This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Recently, a client asked me; “What is the single biggest competitive challenge Quorum Associates faces?” I thought for a moment and then answered, “It is the pervasive negative perception of executive search and the tarnished reputation of the executive search business.”

Candidates tell us they feel treated like commodities and traded for a fee. Line managers frequently comment that search firms rarely have real knowledge about their business, their industry and/or the commercial issues facing their industry or company. What’s more, the person who sells the assignment is often not the person who does the work. Line managers, HR professionals and candidates all perceive a general unwillingness by search consultants, including those from the big firms, to invest the time and energy necessary to really understand the client’s business. As a result, positions are not really as represented and candidates are not as expected. The relationship of trust between clients, candidates and recruiters is damaged.

The feelings of clients and candidates applies to all types of search firms, retained as well as contingent; and all sizes of firms, large brand names and small boutiques. Many of the metrics typically used to evaluate search firms have little bearing on the quality of future service provided. A long list of prior assignments is no guarantee of future performance. Standard selection processes such as beauty parades, preferred provider lists and placement history may be convenient and easy to use, but they are, at best, poor measures of future service quality or assignment success. What should line managers, their HR partners and candidates expect from executive search firms?

The only way to establish trust is for clients and candidates to experience a quality search process. And that requires time, energy and commitment on the part of everyone involved in the process. So how does one identify a quality search process?

A quality search process begins with knowledge about the client and a commitment to client service. This means line managers and HR professionals need to find executive recruiters willing to commit the time and intellectual capital to get to know and understand the client’s business and company. Specifically, they need to find search consultants who will do fresh research on the industry, the manager’s line of business and competitors.

HR professionals should remember that when a recruiter says, “I know the market,” he or she often means, “I know some people in your business.” It does not necessarily mean, “I know and understand your business and the challenges and issues you are facing.” Nor does it mean the consultants are willing and able to obtain the knowledge and understanding required to effectively complete an assignment.

A quality search process requires clarity about what the client really wants and why. In our experience, it takes a number of thoughtful and probing conversations to fully explore the scope of what a client wants from a particular role. This requires both time and effort on the part of the line manager, HR and the search consultant. This is not easy, but it is very important because, to get the search right, you have to get what the client really wants right.

The search consultants must be able to write a document which clearly articulates knowledge of the company, clarity about the position, understanding of the culture of the company and the specific performance expectations of the client. Putting the scope of the role down in writing, allows the line manager and the HR partner to be sure the search firm understands what is needed. It also allows everyone involved in the process to clarify any ambiguity, carefully consider exactly what they expect from a position, and resolve contradictions between the expectations for the role and the specific measures of success. A quality recruiter should be willing and able to do this before the search begins.

HR professionals will know this is done properly when the line manager, as well as everyone else involved in the hiring process, can read the final document and say, “This is exactly what we want and if you bring us someone who fits this document we will hire them.” Potential qualified candidates should react to the document by saying, “I know exactly what they want to do, why they want to do it, what it takes to do the job and how performance will be measured. This document is clear and specific.”

Most clients and candidates experience the process of executive search as bumpy and chaotic, which leaves everyone feeling uncomfortable. Many recruiters stumble from candidate to candidate, working their existing network of contacts or some internal database. When these efforts lead to dead ends, the search grinds to a halt. Both clients and candidates are left to question the value provided by the recruiter.

Quality search consultants understand that a strong search process has structure for the search firm and transparency for the client. It allows the client-both line manager and HR professional-to have timely input, provide valuable guidance, help steer and direct the search, and ensure a successful outcome. It requires a team effort. Any issue, confusion or misunderstanding must quickly surface and be resolved. Lack of commitment and engagement by the client is the best way to ensure poor search results. A well-defined process with clear benchmarks and deliverables at each critical step is the optimal way to keep an assignment on track towards success.

