An Ounce of Development is Worth a Pound of Head Hunting

    Caliper Canada says board's search for new CEO needs to start with
    succession plan, not head hunter

    TORONTO, Aug. 1 /CNW/ - Beyond strategic direction and governance, one of
the most important roles a corporate board of directors plays is selecting a
new CEO when the time comes. The board needs to identify potential CEOs who
are best suited to lead the company to future growth. Yet, according to
Caliper Canada, boards generally do a less than stellar job of knowing and
reaching out to high-potential internal candidates.
    "When it comes to finding a new CEO, more often than not, the search
committee picks up the phone and calls a head hunter," says John Szold,
managing director, Caliper Canada. "And head hunters do what they do best -
look for external candidates."
    However, an external candidate may or may not be the best choice for the
organization. Outsiders are more likely to import disruptive change and the
cost/benefits of this change are often outweighed by the advantages of an
internal candidate who already understands the organization and its goals. The
Center for Creative Leadership reports that fully two-thirds of senior
managers hired from outside fail within their first 18 months. And, when an
external hire fails, the failure can often be linked to either the persuasive
influence of fee-driven head hunters or the isolation of the board from senior
management team.
    Boards can be prepared for an inevitable shift of leadership by ensuring
a consistent and rigorous succession planning process is in place long before
a new CEO is required. Such an effective process helps the board know,
prepare, and challenge internal candidates. And, when faced with selecting a
new CEO, the board is well-positioned to make the choice between internal and
external candidates.

    To ensure an effective process Szold suggests:
    -   Starting the planning process early. For example, in an industry with
        a six-month product development cycle, Intel thinks about succession
        ten years out;
    -   Creating the conditions for candidates to develop integrative
        thinking; the type of thinking that allows them, for example,
        to balance Sales' needs for more variety with Manufacturing's desire
        to rationalize production;
    -   Providing an opportunity for candidates to appreciate and utilize the
        value added by staff resources groups like finance, HR, and
        market research in making informed decisions;
    -   Engaging the board in the creation of cross-functional learning
        opportunities, like national or international assignments, and
        keeping the board involved in the evaluation and the outcomes.

    "By taking a more proactive, up close and personal role in the care and
feeding of potential CEO successors, the board will not only retain a pool of
great talent, but will provide insurance against organizational turmoil and
loss of shareholder value," Szold says.

    About Caliper Canada

    Caliper is a psychometric assessment and consulting firm that helps
organizations hire the right people, build team synergy, measure engagement,
evaluate and develop high-potential performers, and develop and implement
effective succession planning. Based in Toronto, Caliper has worked with
organizations in wide-ranging sectors of industry throughout Canada.
    A global organization, Caliper has assessed the potential and motivation
of more than two million individuals and advised over 25,000 organizations
worldwide. Clients range from large multi-national corporations to major
league sports teams to start-ups and entrepreneurs.

For further information:

For further information: Melanie Rockliff, Palette PR, (416) 703-9859,
ext. 14,

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