Uncovering executive excellence

The company offers comprehensive international coverage through a global network, predicated on developing a comprehensive understanding of the client’s past, current and future needs.

HR Management caught up with three of Diversified’s experts – Judith von Seldeneck, Chairman and CEO; Tracy Murdoch O’Such, Managing Partner, New York and Practice Leader of the Media and Entertainment division; and Keith Gaspard, Managing Director and Practice Leader for Life Sciences – to discuss why executive search is such a potential minefield, and what organizations need to do to ensure recruitment success.

With new dynamics in executive recruiting, will the issue of cultural-fit be seen as just an added bonus, or is it as important as the specific skills and experience of the candidates? What do companies need to do to ensure that new hires match the culture of the company?

TMO. Cultural fit has definitely become paramount because companies are moving faster and have the need to build teams that work as a cohesive group. They want to bring in people who are like-minded and goal-oriented. In my field, Media Entertainment, it has become a critical component. Working with an executive recruiter gives companies an advantage because we only present candidates we feel strongly will be successful in that culture. The position as described on paper is one aspect, but the ‘x factor’, or the connection the individual has with the interview team and the company, is also important.

KG. I think cultural fit is as important as specific skills and experience. If you look at statistics, people who fail in a new job typically do so in the first 6-12 months and it’s because of the issue of fit. They’re not able to work well with the team to effectively help move the organization forward. And with the tightening talent pool, cultural fit is even more important; companies can ensure that new hires match the culture by partnering with an executive search firm that understands how employees think and act within the organization, in order to know what type of executive is going to fit into that culture seamlessly.

JVS. To ensure that new hires match their culture, companies must first understand and clearly define what their culture is. In order for companies to fully understand what works for them, they need to articulate the five top-line bullet points that answer the question “what is our culture all about?” They can then determine how these points match up with the skill sets and the qualities of the candidates being presented to them.

There is a trend toward looking at ‘out-of-the-box’ candidates – when is hiring someone with a background outside your specific industry sector a good idea, and when should it be avoided?

TMO. In Media and Entertainment, the convergence of broadcast cable, radio and publishing studios has meant that it’s almost standard operating procedure to hire someone from the publishing world into the cable network, or out of the cable world into an AT&T. Clients are looking for other industry experience and exposure, so they’re not really considered ‘out-of-the-box’ candidates anymore. Of course, there are certain functional areas that are not transferable and are more industry-driven. An example would be the CTO function, which is specific to technology and the internet and doesn’t translate well to the publishing world because the technical pieces are so different. On the other hand, in the same example, the CFO position may well be transferable.

KG. I believe companies should always be encouraged to look ‘outside the box’ for candidates because many skills are transferable. Just look at two of the most successful executives in the past decade – Lou Gerstner, who came out of the food industry to transform IBM, or Meg Whitman, who was a branding and marketing expert before revolutionizing eBay. You always need to look at great talent, no matter what field it is in. In some sectors and industry segments there are functional areas where it doesn’t fit, but overall it’s important for the client to look broadly.

JVS. It’s certainly a good idea to look ‘outside the box’ when you’re looking for creativity, new thinking or new ideas. Perhaps you have people who’ve been with the company for a long time and you would like to stimulate and challenge their thinking. However, when a company is in a turnaround situation, it’s probably not a good idea because you need people who can hit the ground running with very specific expertise and minimum risk.

Your website describes the environment around board composition as ‘highly charged.’ What are the biggest challenges around board-level recruitment today, and how do companies deal with them?

TMO. The introduction of regulations such as Sarbanes Oxley means that boards are being held so much more accountable these days – a board is no longer a place where you attend meetings a couple of times a year and aren’t held accountable. It’s more of an active rather than passive role today.

KG. I agree and I see time as a significant change factor. These days, not only do you need to make time for board meetings and prepping, but you also need to be a really effective board member and be accessible to the CEO at times in-between the board meetings. The time commitment and the regulatory commitments are now more significant than ever, and in light of these commitments it’s important to partner with an executive search firm to help you define the skill sets you need and find someone who fits well and is willing to serve.

