C-suite diversity
Jane Howze founded an executive search company, the Alexander Group, in 1994, and works to create more diversity in C-suite roles. She recently sat down with the Chronicle to discuss her mostly Houston-based company’s unique role in corporate recruitment.
Executive search leader goes outside the traditional circles to find talent.
Q: How big of a role does C-suite level diversity play when trying to diversify a company’s workforce overall?
A: Diversity is a really complex issue and I tell clients you can’t achieve diversity by hiring one board member. You can’t achieve diversity by hiring one C-suite executive. It’s got to be part of a strategy that starts at the top but also starts at the bottom as well. Are you funding scholarships for diversity candidates? Are you having internships for diversity candidates? It also starts in the middle. Do you have mentorship programs for everybody, but especially your high potential performers? What are you doing to keep them? What are you doing for women who work and have child-care issues? Is there a career path for them until they come back to the workforce?
You also have to go back and look in the past, say our turnover is 15 percent a year. If our turnover with diversity executives is 40 percent a year, either we have a small number of diversity executives or we aren’t doing something right.
Q: How do you ensure diversity in hiring at the C-suite level?
A: I think about diversity a lot because the executive search industry, while it is much more diverse now, it still represents many corporations where it’s not diverse. Every search, whether we’re asked to or not, I feel like the client needs to see candidates who are a broad swath. All who are technically qualified but people who they might not be able to find on their own.
In the early ’90s, we did work for Wells Fargo and at that point their legal department was 40 people, and I think there were two women. We did probably 20 searches just for attorneys and we would call minority bar associations. Sometimes, if you run in certain circles you hear about jobs and we were like, well we want to go outside the traditional circles. Maybe we don’t just search in San Francisco but search in the suburbs outside of the city and out of state.
Q: What are the unique challenges in hiring for C-suite level jobs and even board of director positions as opposed to general employee hiring?
A: The lower you go on the totem pole, the more your technical skills are important. When you get to the president or CEO of a company, most of them, I think there was study last year that said companies who hire from the outside, nearly 50 percent did not make it after two years. Why is that? I think it’s a culture fit. As you get to the higher level, I think chemistry fit is what separates a good hire from a bad hire.
Q: How much turnover per year is there at the C-suite and board level and how quickly does the search typically take?
A: The turnover at the executive level depends on what type of company it is. I have a client that I’ve done work for for 24 years and I do a search for them maybe every two years. The board positions don’t turn over as much as the C-suite positions. Now there are some companies where maybe they’re going through a tremendous amount of change. The executive talent they have may not be right for a different thing. Say a company is an early stage life science company. They go public and they form international alliances. They may need a different kind of management team, somebody who’s taken a company public. Somebody who knows how to work with changing a life science company from research to selling, marketing. Sometimes you need turnover because the companies change. Sometimes the culture is not geared toward long-term employees. I’ve had clients where the turnover is 25 percent a year across the board. And it’s kind of just part of that industry and its changes.
Q: How often are searches for the executive level done internally as opposed to externally? Pros and cons to either?
A: Ideally, the larger the company is, the more training they have in place, the more career development they have in place. I know when General Electric did their CEO search 15 years ago, they had three candidates who had been groomed for it. A lot of larger companies have in-house staffing functions.
If you can promote from within, what a great recruiting tool. But when they go outside, I think somebody who’s not part of the company has more time to devote to one search and they can look for both the obvious candidates and not-soobvious candidates.
Q: What have been some of your more memorable searches?
A: I remember way back in the early days, I was doing a vice president of clinical trials search for a life science company. And this was in the days when AIDS drugs were just coming to the forefront. There were only six people in the country that did what my client wanted done, so I called all six. No, no, no, no, no, no. Tried again and one woman said, “I’m not interested but if you’re ever in San Francisco, I’ll have a cup of coffee.” She was the only person that even talked to me. She said, “I’m going to be on vacation so you’ll have to come to my house.” I said OK. I was desperate. I go to her house, walk in the door and a huge German shepherd comes running out and plows me. I’m lying on the ground almost dazed. I look up at her and she says, “I guess I’m going to have to go meet your client, aren’t I?” And I said yes, I think you should. She took the job. The German shepherd saved the day.