search-consult Issue 21 by margaret jaouadi

2004 / ISSUE 21

The International Executive Search Magazine

Interview with Brian Sullivan, New CEO of Christian & Timbers Executive Search Associations Talent in the Life Sciences Sector Part 1 Executive Search in the Middle East Focus on Interim Management in Developing Countries

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search-consult Dear search-consult,

MANAGING DIRECTOR Jason Starr jason@search-consult.com EDITORIAL Pilar Gumucio editorial@search-consult.com PRODUCTION Margaret Jaouadi margaret@search-consult.com

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search-consult is published by Dillistone Systems Ltd, Calvert House, 5 Calvert Avenue, London, E2 7JP, United Kingdom and printed by Mr. Bloom Ltd, Sopot, Poland, www.mrbloom.com.pl. All statements, opinions, and expressions are the sole responsibility of the authors and the Publishers reserve the right to amend/alter articles as necessary. The Publishers cannot be held responsible for any loss or damage, however caused, of any materials supplied. Any materials supplied may not always be returned. No part of this publication may be reproduced in any format without prior written consent of the Publishers.

Your recent article “The Largest Search Firms in the World” correctly outlined some of the major trends developing within the search industry as we recover from probably the worst decline in our history. The search and recruitment industry is seeking ways to respond to our clients need to reduce the number of search and recruitment suppliers to obtain economies of scale and obtain a uniform Level of Service. As the traditional boundaries between “C” level search and specialist recruitment blur and traditional top level search methodologies are used for lower management and specialist positions few firms are able to respond to a clients full spectrum of requirements either by level of search/recruitment or by geographical coverage. Our industry is even more poorly placed to respond to these needs when requirements are multinational or even global. Most networks or even integrated firms who have grown through acquisition or merger, in my opinion, fail to offer clients what they are seeking because of different cultures, traditions, methodologies, and project management tools just to mention a few of the most obvious difficulties. In addition there are no search/recruitment organisations that have anything approaching double digit market share on a global basis. The current scrambling to put together international networks or groups does little to provide the solution our clients are seeking. Is there an alternative? There are several franchised networks that can offer the advantages of the traditional “boutique” while providing global capability. By far the largest, longest established and best known is MRI – Management Recruiters International. This, almost 40 year old organisation (established 1965), currently comprises well over 1,000 offices in North America, Europe and Asia. Consistency of methodology and training (and therefore to a considerable extent standards) is guaranteed by an award winning continuous training programme. This training is available at the desk level (using special internet and Centra based training programmes) in office (with qualified, full-time trainers plus videoconferencing) and at regional locations. The MRI training staff currently numbers over 25 full-time specialists ensuring a high standardisation of training, process and delivery. In addition MRI has established a specialised group - Global Talent Management that monitors the specialisations and metrics of offices throughout the network. This enables MRI to determine which office or offices are best qualified to be involved in a particular project, thereby ensuring that each project is allocated the most qualified MRI resource – thereby guaranteeing a high Level of Service. This has enabled MRI to handle projects for major international clients across many countries with centralised billing and single point of contact at corporate level while allowing MRI staff and client management to define the project and requirements at a local level. MRI has not yet found the “golden bullet” but I believe we are well on our way to offer our clients the best combination of global delivery, standardised Levels of Service, local presence and sector specialisation. In short the art of Serving Globally while Working Locally. Yours sincerely, John Steele President MRI Manserv AG

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Brian Sullivan A CEO That Places The Client First By Jason Starr and Pilar Gumucio ostering client relationships is vital for a successful search and it is what motivates Christian & Timbers, and especially Brian Sullivan as the new Chairman and CEO of this organization. The newly appointed head of Christian & Timbers has close to 20 years of experience as a leader in the executive search industr y, most recently as Vice Chairman at Heidrick & Struggles International, where he served from November 1999 to March 2004. In 1988, Brian founded Sullivan & Company, a fast growing financial services search firm that was acquired by Heidrick & Struggles in 1999. He was appointed the first Global Head of Heidrick & Struggles’ Financial Services practice and in the short span of a year doubled the size of the practice to $150 million in annual revenues, creating the largest ever practice in the executive search industry. In recognition of his accomplishments, Brian was appointed Vice Chairman in October 2001 and given responsibility for the firm’s major account relationships across all industry practices. He also ran the Health Care, Industrial and Consumer industry practices, and the firm’s functional and focus practices, along with the diversity services effort. Nevertheless, differences with the corporate culture at Heidrick & Struggles persisted and Brian began to contemplate establishing a new search firm or joining an established

