Usually the most clever and shrewd clients remark after meeting shortlisted candidates that they conducted the most insightful, high value marketing study without initially realizing it. This post is what their sweet grin and shiny $$$ eyes tell the search consultant.

The senior executives of the hiring firm who spend the whole day interviewing, discussing and dissecting their business with highly qualified candidates were provided with not only (in)direct information on alternative business models, but they also harvested a wealth of ideas on how they can improve on their current business plan. In short, they found out within the span of hours how they could significantly increase ROI on a specific business project, based on feedback from local, battle tested professionals.  They close their eyes and hear the sound of an old-fashioned cash register: kaching!

Two conditions must be fulfilled for such knowledge transfer to occur. For a start, the candidates must be genuinely outstanding (which is our job), and the representatives of the hiring company have to be savvy, wise and open to new ideas. Furthermore, this hidden value usually materializes in the context of the organization venturing into a new territory or into a sector they have few or no expertise. Examples are Private Equity Funds interviewing CEO candidates for acquired portfolio firms in a sector they do not have experience yet, or multinationals appointing business development or sales directors covering regions they have no presence. Another example is with companies out of start-up phase, institutionalizing their business through new, senior outside talent (provided they know what they want, I ended up once as referee between founding partners).

In one case the representatives of the hiring organization that were flown in for the interviews, realized that the local company they were planning to setup in a particular, large emerging market would never be able to import and stock goods locally. The reason was unless they “cooperated” with particular custom officials and/or sold with “undervalued” invoices - a practice taboo clearly taboo for listed (actually any self-respecting) companies - their product would be priced much higher to those competitors having their imports managed directly by the main, local channel partners. The only solution was to setup also a manufacturing unit, and take a local equity partner.

In another case, a client learned during interviews of how sales and inventory reports in the East and Southern EMEA region were cleverly manipulated by the distributors of his competitors, and discovered to his surprise later that week it was also happening within his own channel, causing significant margin and brand erosion. The value of this type of information is hard to translate into hard figures, but nevertheless proved priceless to the interviewing representatives of the hiring organizations. Not so much the sound of a cash register; but rather the the soft, muffled, barely audible "phat "of an executive boot kicking into the bottom of the distributor, finding himself on his way out.