Mumbai: Senior executives eyeing CEO roles should not simply bank on their leadership and business acumen to nail interviews. They may also have to field queries on everything from longevity and global warming to geopolitics, besides having to study financials and present a strategy plan to the board. There may be an odd quirky question like, ‘when was the last time you were curious?’ By the end of it, a candidate may have gone through upto 11 such grueling rounds, each lasting a few hours.
Such a long-drawn courtship before selecting the CEO betrays companies’ fear of making a mistake. Headhunters, obviously, have been left perplexed.
“The role of the CEO has become oversized, with increasing competitive intensity, economic and geopolitical volatility, technology disruptions driving newer business models. In such times, the CEO is often seen as a silver bullet, the one solution to all challenges,” said Pankaj Arora, managing director at global executive search firm Russell Reynolds Associates. “Given the high stakes, naturally the bar on recruitment keeps increasing and the process keeps evolving to minimize risk.”
While the time and complexities of the interviews depend on whether it is for a multinational company or a family-owned business or a private equity backed company, India Inc. is scrutinizing candidates for the smallest errors.
“The stakes are high today, and a wrong move can impact the company’s prospects in a challenging environment. Typically, a CXO today goes through 3-4 hours of discussion with the search firm, and if (the hiring firm is) an MNC, then 7-8 rounds of interviews depending on the sector and the business,” said K Sudarshan, MD for the search firm EMA Partners India Ltd.
Eliciting views on longevity has become an important aspect of CXO hiring. In fact, at a two-day workshop conducted by Silicon Valley based think tank Singularity in September, longevity and its impact on demography and businesses was discussed, along with growth, AI and complex market laws.
According to the CEO of one of the top global search firms, clients want to test if the candidate was curious enough. “Some of the questions asked included, ‘When was the last time you showed curiosity, and how did you get there? And what did you do about it?’”
The executive, who did not want to be named, pointed out that given the unpredictability of the global economy, companies want to be sure that the CEO can work in extreme polarities. “They do not want someone who takes the middle path but want someone who can work in extreme economic and geopolitical conditions.”
The firms are also questioning the social impact that the candidate may have had over the years. Companies want to know their potential leader’s views on the impact of global wars and global warming on business.
But as interviews have become exhaustive with multiple rounds, the time taken to close these positions has increased.
“One candidate went through 11 rounds of interview before he was shortlisted by an MNC. There are times when in the final round, the company has disclosed certain financial details to the candidate and asked him to make a presentation to the board,” said Navnit Singh, chairman and regional MD for Korn Ferry India. The search firm has its own assessment tools to test a candidate's competencies before presenting the final list to the client.
The time taken today to close the top posts also reflects the reduced risk appetite among companies to take a bet on a candidate. Firms are recruiting fractional CEOs to take over for a few months until the final candidate gets shortlisted. In some cases, especially where professionals are at the helm or in multinationals, there are multiple rounds of meetings.
“That is largely because of a heavily matrixed reporting environment and multiple stakeholders and, in general, no one wants to take the liability of making the final decision,” Sudarshan said.
When the reputation of a company can be brought down on social media, the CEO may have to step in to ebb a crisis. “They (candidates) are quizzed on how they will manage and mitigate the risk of social media negativity on business and brands,” said Mala Chawla, managing partner, Stanton Chase. “Today, time taken to close a CEO search has gone upto 8-10 months as compared to 3-6 months earlier.”
