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.

Emerging markets characterise themselves by a low degree of overall insitutionalization combined with high growth potential. Local companies in those markets pose by times particular challenges to the Executive Search Consultants. Low institutionalization correlates with high degrees of high political risk and/or high scores on the Corruption Perceptions Index. The higher those scores, the more  the traits pronounced below become.

1. Weak ethical frameworks render the provision of search service problematic, precisely because the commitment of the client is always in flux. By times there is a remarkable lack of the necessary implicit trust to make partnerships work, which implies no one will take advantage of the other, and that terms, conditions and time frames are fair. It happens more than often a client tries to re-negotiate fees after all services were succesfully delivered, according to, and as stipulated in the contract/proposal.

2. Weak legal frameworks that do not protect the service provider. A recruitment service is intangible and it is hard, or by times, impossible to prove it was properly delivered. Searches are "cancelled" but weeks later shortlisted candidates are contacted and hired. Courts are more than often not an option to settle a dispute.

3. An intangible deliverable such as a service is hard to sell. Because a service is invisible and can't be touched, its value is also deemed inferior to that of tangible products. I often hear technology companies selling ERP software solutions are asked to provide the necessary maintenance and consulting services "for free", as these are anyhow required when buying the software licences. The similarity with Search Service starts and ends when a physical person, like office furniture, a production machine or stationary, is brought in.

4. Though there are definitely exceptions, local companies are often structured in such manner that proper delegation is out of question, and "our people matter" is usually an empty slogan. Since there is a lack of trust towards a majority of key employees, the delegation processes required to generate and sustain seizable growth are not properly implemented. Value based retainer fees are therefore hard to come by as the companies who need talent the most, cannot recognize, develop neither integrate it.

The result is that more than 80% of searches in such markets are conducted for multinational firms entering or present in those markets; or go to the few local firms that have managed to succesfully establish themselves outside their home market.

Google designed an algorithm to solve its staffing problems. The algorithm is designed to help the organization identify employees most likely to quit. The Wall Street Journal put it this way:

The Internet search giant recently began crunching data from employee reviews and promotion and pay histories in a mathematical formula Google says can identify which of its 20,000 employees are most likely to quit.

Yeah. The folks who brought us the best and cool search engine, will now calculate and determine whom they might risk to loose. One of the boffins at Google, Lazlo Bock, believes the algorithm can get "in people's heads" and determine they will leave before they will know it. Though I can't comment on using an algortithm to predict who will quit, I am sceptical about the algorithm mentality already ruling the other side of keeping talent; I mean the one that brings talent in, or recruits new DNA into Big Brother.

I worked with Google recruiters in the past, they courted us by times to help them finding country managers for operations in emerging markets with fast growing economies;  but also with poor information infrastructure and legislation, and in some cases, markets that function in politically and culturally closed societies.

The power Google holds to search information on the web, and also on its own corporate networks, is immense. It permeates all aspects of its business, including talent acquisition. To my experience, the power of Google Corp. and its associated status leads by times to an attitude that is self defeating because the company looses a sense of realism most commonly closely linked to the admirable trait of humbleness.

It therefore fails to recognize talent outside predefined criteria of its search algorithms; criteria it confidently ascribes the power of dogma. While such criteria are quite valid in the First World, they are practically inapplicable to the type of emerging markets described above. The type of these c"hiseled in stone" commandments, such as Ivy League education, top university scores, and previous employment, can lead to the wrong candidates being hired, and the right ones not to be considered.

The internal recruitment managers Google apply similar algorithms to find candidates all over the globe, and of course, by times get stuck because the right professionals simply do not show up on their screens. This for various reasons, the most common one because the majority of professionals have degrees not from the "right" universities, do not have the "right" work experience, or not the "right" seniority.

For instance, the son of a poor factory worker in an ex-communist country who build the most successful portal in that country is not considered a candidate because he got his MBA from a UK University considered to be not "as good" as Europe's top universities. Hey, he has a local engineering degree, saved all he could get to receive a graduate education in the UK, to return and create upon his return the most valuable internet property and business in his country. The algorithm mentality completely missed a relevant candidate.

Furthermore, there is no algorithm providing a way to distinguish between false and correct information. I remember an "ideal" candidate to be whisked away to London to undergo the last interviews for a country management position in a North Africa. Only during the final due diligence of the candidate's education and career history it became clear he faked generously parts of his CV, prompting a colleague to swallow his "I told you so".