JVS. The ideal choice for corporate and public company boards, a sitting CEO, has become extremely difficult to find. CEOs are now limited by their companies in their ability to serve on boards, so the traditional pool for board members has become less accessible. In addition, the demands that are made on board members require that they truly understand business issues, have expertise and contribute. More than ever, boards are evaluating their members and replacing those who aren’t adding value. And, with boards becoming smaller, it is vital that each member is effective and fits in well with the culture of the board. Making a mistake in the selection of even one member can impact the dynamic of the entire board. At the end of the day, skill set, experience, credibility and credentials are what make an effective board member.

Given your name, it’s no surprise that Diversified has been a champion of diversity recruiting. What advice can you give to companies that want to build a more diverse workforce?

TMO. The most obvious strategy is working with a search firm that, as part of its standard operating procedure, presents a diverse slate. That is clearly something in which we excel.

KG. I would agree with Tracy. Additionally, companies need to clearly define the business case for diversity internally – what it means to the organization and why it’s important. It is critical that there is management buy-in from the highest levels of the organization, as well as strategies that involve all employees. If you have a diversity council, it should be a diagonal slice through the organization involving all functional areas and all levels of the organization working toward that initiative.

JVS. The most important thing is that diversity has to start at the highest levels of the company. The board of directors should issue a mandate to management and include, as part of the CEO’s objectives (and bonus) that the company will meet specific diversity goals. This directive should trickle down from the top to be effective, not come from the bottom up. I would also caution clients to look at the composition of their search firms. At Diversified, we have a very impressive blend of diversity in our firm and I feel that it goes a long way to truly understanding the issues.

Globalization has brought many advantages to business, but how has it affected recruitment? In reality, are companies tapping into a global talent pool, or is there more that can be done to attract the very best, wherever they are?

TMO. One of the changes we see is that globalization has created a longer workday for us. We’re talking to the UK at five in the morning and Tokyo and Australia at eight at night. We’re finding that clients are looking around the globe for talent because with all the movement worldwide, there are no boundaries. Your talent could be working in Ireland, but have US citizenship and a desire to return there.

KG. Globalization has become a hotter issue for executive recruitment as businesses truly globalize and move executives from one geographic region to another. Developing recruiting executives that have intercultural skills to work effectively across borders is increasingly important in this environment. It requires a much broader reach and network than some search firms can deliver, and a focus and understanding of what it takes to be effective in a worldwide company.

JVS. I think it’s a whole different type of recruitment business. Global companies want people who have global knowledge and understand, through hands-on experience, what’s going on in various parts of the world. There are all sorts of dynamics involved and the recruiting process for top talent is more difficult than people realize. Right now, the control is in the candidates’ court, and they can literally name their own employment terms, timing, etc. The bottom line is that top-notch people are in great demand and there’s a shortage of supply.

In this very competitive environment for talent, what should companies be looking for from a search firm beyond recruitment?

TMO. Companies should be demanding a true executive search partner who is very involved in the company’s goals and objectives beyond the talent component. As it relates to the talent component, the search firm should be providing compensation information on the cost of this talent to help the client adjust their cash and equity components, depending on the offer. Companies can also look to search firms for validation that their strategy of recruitment is spot on. So, in essence, the executive search partner is looked at as a human capital partner.

KG. The expectations a company should have of their search partner is that they take a very consultative approach and really are a seamless extension of the company out in the marketplace. They should provide market and business intelligence in addition to compensation, and be able to advise on what the talent pool looks like for that position. Beyond that, once the placement is made, is the effective transition and assimilation into the culture, working with the candidate and the client. One example is working with HR to evaluate, assess and, after 90 days, set up a meeting where all the direct reports to the executive can share information on what’s working and what’s not. Other services include helping companies with in-house developmental plans and succession plans.

JVS. I think a company needs to look at the search partner’s attributes and ask themselves: “Is this the person I want representing my company out in the marketplace? Does he or she understand our company business strategy and what we’re trying to do?”