A Smorgasbord of Thoughts From the Road
May 31st was the 76th wedding anniversary of my parents, Ginnie and Chuck Perkey. It dawns on me that I should always celebrate my parents’ wedding anniversary because without their union, I would be either illegitimate or not here at all. Not that there is anything wrong with being illegitimate; there have been several significant historical figures who fit into that category of legitimacy. Chuck passed away in 1992 and Ginnie in 2012, so they only celebrated 45 anniversaries while on Earth. I am pretty certain that they have had a nice gathering with some of their closest friends in order to celebrate their 76th anniversary-Jack and Dot Purdy, Paul and Mary Smith, Rita and Paul Hutcherson, and many others. Chuck has mixed whiskey sours for everybody, and they have toasted the past and the future, with all commenting on how fortunate they are that there is no debt ceiling in heaven. Apparently no one is a Republican or a Democrat in heaven, but they make everything hell everywhere else.
I am thinking a lot this week about how much relationships mean to me. One person who I worked with 35 years ago reached out to me recently-wow, that meant so much! Meanwhile, I am working to rekindle a friendship that I had from four decades ago. It’s not easy sometimes - it takes effort - and sometimes it doesn’t work at all. But I have found the “once a friend, always a friend” mindset to work quite well.
I can trace the origin of one recent search to a compensation consultant who I first met when he was a sophomore in high school-in 1976. Another of my current engagements is for a client that I can trace back to a CEO search I did for one of the best-known consumer food products in the country - in 2013. That consumer products CEO search came to me via a referral from an attorney who I first met at church. I can’t confirm that I was awarded the assignment through divine intervention, but I’m sure that doesn’t hurt!
We just confirmed another new assignment that came from someone I first met as a candidate on a search that I did in 1997. 18 years later (2015) this candidate became a client. I would say that in the interim between 1997 and 2015, this person had morphed into a friend, and at the end of the day that is the relationship I care about the most. It is not that I don’t give maximum effort to searches from folks who don’t fit into the “friend” category – I do. It is a reminder to me that there is only one successful candidate on each search, but there are typically 10 to 15 other very capable people who don’t get the job for one reason or the other. Those folks are very talented and will go on to do great things and have great careers. I encourage you to keep up with them! Track their careers! Keep being a sounding board for them or use them as sounding boards! I’m not just suggesting you only do this if you are a headhunter; I suggest that you do this as the hiring manager!
June is a surprisingly busy month in the executive search business. I call it “The Die is Cast Month.” That is to say companies have five months’ worth of performance data regarding how their year is progressing; they know the trends and have a feel for where their annual results are going to end up. And if that trend is not great, companies make leadership changes. It is not necessarily going to enable a company to salvage the current year, but it will definitely help a company get a jump on turning around its performance in its next fiscal year.
For the foreseeable future - read that as until bank stock prices recover - we at Caldwell will be doing more CEO searches for banks that are in the $2.5 billion to $10.5 billion asset size.
Why is that, you ask?
Let me tell you!
For many CEOs of banks in the $2.5 billion-$10 billion asset size, their CEO succession plan consists of the sale of their bank to a “consolidator.”
But when stock prices are down, there is typically a dearth of buyers willing to pay 2X to 2.5X book value to acquire a bank. Oftentimes it is hard for banks in this size range to develop successors, and sometimes the CEOs don’t want to sell if there is no ready internal successor.
So if that 65-year-old CEO wants to retire, one of their options is to hire a search firm to go find their successor.
Question – what is one of the most important determinants of whether any strategy will be successful?
Answer - That would be whether or not the board is aligned around the 3 to 5 year “endgame” for the organization. When directors are not aligned around the go-forward strategy, companies are more likely to sell.
One month to go until the Peachtree Road Race! One of the advantages of aging is when you move up to a new age bracket, all of a sudden, you are a “rookie” again!
That is all for now. I think I am going to go declassify some documents now. I think I can do that just by thinking about it!
Wow, I am thinking of some amazing new applications of that ability!
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