search-consult ISSUE 21 2004

one where he felt his core values and vision would be better suited. THE PERFECT MATCH Meanwhile, Christian & Timbers, considered among the top 10 search firms in the United States, was established in 1980 as the first hightech search firm. The New York headquartered firm, which was founded in Cleveland, was soon completing significant top-tier search work nationally and internationally by the late 80s and early 90s. From that strong base, the firm was tapped to bring Carly Fiorina to Hewlett-Packard. With these strong roots, this search firm is well positioned to be an even m o r e s i g n i f i c a n t g l o b a l p l a y e r. Christian & Timbers was looking for a leader with an outstanding reputation and the appropriate vision to take the firm to the next level. As a result, the perfect match was established. Brian Sullivan considers that there is an alignment between his and the company’s philosophy. “The partners and staff at Christian & Timbers demonstrate in every assignment the dedication to the principles that I believe constitute an outstanding firm -- that is, relentless focus on serving clients, teamwork, unrivalled industry knowledge, flawless execution and timely performance and completions.” Mr Sullivan explains that what attracted him to Christian & Timbers was the calibre of the people and the enormous potential he saw in the business. “There is something here and it is all because of the client

service, and I want to become part of that culture and I want to expand that culture and use that as a core franchise.” BROADENING THE POSSIBILITIES When asked what his main objective as CEO is, Brian Sullivan responded that his aim is to maximize the assets of the organization and to maximize the client relationships within the firm. T h e C E O o f t h i s N e w Yo r k headquartered search firm describes how the technological practice historically has been NASDAQ size companies. He now intends to move the company forward by gravitating towards more of the Fortune 500 type companies and larger accounts. Within this context, he explains the current client profile is distributed: “less than 50% is sof tware and hardware. The remainder of the business is industrial, healthcare and life sciences, media and entertainment, telecommunications and financial services.” Over the long-term, Mr. Sullivan hopes Christian & Timbers will become a real generalist business. For the newly appointed CEO, “the infrastructure is there. There are 1 to 3 partners in each of those segments.” “What is needed,” he adds, “is geographic reach and once the firm achieves that, “we are going to have a lot more impact in the marketplace and then we are going to allow our clients to dictate where they need us.” Mr. Sullivan sees London as

strategic for the firm’s European operations and either Hong Kong or Tokyo as crucial for anchoring businesses in Asia Pacific. In the case of the UK’s capital, he explains that Christian & Timbers presently have an agreement with Renoir Partners that works fantastically in the technological area. Nevertheless, Mr. Sullivan considers that it is very important to be able to present clients with a broader offer. For instance, “the financial services component will absolutely need a London operation very quickly because the cross border search business in financial services is very genuine.” He adds that this will also be the case as the firm’s other industry sectors are built up. As a result, Piers Marmion, who is currently Chairman of Renoir Christian & Timbers and was CEO of Heidrick & Struggles from 2001-2003, and Brian Sullivan are exploring ways to deepen and formalize their current relationship. This should be decided within the upcoming months. S T RE N GT H E N I N G C L I E N T RELATIONSHIPS The role that executive search firms play with their clients is changing. It has moved from client-vendor to that of partners for long-term growth. Mr. Sullivan explains that in his conversations with clients they highlight that as organizations are preparing to start hiring again, they have indicated they are tired of the same search firms, the same search consultants, the same processes and the same frustration levels with how long the entire process takes and how clients feel that they are not the firm’s top priority. They are demanding fresh and creative thinking and especially more of a client-focused approach. In fact, Christian & Timbers has already put in place a “40 day audit”. According to the firm’s new CEO, “this is a great visionar y tactic. It is something that works well for our firm, but could never be implemented in any of the 4 or 5 big firms.”

