According to the association of executive search consultants Thorndike Deland established the first executive search firm in 1926, focusing on retail executives. He charged clients a retainer and 5% of the first year’s salary of the executive.
Top management consulting firms like McKinsey and Booz, Allen & Hamilton would also provide executive search services until conflicts of interests became an issue and certain partners left the firm to establish executive search business.
The first one was Sid Boyden who left Booz, Allen & Hamilton and launched a company named after himself in 1946. Booz, Allen & Hamilton continued offering executive search until 1980.
Ward Howell left McKinsey to establish his own firm in 1951 and consequently McKinsey exited the business. For some reason he also decided to name the company after himself.
Gardner Heidrick and John Struggles were also Booz, Allen & Hamilton alumnus; they established their executive search practice in 1953. Curiously the new firm was named Heidrick & Struggles.
Spencer Stuart used to work for Heidrick and Struggles for merely one year in 1955, then he left and the year Elvis Presley, Johnny Cash, Jerry Lee Lewis and Carl Perkins were jamming spontaneously in one studio, he established his own firm, calling it quite surprisingly Spencer Stuart. It is interesting to note that he was concerned that he had entered the business too late; he considered the space already too crowded back then!
Egon Zehnder left Spencer Stuart and launched the firm bearing his name in Switzerland in 1964.
Lester Korn and Richard Ferry left accounting careers behind to get into executives search in 1969, and Russell Reynolds used to be a commercial banker at J.P. Morgan – he also launched in 1969, when the American charts were dominated by Led Zeppelin, Neil Diamond, the Beatles and the Jackson 5 and when Neil Armstrong took a casual walk on the moon – whose name luckily remained “the Moon” – perhaps because Armstrong was not a consultant.
A lot of things changed between 1926 and 1946, between 1946 and 1969 and between 1969 and 1989 and of course since then: new industries emerged, new business models appeared, management theories came and go, the average tenure of a CEO had decreased to 2-5 years, depending on the industry and the geography, market leadership means different things today than 60 years ago, success factors for companies has changed, transparency has increased, the public’s perception about companies and corporate life has changed, entrepreneurship has evolved considerably, the role of board of directors has changed dramatically, how we work and communicate has changed, careers have changed, change itself has come to mean something entirely different than 40 years ago.
Only one thing has not changed much at all is executive search. Some firms have added more services perhaps to counter balance the decline in their search business but they didn’t change the search business itself.
Well, it seems something has to change!
The mistakes are getting more expensive: appointing the wrong CEO may cause the demise of companies employing 100s of thousands of people, the elimination of a large chunk of people’s retirement funds, it may affect the economy of countries and regions and it may even cause global financial crisis.
Just to stick to less complex examples it’s enough to think about the recent mistakes HP’s board made with CEO decisions, including how they ended up hiring Leo Apotheker, Yahoo!’s years of inability to appoint the right CEO, Nokia’s and RIM’s ongoing story and the list continues.
Boards in some cases are absolutely clueless, inert or indifferent when it comes to appointments. They should be responsible. The old paradigms are no longer valid. Today it should be clear to everybody that we operate in constant crisis; to assume otherwise is a fatal mistake. But first things first! ….to be continued
Celebrities were created by the herd; they do everything possible to comply with the expectations of the herd and the herd celebrates their success – this is the de facto definition of success.The most successful celebrities manage to exceed expectations – and this is not a good thing!
The expectations are well defined and clear: how to dress, how to speak and how to think.
It would be a waste of time to list all herd / celebrity segments, so we just pick 3 to make the point:
For anyone who tend to form their opinion independently, it is obvious that these are not real segments since the herd behind them is the same.
Personal branding consultants help the wannabe celebrities comply, teaching them repulsive methods to exceed, which could be summed up by the following: be louder, go farther (down the herd lane), go faster. They are teaching other stuff too, like being passionate about all this, that telling everybody that you’re the greatest is not distasteful but shows confidence, that wanting what others what even more is what makes you unique and similar non-sense.
Now these branding consultants and similar bottom feeders, like “introversion experts”, behavioral coaches and others, are following of course their own advice and call themselves authorities and gurus(!) every chance they get, do speeches, pull together a book or two on the collective wisdom, quoting the quotes of other celebrities and pop a champagne at the award ceremonies of their respective fields together with their herd, celebrating each other.
How about stepping out of the herd, wash off the nauseating smell and start again on true fundamentals?
People usually polarize between “what should be” and “what is“. Their position on this scale depicts very distinct types.
