Changing jobs at top management level. The most common reasonsarticle
Article written by Cristina Popa-Bochiș, Consultant at Signium - Stein & Partner, for Economedia publishing
The decision to make a change professionally can derive from many situations – from the desire for a new challenge or growth, to changes or misunderstandings within the organisation, but also various personal contexts. This is true at any level. However, I have noticed over time that people tend to have different motivations depending on the level of seniority; if a person at the beginning of their career is rather looking for financial motivation or accessing roles where they can learn or grow, for example, an executive or manager has other challenges and expectations.
Working in top management recruitment for over 10 years, both locally and internationally, I had the opportunity to talk to many managers, from different industries and in different professional contexts. Analysing the reasons why many of them are open to new professional opportunities, I was able to extract some common situations:
Changes within the organisation. It can happen that during the term of an executive director, major changes at the level of shareholders or Board to arise, and this influences the overall strategy or even the purpose of the CEO’s role. The direction in which the company goes after these changes may contradict his/her vision, he/she may feel that he/she no longer aligns with the values or approach, he/she feels that he/she would compromise professionally if he/she continued in the new structure or that he/she cannot use his/hers experience and skills at true value.
Changes at industry level, especially decreases / contractions. If the CEO works in an area where he/she can no longer grow, the company is at a loss, and no solutions to rectify the situation are implemented, he/she will probably consider options to go to a sector in which he/she can have better results. Another situation is when the field changes, digitises or the goods or services sold are commoditized, and the current executive director is not suitable or prepared to lead the company in the new context.
The company enters another phase of maturity. The most efficient executives have a multitude of skills, from adaptability, vision, to the ability to relate to diverse people, to leadership skills (especially). They manage to connect the dots and identify the best ways to address the challenges and opportunities in business and industry, but also the needs of the community at large. That being said, in every phase of a company’s development (business lifecycle), its needs are different. Certainly, another approach is needed in the phase of entering a new market versus increasing or maintaining market share, and when the organisation moves to another stage, sometimes the existing CEO is not suitable to handle the new challenges.
The desire for a role with more impact. As they advance in their careers, many professionals become less interested in their title and money (because they have already obtained them in many cases) and seek to go for roles with greater impact. This desire can go in two directions. Some are looking for positions in which they can have substantial challenges; they are interested in ambitious projects, to be able to design strategies, to develop new markets, to change the business model, transformation processes, restructuring, integrations, streamlining processes and structures. Others rather look at the environmental / societal / governance (ESG) impact, move away from the transactional area and move towards companies with a sustainability strategy. Many executives today want a balance between the ambition to deliver better financial results and making a significant contribution to the environment and society (e.g. carbon footprint, diversity and inclusion, human rights concerns, social activism). The reality is that financial indicators currently remain the dominant decision engine for most managers, which is why they are open to opportunities that would allow them to have a greater impact beyond the profit of the company they run, or to run a company that addresses the needs of civil society.
They are not supported in achieving the required results. Mega-trends disrupt existing business models; the rapid development of technology in all areas, combined with the increasingly demanding requests of customers, the emergence of new competitors, new generations of employees joining the workforce, but also pressure from shareholders, wearies executives, who must constantly innovate. To keep up, they need funds, freedom of decision and support. Whether it is a refusal to invest or a lack of availability to support the company’s top management with potential solutions or ideas, but also a lack of top-down transparency, CEOs may have limited results when they do not receive support from shareholders and the Executive Board.
They have no power, freedom of decision, autonomy, and control. There are companies in which the Group or the majority shareholders establish the strategy, and locally the CEO has only the role of implementation / execution. For experienced professionals, who can add value if given this freedom, this can be frustrating.
What managers consider when analysing an opportunity
In most cases, although financial packages are fiercely negotiated, they are not the reason for the change. Good and experienced executives know their value well, they know they can bring results and a lot of money to shareholders, and that’s why it’s normal for them to want to be rewarded accordingly. However, they are attracted to other things as well: to use their skills and knowledge in new projects or markets, to develop business lines, to transform organisations, in short to have an impact and leave something behind. The challenge is what motivates them and the potential to contribute, no matter how much it sounds like a cliché.
CEOs are putting more and more emphasis on people. They want to grow teams, put people in the most appropriate roles, make them more efficient, delegate and stop the micro-management approach. For example, they avoid going to organisations where the founders are very authoritarian, refuse to let go of the business, and people are under constant and unproductive pressure. It is important for them to join a company in which employees are put forward, supported, grown.
Financial performance and shareholder value remain the dominant indicators for CEOs, but many want to lead their Boards into a new business era that prioritises innovation, digitalisation, long-term growth, but also offer better protection of all stakeholders’ interests, including the community. Especially in the context of the pandemic, we have noticed that many want this situation to accelerate the transition to a more goal-oriented, but also to a more employee-centered way of leading the business.
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