In this chapter we consider what it is like for you when you're ready to be considered for one of the corporate world's top jobs. You're ready to be a CEO. You are well regarded and well treated where you are, but it may be a long time until the top job opens up. Or you have gone as far as you can because there is an heir apparent or you're a foreign national in a company where "natives" get the top job. But for whatever reason, the stakes are high and the number of opportunities is likely to be relatively small.
You have a number of big questions to ask yourself. How urgent is the need to make a move? You may have no chance for advancement where you are, but the consequences of a wrong decision are even worse. You may feel impatient, but it would be unwise to take the first train out of town. To take a CEO's job where the fit is bad, or the odds for success are low, will only place you into a situation later where all your options are bad, or worse. So pick carefully. The key question is how to ensure that you get to see a reasonable sample and then do the right things once the process starts.
Understand That the List of Openings Is Short
When your next move is to the CEO's chair, you already know half to two-thirds of the companies where that would make sense. At your level, prior industry or analogous experience narrows the field, so you know which ones you are or could be in line for. That means you must keep up-to-date on those companies. You must understand when things are occurring that might create an opportunity. Also, you want to become visible among the directors and other members of the target companies "official families."
Network with Other CEOs and CEOs to Be
Spread your record and reputation to people who are peers to the job you might want to pursue. When search firms call around, they will look for other CEOs or presidents, both to see if they are interested and to get other names. If you have been involved in civic and community groups at this level, both your style and record will bounce back from these people. Again, this is just your version of the lesson that we talked about earlier, networking with peers. But for CEO level candidates, that peer group is very broad. So you need to break out of trade and industry groups and into leadership-oriented groups. These are likely to be civic, community, and broadly-based professional organizations.
Answer the Three Unavoidable Questions
Once you have begun an active search, in addition to all the rules for getting on the radar, candidates for CEO jobs must be conscious of three key questions. The number of positions is relatively small and their visibility very high. There is always the risk of hurting your current situation by being perceived as being too actively looking, or too publicly disenchanted with your current situation.
Is all publicity good?
People have different approaches to this question. Some contend that as long as the relatively small number of the "right" people is aware of you, broader publicity isn't useful and can even hurt. The press is not interested in helping you with your career. The more interesting stories are negative ones, and there is always a risk in trying to attract press coverage for yourself and your accomplishments. On the other hand, it is one of the few ways that a broad audience understands your relative contributions and association with successful events. Most say that there is no easy answer to this question, and it is a function of your own comfort and expertise. It should also be a function of the level of confidence you have in the particular reporter or media. Some are less inclined to find the negative or controversial.
A related question is whether you would want publicity that you are being considered for another CEO job. It can make it clear you're in demand. But it can also suggest you came in second if someone else is selected and you don't publicly decline interest. In general it's always safest to say that you're happy and content to do what you are doing. The people who are looking for talent aren't going to be deterred by that, even if they believe it.
Who do you tell that you are looking?
You live in a world where everyone knows everyone. How do you get the word out without it becoming the kind of common knowledge that doesn't advance your cause? Most search firm partners say that, generally, the fewer people you tell the better. If there are partners at the major search firms whom you trust, you can be somewhat candid. They will understand what you mean anyway, and they are not deterred from talking to people who aren't viewed as being "on the market." In general it is better to take the position that, "I'm always open to conversation, but I am not eagerly trying to change my circumstances." As long as you are visible in a broad sense, whatever situations are out there will find you regardless of whether you advertise interest.
Do you ever quit conducting a search full-time?
The answer is, "It depends." For the most part, there is no great advantage in stepping away from a job to conduct a search. Even if all of the reasons are good, it raises questions. The exceptions might be a merger, for example, where you clearly are odd man out. It also might be warranted when the company you are with is headed to a disaster you can't prevent, or when a major disagreement between you and the board is headed for a public explosion. But most people feel that you should quit altogether only when it is the substantially lesser of two evils.