There is a point in a search process where focus shifts from the client to the candidate. Culture and chemistry are why a candidate succeeds in a given position. The candidate with the best cultural fit with the company and ease with the style of management will be most likely to succeed. It is always a mistake to place any candidate, who is not a good fit for the company, the manager and the role. And these concerns are just as important for any candidate.

When it comes to candidates, Quorum is in the business of dreams, aspirations and ambitions. If we can match these dimensions with the strategic and tactical objectives of a client, the results are always powerful. Consequently, our focus is on developing a holistic view of candidates, in terms of their lives, not just their professional interests. We also caution candidates, that if for any reason they hear a little voice telling them that something is not right, to tell us. The process stops until that voice is carefully heard.

Fees are probably the most volatile issue. The rage clients feel is profound. They become angry when they have paid an entire fee upfront only to have the search drag on for months with few quality candidates and sometimes no placement. Quality search consultants get paid as they perform. They believe clients should not pay full fees for assignments that are not completed. Honest and fair dealing is important for both the client and the search consultant.

On the other hand, when the circumstances of a position change, clients must be open with the search consultant and the candidates about the change and the reason for the change. Problems and issues with the role or the company need to be disclosed up front as the assignment begins, not once the candidate joins the firm. Many search consultants feel angry when clients and their HR professionals try to hire candidates presented behind the search firm’s back, attempt to renegotiate fees and/or reinterpret retainer agreements after candidates have been hired.

Quorum believes that clients should be charged for work performed based on agreed objectives and benchmarks. In return, clients and their HR partners have an obligation to work openly, honestly and diligently with their service provider to facilitate the completion of the assignment.

There are many good professional search firms dedicated to quality service and strong client relationships. Clients should be open with these firms, share issues and concerns, allow these firms to help them and, finally, let them demonstrate the level and quality of service they can provide. Quorum wants relationships with its clients. This means we will do what is right and best for our clients, and we hope and expect that our clients will do the same in return.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Headlines proclaim the loss of jobs in the financial services industry, particularly on Wall Street and in London. It has been six or seven years since the last major purge. As I read the stories and hear the news, I ask myself, if there is anyone working in financial services who remembers any of the following events: the S&L implosion, the New York City Financial Crisis, Prime Minister Healy’s request for a loan from the IMF to prop up the Pound, the Mexican Peso Devaluation of 1976, Fed Chairman Paul Volker’s attack on inflation and, lastly, the market events of October 1987.

Markets have a serious advantage over people. Their knowledge is cumulative and deep, and at each opening bell, they know how all the cards are dealt. It seems that markets never forget and are incredibly intolerant of mistakes. George Soros once said, “I am far to rich to suffer the indignities inflicted by markets.” Markets are happy to teach their lessons over and over again, or at least until your money runs out. Yet markets are a product of people; they exist only when there are people to trade. The more people involved, the more trading, the better the market. But what about the people who make up the markets?

People actively engaged in capital markets are forced to constantly learn. Remember, the market is a ruthless teacher. It is what traders do not know that costs them money. The breadth and scope of this knowledge seems limitless. It is more than the knowledge of finance, a company or industry, a particular asset. It includes understanding how the market behaves and what calms it down or makes it jumpy. It also requires past experience, knowing how the market behaved under similar circumstances in the past. Some of this is captured in aphorisms senior traders know: the trend is your friend; never catch a falling knife; there is no crime in being wrong, the crime is staying wrong; the shorts always know more than the longs. But some of the knowledge, the deeper knowledge, cannot be distilled into pithy sayings. Sometimes market participants will express this in terms of how the market “feels” or how they see it “behaving.”

I was once talking to a seasoned portfolio manager who said to me that we were heading into a recession. I asked him how he knew that and he said “all I have to do is watch my screen; I can see it in how the market behaves.” He had been managing money for more 40 years. He was more than just smart; he was wise. Experience had made him so.

