Challenge
Amid a US government investigation of accounting fraud at the company, our client had dismissed its CEO. The company brought in Spencer Stuart to conduct the search for a new CEO, but, under the threat of bankruptcy and the ongoing government investigations, the search was put on hold to allow a turnaround firm and an interim management team to negotiate with creditors and sort out the financial issues.
With the financial picture clearer and negotiations with creditors well underway, the board restarted the search. The company wanted a chief executive or president of a large corporate division with experience in turnaround or growth environments. Experience in the healthcare industry was preferred, but not required. More important was finding an individual with proven leadership skills and a reputation for getting results.
The board also wanted an executive whose personal integrity was above reproach and who could help to restore the company’s credibility with employees, Wall Street, government agencies and shareholders. Complicating the search was the fact that the board, previously criticized for its lack of management oversight, also was being reconstituted.
Action
Working with the client, we quickly finalized the position description and reviewed all of the candidates the board had previously interviewed for the position. We identified a field of 16 exceptional healthcare leaders who each had the turnaround experience and leadership qualities required for the next CEO.
While these high-caliber executives were intrigued by the opportunity and challenge the position presented, we had to overcome lingering concerns about the ongoing government investigations and the future composition of the board. We worked with the board to encourage a cohesive approach to the search that kept the process on track.
Result
Ultimately, we presented a candidate who possessed the combination of leadership traits, healthcare industry experience and financial and operational expertise that the board had identified as ideal. While not a CEO, the candidate was president of a multibillion-dollar division of a national hospital system who had demonstrated his ability to lead people in high-growth and turnaround situations.
The new CEO moved quickly to shore up support among external and internal audiences, making additional leadership changes and stabilizing the company’s core business and financial structure.