Executive Search#: Growing, declining or staying the same?

What does a industry do when it doesn't know the answer to its own questions? It puts out reports like the ones that surfaced earlier this week from HSZ Media http://www.hszmedia.com/dailynews/recruiting/story.asp?param=5E5A58565A, and related report from the Association of Executive Search Consultants (AESC.) According to HSZ run by Christopher Hunt and Scott Scanlon, executive search is growing in North America but declining globally. The AESC report says declines in North America aren't as great. Confusing to say the least and indicative of continuing flux.

Neither HSZ nor AESC enjoys a lot of trust and confidence both for different reasons not worth unpacking right now. Top recruiters -- not to be confused with those professionally managing large firms -- don't put a lot of stock in these sources. As recently as last year, long-time AESC head Peter Felix was predicting an upturn in search once the economy settled down, which may prove to be true in the next millennium despite evidence that large companies have moved a lot of the traditional function in-house. Here's a previous take on that issue: http://povblogger.blogspot.com/2013/02/executive-search-disrupted-vs-disrupters.html

Image courtesy of freedigitalphotos.net

Back to the "six inches in front of your nose" to borrow a line from Al Pacino in "Any Given Sunday." Look for more disruption in the short run. Independent firms are enjoying niche life while the top of the house at the large firms are largely hitting their numbers. The only exception where it doesn't add up seems to be Heidrick & Struggles, which hasn't seen any significant top-line performance since the days leading up to the Great Recession. Nearly every other major firm, excluding Russell Reynolds, which re-defines outlier, has solidified their position in the marketplace.

Perhaps most importantly, large companies are starting to accept the slow dial back to talent as hiring improves. Granted it's happening at a snail's pace. Many are still holding on, fighting the pendulum tooth and nail mainly by not paying more for lateral hires. The smart ones are getting ahead of this trend and will ultimately dictate where the current headwinds ultimately turn. Or at least that's what the theory of client-driven business holds. Changing cycles usually portend changes in management. Then again, based on stagnant executive turnover numbers over the past few years, even that normal search truth has failed to hold up. Could the next stretch re-establish that age old theory?

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#Final Four/Pitino: "Life is cyclical"

It's hard not to pay attention when Rick "Fellowship of the Miserable" Pitino speaks up on national TV. Here's a guy who has had it all and also has had it all come crushing down. Pitino is not a statesman on par with say Coach K at Duke or the late John Wooden at UCLA, and he doesn't have as many victories with a single school as Syracuse's Jim Boeheim who tried out as a junior and never left the program. Pitino's brash edge, however, can always captivate an audience and did so Saturday night after his current squad, the Louisville Cardinals beat Wichita State to advance to tonight's final here in Atlanta.

CBS announcer Jim Nantz introduced Pitino by listing several recent accolades, including coming in as the tournament favorite and #1 seed, anticipated induction into the Hall of Fame and last Saturday's win at a qualifying race for the Kentucky Derby by Goldencents, a horse that Pitino co-owns. When asked if he thought he was living right, Pitino smiled and said, "Well, life is cyclical." He then went on to talk about his team and anticipating playing for a second national championship as a head coach. If Pitino and Louisville are victorious tonight, it will mark the first time a major college coach has won titles with different programs.

For those without background on Pitino, he won his first championship while at the University of Kentucky and then left to coach the Boston Celtics in the NBA where he preceded to fail if you can call it that in context. Pitino is definitely in the "show me" category and pursues his craft with passion, flamboyance and brashness that have at times made him a target. One of Pitino's coaching progenies, Billy Donovan who played for Pitino at Providence College, went on to lead the University of Florida to two national titles. Other than Coach K at Duke, who trained under Bobby Knight, no other mentor/mentee relationship can claim similar success.

All the previously mentioned have great edge, which for you Welchian leadership students, will be recalled as a key CEO leadership quality back in the late 90s, early 2000s. Most of the great coaches tend to have edge, or that ability to rally the troops or go for the jugular when the situation warrants. Only time will tell if that quality remains a business leadership quintessential.

