March 4, 2021
TPL Insights: Building Peak-Performance Cultures #57 – What Retained Search was Meant to Be
This week’s post is in response to one of my clients who asked me to write a piece on my personal history and views on the art, science, and practice of retained executive search consulting. Writing a 275-page book on the subject was a lot of work but not difficult. A three-page blog post is much more daunting so here is my best shot.
I went to work in search at age 24 on March 3, 1979 for a man named Larry Gladstone. Larry was a 47-year-old Harvard MBA with tremendous passion for the profession. He said that, done properly, it was the most influential form of management consulting on earth. Larry became my mentor and we remained close friends until he passed away in 2011. He took the practice of search very seriously and was a tough task master. He made me record all of my calls so he could play them back and critique my approach. He had me my write all my own letters and then marked them up with a red pen and had me rewrite them until they were perfect. He made me call on new clients and set appointments. Then he went with me so he could critique my client interaction. At times Larry pushed me so hard I wanted to quit. However, 42 years later, I am deeply grateful to a man who cared enough about me to teach me a profession that has become my greatest passion.
In my view, retained search is both art and science. I consider myself a purist, which means I believe that retained search was intended by its founders to be practiced as a specialized form of management consulting, and not a transactional exercise of filling seats in a vacuum. The most effective search consultants are very much like primary care physicians. The best of both are great diagnosticians and take care to make recommendations that support their client’s objectives. They are highly skilled and work relentlessly to become better at their craft.
Both consistently demonstrate an unequivocal commitment to do the right thing by the people they advise. Doing the right thing requires diagnostic excellence and acting in the best interest of all stakeholders involved. The highest compliment my firm has ever been paid came from an investment banker who has referred a constant stream of clients to us for 19 years. He said “The reason I keep sending people over there is that I am supremely confident that regardless of who does the search, they’re going to go through a query, a line of questioning and a process that is going to extract from the client exactly what they’re trying to accomplish and then who and what they need to get there”. Here are additional attributes common to high quality search consultants:
Compassion: Great search consultants care deeply about their clients and work hard to understand their real needs. That often takes patience, skill and listening between the lines. The best consultants also endeavor to do everything in their power to protect candidates from entering employment situations that are predestined to fail. Search practitioners have the responsibility to facilitate matches that work and last, and to refrain from “selling clients and candidates into situations that are less than ideal”.
Broad Perspective: Great search consultants have knowledge and perspective around the issues their clients face. Retained search consulting can be broadly defined as helping clients with complex issues to clarify needs, identify opportunities, solve problems, and offer options and solutions that have the potential to deliver breakthrough results. Sure, finding candidates is part of the puzzle, but that is the easy part. The hard work is in discovery, vetting, assessing, presenting, negotiating, and facilitating.
Needs Analysis: Great search consultants make no assumptions. They employ a well-defined discovery process that sets the stage for a successful search. In complex searches, all relevant stakeholders should be engaged in a comprehensive query involving questionnaires and interviews. The output flows into a search specification, roadmap and assessments that will clarify company culture, values, mission, valued behaviors, political environment, leadership attributes, management abilities, interpersonal skills, specific performance expectations, and other critical success factors.
Search Strategy: The best insists on developing a comprehensive search strategy developed in concert with the client; they keep key stakeholders abreast throughout the entire process. Typically, consultants target individuals who are obvious candidates, those who are second in command, as well as providers and consultants to the space, to identify candidates who may be hidden and or unknown to the search community and bring the best possible talent to the table.
Opportunity Positioning: Establish a clear and compelling statement. Why successful, high performing A Players would consider a change. There must be a story to tell and a compelling argument that would cause a reasonable human being to make the move they are suggesting. This is a part of the Search Specification and integral to good telephone, email, and face to face marketing of the opportunity by a search consultant.
Company Positioning: All organizations have an employment brand. As a part of the Search Specification, the company positioning should include the most salient and current elements of the company’s story, mission, and objectives, as well as why the company is a great place to work. This should be a current and compelling description, not just cut and pasted off the company’s website.
Position Description: As a part of the Search Specification, the position or job description is the least complicated part of the process. This information is all you usually read – a necessity for sure – but this description alone is inadequate as a comprehensive search specification.
Performance Expectations: Focus on the doing, not just the having. Defining success, and a focus on four or five key deliverables complete with specifics and timetables can do wonders to narrow the laser when zeroing in on the very best candidates for your specific leadership role. This is included in the Search Speciation.
Candidate Assessment: Assess FIT in and for a specific client, opportunity, culture and set of performance expectations. The consultant should articulate specifically what will be done to assess and ensure fit. Cultural alignment and an ability to deliver on specific performance objectives are non-negotiables.
References: Most references, which are done on one candidate, just in advance of an offer are utterly worthless. Great search consultants conduct serious due diligence before presenting finalist candidates. Reference audits can be designed to screen out B and C players and reveal each finalist A player’s strengths and weaknesses. These audits should be conducted as part of discovery to fine tune the elements of fit; and to provide clients with a meaningful management tool to assist in onboarding.
Candidate Sourcing: The best knows how to dig deep. They conduct fresh, original, and targeted research for each assignment including in-depth direct sourcing of target companies, as well as organizational charts/mapping of competitive entities. This is an out of the ordinary approach to sourcing fresh candidates. Not depending on a Rolodex or database and missing potential prospects is a hallmark of great consultants.
Initial Candidate Contact, Recruiting & Candidate Development: They work the list in its entirety, uncovering, and exploring every possible lead. Senior consultants should make all initial contacts and develop relationships with candidates destined to make the final cut. The best resists the temptation to delegate these critical phone calls to junior level consultants or researchers. Partner level execution makes a big difference.
Screen for High Performing “A” Players: When a candidate appears qualified and interested in the opportunity, the best have a very direct conversation to set expectations and screen out B and C players, as well as those who might have disingenuous intentions. Each interested and qualified candidate is advised that they will go through a rigorous assessment process that will culminate with candidate arranged reference assessments and a thorough background check.
While there is more to a high-quality search than the components above, these are the must haves in order to ensure a good outcome. The importance of a rigorous process cannot be understated. The executive hiring process globally is largely broken and the “stick rate” at the two-year mark is dismal. Our research indicates that the failure rate among executive hires is almost 50%, and some sources say it is even higher.
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. According to the Harvard Business Review, two out of five new CEOs fail in their first 18 months on the job. Further research shows the same pattern globally. CEOs and senior executives are routinely hired on the basis of their drive, IQ, and resume. They’re fired for lack of emotional intelligence, poor people decisions, cluelessness and being totally out of touch with their workforces and customers. Excerpts from the Chief Executive Magazine article titled “What Causes CEO Failure”.
The purpose of all these blog posts is to share what we’re learning about building cultures of peak performance. In future posts, we’ll dig further into how rule breakers of every variety are building companies that dominate their sectors. These are organizations that practice the nine principles we’ve observed in organizations that outperform their peers: Unified Leadership, Disciplined Hiring, Leading with Purpose, Stakeholder Engagement, Cost Leadership, Measuring Everything that Matters, Customer Experience, Clarity in Everything and Staying Ahead of the Curve. If you’d like to talk about how we can help your organization, or if you’d like a thought partner, please give us a call.
Consultants in Retained Search, Interim Executives & Leadership Advisors