Germán Hernández
Office Manager
Spencer Stuart's Mexico City Office
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Insight

There is No One-Size-Fits-All CEO

Wed, 02/21/2018 - 16:27

Leadership positions are the hardest for organizations to fill. But Germán Hernández, Office Manager of Spencer Stuart's Mexico City office, says hiring the right CEO is an absolutely crucial decision. “The wrong CEO can destroy the value and reputation of an organization,” he says.

Even though CEO succession has always been a challenge, Hernández says there is often a disconnect between the next generation of leaders and the needs of the organization. In many cases, younger leaders with considerable digital abilities do not necessarily have the leadership aptitudes needed to climb to the higher corporate ranks. “The challenge is to close the leadership gap between the generations,” he adds. The solution is to integrate both generations into the business model.

While he believes that some in the younger generations lack the needed leadership aptitudes, Hernández says this issue can be reversed. “Mexico’s leadership needs to see the writing on the wall and simply accept that it has to adapt to the faster pace digital has created. They need to identify younger, digital-savvy leaders and bring their insight into their company’s forward-looking strategy.”

Hernández says the new digital era is changing the way business is done, and some large organizations that used to be important are failing to keep up with the new normal. An example can be found in the telecommunications sector, where the radical changes are forcing companies to question the abilities of their traditional executives.

Leadership positions have always been invaluable, but Hernández says the challenges posed by the new business environment requires company leaders to have a broader, multi-country and industry vision. This means understanding requirements from consumers of different countries and the importance of automated processes among others.

DIVERSITY REQUIRES CULTURAL SHIFT

A 2016 study by the Peterson Institute for International Economics (PIIE) found that almost 60 percent of companies had no female board members and more than 95 percent did not have a female CEO. Germán Hernández, Office Manager of Spencer Stuart’s Mexico City office, believes that improvement can only happen when a cultural shift takes place that leads to more opportunities for women to obtain senior leadership positions.

Several countries have resorted to quotas to create balance. Norway implemented a system in which state-owned companies must have at least a 40 percent representation of women on their boards. Denmark and Finland have also followed this path. According to the same PIIE study, France implemented a 20 percent quota for female board members in 2014, and a 40 percent representation will be mandatory by the end of 2017. Hernández says Latin American countries face this same issue, but he notes the problem is more of cultural here. While Colombia, Chile and Argentina are excellent examples of countries that have managed to start creating leadership roles for women, Hernández believes the greater Latin American region still has a great deal of work to do.

Gender under-representation is not restricted to leadership roles. A 2016 McKinsey study showed women lagged behind men at every level of the corporate ladder, especially in management promotions. Still, not everything is lost, Spencer Stuart found that female representation on S&P 500 boards increased from 15 to 21 percent over a 10-year period, suggesting there has been improvement, albeit it slow.