Life, business and everything in between are indeed cyclical. Leaders take responsibility; losers make excuses. It takes a redemptive man to speak truth on national TV -- or so it would appear.

 

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Hash -- don't rehash

Note: This is a monthly letter originally distributed to clients and colleagues.

March 27, 2013

Dear Clients and Colleagues:

Now that a new Pope has been chosen, it's time to return to leadership life as we know it.

There's only one slight catch: Nothing is new or normal anymore. Except for stuff on-line, which seems to be where a lot of people are spending an inordinate amount of time. Many conversations now have "on-line and off line" components as if lines can be distinguished anymore. Most objective studies indicate business leaders remain skittish about using social media, while some have fully embraced outlets such as blogging, Twitter, Facebook (for execs. who need a date!) and for the adventurous set, YouTube. A client last year asked whether he should have a Wikipedia entry. Sigh.

Please consider these rules of order when attempting digital engagement:

1.) Hash -- don't rehash. Twitter's niftiest invention, hash tags, have taken off in popularity both among advertisers and consumers alike. It's a way to attach content to big breaking news stories, such as helpful content for storm relief to the other extreme: Contestants competing on reality shows such as "American Idol" and "Dancing with the Stars." Hash tags are cool, in other words, while rehashing old lengthy content already contained elsewhere is uncool.

The Garlington Report (TGR)

2.) Cut down on length. This letter is already too long for social media. Think quick snapshots, not lengthy dissertations. Note to self: Take own advice.

3.) Don't copy what someone else is doing unless of course it works then all bets are off. Examples: Samsung's Galaxy vs. the iPhone 5 is the biggest marketing example although that's not a true digital communications example. Think of your favorite on-line personality whose brand image has been invented in the ether. Matt Drudge pops to mind as does a new entry to the branding category, Dan Schawbel, whose story runs counter to a lot of the typical millennials: http://business.time.com/2011/06/15/how-i-did-it-dan-schawbel-on-becoming-a-personal-branding-expert/

4.) It's not all about you despite evidence to contrary. For those who think saying something stupid might spell an end to their careers, digital media probably isn't for you anyway. Give up the fantasy and focus on core competencies. The words, "I" and "me" should appear at a minimum in any written or spoken correspondence. Don't be Dell or else you'll become an even bigger target; see related post here: http://povblogger.blogspot.com/2013/02/dell-great-deal-horrible-grammar.html

5.) Pay an editor or writer if you can't meet desired standard. This is not intended as a self serving message but could be perceived that way. There are far too many daily examples of bad writing and communication not to list this rule. Just because it's on-line doesn't provide license to be non-literate. Review the daily installment. Hint: It's somewhere in your email right now.

6.) Know thy audience more than ever before. Quit obsessing over message. This is an age old rule that continues to be relevant with a small update. There are simply too many messages a day for Marshall McLuhan's rule, "the medium is the message" not to carry weight. The newest improvement focuses on being the message vs. carrying one. That's a tall order for most business leaders but not figures such as Howard Shultz, Jack Bogle, the Vanguard founder and Neville Isdell, the retired chairman of The Coca-Cola Company, which has been spelled out for the obsessed purists who yearn for the secret formula called Coke business. By the way, being the message requires a cogent POV but that's beside the point.

7.) Focus on the present and what it means looking to the future. Leave the past in the past. This may seem like traditional grieving advice, but it also applies in digital communication. No one, repeat no one, wants to revisit crappy economic twists and turns of the past five years. They want to hear about what it means today and what we can, dare say the word, hope for tomorrow.

Last but most importantly and deserving of an entirely separate instructional, the old adage "know yourself and your story" now requires reaching farther: Know how your story fits into a larger, more compelling narrative, or the larger story for true believers. If you don't know how to tell or construct a narrative then please do yourself a favor and re-read 5.)