This process requires that 40 days after the initiation of the search a partner from a different industry sector, and who is not involved with the search or the client, will contact the respective client. The partner, who has prearranged the call beforehand with the client, will ask questions such as: • How are you doing? • Are you seeing candidates? • Do you have the responsiveness from the partner that you expected? • Do you feel good about the search process so far? • Are we on track? • What adjustments do you think we need to make? • Is there anything you want to tell me about the search that is making you feel uncomfortable? Because if so, we are only 40 days in and we can turn this search around?

Mr. Sullivan explains that this 40 day audit is

“unbelievable and a powerful tool for the client because if there is something that they are not satisfied with, you can turn things around immediately.” At the same time, every partner within Christian & Timbers knows that this is going to occur at every 40-day mark of every search so “they come out of the block like a sprinter at the Olympics because they don’t want any client bringing some dissatisfaction with their performance. They also know that these reports are going to come to my desk and that if there is a problem I will extract the partner from the search. As a result, this will not only hurt his or her pride but since

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there is enough of a subjective component to our compensation model it is going to hurt his or her pocket.” The new CEO of Christian & Timbers is adamant that he will review every search that comes into this firm and he will personally ensure that the team on each search is the best team to execute that search. “The partners at Christian & Timbers agree that this part of my role and I will be overseeing each and every one of these assignments. I am not sure if it is a big differentiator but in the short term it will avoid pot holes in the road and in the long term we will forge much more strategic relationships where everybody will benefit.” For Brian Sullivan, “it is crucial that every client understands that search is an art, not a science. There are scientific elements, such as periodic calls to discuss what is in the marketplace and to provide feedback as to what the reaction from prospective candidates are to the role, to the reporting relationship, to the compensation offer and even to the client itself.” All of these factors are all key for a client to be able to make an informed decision. Yet according to Mr. Sullivan, “Clients still feel that they have to drag this out from their search provider. We, at Christian & Timbers, are going to rewrite these rules and make sure that we are partnering with them so that at the end of a search, they not only have the right candidate at the right level that they want, but that they also understand an awful lot of the perception of themselves in the industry sector and the perception from other candidates that they could attract, couldn’t attract or didn’t want to attract - what their reaction to the opportunity is as well. All this is valuable when you are building an organization and when you are competing on a global level.” www.search-consult.com For more information, contact: Web: www.ctnet.com

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Associations:

for

Hunting Perfection

ssociation - An organized body of people who have an interest, activity, or purpose in common; a society.

If applied to the Executive Search community, this definition can mean many things. What would be this common interest other than promoting a profession by nature so discreet that it can seem cloaked in secrecy to outsiders? What common purpose can be found in an industry naturally so overwhelmed by competition? Why would a European Search firm be interested to join a US-based association rather than a local one? Speaking of which, is there a local one at all? To tr y and answer these questions, search-consult conducted a survey of 10 Executive Search Associations based in the US and Europe (see table on page 9). Ranging from the lesser known to the more famous, most claim to be different in terms of membership criteria, benefits and value brought to the industry. If all associations are about finding a common ground between members, it certainly doesn’t mean they have the same views on how to get there. Add different cultures and countries to the mix, and the emerging

global picture is likely to be highly contrasted! Most of the surveyed associations tend to serve a local market of Search firms. This is particularly true in Europe, where almost every single country hosts its own organization. However about 50% of these associations do not rely on official offices or full-time staff, simply listing members along with their current professional contact details. A small team of up to 3 people is the norm for those who choose to have full-time representation. There are two noticeable exceptions: first, the BDU in Germany boasts 17 members of staff as a whole, but as we will see later this is explained by the very nature of this association which only counts Retained Search as part of a larger body of Management Consultant firms. The other one is the Association of Executive Search Consultants (AESC), with a team of 14 full-time staff, reflects its position as the largest global Executive Search association. Originating in the US, its success in attracting quality members led to the opening of a successful European office in Brussels. The other big player among the associations surveyed was the Executive Search Roundtable

By Yann Le Leyour (ESR), another US-based organization. While also aiming for a global reach, it lacks a physical local presence in Europe. CHART 1: AREAS SERVED 10% 10%

20%

60%

Local Global Americas only Europe only

The ESR is also the only association of those surveyed to accept both individuals and firms as members. A huge majority (70%) prefers to have member firms only, while individuals favored Stowarzyszenie Doradców Personalnych (SDP), aka the Polish Executive Search Consultants Society; and the UK-based Executive Research Association (ERA). The ERA counts many independent researchers as members, as does the ESR along with independent search executives.

