Good CEOs are Hard to Find
has been searching for a permanent chief executive officer since September
2007. Barneys New York has now been hunting for over a year for a new CEO.
So, what’s the problem?
the case of Sears Holdings, say the sad shape of Sears and Kmart along
with the prospect of going to work for Edward Lampert is enough to keep top talent from considering the
job. Mr. Lampert, a hedge fund manager who is
also the chairman of Sears Holdings, gets really low marks for his retail
acumen while having developed a reputation as a micro-manager.
A RetailWire survey
in February found that 86 percent believed it was very or somewhat likely
that Mr. Lampert’s hands-on management style
was keeping the company from hiring a new chief. That same month,
an article in the Chicago Tribune reported that Sears
had met “a
number of very talented individuals” about the CEO job but none had been
made an offer.
In the case of Barneys,
concerns about liquidity have caused many to wonder about the company’s
viability. The company’s owner, Dubai
investment fund Istithmar World, gave Barneys a cash infusion in April to
allay the fears of vendors and lenders alike. Even with this action, Standard
& Poor’s lowered Barneys’ credit rating to CCC (“distressed debt”).
Not having a CEO contributed to the rating.
“When we evaluate
the company from a credit ratings standpoint, one of the key attributes
we look at is management,”
David Kuntz, an associate director at Standard
& Poor’s, told The Wall Street Journal. “Without a CEO in
place, it’s very difficult for us to gauge what the direction and leadership
of the company is.”
David Lord, a search-industry
consultant, said searches that go beyond a year suggests, “the board
does not know what it wants or that something is preventing good candidates
from being attracted to the position.”
On the other hand, there
are those who point to CEO-less companies as evidence that executives
within organizations can do the job needed without having anyone looking
over their shoulders. Imran Amed,
a consultant to luxury goods firms, told The Journal that there
was no “concrete evidence that a CEO-less Barneys is suffering any
more than other retailers in luxury retail.”
What do extended and unresolved searches for top executives say about
companies such as Sears Holdings and Barneys? Does the fact that companies
without a permanent CEO continue to operate suggest that chief
executives are not as important to a company’s success as often assumed?
- Lengthy Search for New CEO Dogs
Barneys – The Wall Street Journal
- Sears still hunting
for new CEO – Chicago Tribune