Egon Zehnder Leading CEO Search for Vodafone Group
February 7, 2023 – Leadership advisory firm Egon Zehnder has been selected by Vodafone Group to lead in its search for a new CEO. At the end of the year, Rick Read agreed with the board that he will step down as CEO. “It has been a privilege to spend over 20 years of my career at Vodafone and I am proud of what we have delivered for customers and society across Europe and Africa,” said Mr. Read. “I agreed with the board that now is the right moment to hand over to a new leader who can build on Vodafone’s strengths and capture the significant opportunities ahead.”
According to Bloomberg, the search is in its infancy. Representatives for the search firm and Vodafone declined to comment.
Whoever ends up running the mobile and broadband group will face a number of challenges. Vodafone has been battling to overcome roadblocks to a complex potential merger of its British business with CK Hutchison Holdings Ltd.’s Three U.K., people with knowledge of the matter said last month.
Bloomberg also pointed out that any new leader will also have to manage shareholders like billionaire telecom tycoon Xavier Niel. There’s also pressure to improve performance in Germany, Vodafone’s biggest market, and neutralize years of price competition that have eroded earnings in Italy and Spain. One of the biggest decisions Vodafone’s board will need to make is whether to shake things up with an outsider, echoing the 2018 appointment of Philip Jansen to helm rival British carrier BT Group Plc, or tap someone with internal experience.
Vodafone has never before appointed a complete outsider as CEO. Bernstein analysts wrote in December that there’s no obvious internal successor, so the company’s longstanding problems may encourage headhunters to cast a wider net beyond the business and its competitors.
Egon Zehnder currently ranks as a Top 5 global executive search firm, according to Hunt Scanlon Media. With more than 500 consultants in 68 offices and 40 countries around the globe, Egon Zehnder works with public and private corporations, family-owned enterprises, and non-profit and government agencies to provide board advisory services, CEO and leadership succession planning, executive search and assessment, and leadership development solutions. Since 1964, the firm has been at the forefront of defining top leadership in the face of changing economic conditions as well as major transitions in the executive search field.
Insider or Outsider?
It is yet to be seen whether Heidrick will be targeting insiders or outsiders to fill this top position. Recruiters focused on finding talent for the C-suite say that at least half of all job openings are filled by internal candidates before the positions are introduced to the public job market. This may suggest that companies have relatively reliable bench strength even though leadership development is seen as stagnating at many companies. The main reason given: Companies prefer to promote from within.
Related: Egon Zehnder Recruits CEO for Blue Diamond Growers
For those searches that go to recruiters, with a clear mandate to look wide and deep both inside and outside a client organization, internal candidates still surface more often and get the job about 80 percent of the time.
Bridging the Skills Gap With Insiders
There has been an emergent skills gap that has plagued almost every industry. While organizations have implemented a series of measures to improve oversight of labor costs and value returns, they have focused more on improving the quality of talent acquisition than they have on sustaining employee performance.
Recruiters say clients generally like to be seen as making bold moves but in the end many remain risk averse when it comes to hiring elite executives, especially into their highly protected upper leadership ranks. They look at insiders as safer bets. Knowing this mindset going in, recruiters say they advise their clients that when they have an inside candidate who is 70 percent as strong as an outside choice to hire the insider. Fit and culture seem to be the deciding factor.
“There is a greater risk when you bring somebody in from the outside that it won’t work out,” said Kathleen Yazbak, founder of Boston-based Viewcrest Advisors, a boutique search firm focused on finding leadership talent for mission-driven and high-performing companies, social enterprises, and philanthropies.
Internal candidates know the business model, organization goals, and inside cultures, say recruiters, and oftentimes they have the requisite skills. They know the customers, clients, and co-workers. They have also established relationships with colleagues and their organization’s leaders. But, more importantly, they have already shown their potential. They can, therefore, assimilate faster and will likely be more satisfied in their new roles than outside hires.
Related: Societe Generale Turns to Egon Zehnder to Find Next CEO
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media