What is the right DNA for a successful economic development CEO? One might think there is a simple answer to this question – just recruit someone from a similar economic development entity and entice that individual to make a move. Not so quickly!
Diverse boards and search committees who come together to discuss the “ideal criteria for success” in the CEO role usually have a broad spectrum of opinions and beliefs as to what is needed and what is the best way forward in finding a CEO successor.
Having to replace a CEO creates a real opportunity for an organization to pause and envision the future. In public-sector EDOs, being inclusive and taking the pulse of a broad cross-section of community leaders and constituent stakeholders is a critical first step. In most instances, the intake process needs to be one-on-one, in a confidential setting without fear of repercussion.
Apart from any requirements for professional accreditation, the board needs to focus on what combination of cultural and technical skills is needed in the next CEO. It is not always about selecting the most likable or comfortable candidate:
Do you need a turnaround person?
Someone to maintain the status quo?
An individual who will push the envelope and bring new ideas and is not afraid to take risks?
Does the organization need a change agent?
What is the strength of the management team?
Is regional familiarity critical?
Is international expertise a must?
These and many more questions must be asked, debated, and answered. The following two cases show the importance of this process.
In a recent CEO search for a large economic development entity on the West Coast, there was a significant disparity of opinion among the five-member appointed board on what kind of credentials and persona were needed.
The stakes were especially high because this position had been vacant for over a year, and morale in the organization was low. It was also fighting for market share in a fiercely competitive environment. Due to various constituent influences and strong opinions among the board members, it took more than a month to get the board on the same page, following a tedious outreach effort to community and client stakeholders.
After several months of national outreach, there was a great deal of internal debate as to which of four finalists would best serve the organization. Two of the candidates had direct industry experience. One hailed from the EDO’s customer base. The fourth had unrelated industry background but substantial prior CEO experience and a successful track record.
After much agonizing, the board selected the non-industry professional. More than a year later, this CEO has been acclaimed as just what the doctor ordered: A person with strategic orientation, natural leadership skills, financial discipline, communication skills, integrity, and lastly but most importantly, a great sense of humor. It took a lot of courage for this publicly appointed board to make the decision to go with a non-traditional candidate, because if the new CEO failed, there would be significant criticism and political repercussions.
In the second case, an East Coast economic development client with a very large search committee and board faced a challenge in dealing with a national group that was lobbying for the appointment of a CEO from its segment of the industry. The problem in this case was that this EDO was on the brink of financial collapse. More of the same would not work. In evaluating CEO candidates from around the country, it was determined that the talent needed did not exist within the ranks of the member chapters, much to the chagrin of the national group, which went out of the way to negatively influence the outcome.
Here again, the board demonstrated the courage to take a non-traditional route, selecting an individual who previously led a national association dealing with healthcare philanthropy issues. This individual completely turned the organization’s finances around, grew its signature fundraising event into one of the region’s premier business happenings, and has become the “poster executive” for the ideal type of CEO in this sector.
If you’d like to learn more about maximizing talent in economic development, IEDC’s Annual Conference is hosting a session titled “A Place to Call Home: Attracting Economic Development Talent.” This session will cover:
Tips for training young economic developers to grow into executive roles
How to show young professionals that economic development is a field that provides for advancement and professional growth
Strategies to attract experienced economic developers to communities with limited budgets
Customized criteria are key
Do these two examples mean that EDOs should not look within their own organization and member community? Absolutely not! However, they demonstrate that boards and search committees have to invest the time to develop and customize the right set of leadership criteria for the organization. They also need to take into consideration the organization’s current lifecycle status, short- and long-term strategic priorities, the competitive environment, and the corporate culture before embarking on a search. All organizations have lifecycles, and what worked well historically might not be a great fit going forward.
Governing boards and search committees are best served by being presented with a broad range of options, rather than a slate of comparable candidates. Diversity, which is an important component of any search, is all too frequently defined only along the lines of gender and ethnicity, failing to include diversity of thought leadership. Mixing things up and bringing in new ideas and lessons learned from other environments can be very refreshing and productive.
How about internal candidates? At times, there is a tendency to look externally too quickly. Internal candidates, even those with some gaps, should be seriously considered. Perhaps with some coaching, an internal candidate could rise to the occasion. Gap analysis in evaluating both external and internal candidates is a must, because prior experience alone is not a predictor of future success. “One size fits all” often is a recipe for failure.
The challenge for boards and search committees is to avoid rushing to judgment or being pushed into making a decision while in crisis mode. Doing CEO succession correctly requires a serious investment in time and resources. Take the time to be strategic about the selection of your next CEO, as this is likely to be one of the most critical decisions a board will ever have to make. The downstream implications of making the right decision will have considerable economic, social, and brand impacts within your organization and community.
Tim McNamara, managing partner of Boyden Washington, D.C., leads Boyden’s global Public Sector Practice, which includes executive search, organization development, and succession planning consulting to a broad range of economic development entities including airports, CVBs, EDCs, PPPs, and seaports. He can be contacted at firstname.lastname@example.org or 1.202.536.5168.