One question raised by Roche’s recent selection of Christoph Franz to succeed Franz Humer as chairman of the board is 'when is recruiting outside of an organization’s industry sector the right move to make?' Certainly, for the Pharmaceutical giant to hire outside of its area of specialization for such a key role would have surprised many.
However, when looking beyond the surface of this recruitment and other cross-sector moves, we can see that there are many solid reasons as to why the Swiss pharmaceutical company can be confident in its decision. For example, Christoph Franz has been a member of Roche’s board since 2011 and the family owners had expressed a preference for an inside candidate.
Franz Humer, who’s retiring as announced in March said “Roche is getting a chairman with outstanding personal qualities and an impressive record as head of a major global company.” Mr. Humer went on to add, “I am sure that his extensive experience, exceptional global network and strong links to Switzerland will be great assets.”
Interestingly, Mr. Franz is moving away from Lufthansa at a time of significant restructuring and no small amount of internal turmoil, with tough cost-cutting plans having sparked strikes by its staff. In comparison, Roche, in Mr. Franz’s words are in “very good shape strategically.” Partly thanks to having been relatively untouched by the wave of patent expires that has hit the profitability of many Western rivals.
While it might be true that Roche is strategically sound, there will still be plenty of challenges for Mr. Franz and the organization over the coming years. Not least with global drug companies facing tougher generic competition, market access becoming increasingly complex, plus stricter new corporate governance rules soon to be introduced in Switzerland. Meaning, that chairmen and other board members have to submit themselves for re-election each year.
Perhaps what we can take out of this unorthodox recruitment move by Roche, is that suitability for key, executive, roles really does come down to the quality of the individuals concerned and that this can override specific industry experience. Experience in sectors that have gone through similar strategic challenges are now highly valued.
Headhunters, traditionally siloed into specialist industry sectors, will also have to adapt to the new reality. Senior level search consultants in the Life Sciences sector are reporting that clients are no longer willing to interview shortlists only containing candidates from their specialism. It would seem that a wider net is required to be cast. So, those search practitioners with broader and deeper, generalist knowledge, once so undesirable, are once again in vogue.
In fact, in recent months, there have been a number of other unexpected moves within global executive recruitment. For example, Simon Lowth is stepping down from his role as Chief Financial Officer of AstraZeneca at the end of October to become CFO of the BG Group PLC, a natural gas company. AstraZeneca is a global, innovation driven biopharmaceutical business that focuses on prescription medicines. While BG Group PLC is a British multinational oil and gas company.
AstraZeneca's Chief Executive Officer, Pascal Soriot, said "Simon has made a significant and lasting contribution to AstraZeneca's success, helping put the company on a stronger footing for the future." BG's chief executive Chris Finlayson remarked "Simon... brings with him a great combination of finance, capital allocation, value-based planning, portfolio management and strategy skills - critical skills as we execute our strategy to deliver long-term value to shareholders and focus on excellence in execution."
Looking at the examples presented by Chritoph Franz and Simon Lowth, we can see that crossing the borders of industry sectors is often not only possible, but also desirable in global executive recruitment. Especially when it comes to finding the best person for the job!
This post was written by Paul Cashman, founder of the Cashman Group, a Global Executive Search company based in London, New York and Paris. He has worked in high level recruitment for 15 years. Paul handles senior level Life Sciences, Media Tech, Real Estate & Financial Services industry relationships as well as leading assignments for Chairman, Chief Executive and Non-Executive board members for a broad range of clients from Fortune 500, UK and European blue chip & private equity backed businesses. Learn more about Paul and the Cashman Group here: http://www.thecashmangroup.com
