A colleague shared with me recently how the Regional VP at a prospect gave him a list of names after  he finished his pitch. He was asked to provide positions and the  names of the companies those individuals were working for. This "test" would show the prospective client how well my colleague knew his market.

I beg to differ. Search Consultants do not learn a database by heart.  On the contrary, they know how to get to the right people, and they are intimately familiar with an industry vertical or sector. They also understand a business and the market it operates in. Furthermore, the great Search Consultant has the credibility to approach and even convince Senior Executives, while he understands and masters all intangibles necessary to close a search assignment for his client.

Rating a Search Consultant on his knowledge of names in the industry, is similar to rating a book on its weight, size, color, the font type and print ink used - except for the content. As a result, the most meaningful dimension is completely overlooked. In a similar context a prospective client does not seek to retain a parrot, but trusted advisors who are able to improve his bottomline.

Search consultants and buyers of search services have one major thing in common: the former offers something invisible that the latter wants to buy. This something is called a service.

It is invisible because it is has no smell, taste, shape or touch; there is nothing empirical to it. You can always test drive a car, visit a house you intend to buy, or fit the suit that looks so good; but you cannot test a haircut or try-out a surgeon. As I outlined in an earlier post, every service has a consequence you can't turn your back on,  and this will constitute service as a good or bad experience. Indeed, the proof is in the eating of the pudding.

The problem with the "invisible" is that it is fickle. It is fickle because so many intangibles are involved, most important of all, your personal brand perception to clients and candidates. In our business, to quote Alan Weiss , "there is no empirical quality catalogue that buyers consult. The only thing that matters is what the perception of the buyer is". Therefore I can't stress it enough: perception is reality.

Therefore what matters is your communication, presentation, competence, integrity, passion and so on. Perception is established from the first time a prospect lays his or her eyes on you, throughout the time span of the business relationship. Most important, your brand perception is established de facto, with or without your help, including both positive and negative aspects.

Therefore, the fickle invisible is shaped through your interaction with everyone else in your business:  perception and personal branding happens by default, whether you like it or not. Therefore, take positive control  of all your interaction with clients and candidates.

If you believe this is unimportant, you won't stay long in the service business - you will become invisible yourself in very short time.

To be published in the coming edition of Elegans, the TUGIAD magazine :

One way for companies to increase their competitiveness, revenues, profits and growth, or turn around a string of losses or fall in revenues is to replace under-performing managers, through specialized professionals to bring to them the best available executives in the market. The effect of a management change can yield enormous benefits and gains, and this article is written to give an insight into the consultancy service focused on delivering companies better managers.

The specialized professionals bringing in executive talent, Executive Search Consultants, or in common parlance, headhunters, are seen by most as a mysterious, but also influential operators. It is an invisible profession too, involving an unusually high discretion and confidentiality: its processes do not play out in a court room for all to see, and neither have the familiarity of the medical line of work anyone has already encountered. Nevertheless, Executive Search consultants affect to a dramatic extent the abilities of companies to change, compete, and prosper; while they also significantly affect the careers of the people they shepherd into new positions and companies.

People matter, especially senior management. On first sight this sounds like another truism, until one realizes that cash, inventory, warehouses, and all other assets are worthless until people put them into use. Though obvious, few realize that the assets on a balance sheet are basically inert, and this because only people have the inherent power to create value. The effect of people putting assets into play can be tremendous, because human capital essentially leverages to a significant extent their value. An illustration to understand how far such leverage goes is to subtract the book value from the market value of a company, the difference is the leverage applied by human capital putting assets to use. On the other hand, human skill or knowledge is of no value until it is applied to a business situation: value adding always starts with the goals of a company. It is exactly here where Executive Search Consultants can be so influential, because it is precisely leadership and management that set the goals and values that set direction, trickle down and permeate the organization, and this until the process of connecting human capital to demonstrating value begins.

Executive Search consultants thus provide a solution related to a specific asset leverage problem, and they do this by bringing the right talent and leadership into their client companies. In other words, they will increase the overall ROI of their client company by bringing in not only a great and talented manager, but also someone that is the right professional, fitting the client’s organization, culture and people. They will replace underperforming managers, fill a management slot after someone left, or add new executives in growing organizations with the goal to increase ROI and other metrics of value.

