Wanted: Well-seasoned, well-connected, energetic, intelligent, financially smart, technologically savvy chief executive to run early-stage company. Must enjoy a challenge.
It’s clear from the headlines and the “Help Wanted” signs that the labor market is tight. What may not be so clear is that the squeeze applies to the executive suite too.
“We are as busy as we’ve ever been,” said Brian Samolyk, an executive director at the Boston office of Christian & Timbers, a nationwide executive-search firm.
The firm accepts about 20 percent of the requests it gets to search for top-level executives, because “there is such a need for CEOs and such a limited amount of mature CEO talent,” he said. “Any good technology executive is getting several calls a week” from headhunters, Samolyk said.
The tightness at the top is a fairly recent phenomenon, Samolyk said, brought on partly by the proliferation of Internet companies. If such companies are helping to drive the demand for top executives, they also are adding to the demands placed on those executives, who are expected to hit profit expectations immediately and consistently.
Not surprisingly, technical grounding, either through education or experience, is a key qualification today. “Generally, the people who have some kind of science background (computers, engineering) tend to rise faster,” Samolyk said. “There is nothing worse than becoming a leader of an organization whose product you don’t know about.”
In addition, he said, a CEO today has to know what kind of people the company needs and how to train them; to be strategic and solve problems before they become crises; to have financial savvy, knowing when to borrow and from whom to borrow and, most important, a CEO must have a clear picture of who the company’s customers are.
Part of the shortage in the executive suites is because CEOs, like the rank and file, will depart for a better offer.
“What used to be viewed as job-hopping is now considered good, professional career management,” Samolyk said. “If someone has been on board a company that was a jewel of the tech world two years ago, and they stayed on too long, the flags go up. Loyalty is important, but ignorance can’t be excused,” he said. “If I’m going to ask you to strategically manage my company, I want you to have strategically managed your career.”
Such management is necessary in a fast-moving world where few people will spend their entire careers with one company.
If they are worked harder than ever, CEOs are also paid more than ever. The median salary and bonus package for the top executives at 350 major companies last year was $1.7 million– nearly 10 percent higher than the previous year, according to a study by the New York compensation consulting firm William M. Mercer Inc.
Stephen G. Sudovar has experience in both worlds: the huge, well-entrenched corporation and the more fragile, more dynamic start-up company.
Sudovar, formerly president of Roche Laboratories in Nutley, N.J., has been president and chief executive of EluSys, a biotech company in Pine Brook, N.J., for about six months. “No matter how high you get in a drug company, you never take on as much risk as you do . . . in a start-up company,” Sudovar said. “Pharmaceutical companies don’t typically go out of business, but biotech companies do.”
Sudovar, 53, has to know more about the technology than he did at Roche. “I won’t ever be the scientist, but I have to understand it, if only to go out and raise money” and to make the right decisions. “My relationship with science is what I’ve picked up over the years,” said Sudovar, who was on scientific review boards at Roche and whose undergraduate and master’s degrees are in business administration.
Heading a small company means “a lot less reacting to other people’s thoughts and ideas, and a lot more initiating those thoughts and ideas,” Sudovar said.
EluSys has developed a proprietary technology designed to treat viral, bacterial, and autoimmune diseases and is in the process of deciding which products it will develop with that technology.
Any plans to take the company public are on hold. “We’ve had a tug of war about should we go public, should we be private,” Sudovar said. “The market being what it has been, it’s probably not a good time” to go public, he said, referring to recent swings in the Nasdaq index of mostly high-tech stocks. It’s a reminder that small, new companies are fragile, with much less padding.
“The feeling of a direct link between you and the end results is so much more difficult to have in a very big organization,” Sudovar said. “In a company this size, you get immediate feedback–either your reward or your punishment.”