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CHART 2: FIRM / INDIVIDUAL

CHART 3: TYPE OF MEMBERS

10%

12%

CHART 5: HOW MANY MEMBERS ARE RETAINED SEARCH? %

120

100

12%

37%

20%

40 10

P SD

XS BE

AE N

Associations

70%

27% 12%

Firms Individuals Both

It remains true that apart from the AESC, who only accepts Retained Search firms, all other associations are keen to accept quality members from a larger community of recruitment firms. That includes Contingency Search firms in some cases. For instance, the smaller US-based National Association of Executive Recruiters (NAER), while counting 90% of its members as Retained, does not want to deter successful Contingency firms from joining. There, attracting outstanding members is seen as more important than focusing on a billing practice. In general, Retained Search will form the bulk of members (37%), followed by other Recruitment related firms, or Management Consultancies offering Search as part of a larger range of ser vices. This reflects the fact that, outside the US, firms in general tend not to restrict themselves to a particular type of recruitment and, in order to survive in a tough market, will offer a solution for everyone, with Search being part of the mix but more rarely as the main activity. This explains why the BDU in Germany counts 550 members of which only 10% are Retained Search firms, as the association is first and foremost focusing on Management Consulting firms, with a department devoted to Search itself.

search-consult ISSUE 21 2004

Retained Search Contingency Search Other Recruitment Other Management Other

As for the number of members, the figures vary wildly. Not surprisingly, the AESC counts the most Retained Search members (256 at the time of w r i t i n g ) . H o w e v e r, t h e l a rg e s t association in terms of total number of members remains the BDU, for reasons seen above. Apart from that example, each country-specific association is naturally smaller and some members are also affiliated with a larger professional body. For instance, the Belgian Executive Search Association (BEXSA) has its own section on the larger FEDERGON website (Belgian Recruitment and Search & Selection Association). Each BEXSA member is also a FEDERGON member and, in some cases, also belongs to the AESC via the Brussels office. In general, the proportion of Retained Search firms among all members is between 40% and 100%. CHART 4: NUMBER OF MEMBERS

20% 40%

20%

Below 25 26 - 50 51 - 100 over 101

20%

What does it take to become a member of one of these associations? To this open question, the three most common answers are in line with the corporate governance issues that have gripped the industry lately. They are, in order of importance: compliance with the association’s code of ethics and professional practice guidelines, followed closely by experience and references from both clients and fellow members. Turnover, although it must clearly remain a factor, was only cited once in our survey. The AESC goes one step further by requiring a full audit of prospective members. All in all, what e m e rg e s i s a t h i r s t f o r e t h i c s , accountability and responsibility. CHART 6: MEMBERSHIP CRITERIA 5%

5% 25%

10%

30%

20% 5%

Experience References Turnover Code of Ethics / Practices Reputation Audit International

Once it has qualified, the Search firm will be expecting benefits. The most common is regular meetings or conferences, held at least once a year. Second in the list is legal representation / political lobbying.

Name

URL / general email

AESC www.aesc.org Association of Executive aesc@aesc.org Search Consultants Region: Worldwide

ESR Executive Search Roundtable Region: Worldwide

www.esroundtable.org info@esroundtable.org

Telephone

Contact(s)

US: +1 (212) 398-9556 Europe: +32 2 733 36 31

Americas, Asia Pacific: Nancy DeKoven Director Membership & Programs nd@aesc.org Peter Felix President AESC pmf@aesc.org Europe: Brigitte Arhold Director of AESC Europe barhold@aesc.org

n/a

Linda Rush Membership Chair larushrr@aol.com

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Membership No of members type 256