The service delivered by Search Consultants in leveraging assets and increasing ROI is commonly confused with the narrow process of “finding” or “headhunting” people. The reason is because a lot of Search Consultants, and even more buyers, confuse the ROI, or the value delivered and created by the service, with the actual steps needed to deliver it. It is like a surgeon, describing his value-add to a patient as anesthesia, cutting him open, extracting the swelling, and sewing the cut. It is like a lawyer mentioning his value-add as writing and filing briefs, and going to court. But what about curing your ailment with the least hassle, or winning your case quickly and efficiently? Everyone understands such surgeons and lawyers would be out of business soon; but the same criterion applies for Search Consultants. Therefore the popular, vulgarized view that Executive Search finds and brings people to the client organization is as best incomplete, but more often than not, just wrong.

Executive Search service will unfold through the following steps, which represent much more than presenting a collection of CV’s.

(1) A pre-mandate consultancy will involve the stakeholders in the Client Company, and aim to understand, define, and describe the actual need of a position to be filled. The goal of the Consultant here is to understand and grasp the actual value the client company expects to realize. In my opinion this is the most crucial and decisive element of the search process, but unfortunately often overlooked. Ideally HR will not be a screen between consultant and hiring manager, but actively facilitate between all stake holders defining this value. The pre-mandate discussions will give the hiring organization also a good idea on the content and the level of interaction they can expect from a consultant during the project. Pre-mandate consulting also allows companies to screen their Search Consultant: his or her presentation, credentials and competence, overall personal chemistry and fee or price. To the best of my experience, a large amount of mandates, especially with local companies in Turkey, are awarded on the basis of "here is the job description” “how much time will it take” and “what will be your price".

(2) Finding the candidate matching the job description is the phase that can take up to 5 to 6 weeks and erroneously seen by outsiders as 95% of the value provided. This view is bogus, because the value of the service is situated in realizing added value through the placement of a great manager. Everyone can send CV’s and candidates, what matter is their competence, fit, motivation to join the hiring company. The inane search company (usually one working on success fee), will waste weeks searching for a profile they do not, and probably will never understand - with the buyer or client company only realizing when it's too late.

(3) Assessing interested and relevant candidates in order to select the best is the most critical and intangible element. Assessing properly and effectively the relevance, competence and fit of candidates is best done by Search Consultants that understand a business and sector inside out. In my firm consultants usually work by sector or practice group, such as financial services, technology, real estate, industrial/manufacturing, and so on. Usually these consultants have previous line management experience from the sector, and have therefore a close affinity with the market and professional realities their client companies face.

(4) Selling the opportunity to the right professional, the step probably least recognized. A corporate culture can be biased, like in the case where a board of directors and executive committee sees their company as a shining star while outside candidates perceive the work environment offered by the firm as a mix of risk, lack of opportunity, and an annoying micro management culture. Companies not doing well, in need for a strong CEO or executive face a similar uphill task. A good Search Consultant will be able, ethically, and with integrity, be able to influence an executive to a significant extent closer to joining his client.

(5) Closure of an assignment; which involves the by times intensive management of expectations from both client and candidate, guiding them towards an actual employment agreement. For experienced Search Consultants this is the most difficult and underrated part of the whole recruitment process. The most important issue here are package negotiations, the contractual formulation of the employment agreement, but also the decision making style and pace at the hiring company, and the overall approach towards a candidate. One large multinational company took up to 6 months into making a “consensus” decision on hiring a candidate who by the time lost interest. By times some highly valued professionals are often pursued simultaneously by several organizations, and swift, focused action at the side of the hiring company is of the highest order.

(7) Post-mandate on-boarding, which most clients not even taken into consideration. A Search consultant will stay in touch with both candidate and buyer, and verify if the placement meet the expectations?

