Deciding who leads

“Human capital is... the most critical intangible asset riding on corporate balance sheets,” says Joseph Daniel McCool.

Fire your headhunter. That's his message in his new book “Deciding Who Leads”, in which he says old-style methods of searching for talent are out of date. A highly respected journalist who has written about and lectured extensively on executive search, McCool offers the low-down on search consultants and explains the importance of creating your own internal processes for grooming candidates. He advocates establishing “onboarding” programmes to create a foundation for new hires.

McCool maintains that if you understand how your corporate culture defines success, you will hire better-suited executives. Firms that emphasise leadership development and succession planning have less need for executive search services, he says. The book details how costly bad hires are and advises firms to pursue executive talent worldwide, because of the increasingly global nature of business. To make the most of recruiters, McCool advises that they are engaged for long-term consultation, not for quick, one-hit transactions. With a clear and inviting writing style, McCool persuasively describes the real value companies can derive from using executive search services productively.

In this book abstract, you will discover:

* How to find and keep top executive talent
* What a bad executive hire really costs
* What an “executive search consultant” can do for - and to - your firm

“Deciding who leads is... shared by executive search consultants and their client organisations, but deciding who gets a chance to contend for a top corporate job rests mostly in the hands of the searchers,” says McCool.

Abstract

At many companies, outside executive search consultants deeply influence changes in top management. These consultants, whom companies hire to search for the best new leaders, make the first cut among candidates before they present the company with a list of people to consider for available positions.

If your company is recruiting, be sure your executive search team knows the kind of person you want and has access to the calibre of talent you need. While you may find plenty of bright, capable people, the market for the very best talent is competitive. You want to locate and hire men and women who can motivate your people and optimise your processes. Like much else in business, the competitive market for top executives has gone global, so your search should have a worldwide reach. Seek executives with international experience who know how to adapt, compete and win in the modern marketplace.

Former General Electric CEO Jack Welch once said that if the company properly did its job of building executive talent and planning for succession, it would never need executive search consultants. But GE, like so many other firms, turns to consultants to fill in its upper-level gaps. Executive search consultants wield a two-edged sword. They can help you hire for open positions, but they also might create holes in your staff by recruiting some of your best people for other companies.

The book details how costly bad hires are and advises firms to pursue executive talent worldwide, because of the increasingly global nature of business.

Mandy de Waal, ITWeb contributor

As gatekeepers for the talent they present to your firm, executive search consultants can have a powerful impact on its development and culture. To get the best results from search consultants, actively engage them in your organisational vision. If you look at your searchers as old-style headhunters, you will waste time interviewing candidates who do not fit your company, and you may never meet the kind of dynamic executive who can lead the change you want and who understands modern corporate governance.

“Executive search is often the only way hiring companies can attract and recruit... senior management talent.” - Joseph Daniel McCool

“Executive recruiters occupy a unique brokerage position from which to drive, direct and disrupt the global search for leadership talent.” - Joseph Daniel McCool

“When an executive plans to leave an organisation or aspires to join it, the executive recruiters are often the first to know.” - Joseph Daniel McCool

“The need to drive business on an international scale dictates the effective deployment of management talent.” - Joseph Daniel McCool

Don't be afraid to recruit globally. You are looking for rare talent, so don't compromise your future by hiring from a limited, local pool.

Roy E Disney and Stanley Gold played a big role in hiring Michael Eisner as CEO of Disney. After years of tremendous success, Eisner became the object of shareholder ire. When it became clear that he had to step down, Disney announced a wide-ranging search to select its next leader. The chairman of the board, former Senator George Mitchell, announced that Robert Iger would succeed Eisner, but only a select few knew the details of the supposedly extensive search. Disney, Gold and many other shareholders suspected that Eisner had manipulated the search process, and they filed suit. These directors and the business press wanted to know who among the world's top CEOs had been included in the search. Had Eisner and company really conducted a global independent search? Did they engage several executive search firms as promised? Which ones? What candidates did they present?

If the suit had unfolded, the legal process would have included deposing the executive recruiters, and making their work and their personal notes public. This threat became the catalyst for a truce between the factions. How your firm handles succession is up to its board, but be sure to deal with internal political issues before a crisis erupts. Get to know a number of executive search firms before you need one, so you can make a well-informed choice. Have the consultants learn about your firm, so they have a better idea of which candidates to present. Using a search firm to disguise internal political manipulation is counterproductive for everyone involved - just ask the folks at Disney.

Search consultants have to manage their industry's own image problems. If you are an executive recruiter, don't be sloppy or careless. Don't earn a reputation as a “body snatcher”. If you act professionally, you will stand high above the quick-hit, slick “headhunter” (a widely used term that is an insult to a true executive search consultant).

