In April, Axis Bank announced that it had hired the services of global leadership advisory firm Egon Zehnder towards the appointment of a new managing director and CEO for the bank. The move was made in response to the decision by the incumbent MD and CEO to step down from their posts by the end of the year.
In 2017, when Infosys was looking for successor to CEO Vishal Sikka, it sought the services of a global leadership firm. Co-founder Nandan Nilekani was quoted as saying that the Board was looking at “internal and external candidates and Infosys alumni” for the top job.
The trend of large organisations hiring the services of executive search firms to find C-suite professionals is not new.
There could be various reasons for the management to look outside for expertise to handle any CxO hiring process. The uppermost reason is ensuring greater objectivity in the evaluation process. One of the other major reasons for making such a move is the desire to find a “star CEO”.
Finding a CEO or any other C-suite professional can be a long-drawn-out process.
“It is not uncommon for a company to take a year to find a CEO. Over the last three years, we would have carried out at least half-a-dozen one-year searches,” says Ankit Bansal, founder and CEO, Sapphire Human Solutions.
V.J. Rao, who has served as head of HR in various industries, says the headhunting process was equally complex 20 years ago. However, unlike today, hiring a CEO was a secretive process.
“It was not easy to talk to the candidate directly. We would take the help of a third party to let the candidate know we would be in this city on this day.
These conversations had to be discrete. In some cases, the candidate had to be presented before the Board members, who would meet only once a month. So, we have to set up the the dates and time and present the shortlisted candidates without each of them knowing who the others are,” recalls Rao, who was Head of Recruitment at Tatas.
Some companies seek to fill a CEO’s or a CFO’s post with a candidate drawn from a same or similar sector and with cross-functional expertise, so that the hire is able to get started on his work quickly.
While organisations that are on a rapid expansion mode will want people from the same sector, those that want to shake up things a bit and restructure will be open to hiring candidates from a different sector, says Aditya Narayan Mishra, CEO of CIEL HR Services. He cites the example of General Electric; When the company introduced the lighting division in India, it did not look for someone from the same industry to head the vertical.
In many cases, the head-hunting process will be inclusive: Aditya Narayan Mishra puts inconclusive searches at 33%.
“When they cannot find a successor, the CFO is assigned the job or they manage the role with another hire at the executive level,” he says.