No, we’re talking about executive bonuses. The issue has been popular since the bailout, but with the Occupy Wall Street movement capturing the media spotlight, executive bonuses have once again become a hot topic. However, we’re not here to argue over the size of executive bonuses –we’ll leave that to the politicians and the protesters. Rather, we would like to offer some advice to Boards on how best to utilize bonuses. Having the right incentives structure in place can be a huge key in keeping your leadership on task and your business running smoothly.

Industries are constantly evolving and changing, and so too are the needs and goals of each company. A successful business will have a dynamic leader, someone who can adapt to these changes and keep the company aimed towards shifting goals. As we’ve said before, companies take on the personality of their CEOs. The same too applies for CEOs and their Boards: how the Board treats the CEO greatly affects how the CEO runs the company. If you want a dynamic leader, you need to offer a dynamic incentives structure.

The problem most Boards face these days is that they treat bonuses as something that is static. Meet the metrics, get your bonus; year in and year out the process continues. Boards need to wake up and realize that this type of compensation is already included: it’s called salary. Bonuses are, or at least should be, something different. How successful was the CEO at meeting that difficult, but high priority goal? Have the needs of the organization changed? If yes, then so should the CEO’s bonus structure. Boards need to think about reviewing and changing bonus agreements on an annual basis. Pay a CEO based on how he or she adjusts to new goals, and the adjustments will happen. Pay a CEO based on how well he or she keeps on the same track, and your company will be stuck in neutral.

The CEO sets goals for the company, but the Board sets goals for the CEO. Don’t pay extra just because the CEO runs the business well –that’s his or her job. Use bonuses to incentive the CEO, and therefore the company, to take on new challenges and drive business forward.

A recent Boston Globe article discussed how job seekers these days are lucky to get an email or phone call back, even after multiple interviews. Everyone knows that businesses these days are operating under tighter schedules and budgets. When you have neither time nor money, corners get cut. Most companies and their internal recruiters don’t see the time spent following up with cut candidates as a worthwhile investment. Their job, after all, is to hire someone, not to talk with those who didn’t make the cut.

However, there may be a hidden cost to these types of practices. In business, your brand is everything: if people can’t trust you and your brand, they will never buy your product. The hiring process is one way of building a company’s brand and reputation, and every time it’s run without regard for all the possible candidates you end up with some pretty ugly views of the company. Give a person a second round interview and then don’t follow up afterwards? Don’t count on that person (or his/her friends for that matter) on going to your business any time soon. That’s not to say that in failing to follow up with the ten candidates you didn’t hire you suddenly sunk your entire business. But regardless of what industry you’re in, people will judge your business depending on how you conduct yourself in all aspects.

This point is even more important when hiring at the senior executive level. Let’s say you’re hiring a new CEO and you’ve narrowed it down to two candidates, Frank and Gary. They’re both qualified for the job, but you decide that Gary is a better fit for the company. You hire Gary, sign him to a new contract and move on; but what about Frank? Chances are he wasn’t right for your company, but he was right for a different company, one that’s most likely in the same industry as yours. If you handled the situation right, you now have a connection with the new CEO of a prospective business partner. If, however, you gave Frank the cold shoulder after choosing Gary, you killed any chances for a future business deal before you even realized it.

The situation above is hypothetical of course, but that doesn’t diminish the importance of the lesson: people treat you based on your reputation. Yes, not following up with every candidate will save you a little time and a little money, but even if your company sells the best product at the best price, a bad reputation in any aspect will come back to haunt you. Be respectful and be sure to show all applicants common courtesy. As experts in the field of recruitment, we’ve seen it time and time again: sometimes it’s not just about the candidate you do hire, it’s about the one you turn down.

The baseball fans out probably know the story already, but for those of you who don’t know an RBI from an MRI, here’s the quick background story: despite getting off to a slow start, the Boston Red Sox went on an impressive run over summer. They were on pace to win 100 games (a difficult task for even a great team), and by the end of August they held a 9 game lead in the race for the playoffs –a seemingly insurmountable edge. All in all, the team looked poised to make a run for the World Series.