There is no algorithm that can capture the cultural finesse required to separate the wheat from the chaff. This issue won't be much of a deal breaker in the US or Western Europe, just don't extend it over-zealously to all markets and countries. A dose of some good, old common-sense modesty is sometimes the best antidote to algorithmitis.

As for an algorithm to identify people before they resign, must somehow be able, as the Google boffin Bock claims, know the thoughts of employees before they do. Next year we might get a full-blown psychoanalytic algorithm as result.

It's a brave new world, Dave.

I heard the last month one of my candidates recounting a negative experience with a recruiter or "headhunter". His story featured a search consultant conducting a disasterous interview. This "consultant" did clearly not understand the role the executive was working in. He asked senseless questions about his career and responsabilities; which made clear he was in no position to assess candidates, let alone convincing them to change jobs for a new opportunity. The interview was a waste of time.

The result of good influencing skills is the ability to attract great talent, and when required, to bring a client to the point he is willing to accomodate the expectations of a good candidate. The more senior the position one is recruiting, the more important approach, attitude and maturity matter on the consultant side.

Influencing is hence one of the top attributes a good search consultant must possess, as it is key in waxing away a key asset from one organization to the other. The basis for influence is the succesful creation and communication on a "peer" level; conveying a sense of professional intimacy, providing trustworthy advice on a solid basis of integrity.

The good folks at The Fordyce Letter, the source "providing straight talk about the recruiting profession", published a post by Jeff Allen, who in his own words, is the world's leading placement lawyer.

Jeff's posts on the Fordyce website as "Jeff on call" whereby he gives free legal advice to recruiters. On 23 April Jeff got the following request for information.

Q: I have a candidate who interviewed with my client and is going to receive an offer. She just told me that she is transgender and wants me to disclose that to the employer.

Jeff's advice goes:

In this case, your candidate is a member of a “protected class.” Therefore, his consent is vitiated (nullified). It would be like having a child consent to work for less than minimum wage. Since the child is the victim to be protected, he can’t consent legally to an illegal act against him (My bold case)

I am astonished about the absurdity of the whole case, not just that transsexual candidates by defenition are a victim to be protected. I am not working in the US, where lots of questions to candidates are taboo: everyone can be a victim, and if you do not want to be a victim, an experienced lawyer can always make you one. Like they applaud a chronic denial of responsability, should you succeed to overcome your victimhood, then you loose your status, special rights and claims to priviliged treatment.

There is no doubt that the US legal system detoriated, helping this form of narcissism win legal battle after legal battle. And the defining trait of narcissism is that when something goes wrong, it is never its fault. When you are a victim, you are not responsible for what you have done.

In Chicago, a man complained to the Minority Rights Division of the U.S. Attorney's Office that a local restaurant was violating federal equal-protection laws because the seats were not big enough for his unusually large backside.

"I represent a minority that is just as visible as blacks, Mexicans, Latins, Asians, or women. Your company has taken it upon itself to grossly and improperly discriminate against heavyset people, and we are prepared to bring federal litigation against your company to comply with the Equal Rights Accomodations Provision. I have a 60-inch waist and it is absolutely impossible for me to get service because of the type of seating you have installed.

We are very serious in our demands that you recognize the existence of large and heavyset minority that make up nearly 20% of the American population, and take severe steps to provide at least 20% of the seating in your restaurant to be suitable for heavy people"

Mike Rokyo, Chicago Tribune Columnist, noted that in spite of this person's attempt to equate his status with that of blacks and women, he "was not born with a 60-inch waist and enormous butt. After a certain age, he created himself and his butt. They are his responsability. And even the most liberal of liberals would have to agree that his 60-inch waist and awesome butt should not be the responsability of the United States of America" (quoted from Ken Wilber's book Boomeritis).

Following another fine tradition Jeff recommends the recruiter asking him the advice to:

Next month when it’s released, your candidate might want to pick up a copy of my new book, entitled Instant Interviews: 101 Ways to Get the Best Job of Your Life (Wiley). “Do” (Chapter) 81 is entitled “Disabling a Disability Instantly.” I use a take-no-prisoners approach that will work well for him. (Of course, transgender status is not a disability, but the disclosure technique is the same.)

Thanks for asking, and “consenting” to us sharing the reply to this great question.

As for Jeff, une applaudisement de la foule en delire. Sigh. Yawn. I should actually buy that book, read it, but also review it. But that's for another time.