The relays in the domes of the listed companies of half the world ran normally until the pandemic arrived. The covid-19 paralyzed hiring with a stroke of the pen. Between March and June 2020, 19 of the 20 largest economies signed fewer executives.
US companies in the ranking Fortune 100 incorporated only two CEOs, compared to 7 in the same period of 2019, and among the top 100 Chinese firms only two instead of 8.
After overcoming the toughest confinements brought by the virus, the moment of panic, the waters began to return to their normal channel and the selection processes were resumed, explains Stefano Salvatore, general director of Heidrick & Struggles in Spain, especially in the United Kingdom [the only country that recruited more leaders than the previous year] and Italy, the most active markets, which live the best year in its history.
In Spain, the three additions that the Ibex 35 companies have announced took place in June, when Andreas Naven took over at Siemens Gamesa ; Luis Gallego was appointed IAG’s chief executive officer after the summer and the change in Banco Sabadell, which has signed César González-Bueno to lead the entity , came after the failed attempt to merge it with BBVA, in November and is still pending approval by part of the ECB.
The virus has not only modified the succession rhythms but has also driven the change in the most sought-after profiles to lead organizations. And, as a consequence, it has slowed down the push for diversity that had been taking hold in recent years.
“In total, 30 CEOs were appointed after the official announcement of a global pandemic [in the 20 countries the headhunter analyzes, from the US, through China or Hong Kong or through Brazil or Australia and almost all of Europe], and we found that their backgrounds differ significantly from their more recent counterparts, ”explains Heidrick & Struggles in their annual Route to report from Top.
Large companies that fluctuate in the stock markets have returned to their “traditional comfort zone”, incorporating candidates with previous experience as CEOs and demonstrable successes in their management, particularly during periods of crisis.
63% of the new leaders appointed between March and June have already served as such before (compared to 44% previously). “The extensive experience of César [González-Bueno], as well as his successful career leading strategic innovation, digitization and restructuring processes, make him the ideal profile,” said the president of Sabadell, Josep Oliu, when announcing the appointment.
They have parked the growing opportunity that they were giving to women (there are few who have background in the top leadership), with which the gender diversity in the leadership that in the five months prior to the crisis stood at 12% it has gone to 6% later. Racial diversity, nationality, professional experience, and even educational diversity among senior leaders have also suffered.
And companies have chosen to hire executives from other organizations instead of fishing in their internal fishing grounds, something that will also have consequences, according to the head hunter , in business succession plans. External hires jumped from 35% observed between October 2019 and March 2020 to 57% thereafter.
“We have seen this evolution previously, in the financial crisis of 2008, but this is by far the most pronounced change,” the report emphasizes. Salvatore sums it up in that executives have gone from being poets to warriors, managers who put on helmets and go into trenches because decision-making cannot wait. And that has caused the defendant profile to be modified.
“The experience or seniority in the governance of a company is an asset in itself,” says Tobías Martínez, CEO of Cellnex Telecom, who believes that the demand for profiles more oriented towards stabilizing the organization in times of extreme uncertainty such as the current one, while considering that what is important for good business management is the balance in the combination of skills, abilities and attitudes of the candidate.
The pandemic has also emphasized the need for the softer skills that are the hallmark of modern leadership, such as humility, empathy or communication skills. And there are those who think, like Cargill China CEO Jerry Liu, that the coronavirus will bring a more local approach to decision-making.
“To be able to think globally and at the same time act more like a local player will require a change in behavior and mentality, and it will be the key to success in the future,” he predicts in the aforementioned study.
“We suspect that these trends in CEO selection, including increased outsourcing, may not represent long-term changes but rather a struggle to survive in a highly challenging and competitive global environment,” says the headhunter and confirms Salvatore , in the belief that the listed companies are returning to normal, to worry about the diversity and sustainability of their businesses.
“The weight of women is increasing, companies are making a real and sincere effort in their policies of equity, diversity and inclusion,” appreciates Tobías Martínez, who refers to the recommendations of good governance as drivers “for good measure “to force” all of us to this discrimination in a positive sense ”.
In all respects, 2020 has been a very unusual year, says Heidrick & Struggles, which in the face of the year that has just started maintains some optimism in the selection of executives, according to the director of the firm in Spain.
At least in the Ibex there is already a replacement in the making: that of the CEO of Almirall, after the signing of the current one by Merck .