The “what’s possible” usually becomes a matter of opinion but -quite logically- the closer it is to “what is”, the more likely it is that the possibility may become an actuality… but: closer to whose reality…?
What I describe as intellectual cowardice is when people who know better (have the experience, have seen proof, have the intellectual capacity to recognize and embrace potentials) decide to take the comfortable position of the lowest common denominator, the “what is”, and against all they know, they don’t sway from it one inch. Their motivation is typically career related: it’s safe to be the guy who challenges potentials or the potential. Not only is this motivation not heroic, very often it is also ill-willed and cynical in that it makes it look like that the “what should be guy” doesn’t even know what’s going on; and of course nothing is farther from the truth.
This clip, depicting a hypothetical scenario of Nikola Tesla (what should be) pitching to VCs (what is), provides a great example for all this. While the clip is incredibly funny, it’s not an exaggeration and it’s a perfect snapshot of what I mean by cowardice and often even sabotage with or without arrogance as a style element. http://bit.ly/19OBSEn .
In highly bureaucratic organizations you can’t make a career by being the “what should be guy”; such guys typically get to play only when it’s already too late.
In highly entrepreneurial environments the “what should be” guys should lead. In an ideal world both the VCs and the founders are of this breed!; and the way they lead is very different from how the “what is guys” lead.
Otherwise do any of the following and watch the dynamics change:
- don’t invite “what is guys” to meetings about strategy
- make rules, like: you’re not allowed to make statements about things everybody in the group is aware of (like what is the budget (e.g. we don’t have a budget for that), what day it is (e.g. we are not there yet), basic math (e.g. that’s gonna cost us), etc.)
- put “what is guys” in problem solving or solution development positions
The lifesytle expat is a sign of times, their existence is a logical necessity; they are the byproducts of flawed views and the corresponding thinking that are prevalent in the corporate world, which promotes arrogance and infantile behavior and necessarily divides employees into cynics and idiots.
The lifestyle expat may be best described by one word: entitlement.
They are typically sent from mature markets to developing ones to “get things done”, to “teach and educate those people”, to “achieve” and what in light of all this seems to be paradoxical: to gain international experience. Not all expats are lifestyle expats but we won’t speak here about the others.
Six simple ways to recognize the lifestyle expat:
- She’s doing the company a favor. The ones that are not that bright are convinced of this, the cynical players are just good at playing this card smart.
- He has demands or non-negotiables: these are typically stuff he could not get at HQ in his “normal job”. A good example could be vacation days for North American expats (a scarcity in their home markets), job for the spouse, paid (elite) school for kids, the best house money (not budget!) can buy – and similar. For lifestyle expats non-negotiables are a vanity question (a “question of principle” as they put it) and they fight for them vehemently.
- She is not really participating, let alone rocking the boat. She typically lets her team working overtime while she’s leaving precisely at 5pm (work/life balance), takes her vacations when the going gets tough (on short notice if necessary), etc. She often counterbalances this with a great smile and a smooth personality.
- No ideas, no strategies. He’s much happier talking about his career plans. This typically boils down to becoming a general manager and a regional CEO. The career usually stops at the GM level, they rarely become regional CEOs and never become CEOs of multinationals….and this is of course a good thing.
- When it becomes clear that there is no “room for growth”, or when the lifestyle is not likely to be financed by the company anymore she moves on to another company. The plan is typically to become a GM by the time he’s 35…then by the time he’s 45, etc. Some of them are out of there way before the notice period is up… like they had never even been there.
- Never learns a local language, interacts mostly with expats and locals who share “his views”. I link here some more relevant stuff to this from my friend Eric Bilginoglu, who has a unique perspective on the issue.
…and you can probably list many more.
Someone dealing with these guys often summed up their performance like this: nice guys, great at building relationships, perfect presentations, structured input, absolutely no results.
Top 3 reasons why lifestyle expats exist:
1. There is no leadership in the organization: the boss of the lifestyle expat may very well be another lifestyle expat, a Like-minded Local or just a weak manager
2. The company’s “culture” actually favors the lifestyle expat; this means that it’s full of incompetent super stars. Since in this case the company is not performing well (most of the good guys have already left and the cynical and the stupid constitute the majority) a CEO change and a major organizational change should be expected – or the company’s demise.