Match the soft skills of each executive recruit with the culture of your client's firm. Measure your success in terms of the respect you earn from the executives who sign contracts with you or those you place in new jobs. Track the quality of the improvements your placements bring to a firm. Search consultants who do their jobs well improve the lives of their clients and the executives they place. To build a good reputation, develop a strategic affiliation with your clients, not just a transactional relationship. Even top executive searchers know, though, that corporate hiring executives are apt to take credit for great candidates and to blame the executive search consultant for poor hires.

If you are a corporate executive who hires search consultants in your quest for new leaders, you'll be a better client and have a more productive outcome if you identify the kind of candidate you want. Seek someone who can listen, build consensus and use emotional intelligence, rather than the top-down commander of yesteryear. To make your company a learning organisation, look for candidates who show that they value learning in their personal and professional lives. Recent ethical scandals, such as the events at Enron, demonstrate the importance of recruiting leaders with integrity and solid ethics. Be aware of all the subtle contexts in which the person must lead. A savvy leader can still fail despite having technical brilliance, boundless energy and business

virtuosity if he or she doesn't grasp the firm's social environment.

“An organisation can't afford to recruit the wrong person and isn't willing to settle for second best.” - Joseph Daniel McCool

“The more softly and effectively executives land in a new leadership post, the more quickly they gain momentum, build rapport and gain confidence.” - Joseph Daniel McCool

“Executive recruiters... influence the gender, cultural and overall demographic profile of C-level leaders, senior management teams, and corporate and not-for-profit boards of directors.” - Joseph Daniel McCool

“Every client should ask every search consultant before every search begins... 'Who are you prevented from approaching?'” - Frederick Wackerle

A skilled executive search consultant also can help you in the evolving area of CEO compensation. The demands on corporate CEOs have never been greater. They want to be paid well for sacrificing their personal lives and privacy. This isn't just about a big paycheque with juicy benefits and generous options. It includes signing bonuses - like the one Ford had to pay Alan Mulally to persuade him to leave Boeing - and golden parachutes. Remember the scathing press over Jack Welch's lavish retirement package? Trying to get CEO compensation just right, and aligning it with shareholder and stakeholder interests, is always tough. Your search consultant can help you design a compensation package with all these complicating factors in mind.

The cost of hiring a bad CEO or other high-ranking executive is far more than the sum of the wasted salary and the executive search fee. Add in the opportunity costs of lost business, lost customers, lost employees and lost time, plus the expense of nursing the company back to health, and conducting another search and hiring process. To avoid bad hires, your recruitment team must agree on its goals and options. Be clear in telling candidates exactly what you want.

Work with a prospective hire to set realistic expectations before he or she becomes the boss. Beware if the candidate resists learning from your observations or harbours expectations that don't fit your culture. Seek flaws before you hand over the wheel and let someone drive your firm into a ditch.

Work with people before hiring them, so you know their motivations and leadership styles. Determine how compatible they are with your firm. Check references; don't assume anything.

If you handle hiring for your company, it is in your best interests to be engaged actively in each new hire's early success. You already built a search team and a selection process. Now, assemble a strong “onboarding” program with a solid support system. Help the executive acclimate to the corporate culture and communicate his or her vision to the firm.

If you assume that such a highly qualified individual should be able to make his or her own way, you run the risk of having your organisation reject the new executive like your body would reject a transplant if it didn't get proper medication. Don't be fooled by the happy honeymoon phase. Early enthusiasm is based more on politeness and hope than on sincere, informed support for the new leader.

Make your onboarding programme broadly based, so every area of the firm becomes invested in helping the new leader succeed, and so new executives learn who and what they are leading. Consider using a consultant who specialises in onboarding to help develop your programme and track its results.

When you engage an executive search consultant, decide if you are getting help for one assignment or beginning a strategic partnership. Is the executive search consultant competing with your internal HR department or serving as a resource to help HR?

For a successful search and hiring process, HR and the executive search consultant should work in tandem to identify and recruit the best talent. Position your executive search firm as a strategic competitive resource. Communicate accurately with your search consultant; be open and honest about your hiring processes and desired candidates.

When you develop a working relationship with an executive search firm, its consultants may offer you great prospects when you aren't searching, especially if they know you value talent, and can hire and develop top people even if you don't have an immediate gap to fill.

“Hiring is always a gamble. The trick is to improve the odds...[and] make sure the chemistry is right for both parties.” - Leadership consultant Andy Hunter.

“Executive search consultants...make their living off the long-perpetuated failure of organisations everywhere to develop executive talent from within.” - Joseph Daniel McCool

“I've always had a love-hate relationship with the search industry...I'd like to put all of you out of business. If we did our job [developing leaders], we'd never call on you.” - Former GE CEO Jack

Welch.

* About the author

Joseph Daniel McCool is an industry analyst who deals with global executive search consulting and executive succession. He has written three books on the subject.

Deciding Who Leads (c) Copyright 2009

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Deciding Who Leads
EAN: 9780891062462
232 pages
Publisher : DAVIES-BLACK PUBLISHING