The Making of an Award- Winning CEO
- Dec. 10 2014 00:00
BRAINFORCE AG helped to prepare the 'CEO of the Year Russia 2014' awards and it is the representative of the ranking system in both Russia and China. Martin Schneider, Chairman and CEO of BRAINFORCE and Managing Director of its German unit, explained the thinking behind the awards and what they tell us about Russian business.
In your experience, how do Russian CEOs compare with CEOs on other global markets?
Obermatt compares the performance of a CEO against an international peer universe. This means that the CEO has to compete globally and therefore a winning CEO has beaten at least 50 per cent of his global competitors. Nevertheless the fact that only about 30 per cent of the analyzed CEOs in 2014 were able to beat their peers in terms of combined performance indicates that the Russian companies do underperform in general. Of course, this is not the case for the winning CEOs.
What are the key management trends that you identify in Russia? For example, we know that Russian companies have more homegrown talent and use fewer expats than before.
From our observation, there is a growing number of well-educated CEOs in Russia. However, we also observe that the demand for good CEOs still exceeds supply by far. We still see many CEOs who are doing well in times of economic growth but not well in times of economic contraction. A strong, experienced and talented CEO will also perform well in economically challenging times.
How narrow is the peer universe for each company? How many competitors do you include in a peer universe and where do you set the boundary: ie, do you compare food retailers only with other food retailers, or with retailers in general?
The usual peer universe consists of 30 to 70 companies and they include product peers, food retailers for example, but not only. To come up with enough companies for a statistically meaningful result we usually also include companies which have the same economic cycles. This can be a company in a similar field of activity, such as other retailers, or suppliers and customers.
Which industry sectors did you consider for the competition?
We cover all industry sectors except for private equity companies since PE companies are usually invested in different industries and therefore cannot be compared among each other.
What is the relationship between BRAINFORCE and Obermatt regarding the CEO of the Year awards?
For "CEO of the Year — Russia — 2014", Obermatt analyzed publicly traded companies headquartered in Russia with market capitalization over 3.5 billion rubles in 2013. The source for the financial data is Thomson-Reuters and Obermatt AG. The Source for the CEO data is BRAINFORCE AG, Switzerland. The source for Peer Universes is Obermatt AG. And Obermatt executes all the calculations. BRAINFORCE is Obermatts's exclusive representative of the CEO Ranking in Russia and also in China. More countries will be added in coming years.
How can companies use the BRAINFORCE and Obermatt data, for example, to establish pay levels?
There is no direct relationship between the CEO ranking and the compensation of CEOs. However, Obermatt's specialty is to establish benchmarks of individual companies that, as a result, could be used to design a compensation or performance bonus for the CEOs involved. Typically, the board of directors would hire Obermatt for such analysis in order to design compensation and performance bonuses of the CEO of that company.
As well as being involved in the CEO Awards, BRAINFORCE is a specialist in interim management. Do you see a need for this service among Russian companies?
Interim management is a modern, innovative approach to management in special situations of growth or change in general. The higher the level of efficiency, effectiveness and transparency in a company — and the more it is demanded — the more value interim management brings to a company.
What is the advantage of using interim managers?
The main reasons why interim management is so effective are that it provides an unbiased view, focusing on results rather than on personal career goals like employed managers. It also brings seniority and a strong track record, and a deliberate over-qualification for a specific assignment. This means no learning curve is required and there is immediate availability thanks to a large pool of qualified, independent interim managers. Matching the right interim manager with a specific situation is another advantage, taking into account the personality and cultural fit with the client organization.
When a CEO or specialist, or a team, is 'helicoptered' into a company, how do you overcome issues of trust?
Trust is best built by previous proven experience and proven achievements and independent, solid references. Trust is further enhanced by the standards of quality of interim management service providers like BRAINFORCE and their existence in the market for many years. In case of BRAINFORCE we have been in the market for 35 years, and in fact, we were the first company, the pioneer of such services in continental Europe.