The impact of a great hire can be spectacular, because even a marginal improvement in overall performance can bring a significant revenue upside. The burden of the wrong hire and resulting under-performance, additional intangible costs related to higher employee turn-around, disillusioned management, inefficiencies and lost opportunities can be huge. Estimates for the cost of a bad senior executive hire, combining direct and indirect costs can amount up to, worst case scenario, 15 times the annual salary.

Management matters. Management has the fundamental ability to create value, both tangible and intangible. Retaining an Executive Search professional to search, select and bring in the right manager, is a rational and wise course of action.

The book "Deciding who Leads - How Executive Recruiters Drive, Direct & Disrupt the Global Search for Leadership Talent" is one of the very few books written by a Search Consultant on Executive Search. Alas, it doesn't show, and its reading left me unsatisfied and dissapointed. The blurb on the back:

Deciding Who Leads offers a front-row seat from which to witness the high-stakes drama, victories, and missteps that characterize the executive search process amid what has become an intense, truly global competition for leadership talent.

If you take that Hollywood movie like claim at face value, then you're in for some major disappointment.

The main reason is because the book presents a collection of mostly trivial idea's, stiched together into what is supposed to be a unique insight into the "secret" world of Executive Search, and how the invisible executive search profession is "charting the course of global business". Such claims raise high expectations, though the style in which they are delivered should already give one some sense of the hot air the author will be pumping throughout the almost 200 pages.

Contrary to the colorful, blockbuster like claims on the back, the book offers seldom anything more than rehashed, stale truisms about the search profession, setting the tone with the cliche  title of the first chapter: "The Global War for Executive Talent". Oh yeah, don't forget, there is a war out there. I have no doubt McCool loves freedom fries.

One chapter which took my particular interest (and the reason I bought the book) was the one examining the cost of bad executive hire. The cost of a bad executive hire is high, potentially very high, and I will not dispute that. The question is how much a company gets hit through a bad hire. McCool asserts the following:

• Direct costs: 20% of the total cost, equal to 2-3 times the yearly salary of the executive. This includes the cost of his initial hire, compensation, cost of "extraction", cost of replacing the misfit.
• Indirect costs: 80% of the total cost, equal to 8-12 times the yearly salary: disruption of unit performance, loss of unit and leadership productivity, loss of opportunities, management level churn, loss of goodwill.

An argumentation as how exactly these costs are calculated is absent. Nada, zilch. Like most of the book the above is based on a "because I say so" style of assertion, whereas one or more case studies , which could for instance cover a large or small company, verticals such as manufacturing, FMCG, technology or financial services, or companies by geography. Such case studies would have provided far more insight, and make McCool's claims much, much more credible. 

One of the parts I liked the most were the lists of characteristics describing clients  search consultants liked and disliked search consultants (pages 132 and 133) - which McCool took from another consultant (listed in the footnote). Food for thought that not every client matters - though during this current crisis everyone will privately confess we are happy with any client.

My take is that most of the book reads like an elaborate and smooth PR exercise, though some some people will like the light, uncomplicated, fiction like fare presented by the author. It surely does not offer the thoroughness, depth and detail of a Harvard Business School Press publication and the likes. Shurely not folks.

Recruiting great talent matters, in case you didn't know yet. Now some high profile boffins published in the May Edition of the venerable HBR "The Definite Guide to Recruiting in Good Times and Bad". One of the authors in question works at a competitor that goes by the name Egon Zehnder. Exec101 could not have this passing by without its own, though less venerable and summarized, reading.

What caught my eye in this well written article is how it lays bare "the ad hoc quality, lack of specified criteria, and inconsistency of practice", that is hiring across a broad set of companies.

Despite a universal acknowledgment that hiring good people is a key source of competitive advantage, we could find only a few companies that excel at one or more aspects of the hiring process

The table below, which I directly took from the article, is an excellent summary of good versus bad hiring practice. The research conducted by the authors covered both senior executives, hiring managers and also executive search consultants.

Search consultants can use it as a "map" to gauge the hiring practices of their customers, anticipate what problems can be expected, and plan the search execution along. It makes a great tool to adapt, adjust and position the consultancy part of the search work, as it touches all 7 steps of the process outlined below.

And yes, consulting we must do, because this is what makes us more than just a "headhunter".