Then September hit and the wheels fell off. The team proceeded to lose 21 of their final 29 games and watched as their 9 game lead evaporated into a tie with the Rays for the final playoff spot going into the final game of the season. In a perfect representation of the season as a whole, the Red Sox lead the Orioles going into the final inning of the game and seemed to have shaken off their September woes. However, in a matter of only a few minutes the Orioles made a comeback and stunned the Red Sox. The Rays mounted a comeback of their own to win their game and take a one game lead over the Red Sox. On the last night of the season, Boston finished its epic collapse and missed the playoffs.

So what’s this have to do with leadership or business for that matter? Everything, actually. As a recent report documents, the team’s manager, Terry Francona, had lost influence and sway with the players. He could no longer motivate them, and the team’s leaders seemed disinterested in helping him. A general malaise took over the organization. Players skipped practice, worked out less, and became disengaged. By September the balance had tipped and the bad habits began manifesting themselves in games. The result was a collapse for the ages. Without a strong leader keeping the team looking forward, the players lost sight of the goal and started putting themselves ahead of the organization. A few days after the season ended, Francona met with the Red Sox brass and the two sides decided to part ways.

In truth, though, Terry Francona is not a bad manager. In his 8 years with the organization, Francona lead the team to 2 World Series victories and several playoff appearances. By almost all standards, he was a very good manager. However, in the words of Bob Dylan, the times are a-changing. He was the leader they needed for several years, but not the one they needed this past year, and not the one they need for the future. Baseball and business are similar in this respect: success yesterday does not guarantee success today, and success today does not mean success tomorrow. If the leader can’t motivate his team to produce, it’s time for a change in direction. It’s not about skill sets or past performances, it’s about results.

Yes, baseball is about homeruns and strikeouts, but when it comes down to it the same rules still apply. A team needs a leader, and sometimes that leader needs to change.

Unless you’ve been living under a rock –or are simply an Apple fan in denial- you’ve probably heard the rumors that Apple has started looking for Steve Jobs’ replacement. With the possible exception of Apple deciding to get into the music business, the hiring of the next CEO will probably be the most important decision in the company’s history. For better –and in some cases, for worse– companies take on the personality of their heads. Much in the same way Henry Ford defined Ford during the early 1900s, Steve Jobs has become the embodiment of Apple; or, perhaps a better way of putting it is that Apple has become the embodiment of Jobs.

With that in mind, here’s our advice to the folks over in Silicon Valley for what to look for in the next CEO:

Go Big
The worst possible scenario is for Apple to hire someone who will merely hide in Jobs’ shadow. They need a leader with a big personality, someone with true charisma. One of the most recognizable images of Apple is Jobs standing on stage for his keynote; trying to keep the jeans and black turtleneck while swapping out the person who wears them won’t cut it. The CEO needs to be his own person.

Look To the Horizon

If Apple is to continue its hot streak, the new CEO had better be a true visionary. In his own words, Jobs was always trying to “get busy on the next great thing,” and for the most part he succeeded. This point cannot be understated: 4 years ago Apple didn’t make cell phones; today they are the largest seller of cellphones in the world. The future of Apple’s success depends upon the next CEO’s ability to understand where both technology and society are headed.

Think Different

Think Different was the title of Apple’s wildly successful ad campaign, launched shortly after Jobs’ return to the company. The point here is not that Apple needs to hire one of “the crazies” mentioned in the ad (though it might help), but rather that the next CEO needs to know how to maintain the brand of the company. The moment consumers stop recognizing Apple as the most innovative and inspiring company is the moment they lose their edge in the market. Apple needs to go after an innovator of both products and company images.

