This insight into the Boardroom’s of Oxfordshire is the result of a series of discussions we had in 2013 with the CEO’s and MD’s from a cross-section of Oxfordshire’s most exciting businesses. Thank you to all who took part, and I hope that what follows is an interesting and useful read.
Oxford is unique in being both a vibrant UK city, and a centre on the world stage for cutting edge biotechnology, automotive manufacturing, and many more niche industries. Its international reputation for ambition and excellence is reflected in some of the data below.
1. CEO’s were asked, “What would you consider a healthy turnover of your executive level staff?”
Whilst 100% of those spoken to stated that they aimed for 0-10% churn at the Board level, it is interesting to compare the actual rate of churn in the chart below.
The over-riding view of CEO’s, is that their most critical role is the selection of Board colleagues who have the appropriate attitude and values to push the business forward. That sometimes means for an in-coming CEO the desire to completely replace those on the existing Board, or for a start-up CEO to bring in hand-picked and trusted colleagues.
Larger companies benefit from the ability to create internal turnover, which could be up to 20-30% at Director and Board level.
SME CEO’s value Boardroom continuity and loyalty very highly, until the point where it translates into drift and complacency.
2. CEO’s were asked, “How has your approach to recruitment at the executive level changed over the last 5 years? What would make your approach more effective in the future?”
Whilst social media sites, LinkedIn and job adverts on company websites have dramatically changed recruitment at the more junior level within the last few years, it seems that CEO’s are still traditional in their thinking when it comes to recruiting at the Board level, and prefer to use either their own industry contacts or a headhunter, and are unlikely to change that approach in the future.
This is particularly important when the radar for experience and geography is set wide. For example, one VC backed biotech company recruited an American CEO, relocating him from the US to Oxford, specifically to ensure optimum success in their potential US market. CEO’s in niche sectors often feel comfortable approaching those known to them through industry networking groups, whilst appreciating that the best teams are those whose skills and attitudes compliment each other, rather than clone one another.
3. CEO’s were asked, “What impact has the economy had on your company’s headcount at executive level? Has it made you more or less inclined to outsource functional areas?
Whilst the economic headlines have been full of ‘doom and gloom’ these last few years, it seems that many of Oxfordshire’s business have been bucking the trend. The majority of CEO’s had actually increased their total headcount in the last few years. Even a large listed business which had reduced headcount across middle management had not experienced losses at the executive level, although a couple of SME’s had lost between 1-3 Board level staff.
Businesses involved in biotechnology, maritime insurance, public sector building and digital technology have fared particularly well in the current economic conditions. Some CEO’s of businesses needing to raise funds have found the economic situation over the last few years more challenging, although for others a reduction in the numbers of those seeking funds, has meant the VC’s and institutional investors are more readily focusing on those with quality business plans.
The topic of outsourcing also generated some interesting responses. CEO’s generally view the outsourcing of appropriate business functions as sensible management whatever the economic situation, especially those with shareholders. There is plenty of appetite for outsourcing IT support, R&D, production, QA, and clinical trials. For the CEO of a medical devices company, outsourcing production was driven by lower costs in Asia, for the CEO of a start-up company IT support is regarded as a sensible area to outsource until his business gets to a size where it is cheaper and more efficient to bring it back in-house. Outsourcing of some functional areas is simply driven by the lack of available staff eg clinical trials and quality engineering.
4. CEO’s were asked, “What skills or experience have you found it hardest to find when recruiting executive level staff?”
CEO’s recruiting at this level said that finding candidates with the necessary skills and experience was relatively easy, what they found hard was recruiting people who have the right corporate values, and whose attitude compliments their existing team. So how do CEO’s ensure that they hire someone with the right values and attitude? Making attitude and approach the priority, and if anything compromising on experience, combined with the candidate meeting as many of the Board/Directors as possible, seems to be the key. At the middle management level, candidates which are proving hard for Oxfordshire’s business to recruit include; hybrid engineers, production engineers, and candidates with medical device, R&D, electronics, or clinical trials experience.
5. CEO’s were asked, “What percentage of your Board have joined from a) Oxfordshire, b) elsewhere in the UK, c) overseas?”
The data below is fascinating because it demonstrates just how diverse the business population in Oxfordshire is. The CEO’s of local SME’s have largely attracted their Board members from within Oxfordshire or other UK counties. However the CEO’s of businesses with big international markets or start-ups have cast their ‘nets’ much further afield. One biotech company has no-one recruited from Oxfordshire on its Board, half of which have originated from outside the UK.
6. CEO’s were asked, “Do you expect your company to experience growth this year? What steps do you need to take to ensure that you can benefit from any growth?
Every CEO spoken to is expecting revenue growth this year, even if that growth is expected from outside the UK market.
Steps necessary to ensure anticipated growth include, continuing to ensure quality product, maintaining reputation, retention of committed and skilled staff, recruiting new staff, securing additional funding, increasing productivity, and diversifying service offering.
Besides the data above, there was one key point present in every conversation we had. Whilst companies have to withstand cycles in the economy and shifts in their market, finding the best people at Board and Director level will always be the number one priority of every CEO and MD.