2020 has been an odd year so far – and we’re only half-way through! When it comes to senior leadership changes, it’s been a relatively quiet few months, but we’ve started to see more movement among GovCon executive personnel: recent announcements of familiar faces in new places.
To get the inside scoop on what’s happening with GovCon executive recruiting in the time of COVID, we reached out to our friend Phoebe Henderson, Managing Director at executive search firm ZRG. We always appreciate how well Phoebe has her finger on the pulse of GovCon businesses.
Q: Set the stage for us. Before the coronavirus hit the US in late February, how were government contractors preparing their businesses for 2020?
Throughout 2019 and into early 2020, many small and mid-sized government contractors were at a crossroads. There was tremendous merger and acquisition (M&A) activity, a heightened interest in smaller firms, and higher multiples than we’d seen in a while. Companies approaching the end of their small business status were evaluating their options. Double down and invest in organic growth? Merge with another company? Look for a buyer? Those evaluations took up time and energy, effectively stalling decisions about whether and when to hire the next round of leaders.
Q: Then COVID-19 happened.
Yes. COVID-19 brought everything to a screeching halt. M&A discussion were put on hold, with a plan to reevaluate post-COVID. For weeks, GovCon leaders were consumed with establishing work from home protocols, workplace safety procedures, and everything else that goes into running a business during a pandemic.
Then, in the April/May timeframe, GovCon leaders had to deal with the realization that whatever they had been thinking might happen wasn’t likely to happen any time soon. COVID-19 brought into focus the need to recalibrate, adjust, and in many cases, recommit to an organic growth strategy. To achieve that goal, many companies started to look for new senior leaders that could get them from here to there.
Q: Which leaders are most in demand?
CEOs, CFOs, and CGOs are definitely in demand. Whenever a company is facing an inflection point, they look at their most senior leaders to assess whether they need someone different to lead the next phase of the company’s growth. For many, the CEOs who got them this far are not the right fit for what’s next. They need a transformational CEO.
Chief Growth Officers and VPs of Business Development are in demand, of course, and we are seeing a new role emerge: the Chief Privacy Officer. With so many people working from home, companies are intensifying efforts to protect their own and their clients’ data.
This is also a tricky time financially. There are backlogs of work from employees who couldn’t go to client sites. There are PPP loans. And there is uncertainty about when work on new awards may commence, when contractors will get paid, and how long it will take the government to get back on track. Companies need to have enough cash or credit lines to deal with the basics. As such, knowledgeable and business savvy CFOs are terribly busy and in high demand.
Q: Is the coronavirus changing the way companies recruit and hire?
Interviewing via a Zoom-type platform is the new norm. Companies need to embrace new ways to make good hiring decisions without total reliance on the opinions of a team conducting traditional face-to-face interviewing. We offer a lot of tools to make this new way more comfortable, informative, and practical. You can get pretty far through the interviewing process via video, but eventually, both parties need to meet face-to-face. That’s been a challenge, though as more places are opening back up, it’s becoming easier.
Q: What’s the impact of association and industry events getting postponed or going virtual?
Attending events is more than listening to a speaker or having a drink. It’s about being seen, building credibility as an industry expert, and actively engaging. It provides a neutral forum where executives can explore ideas and build business relationships. From a personal standpoint, these events allow me an opportunity to observe and engage with potential candidates and clients alike. In fact, I often learn of new growth plans and search opportunities at these events. While the cancellations and postponements have been necessary, it’s also cut off some of the energy flow and made it more difficult to connect with others. I find participating at the board level or on specific initiatives with key associations can help you stay more engaged.
Q: Any advice for company leaders thinking of hiring new executives?
We’re in a unique time, and the coronavirus impact isn’t going away any time soon. I believe many companies will revisit their strategy plans because with change comes opportunity. As these plans are reassessed, current leadership should also be reassessed. For instance, do you have the right CEO to steer the company through the next growth phase? Have you reached a point where you need a COO? Do you need an experienced CFO to work with banks or to initiate M&A activities? Do you have a strong CHRO to shape a compelling corporate culture and drive talent growth? As companies evolve, leadership needs will, too.
Thank you, Phoebe! We really appreciate your perspective and insights!