The right leader will lead Apple into a new decade of success and continue to build on his predecessor’s success. The wrong one will have consumers calling for Jobs to return –and shareholders calling their stockbrokers.

Source: Forbes.com

August 25th was business as usual. Or at least that’s what Apple wanted you to think.

On August 24th, Steve Jobs, one of the most revered and innovative CEOs in recent memory, announced his retirement in a brief letter to the company. No fanfare, no big sendoff; Jobs had slipped out the backdoor before anyone could realize he was gone. The Apple Board of Directors quickly instated COO Tim Cook and acted as if nothing had changed.

Even if no one could predict Jobs resignation or his untimely and tragic passing, the recent release of the iPhone 4S seems almost planned. Despite tech experts expecting a complete overhaul of the iPhone platform, Apple essentially released the same old phone with a few more bells and whistles. Faster? Sure. But fundamentally the phone is the same thing it was 2 weeks ago. It wasn’t an overhaul –it was an update. It’s as if Apple was saying nothing has, or will change, Jobs or no Jobs.

While that may work at most other companies, Apple isn’t most other companies. Jobs built the company’s brand on being cutting edge, on pushing the envelope, on not being business as usual. Though it was clear with Jobs’ resignation, his passing makes it all the more obvious: Apple is currently at a crossroads where it can choose to keep pushing its technology forward or it can try to recreate the company’s heyday under Jobs.

The true test of a CEO’s greatness is not the company’s success under his or her tenure, but rather its success after he or she leaves. As Wednesday reminded us all, every person, even a larger than life one, is human and finite. Certainly, companies can survive off of one man’s accomplishments; but the goal is to thrive, not just survive. To do so requires a continuous flow of strong leaders. A truly great company outlives its greatest leader. True accomplishment is measured not in days, months or years –it is measured in decades and beyond.

None of this is to undermine or take away from what Steve Jobs was able to accomplish over his lifetime. His passion and innovation changed the face of the computer, music, book, and movie industries. He earned his place among the all time greats in business leadership, and the outpouring of sadness over his recent death is a testament to the cultural icon he has become.

But while Steve Jobs is no longer with us, Apple is and the responsibility has now fallen to Cook to lead the company into a new decade of prosperity. Things got off to a rocky start this week with the release of the iPhone 4S, a device that left many asking, “That’s it?” Maybe 2012 –and the expected release of an updated iPad and yet another iPhone- will help Cook, and the company, find their footing once more. Cook is not, nor will he ever be, Steve Jobs. But in truth, he doesn’t have to be. He has taken command of one of the most innovative and respected companies out there, a company that can take a few bumps in the road.

And we all know whom he has to thank for that.

A few quick points from Tuesday’s session:

-Network, Network, Network: In the business world, success if often determined by who you know as much as what you know. But don’t treat networking as a one way street; you should only expect people to help you if you are willing to help them.

-Finding a Job is a Job: Don’t expect to find a job by sending out the occasional resume. Do your homework on the companies, follow up, proofread all correspondence, keep in contact. Tenacity and drive are traits employers (as well as recruiters!) look for in potential employees.

-Be Patient: Sometimes a connection will take months if not years to pay off -not simply days. Just because you didn’t find a job today doesn’t mean you won’t find one tomorrow, so stick with it.

To find out how you can get Leonard Pfeiffer to speak at your university or college, please contact us.

The Duke Career Center presents
Fannie Mitchell Expert in Residence
Leonard Pfeiffer, Managing Director
Leonard Pfeiffer and Company

“Launching into the Future: Tips and Strategies for an Effective Job Search”

Tuesday, April 12
11:30am-1:00pm
Career Center Conference Room
Bay 4, Smith Warehouse 2nd floor

About:
Executive Recruiter, Leonard Pfeiffer will share his expertise to help students understand the recruiter perspective on the job search process. He will talk to students about how to launch and maintain an effective search! You will hear: how to “connect” successfully to those resources and people who can help you in your search; how to effectively present your credentials; and how to develop an effective job search to LAND that job. Don’t miss out on the opportunity to tap into this Executive Recruiter’s knowledge and expertise!

