Your President Can't Commute By Plane! If They Won't Move Their Lives, They Shouldn't Get The Job!Dear Stephen:
I am on the board of directors of a major furniture manufacturer. We own several subsidiaries. This question concerns the headaches associated with hiring a major executive to one’s company at the corporate headquarters/factory and having them relocate withouttheir family. Our company recently recruited a President for one of our smaller subsidiaries headquartered down south. The subsidiary is in a desirable location for families and kids. In other words, the geography should not be an impediment to our recruiting a quality candidate, who would be willing to move with their family. We offer a generous base salary and incentives, and even included a signing bonus in the contract. We were prepared with great local housing, around many golf courses, and we have 250 days of sunshine a year down here. The only downside for some of the candidates is that we aren’t New York City, San Francisco, or Chicago. Still, after a brief search, we found a qualified executive from major city. Since this job was a promotion in title for this executive the finalist said he would move to down to us right away, live in an apartment for a while, and then eventually his wife would join him. That was a year ago.
Call us old fashioned, but we (the company and most of the board of directors, though not everyone) like our Presidents and senior managers to live in the community where our corporate headquarters are based. It shows the local community we care about them, and it shows our factory workers and local executives that the brass wants to build a bond with them as a company and as a community. To be clear, we do not care if our President has a husband, wife, or any partner at all. None of that enters into the equation. We just want him to live here. And this newish President is a prime example of our reasoning.
This President has become the face of the company and our design driven brand. He works hard and has gotten results, but he needs longer weekends to travel home to his wife. It feels like he has only one leg in the pool. He’s always jet setting back and forth. And that does not include all the business travel, which he always seems to schedule in his home city. Rarely, if ever, has his spouse come to our holiday parties or company events. I have even started to wonder if she ever intended to move in the first place. His wife does not have a major job in the big city he left, so that is not keeping her behind, and he is making so much money that I am not even sure she would need a job if she moved. The biggest problem is that his (and his wife’s) absence have started to affect company morale. People talk. I hear that some of our employees think that this President and his wife feel superior to our town and community, that they would rather be in their fancy New York apartment. His refusal to throw himself fully into our community is a distraction. Ultimately, I believe this type of setup hinders our productivity. Maybe I just feel sour because it seems like he duped us. This has been going on for over a year, and I suspect it will never change. Is it really the case that for a company like ours to attract a creative, innovative leader, we have to allow them to live where they want? It increases our costs, and sends a bad message to the people who work here and the people who live in this town. On the other hand, this guy’s work has been great, and we want the very best person. How do we handle this in the future?
Bring the Family Together
Dear Bring the Family:
What you are describing is a common issue for many owners of major factories, board members of companies, and the new PE and VC companies buying manufactures like yourself. The perception is that you have a successful and growing business in a less-than-desirable locale. You seem to have several questions rolled into one, so I’ll try to be general but touch on each point as best I can. Let me start by saying you all are insecure and have inferiority complexes about where your business are located. Get over it. If an executive and their family will not move there for the job, pass over them. There is always someone better. Always.
My feeling is that every company’s President should work out of central headquarters and be available as much as possible. In fact, I think that most workplaces function best when they are organized around a group of individuals working towards a common goal. I seem to have some good company on this side of the argument, too. IBM--the company that pioneered the proliferation of remote offices--recently reorganized and is now insisting that each member of every team work together in the same office. Logistically, this is a nightmare. For example, some people in the marketing department who have worked in Atlanta for two decades will have to relocate to Boston, and some people in the marketing department who have worked in Boston for two decades will have to relocate to Atlanta! Think about how silly that is. Now ask yourself if they’d be undertaking this mammoth project--a project that is sure to lose them tons of talent--if they didn’t have concrete evidence of the efficacy of the underlying theory. And these are low-level employees in the marketing department!
Plain and simple, the President needs to be onsite and needs to be committed to showing up. The best executives lead by example, and you can’t do that without living in the area. If a President’s family cannot, or will not, move then he or she is not the best person for the job. It is common sense and smart business. Some guy making a high income while living in a small corporate apartment locally, missing his wife and kids (or whatever the situation may be) will not get the best results. And it might be even worse. I’ve heard stories of people who use this sort of situation to get out of their old lives. While that is a bit of a sensationalist example (although, you’d be surprised), it’s just more evidence of how this situation can lead to bad outcomes.
Hiring an executive who didn’t have their family and life in the same city as the company’s headquarters would be unfathomable to me, and most of my clients agree. Be it Hickory, North Carolina; Grand Rapids, Michigan; Green Bay, Wisconsin; or even (and maybe especially) NYC, I want my executives in town. I have a special pile of resumes from executive who tell me that their families won’t relocate, but that they’re happy to, and then in the next breath say that they need to be near an airport to better access their customers. This is a very common thing to hear from VPs of sales, who feel they just need to be near an airport, not the corporate offices. Oh really? These absent bosses, no matter the quality of the work they put out, are an insult to the hardworking people at headquarters and clearly don’t understand the real value of face-time with those people--the very people making the furniture they are selling.
A larger point is that there is no good reason that you can’t get a quality person to do that job and live in a town like the one you’re describing. It’s a cop out. If you, as an owner or board, have convinced yourself that superstar executives will never live in your company town, you are not paying enough or not using the right headhunter to find and convince that person.
I understand that there may have been extenuating circumstances in this case, but a condition of employment should have been that this guy live in your town--and not just in some apartment there, either. It seems like you caved to a manipulative executive with an inflated ego who thinks he should be able to live where he wants. My point is that you could have--and still can--find better candidates. It is a Viscusi guarantee that any decent search would have given you a number of excellent candidates who would have thrown their families into suitcases on the day they signed the contract, if that had been what it took to get them to move.
Ultimately, I’m sorry to say that I think you’ve made a terrible mistake.
I think you are right that this family has no intention of moving and that unless you do something you will be wasting a lot of your company’s resources (and the earth’s, for that matter; it’s a green issue too!) with this guy’s trips for years to come. The good news is that you can make a change. Trust me, there is someone who will be the entire package; you just have to find them. Go out and find that right person, otherwise you are just grooming people for you competitors.
Stephen Viscusi is the CEO of The Viscusi Group, a global executive search practice located in New York City. Viscusi is the author of the HarperCollins Best-Seller book "Bulletproof Your Job". You can visit his website at www.viscusigroup.com. If you enjoyed this article please like, comment and share.