These days, what to do with the world’s trash is a hot topic among the world’s top thinkers. Plastic pollution was even a topic at the 2019 World Economic Forum in Davos, Switzerland.
Away from the think tanks, however, individual waste management firms have more pressing issues, such as broadening their recycling services and navigating an increasingly complex regulatory environment at home and abroad. The biggest problem firms face, according to experts, is finding a new generation of leaders. Many senior executives in the industrial services sector, particularly in water services and utilities, are going to be retiring in the next five years, putting an emphasis on boards to devise succession plans that will position them for success in a dynamic, rapidly changing environment.
Historically, more than three quarters of current CEOs came up through the operating ranks. But experts say that organizations may benefit from a CEO who has broader experiences. Indeed, there are several aspects of leadership where operators often underperform their peers in sales, finance or other roles.
“As organizations in the sector seek to nurture the next generation of CEO talent, there’s evidence they may benefit from encouraging a cross-functional development experience,” says Mariano Malvicino, a Korn Ferry senior client partner and leader of the firm’s Industrial Services practice.
Malvicino, along with colleague Dan Pulver, wrote a new report “Putting Talent to Waste,” highlighting why waste management and other environmental firms may want to consider a new approach to CEO succession. The authors spoke with multiple industry executives and analyzed the skills, traits, behaviors and, drivers of more than 7,000 executives in Korn Ferry’s extensive leadership database.
Operators, the authors say, are very good at defining and aligning around a strategic vision, inspiring people to succeed and ensuring people are held accountable for meeting goals. However, they tend to be less skilled at other factors that modern CEOs likely need to succeed. One of the skills operators need to work on is their ability to influence people. Operators also, on average, are not as nimble, less willing to take risks or volunteer for different assignments that take them out of their comfort zone.
Among their recommendations, the authors suggest that organizations identify potential CEO candidates early, and then consider giving them rotations through other functions, such as finance. In addition, CEO candidates likely can benefit from improving their emotional intelligence competencies. Organizations should create programs to help candidates learn these skills systematically rather than rely on candidates learning them on their own. “I could have done a lot better, and helped my team more, if I’d had someone tell me networking and relationship building could help my long-term growth,” says Mike Szomjassy, Gryphon Investors advisor and former president of the energy, water, and facilities division for CH2M Hill.
“Not having operations experience limits the success you can have,” “You can have brilliant ideas and strategic plans, but if you can’t inspire the people to execute, your best ideas and strategic plans will fail,” says Larry O’Donnell, the former chairman, CEO, and president of Rockwater Energy Solutions. But giving those operating executives a new range of experiences can set them up, and their firms, for more long-term success.