The Executive Update

Where Are You In Your Journey Along the Dynamic Path?

Another session from this year’s AESC Americas Conference, Focusing on What Matters, that I found especially inspiring was entitled “Beyond Professional Success: The Dynamic Path.” Based on the book, The Dynamic Path, by James Citrin, a senior director at Spencer Stuart, this session centered on the stages that leaders pass through in their path to excellence, and had a lot to offer to professionals thinking about where they are in their own life/career quest.

 

In developing his theory of the Dynamic Path, Citrin has spent hours interviewing accomplished experts from all walks of life. He has interviewed business gurus such as Steve Case and Howard Schultz, political figures like Colin Powell and Bill Bradley, and countless sports figures such as Lance Armstrong, Mia Hamm, Billie Jean King, Magic Johnson, and Tiger Woods. What Citrin uncovered is that all share some common steps on the path to greatness. By way of example, Citrin shared what he learned from speaking to Bill Bradley.

 

Bradley is one of the few sports stars to rise in the world of politics. To achieve greatness as a basketball player, Bradley demonstrated the kind of drive that would help him succeed as a politician. He amassed 3,000 points during his high school basketball career, captained the US basketball team to a gold medal at the Tokyo Olympics, and graduated from Princeton and studied as a Rhodes Scholar at Oxford University before joining the New York Knicks. What made him an outstanding player was old-fashioned hard work. As Citrin tells it, Bradley practiced his shots for 10 years until it became automatic. Ever day after regular practice was over, Bradley would invest an additional three hours practicing his shots from all over the court. The result was perfect performance and flawless execution because it became automatic.

 

Don’t Wish on Falling Stars When You Make Strategic Hires

Another session from this year’s AESC Americas Conference, Focusing on What Matters, was entitled “Portability of Stardom: Myth vs. Reality.” Presented by Boris Groysberg, assistant professor at the Harvard Business School, this session including some interesting research to uncover the value of hiring super stars, and debunked a lot of assumptions that I had, and that I am sure are shared by recruiters everywhere.

 Groysberg presented his findings for a research study entitled, “Does Individual Performance Affect Entrepreneurial Mobility? Empirical Evidence from the Financial Analysis Market.” Among the key findings presented were:

• A star executive or performer delivers five to 10 times above the average worker
• In general, the performance of stars tends to decline after five years when they leave to join another company.
• When a star moves to a weaker firm, performance tends to plummet and they don’t recover.
• When stars make a lateral move, the decline to average is about two years.
• When stars move to a better firm, they tend not to decline
• Women generally do better than men when they transfer. The study showed that 18% of women were able to continue to perform for five years, probably because they are better at networking and more careful in scrutinizing potential employers.

Handicapping the Markets for Career Advancement

I just returned from the AESC Americas Conference in New York City and it was a fun and interesting trip. The agenda for this year was Focusing on What Matters, and it was more packed than usual, and some of the sessions were very telling for the future of the job market.

One of my favorite sessions was entitled “Looking into the Crystal Ball,” which had a number of prophecies about the Internet and web-driven business. David Barnard, director of U.S. Research for Sanford C. Bernstein & Co., moderated the panel, and Jeff Lindsay, a Senior Research Analyst for Bernstein, presented some interesting research findings on growth areas:

• The Internet sector will remain strong – not with the same hypergrowth we have seen in the past, but strong growth nonetheless.
• Their prediction is the Microsoft/Yahoo acquisition will go through, which will have some interesting implications for the search market.
• Internet access is a booming market, which holds promise for both telecom and cable companies.
• Advertising, online subscriptions, and e-commerce are also predicted winners, as more vendors migrate to online advertising and retail models.
• Wireless Internet is also a growth sector, for obvious reasons.
• Open source is also a growth area as Facebook and Amazon migrate more extensively to open source platforms like Ruby on Rails and Linux.

Job Security? The Rules Have Changed

Last week I attended the annual conference of the Association of Executive Search Consultants in New York. The theme for this year’s conference: The New Rules. I wondered if the rules of recruiting and employment really have changed? Certainly new technologies like the Internet have redefined the way we interact and communicate, but have the fundamental rules of jobs and career changed.

The keynote presentation offered some very insightful views on how today’s job world is, indeed, very different. The keynote speaker was Geoffrey Colvin, senior editor at large for Fortune Magazine. His topic, The New Rules for the Outstanding Executive. I’ll provide a synopsis here but his speech offered some real food for thought.

Coleman offered four basic rules for companies operating in today’s economy:

Any organization’s competitive advantage resides in its people, its culture, and its relationships. In brief, great businesses understand that real business is based on people. To prove his point, Coleman offered two examples. In the first, he compared Microsoft to Exxon. Microsoft is a people-based operation; where the ideas and concepts derived from human capital far outperform the capital of conventional assets, like petroleum production. Just compare their stock performance. He also offered a similar comparison between Google and Citibank. The innovation and creativity of Google’s human capital outperforms Citibanks’ financial assets. In short, successful companies invest in people.
Know when to change your business model. In the era of the “old economy,” the rule of thumb was to change your business approach every 30 years. In today’s fast-paced digital world, smart companies are reinventing themselves every three years. Driven by the Internet and other resources that provide almost instant gratification – the Free, Perfect, Now syndrome which allows customers to get exactly what they want faster than ever – you have to meet customer needs faster, and more specifically than ever.
Understand the reality of wealth creation. This is really important. Wealth creation is about capital earning more than it costs. Institutional investors, not individuals, hold most of the wealth in today’s global economy and many executives overlook this basic maxim that you need to earn more than you invest. Consider what this means when your capital is counted as your people. Invest in people and they should yield a greater return than the investment.
Execution is key. In the old economy, too many CEOs, CIOs, CFOs, CxOs have been focused on the process, not the results – they lose sight of the bigger picture, which makes them slow to adapt to new market conditions. As a result, the average tenure of a C level executive is 4.5 years, and the average tenure of a Chief Marketing Officer is 22 months. As the corporate game plan changes every three years, it’s harder for senior management to re-invent themselves in order to keep up. So even at the top, there is no job security.

The bottom line is that to stay competitive, the innovative companies will invest in people. I know you have heard this before, but there was a lot of buzz at the conference about recruiters identifying and investing in star performers and tracking them from job to job, so when that senior position opens up, recruiters have candidates primed and ready to fill the slot.

So what does this mean for the executive job seeker? Stay tuned. That’s the topic for our next blog entry.