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The Digital Skeptic: Executives Are Next in the Outsourcing Wave

Rent-an-exec
Saxby's ability to be Virtual-Johnny-CMO-on-the-spot is dead easy to do technologically. It turns out that, just like any other information-based job -- whether it's in engineering, law or medicine -- it is a techno non-event for the supposedly irreplaceable, hands-on executive to be injected effortlessly into complex business problems from afar.

"It really depends on how geographically centric a business is," Saxby told me.

Sometimes his people need to be close at hand -- say, if product prototyping is important. But often, what a company needs is product expertise or fresh market vertical insight, which can often be handled better away from company headquarters.

"That is the secret of getting the top-level people I can get," he said. "The last thing they want to do is pick their families up to move cross-country."

When I asked what I thought was the obvious question -- How can a reasonable company be reasonably run without reasonably consistent management? -- Saxby chuckled at my ignorance of the nasty, brutish and short business life of top management.

The average marketing officer's lifespan is now 23 months per gig, Saxby said. That grim figure was confirmed by Chicago-based recruiting giant Challenger, Gray & Christmas' CEO Turnover Report. Our supposed world-beating, irreplaceable executives set a record for trips to the woodshed this year.

Even more interesting, Saxby is dead certain his modular approach to exec hiring and firing works for just about any role with a key to the executive washroom.

"This was not my idea," he told me. He explained that he got his inspiration from a fellow named Doug Tatum, who started a firm that placed chief financial officers on an on-demand basis.

And sure enough, the rent-an-exec model is taking hold. Firms such as Houston-based Phillips & Reiter job out chief legal counsel as contract players. Stamford, Conn.-based Ash Creek Enterprises can send an experienced chief technology officer out tomorrow. Kennesaw, Ga.-based Aepiphanni Consulting is happy to ship off a chief operating officer to run any business essentially at any time.

The age of the 24-month CEO
Saxby is way too polite to point out the obvious investor big-think here. So I will: Considering the grinding, investment-killing horror that is the executive merry-go-round these days, wouldn't just about any firm be better off if management boards simply outsourced the entire executive team?

Besides saving, in some cases, hundreds of millions of dollars in compensation packages, the pointless blood feuding that distracts all from the real challenge at hand -- making investors money -- might actually disappear.

"I cut my teeth at Frito-Lay, Coke (KO), Compaq -- serious A-List firms" Saxby told me. "And I wish I had figured this out sooner. It makes so much sense to cut out all that nonsense out and focus in on what needs to get done."
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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