The Challenge of Finding a CEO in Brazil’s Evolving Market
The Challenge of Finding a CEO in Brazil
Finding a new CEO has become increasingly difficult for Brazilian companies due to growth and globalization. Over the past five years, search times have doubled, while CEO tenure has halved.
Klabin’s CEO Search: A Case Study
Klabin, Brazil’s largest paper manufacturer, recently underwent a six-month search for a new CEO. This involved 11 internal personnel and an external recruitment firm. The process highlights the challenges companies face in finding suitable leaders.
The Growing Trend of CEO Scarcity
Klabin’s situation is not unique. Many large Brazilian companies are experiencing similar difficulties. A survey revealed nine other companies with revenues between R$300 million and R$16 billion facing the same challenge. Experts believe the actual number of companies seeking CEOs is much higher.
The Risks of Delayed CEO Appointments
Delayed CEO appointments can have serious consequences. In today’s fast-paced business environment, companies need to react quickly to market changes. A prolonged search can lead to internal power struggles, uncertainty, and stalled long-term projects.
Factors Contributing to CEO Scarcity
Several factors contribute to the difficulty in finding qualified CEOs:
- Increased Professionalization: Brazilian companies are increasingly seeking external CEOs, leading to higher demand.
- Globalization: Talented Brazilian executives are pursuing international careers, reducing the pool of available candidates.
- Evolving Requirements: CEOs now need to manage relationships with various stakeholders, including shareholders, customers, suppliers, and employees.
- Market Pressure: The capital market’s scrutiny of CEO appointments and performance adds pressure on companies to find the right fit.
The CEO Selection Process
The typical CEO selection process involves several stages, including:
- Creating a list of potential candidates.
- Narrowing down the list based on skills and experience.
- Conducting interviews with headhunters.
- Interviews with company executives.
- Potential interviews with international partners.
The Rise of the “Dream Team”
Some executives are highly sought after by companies seeking CEOs. These individuals often have a proven track record of success. However, hiring a “star” executive can be expensive and doesn’t guarantee success.
The Global Nature of CEO Scarcity
The challenge of finding qualified CEOs is not limited to Brazil. Globally, only a small percentage of CEOs are considered above average. Even founders of successful companies sometimes struggle to find suitable replacements.
Conclusion
Finding the right CEO is a complex and challenging process. Companies must carefully consider various factors to ensure they select a leader who can effectively navigate the evolving business landscape.