Every company can use a charismatic superstar at the top, right?
Not so, says James Citrin, who for 18 years has been finding CEOs, board directors and other top managers for media, tech and consumer firms at Spencer Stuart Inc.
A star at one company can easily flame out at another. Finding the right leader, says Citrin, is like solving a dynamic, multi-dimensional puzzle, where age, experience, industry expertise and ethnicity can all be red herrings.
Citrin’s latest book, co-written with colleague Julie Hembrock Daum, is “You Need a Leader -- Now What?”
We spoke at Bloomberg world headquarters in New York.
Lundborg: A good CEO is hard to find, like a puzzle piece?
Citrin: It’s more like a moving ecosystem.
I can’t tell you how many times I’ve heard, “We want someone who’s been there, done that.”
But that might just be wrong. “Where do things need to change?” is an important question.
Lundborg: At the top, surely no one wants the bean counter over the visionary?
Citrin: Sometimes what you need is great execution, good marketing, smart products. You need an inspiring operating leader rather than the world’s greatest visionary.
Lundborg: Superstar to flameout, do CEOs fall on a bell curve?
Citrin: There’s a bell curve of performance. But the lesson is that looking for the savior, the hero, is the big mistake, versus really diagnosing the situation and figuring out who’s best for what the company’s need is going forward.
Lundborg: You say in your book that you look for someone “self-aware and well-adjusted.” Wouldn’t that have short-circuited, say, the return of Steve Jobs to Apple?
Citrin: Steve broke lots of molds and lots of precepts. But in general, some of the biggest problems come from basic human interpersonal relations. CEOs are not all cut from the same cloth as the rest of us.
Lundborg: Don’t they tend to be Type-A, driven, workaholics?
Citrin: There are plenty of CEOs who fit that description.
But you really don’t want a know-it-all. The hard-driven leader is okay if he has enough self-awareness to know what he doesn’t know, to know when he needs a CFO for a check and balance.
The Flip Point
Lundborg: How can you tell the different between self-confidence and hubris?
Citrin: It’s a continuum, but the flip point comes when someone is closed to any alternate point of view.
In our flatter world, jerks are sussed out more quickly and leadership via fear is not sustainable any more.
Lundborg: You administer an executive IQ test -- what’s that?
Citrin: We have developed a series of business cases about which we engage candidates in a conversation -- we’ve done it with 4-5,000 top executives.
Based on this, we’re able to discern problem solving capability, the ability to be open to additional information, to change points of view -- we score all kinds of things that create executive success.
It’s in addition to interviews and referencing.
Lundborg: You did a CEO transition study. What was the biggest surprise?
Citrin: For one, insiders do not categorically outperform outsiders.
When companies are healthy, insiders do outperform outsiders at a rate of three to one. When companies are in crisis, outsiders outperform since there’s a mandate for change.
Lundborg: Who fares the worst?
Citrin: Saying “We’re not ready to turn over the keys just yet,” and bringing in a number two from outside is usually an unmitigated disaster.
You’ve got the lame duck, no mandate, and the person is in perpetual audition mode, damned if he does and damned if he doesn’t.
Lundborg: What’s your most seductive argument for attracting a CEO candidate?
Citrin: “Impact” is something I talk about a lot -- what their legacy is going to be. “Adventure” is another one.
Lundborg: Not money?
Citrin: Money is important, but at high levels, people who do jobs for the money don’t work out.
Lundborg: Compensation is skyrocketing -- are all those CEOs earning their keep?
Citrin: A leader does add value, and participating in that value is a great thing. A lot of pay is based on looking at peers, and that tends to drive compensation up.
What I find offensive is when executives negotiate big severance agreements up front.
Lundborg: Will change in executive compensation be hard to implement?
Citrin: It’s coming more and more. But there’s a cottage industry surrounding compensation that makes change difficult.
To buy this book in North America, click here.
(Zinta Lundborg is an editor for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are her own. This interview was adapted from a longer conversation.)