Damien O’Brien, chairman of the executive search firm Egon Zehnder, stopped by the Fortune offices yesterday and shared some thoughts on how his business is changing, as well as how the nature of leadership is changing.
Identifying CEO candidates, which used to be the core of the search business, is no longer a prime source of value, O’Brien says – today, anyone can do that with a LinkedIn account. Instead, Egon Zehnder now finds that at least 25% of its work is helping companies identify leaders and developing plans for succession – still a weak spot at many corporations.
“Expectations of leaders have changed,” he says, citing the scandals at Volkswagen and FIFA, as well as the European Union’s investigation of Starbucks’ tax practices and the Goldman Sachs document scandal. Problems like this are nothing new, but what is new is “the scrutiny of the company and the outrage of the community… Leadership has become much harder.” He says Egon Zehnder looks for four key characteristics in leaders: curiosity, insight, resilience, and engagement, or the ability to build relationships with others.
The changing nature of leadership will be one of the topics we’ll be discussing next week at the Fortune Global Forum in San Francisco, with leaders ranging from Alphabet’s Larry Page to J.P. Morgan’s Jamie Dimon. If you aren’t going to be there, follow the conversation on fortune.com – or here in the CEO Daily.
More news below. And have you read a book in the past year that has changed your mind on an important topic? Share it with us; we’re collecting recommendations for our December issue.
• Washington reaches budget deal
The White House and congressional leaders have agreed to a tentative two-year budget plan that would also raise the federal debt limit - a plan that would remove the risk the government might default and also diminish the chance of a partial government shutdown in December. A resolution to both fiscal issues would help end House Speaker John Boehner's tenure on a high note – and also ease the burden for his successor, Rep. Paul Ryan, who is expected to become House speaker when elections take place later this week. WSJ (subscription required)
• Walmart wants to test drones
The world's largest retailer has asked the U.S. government for permission to test drones for home delivery and grocery pickup, a move that aims to match what Amazon.com is also testing to better fill online orders. The brick-and-mortar retailer has already been testing drones indoors but wants to test them outside. Google and others are also testing drones ahead of some rules by the FAA that are expected to be released in the coming months. Fortune
• JPMorgan builds Apple Pay rival
JPMorgan Chase is planning to launch its own competitor to Apple Pay, a bid to allow consumers to pay retailers using their smartphones in stores as the U.S. bank looks to profit from a new way to pay for goods. As Reuters reports, firms that figure this out stand to benefit as they will earn vast sums from taking a percentage of the trillions of dollars that consumers spend annually. Chase Pay has already signed a deal with a group of major retailers that includes Best Buy and Walmart to accept payments through the technology. Reuters
• 4 questions Valeant left unanswered
Valeant CEO Michael Pearson held a conference call with investors on Monday to answer questions about the specialty drug company's accounting practices, which came into question after a short seller raised red flags over Valeant's ties to a specialty pharmacy company. Pearson said Valeant hasn't used pharmacies to artificially inflate sales, and executives took turns answering a number of issues. But some big questions still haven't received answers, including why Valeant didn't disclose its relationship with the specialty pharmacy Philidor sooner and why Valeant hasn't hired an outside auditor to look into the relationship. Fortune
• BP planning to cut costs
U.K. oil giant BP is planning for oil prices of around $60 per barrel until at least 2017, after a steep drop in the price of the commodity over the past year. It also plans a further $3-$5 billion worth of asset sales next year, continues to commit to dividend payments, and for the third time this year announced plans to cut investments. Analysts have warned that oil prices are likely to remain weak through at least the first several months of 2016, with some saying the muted prices will weigh on energy stocks until the end of next year. CNBC
Around the Water Cooler
• Intel goes after AI with acquisition
Intel has acquired a startup that makes a cognitive computing platform that takes in a variety of data and then mimics human reasoning and memory that it applies to problems for clients. Sound familiar? It should remind you a lot of IBM's Watson technology. With so much data derived from gadgets in homes, businesses and factories, tech giants are racing to build computers that can help people make sense of the digital information that is being generated. Fortune
• REI to close on Black Friday
This holiday season, several retailers – including Staples and GameStop – have opted to stay closed on Thanksgiving, when many competitors have opened their doors in recent years to better compete with e-commerce rivals. Outdoor gear retailer REI is taking it one step further, announcing plans to also stay closed on Black Friday, the day after Thanksgiving. REI also plans to launch a campaign to encourage people to not shop and instead spend time outdoors. Fortune
• Kohl's to open smaller stores
Kohl's, which is one year into a three-year turnaround plan, has unveiled plans to open much smaller stores that will cater to customers both in less populous areas and in dense urban centers. The department store's goal is to add $2 billion in annual sales by the end of 2017 to a total of $21 billion. It also intends to open outlet stores to boost sales. The new store plans comes as Kohl's has reported slim same-store sales growth, raising questions on Wall Street about the strength of the retailer's comeback. Fortune