My personal background is not in capital markets. Economics, accounting and finance are my intellectual foundation. However, for a brief moment, I spent some time working at a small hedge fund. After laboring diligently on a particular company, applying all my knowledge and skill to assessing the investment, I sat with the senior partner as we began to build the position. I will never forget the painful baptism I received. As the ticker went from green to red, the market coolly informed me of exactly how wrong I was, in instantly calculated dollars and cents.

Though my wounds have healed, the lesson of that day will never be forgotten. It was a lesson I could only have learned by being in the market. I learned many more, some painful, some joyous, all priceless.

Many have commented on how Wall Street manages its human capital; few comment positively. When times are good, people are hired with abandon; when times are bad, the baby is tossed out with the bathwater. Room is made for the younger by removing the older. It may be that ambition and energy are more valuable attributes of human capital than experience and wisdom. It may also be that some of the recurring cycles the industry experiences are due, in part, to the continued departure of those who have long suffered the indignities of the markets.

Given the time it takes to “learn” the markets, it seems a terrible waste to let this valuable knowledge walk out the door. These individuals with 20 or 30 years of experience are still young and many, if not most, have one or two entire careers ahead of them. Why expose the institution to the market risk of inexperience when a guiding seasoned hand is available? That is not to say that they should stay in their prior positions. It is to say that there are a wide range of other functions that would benefit greatly from their knowledge; risk management immediately comes to mind.

Regulators should also be mindful of the value of this talent. Maybe the shrewd young trader can fool a regulator, but the former head of a desk? Who better to understand what the trading strategy of a hedge fund might be, than someone who traded the other side in a prior life?

So the over-riding theme here is that there may be a relationship between how firms regard experience-based wisdom and some of the cycles of the industry. As they say: the crime is not being wrong; the crime is staying wrong.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Headlines proclaim the loss of jobs in the financial services industry, particularly on Wall Street and in London. It has been six or seven years since the last major purge. As I read the stories and hear the news, I ask myself, if there is anyone working in financial services who remembers any of the following events: the S&L implosion, the New York City Financial Crisis, Prime Minister Healy’s request for a loan from the IMF to prop up the Pound, the Mexican Peso Devaluation of 1976, Fed Chairman Paul Volker’s attack on inflation and, lastly, the market events of October 1987.

Markets have a serious advantage over people. Their knowledge is cumulative and deep, and at each opening bell, they know how all the cards are dealt. It seems that markets never forget and are incredibly intolerant of mistakes. George Soros once said, “I am far to rich to suffer the indignities inflicted by markets.” Markets are happy to teach their lessons over and over again, or at least until your money runs out. Yet markets are a product of people; they exist only when there are people to trade. The more people involved, the more trading, the better the market. But what about the people who make up the markets?

People actively engaged in capital markets are forced to constantly learn. Remember, the market is a ruthless teacher. It is what traders do not know that costs them money. The breadth and scope of this knowledge seems limitless. It is more than the knowledge of finance, a company or industry, a particular asset. It includes understanding how the market behaves and what calms it down or makes it jumpy. It also requires past experience, knowing how the market behaved under similar circumstances in the past. Some of this is captured in aphorisms senior traders know: the trend is your friend; never catch a falling knife; there is no crime in being wrong, the crime is staying wrong; the shorts always know more than the longs. But some of the knowledge, the deeper knowledge, cannot be distilled into pithy sayings. Sometimes market participants will express this in terms of how the market “feels” or how they see it “behaving.”

I was once talking to a seasoned portfolio manager who said to me that we were heading into a recession. I asked him how he knew that and he said “all I have to do is watch my screen; I can see it in how the market behaves.” He had been managing money for more 40 years. He was more than just smart; he was wise. Experience had made him so.

My personal background is not in capital markets. Economics, accounting and finance are my intellectual foundation. However, for a brief moment, I spent some time working at a small hedge fund. After laboring diligently on a particular company, applying all my knowledge and skill to assessing the investment, I sat with the senior partner as we began to build the position. I will never forget the painful baptism I received. As the ticker went from green to red, the market coolly informed me of exactly how wrong I was, in instantly calculated dollars and cents.

