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".

 

 

A recent article in Businessweek quoted the CEO of Heidrick & Struggles (HSSII), L. Kevin Kelly, who claims that the Executive Search business model is "broken". He did not rename his company yet Heidrick & Struggeling though. After experiencing a once in a lifetime 43% profit drop, with 2009 promising even worse, this statement could be more the result of the massive shell shock related to the black swan of a crisis no one saw coming (its NASDAQ peer Korn/Ferry International (KFY) announced similar sharp drops in profit and revenue - which after this event did neither change into Kornflake). As I pointed out earlier, though the industry is ripe for a paradigm shift, it should not be regulated to the dustbin.

Far from that. Revenues and profits drop everywhere, look at any sector highly dependent on short term financing, Real Estate? Construction? or what about the Financial Industry, Car Manufacturing, anyone?

The diversification into management consultancy practices proposed by Mr. Kelly could, and will probably backfire when Heidrick & Struggles swims into waters with predators it did not encounter yet.

What about Mc Kinsey venturing into Executive Search ? Brand expansion has not been treated kindly by history, and I fully agree with Mr. Kelly that his venture into management consultancy represents, I quote, "a huge gamble". Heidrick will need to acquire the necessary expertise through the take-over of smaller firms, dissemate that know-how and skillset (despite a degree of cultural inertia), amongst its high rolling consultants, and refocus in the process a significant part of its activity. I wonder if we will see Mr. Kelly driving a car with the left foot on the accelerator, and the right on the brake, considering the urgency and short time span for the required delicate organizational overhaul.

Search consultants at Heidrick & Struggles are accomplished and recognized consultants in the field. However, at firms like these, the benefit of having a blue chip, multinational brandname could quickly become a curse in disguise. Consultants working in a firm like Heidrick & Struggles, Korn/Ferry International, or Egon Zehnder benefit from the big corporates retaining their services because their brands are universally associated with umbrellas of reliability, quality and strength. They do not have to do much business development, the rolling-up-the-sleeves type kind of work, knocking on the doors and get the message out.Lots of assignments in those firms originate from the email inbox or a humming fax-machine: as they have the majority of global service provider contracts with the large multinationals, work comes in, almost on "auto pilot" and execution skills, delegation to researchers, followed-up with the wining and dining of candidate executives in expensive power suits  becomes the skillset most sharply honed.

Forgive me the satire, but the shift from "execution' mode to "business development" mode won't be easy. It is a skill more required within their existing business model; rather than a diversification into exotic new realms of consulting. Those same business development skills are required over there, however, this time in a different field, selling unfamilar consultancy services,  of which there is no execution experience, and without the umbrella of a recognized brand. Do you get the grist ?

Business is shrinking, no surprise. We are all hit. The answer to these difficult times is belt-tightening, cost cutting, increasing efficiencies, and most important a focus on the unique and core differentiators of one's business. If effective and efficient business development is one of them, it will be undoubtly be easier to weather the black swan.

Fernando Delgado made in a recent article various comments about how the end of Executive Search in its current form could be near. While I do not agree with all arguments of Fernando, he is right that Executive Search is facing a paradigm shift..... somehow.

His experience in the US market shows how hard it is for established firms to compete in a saturated market during sharp down-turns. Still, the major elements making a successful Executive Search practice remain in place: relationship building and management, experience and skill set development, sector and market know-how... elements that point to the software of the Search business, and though they invariable must adapt to the gyrations of the economic environment in order to prosper, the real possibilities towards a paradigm shift, as Fernando puts it, are in the hardware of the Search practice.

By this I mean how technology, properly applied, can leverage the essential soft elements of the business to a whole new level. With proper application I mean higher efficiencies, (much) lower costs and broader bandwidth in terms of market access and engagement. Research can dramatically benefit from a shift from phone based identification to learning the intricacies of search engine syntax and Database querying. For an idea check out the site of Glen Cathey. Centralizing the research function into a call centre type of operation could therefore be a thing of the past, as the advent of web 2.0 and 3.0 leads to an accelerating proliferation of information accessible by anyone owning a laptop and mobile (smart)phone.

The consultant-researcher and consultant-client communication can be similarly improved by redesigning the business processes that touch those contact points. Whereas in some Industries real-time business process integration and communication become unique competitive differentiators, most search firms today believe that improvement on attaching and sending files with email for all aspects of communication and information dissemination are hard to achieve; because the business is about "soft skills" like relationship building, pitching and candidate assessment,..... right ? Right, but as a bicycle is about transportation, so is a car, a truck, train, plane or ship. As we all very well know,technology leveraged transportation, because we do not walk or cycle to a client in a neighbouring city or state.  Technology can in a similar way leverage information and communication of a relationship centric business. Look to what Banks or Telecom operators learned about IT and apply day-in day-out.

Another element is knowledge management, or how insights and experience can be efficiently and efectively disseminated throughout a growing organization. This covers all area's of technology supported group decision making systems, and ditto supported cooperative networks. For the first time people spend more time now on social networks than writing and reading email, and the trend accelerates, even branches out in sub-branches, like a fractal tree. The big question, is how to model this huge intangible core assest of a search firm can be incorporated into the DNA of a company, so that researchers, consultants and partners through their day-to-day work schedule learn from the insights of others and equally contribute to the needs of others. This is not about flat or matrix organizational forms, but activity based learning and decsion making systems. Posting a webcast is one thing, a well composed bunch of slides can achieve the same - imagine a dashboard with drag and drop functionality informing managers about every measurable aspect of company activity, including search methodologies mapped into business processes that are to a great extent quantified and hence, also measurable in terms of quality, time, intensity and complexity, and can be correlated to any other set of data, individual, country sector etc.... I agree, such a system would be more expensive, but it is perfectly realisable.

Therefore, the answer to the question on how to improve research, client management, communication and consultant development lies in the proper organizational integration and application of IT = Information Technology. Much, much more on this topic in a future article.

Tremendous changes are happening in how people communicate and interact. The Internet is driving a new form of industrial revolution by itself, and offers new challenges and opportunities. Executive Search, while it can stay true to its core of relationship and knowledge management, and development, the real paradigm shift lies in leveraging those attributes with IT, and therefore such leverage can constitute a whole new unique core differentiator by itself. The end of business as usual in Executive Search could be near, but only when the Executive Search firm starts to understand and apply the possibilities of leverage offered by IT.

So Fernando, the proverbial End is NOT near, the Executive Search practice itself is highly susceptible to evolutionary and revolutionary changes. I look forward to them, because they will make the smaller firms more agile, stronger and immune to long standing advantages competitors hold because of their size and history.