+1 (847) 885-5680 Robert Patterson, Esq. Executive Director naerxsch@aol.com

Lucy Cranmer Brown ERA Secretary lcranmerbrown@hotmail.com

Benefits

Retained Search Firms

- Regular meetings - Newsletters / magazines - Discounts on products and services - Training - Legal representation / Political lobbying - Worldwide and Regional representation (Councils in North America, Europe and Asia Pacific) - Annual conferences in North America and Europe, Reseachers’ Summits - Forums for communities: Small Firm Forum, Researchers Networking Group - Referral program - Representation in AESC Online directory, Search Connect - Research tools: BlueSteps, Exclusive use of global database of senior executives

Over 101 Retained Search, Research, Other Recruitment Firms & Individuals

- Regular meetings - Newsletters / magazines - Discounts on products and services - Training - Marketing materials, eg Directory of Independent Research & Search Consultants - Listserv email network between ESR members

Retained (90%) & Contingency Search Firms

- Regular meetings

110

Independent - Regular meetings (6 times a year) Researchers, - Training Retained Search, Other Recruitment Individuals

NAER www.naer.org National Association of naerxsch@aol.com Executive Recruiters Region: Americas

ERA Executive Research Association Region: UK, Europe

www.era-research.org.uk n/a lcranmerbrown@hotmail.com

BDU German Association of Management Consulting Firms Region: Germany FEDERGON Recruitment, Search & Selection Region: Belgium

www.bdu.de info@bdu.de

+49 228 91610

Jörg Murmann Deputy Managing Director mu@bdu.de

550

Retained Search, Other Recruitment, Other Management Consultancy Firms

- Regular meetings - Newsletters / magazines - Discounts on products and services - Training - Legal representation / Political lobbying

www.federgon.be info@federgon.be

+32 2 203 38 03

Ann Cattelain Director ann_cattelain@federgon.be

51-100

BEXSA Belgian Executive Search Association Region: Belgium

www.federgon.be/ recruitment/fr/ executive_search.htm efc@euronet.be

+32 2 374 96 72

Robert Brodsky Secretary General efc@euronet.be

Retained Search, Other Recruitment, Other Management Consultancy Firms Retained Search Firms

- Regular meetings - Newsletters / magazines - Training - Legal representation / Political lobbying - Informal meetings - Permanent helpdesk - Statistics - Regular meetings - Legal representation / Political lobbying - Regular information on the market, the services, the legal obligations - Contacts with other parties - Transmission of legal documents - Special facilities for registration to the authority controlling data protection

OAWS Region: Netherlands

www.oaws.nl info@oaws.nl

+31 35 54 27 519

Peter Otten Secretary info@oaws.nl

26-50

Retained & Contingency Search, Other Recruitment Firms

- Regular meetings - Newsletters / magazines - Discounts on products and services - Training - Legal representation / Political lobbying - Quality standards - Quality Award to certified firms

SDP Executive Search Consultants Society Region: Poland

www.sdp.org.pl office@boyden.com.pl

+48 22 628 2165

Maciej Grzegrzolka 26-50 President mgrzegrzolka@boyden.com.pl

APSC Association of Personnel Search Consultants Region: Russia & CIS States

www.apsc.ru akppofis@mtu-net.ru

+7 (095) 970 1203 Michael Y. Bogdanov President bogdanov@consort.ru

51-100

Retained Search, - Regular meetings Other Recruitment - Legal representation / Political lobbying Firms

Retained & Contingency Search, Other Recruitment, Other Management Consultancy Firms

- Regular meetings - Newsletters / magazines - Discounts on products and services - Training - Legal representation / Political lobbying - Access to and representation at interactive, jointly promoted website www.apsc.ru - Collective membership in Chamber of Commerce and Industry of Russia and other organizations.