3. The organization is going through massive change and they haven’t got around firing them yet (see also point 1)
If you have lifestyle expats reporting to you,
- you MUST start showing leadership NOW
- if you haven’t yet, you must realize that business is NOT as usual: you have a CRISIS on your hand and you must manage accordingly
- you MUST re-think how you approach and manage change
- you should start looking for another job
Excerpt from the upcoming book: The funny business of executive search
Search guys’ networks maybe large but it doesn’t mean that they are valuable for clients or potential candidates. This is logical since agents benefit more from their network than their network from them; and when we look at search guys specifically, who are after people not looking for new jobs, they provide actual value only to current clients (even for those ideally NOT through their network) and to a lesser degree to shortlisted candidates: percentage wise – in proportion to their total network– this is close to zero. Even if we consider potential benefits to their network the ratio is not much better for the same reasons.
Interestingly neither the clients nor the candidates act as if they were aware of this. It happens often that clients call search guys saying: here’s a great guy do you have something for him? Or vice versa: candidates often check in with search firms when they are looking for jobs. It’s not a 100% useless to do this but realistically there is not much point in it. Unless they have special arrangements with clients to bring them top candidates without a formal search process in place, the search guys are not that motivated to make moves: they don’t want to jeopardize coming across as desperate or “creative”. There are “influential” search guys out there who can call up a client and say: hire this guy! In some cases they can do this because they put the guys they call in their position the same way, sometimes for other reasons – the number of these players are not substantial and these practices are of course highly questionable from an ethical point of view.
Search guys are of course selling heavily the size of their network. This is typically a sign of the clients and/or the search guys being clueless. People hiring search firms often tell me: I spoke with this guy and I couldn’t finish explaining what the situation was, he kept on interrupting by telling me who he knows who maybe relevant…
Strongly related to the size of the network is when local search guys sell the “I know everybody” proposition. The disadvantage of the search guy “knowing everybody” is that the chance that he will subconsciously screen out candidates before even starting the search is big. A search guy who is not that tied in to the social fabric in a particular location and performs a thorough research will go in without any preconceived notions and talks even to candidates that others may not even think about approaching for whatever reason.
Another thing about this proposition is that people tend to associate knowing everybody with being influential. Knowing everybody often means that they spoke once in a conference, somebody was a candidate once or they both member of the same chamber of commerce, attend the same networking events, etc. Some search guys throw BBQs, have lunch and drinks with somebody every day, etc. None of this means influence. Even if both the search guy and a high profile candidate are members of an exclusive club where members tend to deal mostly “insiders”, the only advantage from all this for the client is that the candidate will be more willing to talk about their role. It absolutely does not mean that the candidate will be influenced by the search guy when considering the opportunity- provided that he really is of high caliber. There are managers who just recently entered high enough positions to get on the search guys’ radar and they often make the mistake to get into discussions and even go to client interviews to please the search guys all the while knowing that they will not take the job. This normally happens when it comes to top tier search firms and the candidates typically think this maybe a good way to build “relationships”. Most candidates sooner than later realize that this is a big mistake and their reputation will become stronger when they deal openly and say NO right off the bat when they see that there is no point in continuing.
Only influential people (the ones high caliber people tend to call before making big decisions) have valuable networks and the size of the network obviously has no co-relation to its value. By being professional agents with one single weapon (similarly to real estate agents and similar), search guys’ sphere of influence is highly limited and so is the value of their network.
Excerpt from the upcoming book: the Funny business of executive search
According to the association of executive search firms the global search business is about $7B. This maybe less than Google’s payroll. Small of course does not mean insignificant or unimportant. In fact: the more elitist a business is the smaller it should remain – at least when it comes to the number of players. Based purely on numbers, if a $7B industry disappeared nobody would notice.
How companies would hire strategically important managers without the search business is a different question altogether. Since search really wants to be perceived as a consulting business, I asked a few people this question a little differently: what would happen if the consulting business disappeared. Two types of answers emerged:
- Great: managers would grow balls
- It would mean demise
The first consulting companies emerged almost immediately after the first private corporations had been registered (from the mid 1800’s), . This fact sheds light to something significant:
business is a mechanical organization.
It means it’s been put together to achieve an artificial goal. I prefer to say: an inorganic goal. It is not by accident that the registered private corporation came to the scene right after the industrial revolution. The registered private company was perhaps the first completely mechanical organization in the history of mankind.
Of course it can’t survive without help! In fact: it needs all the help it can get not to disintegrate. There is no organic force that keeps it together. This is not a great exaggeration! There is of course always a little organicity in any organization; it’s unavoidable, since we are talking about people, right?
So back to the question of what would happen if the search business all of a sudden disappeared: It may mean simply one less mechanical process and a little more organicity. Growing balls is something organic; leadership is definitely organic: there is no such thing as business leadership!
