When demotion is an important step forward

09 Mar 2020

When demotion is an important step forward

The first two months of this year were characterized by a series of striking transfers at the top of the business community, in the Netherlands and abroad.

Spectacular was the transfer of ING CEO Ralph Hamers, who announced last week to switch to the Swiss bank UBS, after having worked for ING for almost 30 years. And this week it turned out that CEO Tom Kliphuis is making the switch from health insurer VGZ to Vivat.

ABN Amro was also confronted with a CEO switch early this year. In January, it was announced that Robert Swaak was transferring from consultant at PwC to the highest position at ABN AMRO. And beyond the national borders, there was the transfer of Seat CEO Luca de Meo, who said goodbye to the Volkswagen group to become the top boss at the French Renault.

Such a switch can offer an attractive new perspective, but is not without risk. Is there a logical continuation in the career of a CEO? And can the top man or woman who makes the switch realize what he or she has come for?

Ed van der Sande, managing partner at Odgers Berndtson the Netherlands, talks about what you can do during the selection process to maximize the chance of a successful transfer.

Search for a new CEO: look beyond usual suspects

It all starts with a thorough understanding of the needs of the company looking for a new CEO. “Based on interviews with the various stakeholders in a company, knowledge of the company and the specific position, you arrive at a candidate profile. That is where you get started," says Van der Sande.

In the search for candidates, the experience and background of candidates are of course important, as is the question whether someone has specific competencies that the new role requires. “You have to realize that the competencies of the CEO determine the strategic agenda of an organization. That's why you have to spend an enormous amount of time on the preliminary phase. If you don't do the initial phase of the selection correctly, your search will fail later."

And where does a head hunter look for?

In the vast majority of cases there is a vacancy, there will be a vacancy or it is very likely that a vacancy will arise. Van der Sande: “We then fully map the breadth of the market and do not limit ourselves to the usual suspects. If you do that, then you have not done your homework properly. You usually know the obvious candidates and you speak to them anyway. For example, look at ABN AMRO's new CEO, Robert Swaak, who was a consultant at PwC. That is clearly looking beyond the usual suspects."

And if Van der Sande has a candidate in mind? “We call them. Nine out of ten people I call are in the right place and have no incentive to leave.” I say: "I know you are in the right place, and I am happy about that. But I have something that you can use to further develop your career." That is what executive search is all about."

CEOs can profit from a personal coach

Ideally, a CEO who makes the switch will see his/her salary increase considerably, or will be given more responsibilities. At least, that is the perception that lives with the general public, and also among many a director. If you do not end up with a larger or more prestigious company, it may seem like a form of demotion. Van der Sande, however, thinks that this is a wrong idea. “The point is that a company and the position fit the phase in which a candidate finds himself as a person and a professional. You have to look at qualities and how they are best expressed. You are no greater king when you manage ten thousand people instead of a thousand." 

"What the outside world sees as demotion can be an important next step in personal development for a CEO”

What Van der Sande finds striking in this regard is that relatively little happens with coaching top CEOs: "In nine out of ten cases, a next step ‘happens’ to the CEO. Either he/she is approached by a head hunter or he/she runs into a wall and has to leave the company." Van der Sande makes the comparison with successful artists, musicians and top athletes. In their career, they are invariably accompanied by a coach, while that happens much less with top CEOs. How is that possible? “It's not seen as normal. If a coach is already involved, it is because there is a problem," Van der Sande outlines.

According to Van der Sande, a CEO who consciously thinks about his/her next step has more control over his or her own career. But that is not always obvious. "I come across a lot of people who leave after ten years and think: "I'll see what comes my way." But that doesn't happen automatically, you have to work on that. Top CEOs also need a dedicated coach. Then you can think better about your own development."

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Source: https://www.businessinsider.nl/ceo-nieuw-baan-carriere-transfer-headhunter/