Biography:
Leonard Pfeiffer has been a force in the executive search business for more than 25 years. As an independent company, and previously, as a Senior Partner for the two largest search firms in the world, Leonard has personally completed over 300 searches for some of the most prominent corporations, associations and charities in the country. Included in this record are over 200 successful CEO searches.

Pfeiffer has recruited senior executives with backgrounds in finance, general management, healthcare, government relations, legal, technology, etc. Some of these clients include Bell Atlantic (Verizon), Fleetwood, Lafarge, McDonalds, National Association of REALTORS, Sprint, United Way and the U.S. Postal Service. Two of his more colorful searches were recruiting CEOs for Country Music Foundation and Ducks Unlimited.

Prior to relocating to Washington, Leonard was an executive recruiter in New York City where he focused on financial clients including Bankers Trust, Citibank, and Goldman Sachs. Before that, he managed the San Francisco office of an international management-consulting firm and opened their Honolulu operations. Prior to that, he was on the executive staff at American Express refining marketing projects in the USA and Europe.

Leonard has been invited to speak at major universities and conventions and has published news articles on ethics and executive recruiting.

Leonard was raised in suburban New Jersey and Pennsylvania, commissioned a Lieutenant in Military Intelligence, and holds a BA and MBA from Harvard University. At an earlier stage in his career, he was a choker-setter in an Oregon logging camp and baled hay on a horse ranch in Montana

Read at REALTOR AE or below.

Your Career: Curb Merger Job Stress

by Leonard Pfeiffer

In his 25 years of executive recruiting for associations, Leonard Pfeiffer has placed CEOs into the top spots at dozens of new associations and MLSs created out of mergers. Here, he offers his advice to AEs facing the career uncertainty of a merger.

Q. One of the biggest (and often unspoken) hurdles to association mergers is the fear AEs have of losing their jobs. Would you agree?

Yes, but it is also an opportunity. A merger may be a chance for the AE to run an even larger group (and be paid more), to learn a lot about mergers (which will continue to be popular in today’s economy), or to negotiate a lucrative severance plan before moving on to a bigger, better, and more challenging job.

Q. What’s the most common scenario: one AE stays and the other is let go, or both stay on but assume different roles?

There really isn’t any common scenario, but what you’re most likely to see is that both AEs leave—maybe not immediately, but it’s important to keep in mind that a newly merged organization might need a new kind of leadership.

It is uncommon for both AEs to stay under different roles. Having two former CEOs in the same organization rarely works. You end up with two bosses, even if one is designated as the senior, “new” CEO. This scenario is confusing for both staff and leadership and it slows down the evolution of the two old associations becoming one. The buck needs to stop at one desk, and one desk only.

Q. When should an AE gain assurances regarding his or her future role?

As in life, upfront communication and clarification of expectations saves many problems later on. The AE should seek a definition of his role and assurances of his future near the outset of merger talks. Only once the AE’s position has been defined can he work to establish the merger and do whatever the directors deem necessary.

Even if there will be no position for the AE in the new organization, there is still important work to be done. For example, if the merger requires a restructuring of staff and one board feels strongly that its government relations SVP is the stronger one in the two associations, the AE will need to carefully negotiate that on behalf of his board. Of course, the same may need to happen in negotiating the dis-position of various assets, such as office buildings, receivables, excess staff, reserves, etc.

Q. Two AEs pitted against each other to lobby for the executive office sounds unpleasant. What would you recommend the board or AEs do to avoid ugly conflict?

In an ideal situation, all four parties (the two AEs and their respective boards of directors) should put personal aspirations aside and focus on what is best for the final, merged association. However, if the AEs do not know where they stand, you’re more likely to see them lobbying behind the scenes.

