The article points out that the hiring process for CEOs is ‘hopelessly inefficient’ yet ends with the old adage that
The most successful companies, such as Procter & Gamble and General Electric, are more than just ever-shifting nexuses of contracts. They are self-replicating organisms that possess distinctive cultures and unique habits—cultures and habits that are preserved and perfected by a loyal cadre of managers. You can certainly buy lots of wonderful managerial skills on the open market. But true corporate greatness is home-grown.
Now, this is an important point, but is this true?
I think firstly, it is important to distinguish between an entrepreneurial company and a huge global conglomerate or business. In the case of entrepreneurial companies, you will almost certainly want to hire on a contract basis.
Larger companies may also like to consider this – if we can deal with three key prejudices.
Firstly, a CEO directs a number of senior managers and is him or herself directed by a board of non-exec directors (or at least this is the best balanced solution).
In this scenario, it is already well established that the non-exec are part time, perhaps one day per week or one day per month. It is also agreed that they are more effective in their role if they hold a number of non-exec posts.
In addition, any decent CEO is going to appear on boards on a number of other companies. Hence, the idea of freelancing or contracting or part time work is well established and considered to have benefits.
Secondly, if the board and the directors of the business do their job well, then the CEO is not the be all and end all of the company. Therefore, continuity in this particular seat is an overblown concern.
Lastly, if a company hires a team of senior execs to launch a new product and that project comes to an end, then one of two things will happen. Either the management of the project will be considered a success or failure. In the later case, the contract will no doubt be completed. But in the case of a success, then the key players may be offered a new role in a different company within the conglomerate or a part time role to maintain continuity, or the manager may leave for a new project, but return to the original company in 12 or 24 months time.
Essentially, if contractors are treated a key members of the team, then the freelance legal structure underpinning the relationship should increase the likelihood of success and the ability to maintain continuity will depend on whether both the contractor and company are happy to do so.
Which is what everyone would want wouldn’t they?