Australian corporates are returning to growth-focused CEOs after preferring operationally focused risk managers in the wake of the GFC, according to recruiter Ampersand.
Ampersand has recruited C-suite executives for the ANZ Group, GE Capital, NAB, George Weston Foods, Fonterra and Kraft since its founding by Hayley James in 2008.
James, who previously worked for recruiters Talent2 and Hudson, said she had seen companies turn away from CEOs with “really strong growth mandates” to governance and cost cutting in the past five years, but the pendulum was swinging back to aggressive growth.
“The next three to five years will be a new business cycle,” she said.
“All organisations are operating in a highly contestable environment … we’re moving into a cycle now where people and customer leaders are more in demand.”
James explained that while all CEOs tended to be all-rounders, some were better at leading through strategic governance, financial rigour and operational management while others were “growth visionaries” who were better at leading and inspiring customers and staff.
The latter skill set had been a “poor cousin” to the former as effects of the GFC reverberated through the Australian economy, she said.
Most organisations emerged from such cost-cutting regimes stronger and more resilient. But for some, that came at the cost of employee disengagement.
“There are examples where organisations that have been financially successful through the GFC have had the highest levels of people disengagement,” James said.
Mistakes and the ability to execute
James said today’s boards sought CEOs with technical ability to drive growth, as well as the “executive presence” that they would need in order to lead.
“It’s the whole package we’re looking at,” she said, explaining that executives could demonstrate their leadership qualities with aggressive diversity targets for example.
“We have seen so many companies that have got fantastic succession plans but what’s holding a lot of those executives back is presence.”
As Australian companies push increasingly into the Asian region, she noted that companies also sought CEOs who had worked across the region and could demonstrate an understanding of the culture and a level of influence in target markets.
Language skills were “a point of differentiation”, but uncommon among senior leaders, she said.
Last month, a panel of company directors said CEOs should be incentivised to stay in their jobs for 10 years, instead of the industry average of 4.5 years, to encourage them to make longer-term decisions.
James agreed that the average tenure of Australian CEOs had fallen steadily from six to eight years prior to the GFC to three to five years now.
She pinned the change on how 49% CEO placements failed within the first 18 months, explaining that CEOs often didn’t integrate well into an organisation, or would be forced out if they weren’t seen to execute well.
“Historically, CEOs were afforded a little more time to execute, but markets are cycling much faster now,” she said.
“If organisations can recruit really well from the outset and those CEOs are integrated really well, then absolutely, CEOs should be given the opportunity to lead through more than one business cycle.”
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