Let’s look at some hypothetical scenarios in the world of business without executive search:
- Advertising would become more intense and diverse.
- Passive candidates would not be approached or would be approached significantly less often; this means that
- The overall quality of candidates would drop; this means two things:
- Lower business performance AND/OR
- More focus on hiring for potential, more training, mentoring, internal promotions
- The significance of business clubs would increase
- Boards’ role and composition would change significantly. At the very minimum, boards would take MUCH MORE responsibility for recruiting and retaining the CEO, but also for all other areas (strategy, compensation, etc.). They would also have more skin in the game.
- The CEO would become much more difficult to replace but it would also be more difficult for him to change jobs.
- The team dynamics in top management would change significantly.
- Shareholder’s expectations would change
- HR would change
COMMENTS ARE WELCOME!
image source: http://www.flickr.com/people/polubeda/
We learn stuff: in schools, courses, conferences, from reading and conversations. Then we repeat.
This is bad enough but it gets worse: whoever repeats stuff louder is considered to be better. If on top of this all somebody is also more aggressive, she’s often considered to be a “leader” – most careers have been built on this recipe.
Authentic knowledge is quiet. It is not acquired, it is created; and since it is more than the individual, it calls for humbleness!
Powerful people strive to break the bondage of their individuality. They don’t need anybody’s recognition! This kind of independence is the only vantage point for control: controlling impulses, control to stay in context and control to think about timing when the time pressure is big; control for listening.
No control, no power. “Me, me, me”, “I did this”, “My idea” and similar was invented by people with no inner power and the weak is almost always loud and they are always overcompensating.
To do big things we need to become quieter. Let’s leave loudmouthing for….others.
Stephen Bates is the managing director of Blackberry Europe.
He’s making a name for himself for acting at interviews like a…how to say it correctly politically…let’s just say like somebody without any authority at all.
If you haven’t haven’t seen any of these interviews yet, the bottom line is that the reporter asks him a semi-tough question, like why was the launch of the blackberry 10 delayed and he talks about completely different stuff – with a straight face. Here’s an example:
People are talking about this phenomena like this is his “PR strategy” ….NOT LISTENING.
Reminds me of the movie with Peter Sellers, Being there. It’s about a gardener with less than average intellect who follows the same strategy as Bates and people tend to hear in his answers (all garden talk) whatever they want to hear. This way he makes his way up to the top. Bates is already the managing director of Europe. Continuing acting like the Gardener may bring him down.
UNLESS: this is the blackberry way: don’t think just do what you’re told! Or worse yet: WE DON’T LISTEN TO THEM (to the market, to customers), WE ACT DEAF AND JUST DO OUR THING!
In this case Bates embodies the company culture and we (customers, employees and investors) must ask ourselves: is this approach sustainable in one of the most innovative fields in business?
I am definitely not buying what this guy is selling!
When BNP Paribas terminated withdrawals from three hedge funds citing “a complete evaporation of liquidity” on August 7th, 2007, it didn’t have the slightest effect on employees anywhere. Business was booming and companies were recording record performance.
Things were different in September, 2008: higher level employees like CEOs, general managers, managing directors and others in strategic roles were faced with questions they never had to answer before both from their subordinates and their boards. But interestingly in some industries business continued for a few months like nothing had happened. I remember one confident manager in the Czech Republic telling me in November: I was in Pandorf (a small village in Austria with a big outlet plaza) over the weekend; it was packed. There is no crisis here! His pipeline was also full. Within 2 weeks orders got cancelled, all of as sudden there was no pipeline and Pandorf lost its prestige as a reliable economic indicator.
Now we have the first 3rd of Q1 in 2013 behind us and a lot of those managers from 4 years ago have “consulting” in their linkedin profile which is another word for being unemployed (if they changed their linkedin profile at all) - some of them for as long as 2 years already! They have to touch their savings now. Most of them never faced this situation before: times have changed dramatically.
The common denominator between most CEOs and waiters for example is that they are both employees. The difference is that it’s much easier for a waiter to find another job and they feel less threatened if they must change their lifestyle.
I have conversations with ex managers on a daily basis. Their “strategy” for survival is surprisingly similar:
- find consulting gigs from previous employers AND
- continue “looking” for a job AND
- maybe start a company
None of them are working.
The first two don’t work because despite all evidence to the contrary, they still believe in a strange illusion: if you reach the top of a career (meaning that you become a C guy, a gm, an md, whatever) somehow you’re in control. Now that they are out of the system they still WANT to believe this: the title has become their identity. This is especially bad in Europe where failure is frowned upon and they consider THEMSELVES as failures, loosing confidence and eventually getting caught up in a vicious circle.
