A
week or two ago, an industry acquaintance asked me an interesting question:
"What’s happening in the financial services market now that hasn’t
happened in the past?"
My
answer surprised him, and it might surprise a few of you, too. It was this:
more executive assignments are now running under NDAs than ever before. Rewind
a few years, and you'd see one in 10 assignments under NDA - and they’d
primarily be reactionary to someone's sudden exit.
Fast
forward to today, and I think about seven or eight out of 10 executive
search assignments are conducted under NDA. It’s not
something that businesses take lightly, either, as it requires a lot of trust
in the search firm you’re using, and they need to have a real depth of market
knowledge.
And
I believe this shift might not just be a trend, but an evolving norm.
Why more searches are under NDA
These
are the reasons why I think we’re seeing increased requirements for conducting
searches under NDA - but there could be more, and I’d be interested in having a
conversation with you about how you see this.
1. Lack of competency in your leadership team
In
many examples of the searches I’m working on, the leadership team simply isn’t
convinced by the potential or competence of their current executive. The twist?
These very executives often operate under the belief that everything is smooth
sailing. While they're charting the ship’s course, the anchors are being
discreetly replaced beneath them.
2. The performance pressure cooker
The
financial market is not forgiving. The margin for error is slimmer than ever.
There’s a soaring pressure to perform, so the need for the right leadership is
paramount. Settling is not an option; the best performance requires the best
people.
3. An evolution of requirements
Even
five years ago, the qualifications that made a senior executive a prime hire
aren't necessarily what businesses need today. Modern leadership demands
adaptability, agility, technological literacy, commercial acumen, and perhaps
an unwavering commitment to innovation.
According
to the education entrepreneur, Michael Simmons: “If
someone is 40 years old today, the rate of change they experience in 2040, when
they’re 60, will be four times what it is now.” If your leaders don’t or can’t
meet this exponential rate, you need someone who can.
4. A necessary refresh
Like
stagnant water, an unchanged organisational hierarchy can breed inefficiency.
Sometimes, even if it isn't evidently broken, a refresh is not just beneficial
but vital.
Leadership
teams who’ve worked together for a long time are naturally in danger of
groupthink, becoming accustomed to certain patterns of thought and ways of
working rather than challenging each other and driving positive change. In
fact, HBR says
that, “Companies that replaced three or four directors over a three-year period
outperformed their peers”.
5. Diminishing patience
While
patience is a virtue, businesses today are running thin on it. You may have
tried to develop your existing leaders, but it simply isn’t working.
And
businesses don’t have the luxury of time. If a leader isn’t steering the ship
right, there are people waiting to take over and prove they can do it better.
6. Rethinking the modus operandi
Doing
things the same way, especially under the same leadership for aeons, prompts
the question: Is this still the optimal route? Companies are beginning to
reevaluate, and rightly so. Just because it’s how it’s always been done doesn’t
necessarily mean that’s how things should be done moving forward.
7. Retaking the reins
A
palpable shift is afoot. Companies, once wary of losing their staff following
the pandemic, are now confidently reclaiming control. The balance of power is
tilting, and businesses are ensuring they're not left at the mercy of a few and
are getting back to being laser-focused
on results from their leaders.
A final thought
As
we navigate this shifting landscape, NDAs are becoming the norm, not the
exception. And, of course, there are still those searches that are under NDA
for more practical reasons, like an acquisition, a new product launch or a
change in strategy.
While
the confidentiality cloak NDAs offer is indispensable, handling such
assignments requires discretion, deep market knowledge and real trust.
If you find yourself grappling with these
challenges, get in touch with me directly
and let’s have a chat. Having worked extensively under NDAs, I can provide
insights and advice that could help smooth the process for you.