Though my wounds have healed, the lesson of that day will never be forgotten. It was a lesson I could only have learned by being in the market. I learned many more, some painful, some joyous, all priceless.

Many have commented on how Wall Street manages its human capital; few comment positively. When times are good, people are hired with abandon; when times are bad, the baby is tossed out with the bathwater. Room is made for the younger by removing the older. It may be that ambition and energy are more valuable attributes of human capital than experience and wisdom. It may also be that some of the recurring cycles the industry experiences are due, in part, to the continued departure of those who have long suffered the indignities of the markets.

Given the time it takes to “learn” the markets, it seems a terrible waste to let this valuable knowledge walk out the door. These individuals with 20 or 30 years of experience are still young and many, if not most, have one or two entire careers ahead of them. Why expose the institution to the market risk of inexperience when a guiding seasoned hand is available? That is not to say that they should stay in their prior positions. It is to say that there are a wide range of other functions that would benefit greatly from their knowledge; risk management immediately comes to mind.

Regulators should also be mindful of the value of this talent. Maybe the shrewd young trader can fool a regulator, but the former head of a desk? Who better to understand what the trading strategy of a hedge fund might be, than someone who traded the other side in a prior life?

So the over-riding theme here is that there may be a relationship between how firms regard experience-based wisdom and some of the cycles of the industry. As they say: the crime is not being wrong; the crime is staying wrong.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Think about the last time your company purchased a piece of capital equipment or computer system. Assume the purchase price was between $150,000 and $300,000. Then let’s add in the cost of installation, service contracts, additional hardware and software, and insurance. People will need to be trained on how to use the new equipment or computer. Lastly, there is the cost benefit analysis to monitor the investment against predetermined parameters.

Now think about the last time your companied hired a senior executive. Assume the salary and bonus was between $150,000 and $300,000. Add the direct costs of employee benefits and pension, and a multitude of indirect costs. And these are recurring costs where as the purchase price of the machine or computer is paid once.

When a costly piece of equipment or computer hardware is purchased, measures are taken to ensure correct installation. It is tested and checked to make sure it is working properly before putting it on line. Staff is trained to operate the new equipment and to understand why the company brought it in, but what about the investment in a new executive? Typically, when new executives arrive on the job, they are shown to their office, introduced around the company, meet with human resources, are taken to lunch, and then left to “get on with it.”

It is common for companies to view capital expenditures differently than employee compensation. They feel that senior executives should not need the same care and attention as a large capital investment. The long-term success of a new senior executive is often determined within the first 60 days of employment. First interactions with the rest of the senior management team are critical. Usually the new executive has no knowledge of the history or dynamics of the team. Consequently, these interactions are fraught with danger. In large companies, it can be compared to walking through a mine field, and sometimes new executives do not know they have blown themselves up for six months. If new executives are allowed to self-destruct, the investment becomes worthless. So how can a company protect its investment in a new executive hire?

There are two very effective ways to help ensure the long-term investment in a new senior executive. The first is a strong in-bounding program and the second is coaching. In-bounding is a program that maps out the first 45 – 60 days the new executive is with the company. It is designed to help the new executive integrate into the company quickly and successfully. In-bounding formalizes a process that is often left to the individual hired and to chance. Coaching helps the new executive better understand culture, personalities and style of the new company, and adjust to a new environment.

In-bounding
In-bounding should be a custom-designed program that helps new employees understand the company, the management, their peers and their reports. It should carefully map out everyone this individual needs to meet and what information the executive needs to know in order to have a full understanding of the company. In the beginning, this program would include a detailed schedule for the first two or three weeks with the company. It would provide a brief summary of the background of people to be met, their respective roles in the company, and how and why they and their department will interact with the new executive and his role. Having met the senior management team, the new executive should also meet key direct reports of each senior manager. This will serve to develop an understanding in the company of why the new executive was hired and to help the new executive understand how to get things done in a new company.