The 3rd one doesn’t work simply because you can’t start and run a company with the mentality of an employee.
They are paralyzed and feel that the only thing they can do is to go from interview to interview, waiting for something to happen; the whole thing reminds me of how a tiger that was born in captivity desperately wants to go back to the cage when he’s been released into his natural habitat.
Changing our own mentality is unbelievably tough; as tough as changing our lives. What’s been happening since 2008 is not a shakeout, it’s a cleansing fire that burns up our illusions about employment, careers and entrepreneurship. I thought it maybe worth making a short list of the most common illusions that hold managers back from moving forward:
- Nobody is born as a corporate function! This is tough to believe, but it’s true. Nobody is born as a payroll administrator, a marketing manager, a controller, an IT guy, etc. You won’t ever be fulfilled even if you get a certificate that proves that officially you are the world’s BEST controller!
- There is no such thing as corporate Darwinism: the natural unfolding of life does NOT happen according to corporate hierarchies! The VP is not a superior life form to a manager in an evolutionary ladder: if you’re a VP and believe this, Darwinism may catch up with you in the end after all, and you may go extinct. Also: an employee doesn’t have more prestige than an entrepreneur and vice versa.
- Prestige doesn’t come from a position or anything quantitative like the money you make, the car you drive, the home you live in and similar. There is only one thing that determines your prestige: the impact you make on others. Naturally the more authentic you are, the bigger the impact you can make.
- Authenticity doesn’t mean read/look/listen and repeat. The least authentic guys are probably those strangely upbeat and annoyingly loud evangelists who are spreading the “good news” to anybody who listens and also to those who don’t. Authenticity is knowing who you are and looking at everything through this lens, doing things that correspond with your identity and simply not doing things that don’t. It’s always quiet, intelligent and considerate and it is not concerned with rewards or risks.
Not being employed is a great chance to start living and working authentically. Wake up and don’t waste this unique chance by holding on to destructive illusions for years. You used to have a nice cushy job, great! It’s like your first love that will never come back. You gotta move on!
One last note: if you are employed and miserable, here’s a list of reasons from James Altucher on why to quit your job right now. YOU MUST READ THIS not for getting motivation but to get real:
There is still a lot of discussion going on about our constant access to information and if it makes us smarter or stupider. I think raising the question like this completely misses the point. Everybody knows that access to data or information has nothing to do with being smart or stupid. The confusion about this issue comes from systematically disregarding world views as the most important factor. This of course raises tons of very interesting questions like the relationship between the EXISTENCE of data and awareness for example, but there is no room to address these here in detail.
To keep things interesting and not to insult anybody’s intelligence I won’t even elaborate on the world views themselves; I only resort to listing some important aspects to consider.
BY ITSELF data NEVER becomes information, information NEVER becomes knowledge, and knowledge NEVER becomes wisdom!
In a hierarchy, the lower levels depend on the higher, not the other way around.
Data MAY become information, information MAY become knowledge and knowledge MAY become wisdom (wisdom as purpose is often mentioned but is rarely actually considered or addressed!)
The key is the observer (the man, the player, the guy in charge)!
If the observer is wise, data and wisdom are directly connected through awareness. The significance of quantity is minimal; in other words a wise guy (forget the Sopranos!) doesn’t need an iPad!
If the observer actively knows (knowledgeable would not be an appropriate expression), data and knowledge are connected.
If the observer is well informed, data and information is connected.
If the observer has absolutely no awareness of anything, give him all the access to all the data: he’ll use his iPhone as a fashion accessory: goes well both with suits and turtlenecks.
From the lower point of view: knowledge is gained from wisdom, information from knowledge and data from information!
Without knowledge, data will never become information and without wisdom (intelligence in a supra rational sense) there is nothing: no data, no information, no knowledge!
More explicitly, without QUALITATIVE, essential leadership:
Wisdom cannot be achieved by knowledge management (itself an absurd idea).
Knowledge cannot be achieved by information management.
Information cannot be gained from data management.
Most importantly: the less wisdom is present, the more data proliferates.
To deny this automatically means that we say that there is no wisdom without data; and this is a question of world views!
This has of course far reaching practical implications in all areas of business; it’s enough to think about “knowledge management”, the once again popular big data question, decision making, risk management, organizational development, marketing…pretty much all business functions + leadership, which is of course NOT a business function!
So: looking at the size of the mobile and enterprise software industries how many wise guys do you think there are out there?