Happenings, Insights, Thought Leadership
Choosing a new CEO is the single most important role of any Board of Directors. It can present a host of challenges for the board, but none that are unsurmountable. At FCC Services, we have found that building a robust structure around the CEO Selection process removes intuition and complements the experience level of each director. We combine a data-driven approach with key areas of “fit” that the directors are looking for, assuring the board to feels comfortable making this decision. This all adds up to a process that is accurate, thorough, timely and cost-sensitive.
One challenge a board may encounter is the differing levels of experience each director has in hiring executive level staff. “Our outgoing CEO had been in the position for the full tenure of all of our directors,” says James Nivens, Chair of the FCS Financial board, which selected FCC Services to assist with their CEO search. “Very few were familiar with hiring employees at all, let alone hiring a CEO.” To address this, FCC Services uses a qualitative, numeric approach to the interview process.
When considering the next leader, it can seem natural to turn to an internal candidate – the heir apparent. And while this person may indeed be the best choice and will become the next CEO, it behooves any board to take a broader view and conduct appropriate due diligence in considering other candidates in a logical, fact-based approach that leaves intuition at the door.
“The board is accountable for the CEO selection, and has a fiduciary responsibility to have a robust selection process even though there may be a comfort level with an internal candidate,” says Jay Lux, Vice President of Organizational Effectiveness Consulting at FCC Services.
FCC Services has helped numerous Farm Credit associations conduct just such a robust search, helping boards identify the best possible CEO candidate to successfully manage through their organization’s specific challenges, goals and culture. FCC Services serves as a guide through the selection process, leaving all decisions to the board and adjusting the process itself to meet specific requirements or requests from the board.
“It had been 30 or more years since we’d hired a CEO, so having an unbiased professional who does this for a living helped a lot,” says Mark Pierce, Vice Chair and search committee member for FCS Financial during their CEO search, which FCC Services facilitated. “Making a bad decision at that level can have a huge impact on the organization, so it’s important to have someone like Jay help you find the right leader the first time.”
In guiding organizations through an executive search, FCC Services starts with a survey of the full board of directors to define key skills, attributes and competencies the ideal candidate will possess. This first step in arriving at an objective decision sets the framework for candidate screening, and provides essential information to finalize a job description for the CEO position.
“The most important thing FCC Services did was force us to come to a consensus as a board about the issues the organization was facing, what type of CEO we were looking for, and the attributes and skills we wanted that person to have,” says Bobby Sexton, Board Chair for Farm Credit of Florida, another FCC Services client.
Dick Weathered, retiring CEO at Western AgCredit, adds, “The board survey helps customize the search to what our board wants in a new CEO rather than what Harvard Business Review might say you need.”
Once the job description has been finalized, FCC Services works to identify a broad field of potential candidates, a process that can include proactive outreach to qualified individuals known to FCC Services, outreach to competitors or within specific industries and posting the position on relevant career sites, including those within Farm Credit.
“Given the uniqueness of Farm Credit, some boards specifically want candidates to have Farm Credit experience, and we can work within that parameter,” says Jay. “Others decide to look more broadly within the financial services industry, and we have connections to service that approach as well.”
After an initial screening of all applicants, FCC Services narrows the candidate field and administers a series of industry-leading skill and competency assessment tests that will have already been discussed with and approved by the board, and that will assess key parameters they’ve identified during the initial survey process. The assessments measure things such as leadership capacity, critical and strategic thinking and emotional intelligence.
Assessment results are compared to the needs already identified by the board, narrowing the field to four to six semi-finalists who undergo a first round of interviews. FCC Services facilitates the interviews, after working with the board to develop effective interview questions that address its concerns and priorities.
“As a candidate going through the selection process, it was certainly very thorough, and having come from a previous CEO position, I could see the benefit of the assessments I took,” says Greg Cunningham, who was selected as Farm Credit of Florida’s CEO through an FCC Services-facilitated process. “I also felt that during the interview process, I was able to demonstrate who I am and what I had accomplished in my previous leadership roles.”
Following the first round of interviews, FCC Services helps the selection committee identify two or three final candidates, who are then typically interviewed by the full board. With FCC Services facilitating these interviews, the board is assured that it has the information it needs to make an informed decision regarding its next executive leader.
David Janish, CEO of FCS Financial selected through an executive search facilitated by FCC Services, says, “Because of the assessment process and the opportunity to answer the board’s questions during the interview process, I came in feeling pretty good that the board and I were on the same page, that I understood what needed to be done and what their direction was.”
Upon starting his new position, Greg Cunningham had a similar experience. “When I walked in the door, I felt that I had the board’s confidence because I knew how thorough their selection process was, knew they’d put all their final candidates through the same process, and that they’d selected me because they believed I was the right person for the job.”
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