In addition to meeting key employees, the new executive should be walked through key business processes. Those senior managers responsible for each key segment or function of the business should personally provide this overview. The new executive should understand how the company goes to market, manufactures or provides its goods or services, develops and designs new products or services, and the relationship with key customers. This will facilitate for the new executive an understanding of key opportunities and challenges that will need to be addressed. It allows the new executive to develop a deeper understanding of the company so he or she can add immediate value.

Coaching
Organizations are organic, behaving like living organisms. Personalities, internal culture, egos and territory are all carefully protected. It is quite easy for a new executive to say or do something that seems completely neutral, but may, in fact, set off red alerts in other senior managers. This is where coaching can be of enormous value. Coaches should be very familiar with the company, but not an “insider.” They need their independence to be respected by the company in order to provide the new executive with an objective and confidential source of advice. The ability to discuss events, conversations, issues and concerns with an objective, well-informed third party can be crucial to the success of the new executive.

The coach can help the new executive understand how other managers react to new ideas, articulate the internal culture and how it work, and lay out potential “mine fields.” Behaviors and attitudes that were encouraged and successful at a former company may not work at the new company. In one recent example, a client, with a deep and complex culture, hired a talented key executive from another company and accepted the advice to also provide coaching. Over the course of three months, the coach was able to help the new executive adjust her own personal and management style to better fit with the culture of the new company. Consequently the executive learned how to raise issues and be heard, and quickly proved to be especially effective. She is considered to be one of the best hires the company has made.

The role of human resources
The role of human resources is important as they should play a critical part in the development of the in-bounding program. Working closely with the hiring manager, they can develop a plan that accelerates the value a new hire brings to the company. Just as importantly, they create the foundation for success and, therefore, help the company protect its investment. They can also provide the coach with important details and background information about the company and the management. Human resources should facilitate open communication and understanding in order to provide the coach with an appreciation of the nuances of the culture and its various management styles. By providing this consultative service, human resources can step into a virtuous cycle with management and strengthen their role as a valuable partner with the business.

In-bounding and coaching are important parts of a larger human capital effort. Some companies recognize that their people are just as valuable, if not more valuable, than their equipment and facilities. The care and feeding of these important assets is very important. These companies at the boardroom level understand the importance of organizational and human capital development. They approach it strategically from the top down and back again.

More and more potential candidates demand to know that a hiring company will commit to their success and development. They recognize the importance of knowing what processes and services a prospective employer has in place to help them grow and develop as professionals and as managers. They want to know how their success will be measured. In-bounding and coaching are two key elements of the successful integration of a new executive into your company. It’s the best insurance you can buy.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Hiring managers want to hire the best, of course, and often use face-to-face interviews as the primary path for hiring decisions. Defining “the best” may be more difficult than it seems. Five individuals with identical credentials and experience may not have equal chances of succeeding in a given position at a given company. Success or failure in a new position goes beyond credentials and experience and into the culture, personality and temperament of the company as well as the perception of the position by both the candidate and the company. What can line managers and human resource professionals do to ensure that on the day of the interview they really are looking at the best candidates for the job?

Line managers, in addition to their day-to-day responsibilities, are charged with building good teams. In any workplace there are internal assumptions and terminology that are believed to be well understood. Consequently, as discussions for a new position take place, these assumptions and terminology are included without critical review. The hiring manager and the human resource partner are deeply imbedded in the organization. They use language that is clear and understood between them. There is no perceived need for further clarity. These internal codes are almost sub-conscious and very difficult to detect. When someone from outside the organization reads or hears about a position, those assumptions or terminology are translated into another context, not necessarily the same as that of the hiring manager.

