Traditionally, it’s been uncommon to have an exterior CEO appointment. It pays off when incoming CEOs who’re promoted internally have been on the firm for a longtime period of time, have relationships with their colleagues on the firm already, and perceive the day-to-day operations from a firsthand perspective.
Govt search firm Heidrick & Struggles launched information on the finish of 2023 analyzing the brand new appointment of CEOs all year long in a few of the world’s largest markets. Inside main firms in the US, the findings present 79% of the brand new CEO appointments inside appointments, whereas solely 17% got here externally.
Nevertheless, the search and management advisory big really went towards the grain with its personal high job, deciding on an exterior candidate as its subsequent CEO when Krishnan Rajagopalan retired in January after seven years as CEO and a collective 23 years on the agency. The corporate searched each internally and externally for who can be the following particular person to step into the nook workplace, and one particular person up for the position was Tom Murray, who has been at Heidrick & Struggles since 2018 and now serves as its president. He had labored in various management roles all through the final couple of years, together with international managing associate of government search.
“I came in second place to be the next CEO of Heidrick,” Murray stated on the Fortune COO Summit in Middleburg, Va., on Tuesday.
As a substitute, the chief search agency chosen Tom Monahan, a managing associate at Norton Road Capital, as the person for the job. Murray was promoted to president of Heidrick & Struggles.
In hindsight, Murray is aware of why he wasn’t chosen as the following CEO. One in all his gaps was in not having a stronger relationship with the board and particular person impartial administrators. Now, throughout board conferences he tries to be extra concerned in conversations about enterprise technique, versus simply speaking strictly operations.
Along with constructing stronger relationships with the complete board and collaborating in technique discussions, Murray seeks out suggestions from board members and senior leaders. He asks the chairman of the board and the present CEO what they assume his strengths are, and the way he can work on his gaps.
Murray additionally spoke about a few of the key CEO traits Heidrick & Struggles seems for through the government search course of for its purchasers. One of many main qualities a possible CEO should possess is the flexibility to pivot into the following technology of know-how and synthetic intelligence. Heidrick & Struggles exams these candidates for technical competency, empathy, interplay with workers, and being interested by change.
“If people in the room are looking to step up themselves—to take the next CEO role—be honest with who you are and what you need to complement yourself,” Murray stated. “We all have strengths and weaknesses, and making sure that you have a leadership team around you—that’s that next-generation leadership team that you have a plan with that will complement your skill set.”
