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A Step Closer to Armageddon

August 9, 2019 by John Gradek Leave a Comment

This week’s attention-grabbing headline screamed out news of the Apocalypse: FedEx Ends Ground-Delivery Deal With Amazon.

Who would have thought 10 years ago that the retailer-logistics relationship between Amazon and FedEx would one day see an end? The FedEx distribution powerhouse and the ever-growing ecommerce juggernaut called Amazon, together operated a juggernaut of global proportions. Who could forget the days where an online Amazon purchase would end with an at-home door delivery within a couple of days? Who would have dreamed that this relationship would end?

This saga had its genesis during Christmas 2013, over 5 years ago, when the combination of a surge in Christmas delivery orders and poor weather across the U.S., prevented FedEx, among others, from meeting the delivery commitment made by ecommerce giants like Amazon. While the logistics organizations change their staffing and operating practices to avoid a repeat performance during subsequent peak shipping periods, the faith in the reliability of the supply chain was broken. A fresh approach was deemed to be needed.

With the growth of its truck fleet in 2014 and the launch of its Prime Air service in the fall of 2015, Amazon has targeted its transportation partners with its own asset-heavy infrastructure, looking to leverage service disruption, i.e. same-day and 2-hour delivery, with laser-focused last-mile delivery practices. FedEx, along with UPS and USPS, have been observing and learning from this Amazon shift in supply chain management, all wary of the potential for this new Amazon model to further erode their traditional ecommerce support role.

While FedEx might be the latest service provider to feel Amazon’s focus on integrating distribution in-house, it is obvious that others are in Amazon’s cross-hairs. Look out UPS, USPS, your turn’s coming up.

As a business executive with oversight of your company’s supply chain, you need to be vigilant of the strategic moves being made by other, key players in the chain. Risk management and risk containment are key practices in today’s world and the Amazon-FedEx scenario should serve as a reminder that relationships can change, suppliers can become buyers and partners can become competitors.

John Gradek is Principal with Dergel Executive Search. His practice covers Executive Search for Supply Chain and Logistics, Manufacturing, Operations and Technology Leadership.

Dear Samuel: Help! I’ve been Ghosted

July 23, 2019 by Samuel Dergel Leave a Comment

Dear Samuel,

Here is my question: What happens when an executive recruiter “ghosts” you as an executive candidate?

There are tons of articles due to a robust job market that candidates are “ghosting” recruiters during the sourcing and/or after job offers phases. But how do you deal with a top-rated recruiter who “ghosts” executive candidates? This happened a few times to me and I find it frustrating, especially at the executive level.

Thank you,

Chuck in Chicago

Dear Chuck,

Wow.

First, on behalf of all the executive recruiters out there that care, I’m sorry that someone treated you this way.

Why do people Ghost others? This is a relevant question across the spectrum today, both in our personal lives as well as the business world we live in.

From my perspective, there are three reasons why people Ghost.

They are uncomfortable with sharing bad news, or
They have no news, or
They don’t care enough to follow up.

Executive recruiters are humans, and as humans, we are not perfect.

However, “top-rated” recruiters stay “top-rated” knowing that a candidate can be a client at some point in time in the future. All executives that they deal with need to be treated with respect, courtesy and care.

If I was in your shoes, I would take the Ghosting as a sign that the client is not interested in you. You need to look at it as it is their loss, and that they were not the right fit for you. See it as a gift.

Your next role is out there with an employer that appreciates what you are bringing to the table and sees your value. They also have made the decision to work with an executive recruiter that reflects their values.

And as you need to hire for your new employer, you’ll make sure that you’ll only work with “top-rated” recruiters that care.

Wishing you the best as you continue your career for people that treat you right,

Samuel

Dear Readers,

Dear Samuel is a feature of our Leadership Blog that deals with questions executives have about their leadership roles and career situations. If you have any questions that you would like Samuel Dergel to address, please send your questions to dearsamuel@dergelsearch.com.

Please note that all questions asked will be treated in the strictest of confidence and all identifying material in questions asked will be edited to respect the privacy of all participants and companies.

Samuel

Dear Samuel: I’m actively looking for my next executive role.

June 25, 2019 by Samuel Dergel Leave a Comment

Dear Samuel,

I am an executive that is actively exploring new career opportunities. Do you find that retained search firms are the primary source for new roles or networking? Other than leaders that you have worked with in the past, who do you network with and how?

Sally in Seattle

Dear Sally,

A good number of the executives we speak with that are new in a role tell us that they got the role because they are were hired by someone that they’ve worked with before. The reason this happens is because a high level of trust already exists between the person hiring and the person being hired.

Retained search firms are hired by companies in two instances:

Multiple people are involved in the hiring decision process, and having an outside objective, experienced and trustworthy search partner ensures that a complete search will be done and that a strong pool of qualified candidates will be considered in the hiring decision process.
Where a potential candidate is already trustworthy to one of the people in the process, an executive search firm can ensure that this person is properly compared to others. In many cases, the person who is already known and trusted by one of the hiring decision makers is the person that wins. This can include an internal candidate for consideration or an external candidate that is known to or used to work with one of the hiring decision makers.
When there is one key hiring decision maker involved, if they do not have someone they already trust that is interested and available, they will go to search.

The best people to network with as you look for your new role are those that you have worked with in the past. They already trust you.

The biggest challenge many executives have is that they only build their network when they are looking for their next role.

Successful executives are always networking, even when in their role.

Your question pretty much tells me that you are like most executives. You have not invested what you needed to so you can be as successful as you can be.

Is it too late to build your network when you are actively looking? No.