 

Thanks for making it this far. Happy Holy Week,

JG

Jeremy C. Garlington
Point of View LLC
Five Concourse Pkwy./Suite 2850
Atlanta, GA, 30328
Phone: 404-606-0637
Email: jeremy.garlington@hotmail.com
Web log: "The Garlington Report (TGR)" www.povblogger.blogspot.com

Executive Search: The disrupted vs. the disrupters

Today's 4Q earnings/2012 report by Heidrick & Struggles reveals what's been known for quite some time: Executive search is on a downward path -- or spiral if you prefer dramatic effect. What remains to be seen is where this downward trajectory eventually lands.

The executive search industry now comprises two groups: The disrupted or large publicly held firms that are trying to change and the disrupters, or smaller and independent firms that love to tweak the big way of doing things. The large publicly held firms, Heidrick and Korn Ferry International, continue to show why being public makes little sense while the privately held firms, Spencer Stuart and Russell Reynolds, go about their business quietly under the radar. To those close to the wider picture, the disruption is masked by across the board growth in the number of executive searches such as what Peter Felix at the Association of Executive Search Consultants likes to cite in expensive reports.

The big firm way is no longer as big as it once was. Nor is the executive search function as standard as it once was. The pie has shrunk, and in the overall picture of recruiting, executive search is declining at a pretty rapid pace with the growth of LinkedIn and more corporations pulling searches -- and recruiters -- in house. Major business media have reported at length on this trend starting with the Wall Street Journal and then Bloomberg Business Week.

One side note: As a large firm recruiter puts it, the movement to in-house recruiting is nothing new. Corporation A, let's use the Coca-Cola Company as an example, loves to publicly boast about how they're bringing the function in-house to reduce expenses. Then whoever gets the big title/position turns around and runs the expenses right back up only to be questioned later with, "why are we getting such bad or mediocre candidates?" Attention then shifts back to outsourced service provider and the cycle lathers, rinses and repeats.

The lone exception to the shrinking pie continues to be where brand value resides at the Top or CEO and board-level. Every major Fortune 500 company facing scrutiny has used one of the Big Five firms, and until a major company board publicly states they're not going to use an executive search firm then it's business as usual. (Note: Boards don't generally issue those types of statements.)

Granted the actual work is different now. A few years, Spencer Stuart started re-framing CEO turnover as "internal and external transition." This simply reflects how Fortune 500 CEOs have remained largely intact reversing an earlier decade's fascination with churning and burning the position. Boards continue to perpetuate the status quo despite growing investor pressure. The old days when a major company conducted a major CEO search in the dark are now officially over and have been for some time. Throw in all the other services that are growing by leaps and bounds, coaching, on-line assessments, culture shaping, succession planning, etc. and the mix gets pretty, well, mixed up pretty fast.

A CEO of a firm asked last year, "where do you think this industry ends up?" Who knows, hard to tell. Here's the only certainty that you can take to the bank: The most valuable service performed at the top of the house -- assessing, vetting and informing -- selection of C- and board-level leadership, will not only survive but will prosper in a different form. There's simply too much at stake for these all important decisions not to be done fully and completely with the help of objective third-party advice. Especially now with risk aversion at an all-time high and boards scared to death they're going to make a big public mistake.

The problem is that the value of executive search was sold out long ago in the name of money and profits, which are now dwindling thanks to disruptive change that only comes around once in a generation. Unfortunately or fortunately depending on your view, disruptive change is now the name of the game. The individuals and firms who adapt the best to this dynamic will lead the industry forward; the ones who don't will die or move on to other platforms. Everyone will ultimately get stronger, assuming you're a free market capitalist. If you're not, well, the executive leadership marketplace isn't for you.

Dell: Great deal, bad memo form

The Wall Street Journal served up a treat today by posting the Michael Dell deal announcement memo: http://blogs.wsj.com/deals/2013/02/05/michael-dell-to-staff-exciting-new-chapter/.

Read the first line..."this is a great deal for me and..." Aside from the obvious emphasis on self, more felicitous grammarians would instruct putting 'me' after the other party, which in this case was private equity firm, Silver Lake. But hey, when you're the founder, namesake and chief equity holder who just orchestrated a billion dollar deal that removes public scrutiny then you can say and do whatever you want.