Keep in mind that this is, and always has been, a board of directors’ decision. If the directors want to avoid the backstage drama, they need to be very sympathetic to both AEs’ financial and career situations. Providing very attractive severance packages is a typical cost of merging that makes the process go smoothly.

If one board of directors insists on keeping its AE as the final executive, they owe it to everyone to make that a clear condition of the merger at the outset. The ugly conflicts erupt when directors make that a requirement at the eleventh hour.

Q. Sometimes working out who will be the CEO of a merged organization becomes the job of an outside consultant. What has been your strategy for choosing the best fit whether between the two current AEs or from outside?

Our strategy is focused on the goals and needs of the combined, new association. The position specification (job description) we develop may be radically different from the job descriptions of the two present AEs. We then move forward with a search, seeking qualified candidates who meet that new specification. Of course, we will look carefully at both of the sitting AEs as potential candidates, unless our client, the new board of directors, suggests otherwise. Frankly, there have been times when we have been more supportive of a sitting AE than the directors were, and we had to convince them to see some of the AE’s strengths that they had previously overlooked.

Q. What should an AE expect if he or she is not chosen to head the merged association?

If the AE will not stay on board and serve as the final CEO, she should establish a severance package to take effect after the merger is complete for anywhere between six and 24 months.

A severance package allows the AE to focus on the merger and not worry for a long time about finding a new job. Such an arrangement also helps the reputation of the new organization in that taking care of the CEOs in an honest and straightforward way sends a positive message to the staff and members of both organizations.

It is important to keep in mind that a merger may lead nowhere. You don’t want a situation where an AE quickly finds a new job and quits. If one or both of the AEs is nearing retirement, it could be opportune for the AE to negotiate a lucrative early-out package.

Q. What’s the worst thing you’ve seen an AE do in a merger situation?

Mergers can bring out the best and worst in people. Sadly, we’ve seen a few AEs revert to tantrums and other childish behavior, making themselves seem foolish and embarrassing their board of directors. Other AEs have, immediately upon learning of a merger, aggressively searched for a new job. The result is that one, or possibly both, associations lack an AE to negotiate the merger and it ends up falling through or is very one-sided. This is probably the worst-case scenario for both sets of leadership.

As we said above, the boards and sitting AEs need to speak frankly the moment a potential merger scenario appears. Once the AE is taken care of and protected fairly, he or she can be a tremendously positive influence on whether “to merge or not to merge” the association.

That’s a line from the movie Inception, and while the plot may be a little far-fetched there’s some sage advice hidden in the dialogue: people tend to focus on the topic and not just the way you’re spinning it.

An article came out today on CIO.com discussing the merits of the “What is your greatest weakness” question. The article wasn’t about how to respond to the question, but rather whether or not you, as the interviewee, should bring up the question yourself if the interviewer doesn’t. As recruiters we get asked this question a fair amount: should I discuss my weaknesses during an interview?

The short answer is a simple no. Like the Inception characters with elephants, if you start talking about weaknesses, the interviewer will focus on the weakness and not your particular spin on it. Remember, you’re selling yourself as a candidate –speak in positives. When we prep our candidates, we make sure to tell them that if they get asked a question about something outside their field of experience (“How do you solve problem X?”), never begin with the phrase, “We’ll I’ve never done that, but…” Everything after that is irrelevant, as you’ve just discounted yourself as a prime candidate. Instead, begin with a positive: “That sounds a lot like this problem I faced before, and here’s how I solved it…”

This is not to say you shouldn’t be prepared for the weakness question. As a leader, you are expected to understand your own strengths, weakness, and leadership style. No one wants to hire a person who has never taken the time to self evaluate, and no one especially wants to hire a person who thinks he has no weaknesses. If you get asked the question, have an answer ready; if you don’t, let it be. There’s no reason to short sell yourself during an interview.

The interviewer should walk away thinking about your qualities as a leader –not about those elephants.

We hope to hear from you soon.

-LP&CO Team