ISSUE 21 2004 search-consult

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North America

56 offices in 36 countries Latin America Europe/Middle East/Africa

Asia /Pacific

15%

24%

17% 15% 17%

12%

Regular meetings Newsletters / Magazines Discounts Training Legal rep / Lobbying Other

The most surprising aspect of the survey was the huge diversity of annual membership fees, ranging from $100 to up to $2,500. The BDU bases its fees on the prospective member’s turnover,

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US$

ranging from $1,400 to $9,300 for turnovers up to $250,000 and $30,000,000 respectively. We took its minimum fee into account for the following chart. The AESC is not included as its fee is based on the number of consultants, in a regressive way (the more consultants the lower the fee is per consultant). CHART 8: ANNUAL MEMBERSHIP CHARGE (US$) 3000 2500 2000 1500 1000 500

SC AP

S AW O

N O

XS BE

AE N

Newsletters, magazines, training and discounts on products and services are all popular. Each association surveyed was offering other specific benefits too. To name a few: the ESR offers marketing materials such as directories of search and research consultants and an email network for members. FEDERGON prefers to have more informal meetings and has a permanent helpdesk. OAWS, the Dutch association, has high quality standards and offers a quality award to certified firms. The APSC in Russia (Association of Personnel Search Consultants) has a collective membership in the Chamber of Commerce and Industry of Russia and other organizations. The AESC offers worldwide and regional representation with its Councils in North America, Europe and Asia Pacific. In addition to its annual conferences, it hosts a Researcher’s Summit and forums for communities, such as the Small Firm Forum or the Researchers Networking Group Referral program. Finally, the use of BlueSteps, its global database of senior executives, as a research tool is another major asset. CHART 7: MOST COMMON BENEFITS

Associations

When asked what efforts they are making to increase the number of members, the usual response was marketing, PR and networking meetings. Some rely on their website and word of mouth, while some have more hands-on approach by actively contacting new players or companies that they would like to see join their ranks. For instance, the NAER wants each firm in the association to represent a single particular industry and will target firms of interest by coldcalling them. On the other hand, BEXSA already has all the major players but one as members in Belgium and, as a result, doesn’t prospect much. Another interesting example is Russia’s APSC, which is setting up local recruiters’ clubs, and has direct contacts and joint projects with members of other recruiting communities. For that reason the APSC is widely regarded as a major and active promoter of professional consultants’ interests. Its ambitious goal is to have 50% of the Russian market as members by 2010. In conclusion, what value do associations bring to the Recruitment industry? The overwhelming answer

is “improving our image”. Market transparency has never been more important and each association has high ethical and professional standards. Reputation is everything and raising the profile of the industry is deemed the most important point. This can be achieved through best practices and professional development and frank discussions among members. Legal representation and political lobbying, as seen above, are also very important as associations are generally involved in political negotiations; for instance the AESC represents and protects the interests of the profession worldwide on data p r i v a c y, s t a t e l i c e n s i n g a n d employment laws. The general picture emerging from the results of this survey is one of a changing industry. Local branches of global firms are generally adhering to both a local and an international US-based association, helping to promote both a cultural knowledge of their market as well as the strength and resources associated with a multinational corporation. The best players in each country are now acting similarly, following suit to gain international exposure and possible future partnerships overseas. Again, the main issue seems to be improving the overall quality of service. Transparency and ethics are now on the front seat, and the common ground that Search firms are finding by joining an association seems to be a quest for quality, better services and deontology. In return, this “Quality Seal” helps them to prove their professionalism and their ethical way of conducting business to future clients. With such groups of likeminded professionals on the road, surely the Executive Recruitment community will be able to reach its ever-elusive Grail.

www.search-consult.com For more information, contact: Web: www.search-consult.com

ISSUE 21 2004 search-consult

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LifeSciences a Market in Search of Good Health by Pilar Gumucio n today’s competitive environment, life sciences organizations are striving to shorten their research and development cycle. At the same time they must increase, improve and expedite their product pipelines. They must explore how to better sell and market their products and make strategic alliances with other companies in the hope of generating greater revenues. These are examples that reflect how the life sciences sector is undergoing massive structural changes as globalization is affecting the very nature of its business. The life sciences industry is considered the second largest worldwide (oil being the first). Therefore, it is very competitive. Moreover, the amount of players competing for a share in their respective markets is intensifying as companies must adapt to these challenges and see how to stay one step ahead of their competitors. Within this context, it is important to highlight the crucial role talent has, and will have throughout these defining moments, for companies as well as the industry as a whole. As a result, matching the right talent with the right company at the right time is now fundamental. Moreover, companies must understand the critical importance human capital has, which means that the profile of the executive in life sciences is also being redefined. In the first part of this article we will analyze the situation of the life sciences market in executive search and the trends that are defining it. A second part, which will be published in our next issue, will depict the profile of the executive that is emerging within this dynamic industry, clients’ expectations, how

the search process is evolving and how search firms are responding to their clients’ needs.