However, even if you are very successful in the building your network in your search process, the likelihood is, as it is for most executives, that you will ignore your network once you start working again and let your network go stale.

Networking is a verb. It requires action. If you don’t tend to your network, you won’t have a network that works for you.

An active network to whom you continually add value to you will keep you in mind for opportunities.

In your situation, I would focus on adding value to your current network of people you have worked with in the past, and grow your network of people so that you can begin to add value to them today so that they will be able to add value to them in the future. Could this turn into an opportunity in the short-term? Maybe. But if you are not playing the long game, you come off as desperate, which is the kiss of death for an executive in transition.

Also, spending time reaching out to recruiters may not be the most effective way to find your next role. Sure, recruiters out there may have the role that fits you, but experience shows that if you are visible and branded, good recruiters will find you if you are what they need to meet their clients’ needs.

Good luck with your search!

Samuel

Dear Readers,

Samuel

Dear Samuel: I want to cash out my vested shares, but…

June 19, 2019 by Samuel Dergel Leave a Comment

Dear Samuel,

Here’s a career challenge for you…

Situation

Approaching 5 years of CFO service in a PE situation that chose to recapitalization vs sell. PE is minority, founders in early 50’s control.

As CFO, I hold in-the-money vested equity interests worth approx. 8 times annual salary at current expected valuation. Payout requires change of control, however. And there are significant barriers to exit – it’s essentially “must be present to win”.

Location is undesirable, and with last child graduating in 1 year, it’s time to think about an exit strategy. Obviously, want to retain or cash out of equity, but location is a problem on the family front, and a strong motivation to relocate.

Question

What recommendations do you have to negotiate from this golden handcuff toward a more desirable financial and geographic outcome?

Options I have been pondering…

Ideally, payout and exit as a “good leaver”, with non-compete. This is contrary to founders and PE partners, who have intimated unwillingness to consider.
Relocate to a commuter/remote situation.
Pitch PE firm to relocate within the portfolio family (I’m regarded very well among all portfolio company CFO’s), and retain equity interests until a change of control.

Bob in Boise

Dear Bob,

The one thing others can learn from this is to make sure when going into a new career opportunity with a PE player, make sure (if possible) that a recapitalization counts as a change in control would for vesting purposes.

Option 1: As CFO, you might be in a position to speak to potential purchasers that would come up with a price that the founders and PE couldn’t say no to. That would benefit them (and you), and might get you to leave with your head held high and your bank account flush with cash. The likelihood of this happening is low, but you should at least sniff out potential interest without upsetting the owners. Not easy.

Option 2: You can ask them to consider a remote / commuter situation. My thought is that this is the most likely situation that will allow you to continue to grow your equity and keep your family happy. It may be the easiest solution for the owners to accept, especially if they like you.

Option 3: This could be a good solution. While it might make your PE firm happy, the original and majority owners may not be thrilled with this situation and might put up a stink.

Without more information than you’ve provided in your letter, I would recommend the following approach:

Speak to your PE owners, telling them that you want the company to continue to be successful, but your life situation has changed since you’ve started and you would like to make a change. Be honest and say that you were hoping for a sale rather than a recap, as this would allow you to exit gracefully and earn what you’ve invested over the years. You can ask them to change the deal to include recap to trigger your change of control provisions. They may balk, but your should at least ask and let them know this is your first choice. You can provide them with Option 2 (remote / commute) as the first alternative option once they hesitate and Option 3 (relocating within the PE family) as a second option.

In essence, the owners should know what you want, how you feel, but not believe that you are holding a gun to their head. Asking for what you want and providing alternative solutions can lead to a solution that everyone can accept.

Good luck and let me know how this turns out.

Samuel

Dear Readers,

The HR Leadership Disconnect

February 7, 2019 by Samuel Dergel Leave a Comment

“Our people are our most important asset”

— So says almost every CEO.

Yet most companies do not live up to this statement.

How do I know that most companies do not live up to this statement? I hear this from top HR Leaders every week. (Complaint No. 1)

Do you want to know what I else HR Leaders grumble about?

They complain when executives without HR experience become CHRO or Chief People Officer. Nothing makes the ambitious HR Leader that is in line for the top job more frustrated than when they get passed over by someone that comes from the business and ‘knows nothing about HR’. (Complaint No. 2)

Complaint No. 1 is valid. Forward looking HR Leaders that want Complaint No.1 to disappear need to embrace No. 2.

Let’s take a look at this real-life situation from the new this week.

Deirdre O’Brien, a 30-year Apple veteran, will now lead Apple’s Retail and People teams.

Apple’s Head of Retail retired, and the role was given to the Head of HR in addition to her current role. Now Dierdre O’Brien is Head of Retail + People at Apple. Dierdre is not an HR lifer – she has cycled through business leadership roles and is continuing on the path beyond HR. When she becomes CEO one day, wouldn’t you want her as your CEO?

One of today’s most iconic CEOs is Mary Barra of General Motors. She too spent time in HR in a senior leadership capacity. This has helped her not only understand the various facets of the business that she has cycled through during her career, she is now leading the dynamic people based changes and disrupting the transportation business in the process.

These are just some of the situations where business leaders are cycling through HR on their way to the top.

The pessimist can look at situations where the Head of People role goes to an ‘outsider’ from the business and says ‘this is not good for the company’.

An optimist (count me in here) looks at this and says that the best way to get a future CEO to truly understand that people are a company’s most important asset is for them to have an opportunity to do so.

My challenge to HR Leaders: Embrace the opportunity to have your business leaders get hands on HR experience. If you really care about the people and know that if is through people that your business will succeed, take the opportunity to support these business leaders become better People leaders.

Contact us and let’s get started!