Is There a Director in the House?
Another part of the senior management career game is to determine whether you want to pursue outside directorships. These can be a source of great education, networking, and experiences that you can't get within your own company. But they also take time and energy. While director compensation is improving, on a per-hour basis it doesn't hold a candle to what you will earn as a senior executive in your own company. So decide how much time you can afford to spend away from your primary business.
Which is the chicken and which is the egg?
People say, "Well, how do I get to be a director?" The honest answer is, "Figure out how to get to be the CEO or an inside director of a company and then director opportunities will come to you." People want other CEOs on their board. Various shareholder groups and shareholder representative groups are pushing companies to populate their boards with outside CEOs both for the experience and the accountability.
How many is too many?
There are points of both diminishing returns and outright negative returns if you put too much time and effort into outside directorships. Since the payoff is in contacts, experience and exposure, not in money, you have to ask yourself at what point you have covered the waterfront. In general you are better off being on fewer boards, but on those with more broadly-based and more recognizable companies. The networking value will be better and the peer group higher. Serving on one or two well-established, well-recognized companies with national boards is better than serving on three or four lesser companies. The challenge is deciding which ones you should pass up because it is the smaller ones that are offered earlier in your career.
Being a Good Director
You are invited to serve on boards partly because you earned a reputation as being a good director. A good director has three traits. First, she does her homework. She learns enough to be informed and focused on the right questions and makes good use of the information the company provides, but doesn't expect to be spoon-fed. She doesn't waste time asking questions that are easily answered by reading the package. Second, she uses her contacts to promote the firm. While the director's role is in governance, directors who take a "sit back, fold my arms, I'm here to judge you" attitude won't be invited to serve on other boards. The director should help to sell product, recruit people, and help the company build new relationships. Third, she doesn't showboat. Her job is to help the CEO do his job as well as she can. If she has a criticism or suggestion for improvement it ought to be made in private, at least the first time. The director gives the CEO the chance to get the benefit of her counsel. A director who takes her shots in public will not only make the CEO defensive, but will also create a reputation as being more interested in scoring points then getting results.
Only take directorships that you plan to stay with for the long haul
It is considered bad form to accept a directorship and then resign within a couple of years, especially if it is for a better offer. A director resigning or not standing for reelection tends to be viewed by the market as a signal of something amiss and certainly invites inquiries. In general, if you can't serve for at least five or six years, then you probably shouldn't accept an offer.
Show the skills of a good CEO to other directors
Board members are people asked about CEO candidates. You want to show the same skills, recognizing that you are not competing with your own CEO. You ask strategic questions, do your homework, display good communication skills. Your questions are cogent, and you are focused and sensitive to other peoples' feelings. You are not arrogant, and you bring forward your own relevant experiences so your reputation for results is gradually communicated.
Being a director is difficult and demanding. That is why companies want to find the most qualified and senior people to serve. It is not something to be treated as a perk or benefit. It is an investment in the company on whose board you serve, in their management and on behalf of their shareholders. It requires time and energy, and creates risk and obligations. There are benefits in networking and experience. On balance, you should believe in the company and limit the number of directorships you attempt. Directorships are opportunities to serve and learn as well as opportunities to be seen and become visible. But it is hard to do them well. If you try to do more than just a few, you will almost certainly neglect something for which you are more directly responsible.
PART FIVE
Keeping It in Perspective
Building an executive profile is not cost free. In fact, there are some JU* fairly high prices to pay. You lose spontaneity about and control over the range of experiences you might want to enjoy. You must have a high tolerance for frustration and the ability to adopt a longer-term agenda with patience. You must understand and manage consequences for your spouse and family.
In these last two chapters we will expand on this theme of trade offs. In a book full of advice on how to get to become a senior executive, it may be assumed that you must become a senior executive:
- If you want to be happy
- If you want to be fulfilled
- If you want to be a success
- If you want to be a good person
- If you want to get the most out of life