An executive search consultant, listening carefully to a discussion between the HR professional and the line manager, identifies those internal codes and helps the client understand how a thoughtful candidate will hear and understand a position description. Writing a detailed position document for a client allows them to understand how positions will be perceived by candidates. In addition, reframing the internal language allows clients to hear their own assumptions and terminology. This enables them to make critical revisions to the nature and scope of a position description and to be clear about expectations. When there is a shared and clear understanding of expectations, it is much more likely that the candidate will meet them.

Successful individuals want engaging, strategically important and rewarding work. Understanding why a position is strategically important to an institution frames the larger context of any position. A clear discussion about the tactical issues associated with the larger strategic objectives provides candidates with an understanding of the level of institutional commitment to the role and whether the opportunities and challenges are engaging. Clear concrete measures of success, with specific delivery periods, allow candidates to evaluate how thorough management has been in developing the position. When measures of success are specific, and clearly relate to the strategic and tactical objectives of the institution, potential candidates’ reaction to any position will be much more positive. The thoughtfulness of it demonstrates to the candidate the importance of the position within the organization. 

Line managers and their supporting HR professionals should be as candid as possible about challenges and issues within the organization. It is human nature to avoid discussing anything that might be perceived negatively. Organizations have external reputations that are based on interactions with third parties and former employees. Negative perceptions and experiences tend to travel faster than positive views as people “warn” friends and colleagues. Regardless of the challenge or issue, it is important is that these issues are well understood and discussed openly.  In one instance, a global investment management client was seeking to hire a country manager. Many candidates found the position interesting but perceived the designated country of operations as a career dead end. The client, on the other hand, felt its name and reputation should more than compensate for the location of the position. After a frank and open discussion, including a review of both internal and external candidate reactions, it became clear that the role needed redefining to include career advancement outside of the host country.

Potential candidates need to be sure a position is right for them. They will try to determine how the role fits with their professional development and if they have the right experience or skill set to be successful. They may have some knowledge of the hiring company and a sense of whether or not they are a “fit.” This last point is very important. This is where the culture of a company becomes critical. Cultural attributes are difficult to define and even harder to communicate.

So now the candidates understand the range and scope of the role. They have an understanding of the issues and challenges that need to be faced. But they still do not know what it will feel like to work in the client organization. They need and want to understand the culture and temperament of the business. The word culture raises a wide range of complex issues. Many companies spend a significant amount of money to define their culture and values. So how can line managers and their HR partners help an outsider understand the environment within the company?

Reviewing experiences of recent hires, whether successful or not, can help to articulate different dimensions of the institution’s culture and temperament. Discussing how decisions are made and how issues are raised within the organization discloses important aspects of the company culture. Asking how bad news is received is a good way to learn about the temperament of a company.  There are a few ways to facilitate this understanding. In the first instance, it starts with line managers and their immediate reports. Listening to the line manager describe each member of his team; how and why they are valued, providing a balanced assessment of key skills and abilities, and defining specifically what it is that makes them effective both within and outside the department. This should include a discussion of the line manager’s management style, how the manager gets comfortable with members of the team, and how trust is built or broken.

It is also important to understand what challenges the line manager has with the institution and what are the most effective ways of managing those issues. The HR business partner can provide insight into how other managers negotiate their way through the institution and deal with similar issues. By listening carefully to these conversations and synthesizing them, it is possible to define the culture and temperament of an organization that rings true to the line manager and HR professional, yet is clear to someone unfamiliar with the company.

The issues discussed here are neither easy nor trivial. However, what they yield is a deeper understanding on the part of clients and candidates about the goals, objectives and expectations for a given position. The time and energy invested in the deeper understanding of the company allows potential candidates to decide quickly if the opportunity presented is right for them and to subsequently make a solid, well-informed decision to accept a position.

Quorum Associates markets clients to potential candidates. Each client has a story to tell and marketing that story is a part of attracting high quality candidates. By the time candidates reach the interview, the client will still have a difficult decision. But rather than having to decide if they would hire any individual, they will have to decide which individual to hire, since they’ll want to hire them all.