January 18, 2024

TPL Insights #205 – How Great Retained Search Practices Can Improve Your Hiring Effectiveness

By Rob Andrews

Retained executive search was born in the late 1900s and grew out of the big management consulting firms. Retained search, in its purest form, was intended by its founders to be a specialized form of management consulting. Done properly, search is one of the most influential and valuable forms of management consulting there is.  CEOs, CHROs, boards, corporate recruiters and talent acquisition departments can add substantial value to their organizations by viewing the world through the eyes of a disciplined retained search professional.

To illustrate, meet fictitious characters Jack and Sam. Jack is a composite of all of the stellar executive search professionals I’ve known, and Sam was his mentor. Jack began his search career in 1989. He loved it from the beginning. Jack learned from Sam, his managing partner, and thirty years his senior, that search consultants have a tremendous responsibility to do everything in their power to facilitate matches that work and last for both client and candidate. He was taught that almost one in every two executive placements fail within two years, and that most are predestined to fail.

Sam made Jack read studies to illustrate. He showed Jack that according to some studies, up to a third of U.S. CEOs last less than two years, with top executive failure rates as high as 75 percent and rarely less than 30 percent. He showed Jack a Harvard Business Review study in which two out of five new CEOs fail in their first 18 months. The article said CEOs and senior executives are routinely hired on the basis of their presence, drive, IQ, and resume. They’re fired for lack of emotional intelligence, poor people decisions, poor cultural fit, poor performance, cluelessness and being totally out of touch with their workforces and customers.

Sam had studied thousands of failed executive placements over decades, and determined that almost half fell into the category of cultural misalignment. Another quarter of placements failed because the new hire did not meet performance expectations. However, neither the company’s culture nor its performance expectations were clearly laid out in the hiring process.

Sam gave Jack a very thorough needs analysis template that Sam required all of his consultants to follow. The document was designed to extract from the client exactly what they were trying to accomplish, and to identify who and what they needed to get there. He taught Jack how to set up a kickoff meeting, establish relevant stakeholders, and gather sufficient data in order to build a comprehensive position specification, which would become a marketing piece and the roadmap for the search. He taught Jack how to resolve disconnects among decision makers and gain agreement on key points.

Jack learned to work closely with his clients to showcase the opportunity his client had to offer, while simultaneously introducing the company itself and the basic requirements of the job at hand. Jack learned not to inflate the attributes desired in the candidate and to drill down on defining the company culture, the behaviors that would be desirable in the new hire, the nature of the existing leadership team, and values and purpose of the organization. In other words, Jack learned to help his clients focus on who their ideal candidate would be and what their ideal candidate would be able to do do, rather than getting distracted by any irrelevant qualifications they expected candidates to have.

He learned how to work effectively with clients as a thought partner in order to determine specific performance expectations that would determine success. Jack became excellent at this solving this part of the puzzle. because Sam convinced him of an important truth: that defining success up front could make the difference between a great placement and a dismal failure.

Jack still recalls how, after his first client approved his spec, Sam made Jack single-handedly map the space to identify all potential candidates who might either be candidates or referral sources. He was not allowed to rely on databases, his own network or LinkedIn. He was taught to use all the technology available to identify candidates who were not on the radar. He was taught to include all influencers in the space, including consultants, suppliers, and customers.

Once the target list was finished, Sam taught Jack how to reach out to candidates and go through a series of steps designed to facilitate effective matches. Jack determined that asking for referrals was a better method than trying to recruit candidates directly, because it put him in a position of facilitator, rather than salesman.

If candidates were interested in an opportunity, Sam would ask them to engage in a rigorous process of self-assessment, 360-degree reference audits and background checks before final interviews were arranged. Jack was skeptical of this approach at first – wouldn’t candidates get bored or frustrated and drop out of the search? But ultimately, Jack found that A candidates – the top players – were eager to do the hard work, providing multiple references and submitting to background investigations, while B and C players opted out.

Much to Jack’s chagrin, Sam made Jack work on search engagements in industries where Jack had no experience or knowledge. Sam insisted that conducting a thorough needs analysis and having a “make no assumptions” mindset was far more important than how much direct experience Jack had in the space. Without a truly curious mindset, Sam claimed, experience can cloud a consultant’s judgement. He can convince himself that he knows things he doesn’t, making dangerous assumptions along the way.

The more Jack bought in to Sam’s methodology, the better he got. He came to see himself as a true consultant and a trusted advisor committed to helping his client achieve their business objectives, rather than simply filling whatever seats happen to be empty. Now committed to facilitating matches that will work and last, Jack uses an arsenal of tools to advise clients on best practices. More importantly, Jack knows that he cannot substitute his own judgement for the client’s. His willingness to ask questions, and his skill at getting to the client’s real answer, is the most valuable “expertise” Jack has to offer.

If you find this material helpful and would like to know more about developing human capital practices that will allow you to improve your hiring effectiveness, give us a call.

Warmest Regards,