operations managers, and supply chain executives. Such profiles are deficit.  Executive Search Energy and Infrastructure: Complexity at Scale  There is the highest demand for executive talent within the energy and infrastructure sectors.  Major projects and regulatory complexities, as well as lengthy investments, require leaders who are comfortable with uncertainty in all the essential domains, not just the technical. This includes stakeholder

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Executive Search in Spain: Talent Gaps and Leadership Trends 

The Spanish talent market is perceived to be mature and easy to operate in. This makes some sense from afar. There is a solid network of business centers, a developing international business presence, and a considerable pool of experienced talent.  Problems arise when businesses attempt to recruit senior executives.  In Spain, executive search is shifting from talent arbitrage to understanding the true gaps and the reasons behind their expansion.  Where the Talent Gaps Are Actually Emerging  Spain may appear to have many senior professionals, but the issues here are more complex.  The problem is not the experience, but the type of experience that is most required by the different companies.  As per McKinsey & Company, the nature of change of senior leadership roles in Europe is at a much quicker pace than the nature of change in the senior leadership roles in the talent pool. Executives are required who are able to be strategic, also have the ability to execute, and be the change agent.  That blend is still too little. This is especially the case in Spain in the industries that are shifting the fastest—energy transition, infrastructure, and technology. There are many executives who have strong functional experience, but far fewer who have held positions to manage large, complex transformations, or to operate internationally in complex situations.  This results in the mismatch between the hopes of the companies and the actual situation in the labor market.  The Shift from Stability to Transformation Leadership  For many years, leadership in Spain emphasized operational stability and incremental change.  This is not enough anymore.  At present, companies expect executives to manage change and uncertainty, and lead in multiple dimensions simultaneously, including at the same time digital transformation, new business models, and the increased need for operational efficiency. 

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Executive Search in the United States: Private Equity and Portfolio Leadership  

According to McKinsey’s Global Private Markets Review the United States remains the largest private equity market globally. It accounts for nearly half of global PE deal value.    Unlike traditional recruiting, Executive Search in the U.S. private equity-backed environments is much more complex.  In PE platforms, leadership is directly tied to value creation, EBITDA expansion,

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Executive Search in Mexico: Leading Sectors Shaping Demand 

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