Fortunately, or unfortunately based on your point of view, obsession with self dominates leadership ranks. Dell makes a good case for Me, maybe the best anyone could make in the same context. It's still bad form, however, not to recognize others first who helped make the deal possible. Funny how there was no mention of Microsoft, which kicked in a couple $$$billion. Should be interesting to see where this deal goes from here.

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No risk, no reward beyond norm

Editor's Note: This is a client letter originally distributed earlier this month.

January 15, 2013


Dear Clients and Colleagues:

By now Christmas is a distant memory, resolutions are either taking hold or fading and the fiscal cliff has been averted. At least for the time being or until the country's so called leaders re-introduce the next crisis to leave unsolved. That's not political statement; it's fact.

Which brings us to another reality that has rendered big business' credibility emptier in the ongoing melodrama called the zero growth economy, or ZGE for acronym hounds. Companies and boards seem to have forgotten how to evaluate risk vs. reward. Note evaluate and consider, not manage with all due respect to mid-tier bank presidents. In news cycle after news cycle, we read about uncertainty, fear and the "tepid job recovery" as a four-column Wall Street Journal article recently led off a weekend edition. Big business blames government's inability to get things done that favor them; government blames each other while flying all around the world arguing via cable news feed. The result is nothing generally happens resembling productivity. The newest culprit is GM CEO Dan Akerson who recently said the company can't really look forward until the next 60-day deadline set to deal with the country's fiscal matters has been resolved. This from the top leader of a company that was rescued by the government back during the last crash. Akerson is not alone. Sequestered martinis, anyone?

Back in the real world, businesses and individuals try to adapt and grow. Large amounts of cash line balance sheets yet revenues as a percentage or GDP (pick whatever measure suits) remain relatively unchanged. There are obviously exceptions to this reality so please don't discount the general line for the sake of positive cited examples. Apple's recent introduction of the iPhone 5 and iPad mini, hardly innovations by the company's high standard, are welcomed exceptions from an entrepreneurial point of view. So are other companies who have defied the New Normal tendency to do nothing and evolve into something better. Insert your own favorite example.

Leadership comprises many things, but at the core in this context, it's about knowing when it's time to take risk and then making the decision to take risk. Or not take risk. Despite whatever personal political beliefs you may have, until more risk is taken, rewards will not increase beyond pre-existing self interest. Which means little will change and the status quo will continue. The litany of ongoing excuses for why risk can't be taken no longer hold much validity. The election has been decided, the payroll tax has been eliminated and big companies are paying more than ever for Super Bowl advertising. Surely a few of those same ad buyers could hire a few folks to generate some demand on the streets? Wake up, captains of industry. Step up and unlock the risk vs. reward ratio. That means you, you and you. The size of the risk doesn't have to be large. The marketplace will be a better place if you take the step. Plus you'll actually feel better about having done something vs. remaining on the sidelines, a place that far too many businesses and their leaders have been for the past five years.

To the doomsayers who say nothing will improve, go see the movie, "Lincoln" and adapt your position accordingly. Negativity may focus the mind and heart in the short run, but it can't be sustained in the long run. Or at least not with non-risk averse leadership present.

Thanks for your continuing support,

JG

Jeremy C. Garlington
Point of View, LLC
Five Concourse Pkwy/Suite 2850
Atlanta, GA, 30328
Phone: 404-606-0637
Web: www.pointofviewllc.com
Blog: www.povblogger.blogspot.com

Best news of the New Year

http://finance.yahoo.com/news/el-erian-normal-may-nearing-170758437.html

The coiner of the term, "New Normal", is officially on record that it may be nearing an end. What great news. Guess that means we're back to the Old or Current Normal, which is a welcome sight compared to anything as oxymoronic as putting the term 'new' in front of anything besides maybe life or car. New phone or house just doesn't seem to have the same ring anymore (pun intended.) That may be the New Normal's greatest legacy: Rendering previous joyous experiences empty. Back to normal seems to be everyone's desire these days. Onward and upward!

 

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