Lisa Geherdt

DIAGNOSING THE PATIENT: A GENERAL OUTLOOK Overall, executive search in life sciences and healthcare is in good health. In fact for some, such as Cheryl Buxton, Global Managing Director of the Life Sciences Market for Korn/Ferry International, “It is the most buoyant market we have had in the past 3 years. Life sciences in North America has continued to grow, Europe and Asia are now experiencing over 50% growth over 2003. Europe is seeing Biotech investment and our growth in Asia is fuelled by strong investment, particularly in India and China. Pricing pressures and government restrictions while concerning, haven’t had such a negative impact on the

market, as the upward demand is likely to continue.” It is important to note that the level of optimism depends on where the consultant is based. For instance, Steven P. Hochberg, President of Caliber Associates, which is based in the US, explains how his firm has “experienced a significant upturn in business at the senior management level within the life sciences sector throughout all of 2004. After two years of flat activity, numerous companies have become more aggressive in their key strategic staffing needs. We see this trend continuing through the first half of 2005 although the capital markets could certainly stymie growth prospects.” In Europe, however, consultants are more cautious. For example, Dr. Tony Chandler, Executive Chairman for Talentmark Search & Selection, explains that, “Big Pharma could hardly be described as buoyant, but there are some strong green shoots emerging amid mid-Cap and smaller companies. European biotech is still depressed due to restricted funding, but we’re seeing some good volume growth in the medical instrumentation and diagnostics sectors.” Christopher Seabourne, Vice-President at A.T. Kearney Executive Search, and Lisa Gerhardt, Partner at Boyden, have similar opinions as they both describe the life sciences market as steady. When you compare this industry to others in executive search, there are definitely reasons to smile. According to Marc Lewis, President of North America at Morgan Howard, the life sciences sector is ”relatively vibrant in comparison to less vibrant areas such as ISSUE 21 2004 search-consult

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Tony Chandler

manufacturing. There is fresh growth, similar to financial services. Yet less sophisticated clientele since financial services clients are accustomed to working the human capital market through boom and bust cycles.” The Association of Executive Search Consultants' latest report reinforces this stating that the life sciences and healthcare sectors experienced the largest increases in number of executive searches, up 2% from last quarter, as revenue per consultant is also projected to increase from last year’s revenues. For Denise DeMan-Williams, President & CEO of Bench International, the “life sciences market is heating up, particularly within the mid-level, infrastructure supporting commercialization, as well as in the early clinical decision-making arena, facilitating faster, more targeted decisions for investing in drug development.” Steven P. Hochberg states how his firm has “seen significant growth in the specialty pharmaceutical sector and have continued to see increased activity in clinical development, regulatory affairs, business development and board level searches.” Dr. Tony Chandler agrees with these comments and also sees opportunities in “project management, veterinary pathology, biopharmaceutical validation, medical affairs, drug safety, experimental medicine and particular therapeutic specialties.” He also expects a stronger demand for gateway

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functions such as clinical pharmacogenetics. Dr. Richard Eidinger, Co-Head of the Global Life Sciences Industry Group at Heidrick & Struggles, explains how “the single most difficult searches are in oncology where you must combine both business and medical skills. There are also searches in regulatory affairs and those types of roles. There is a great deal of demand for roles that contribute to the commercialization of products. Finance executives are also high in demand due to the Sarbanes-Oxley Act. One function for which there is increasing demand is for project managers, and this will probably increase as clients try to accelerate the approval process.” Cheryl Buxton adds that the other major area of growth, which may seem obvious, stems from pharma companies who have been working hard to uncover unmet medical needs – more lifestyle disease therapies, e.g. sexual dysfunction, and more niche markets such as restless leg syndrome and overactive bladder syndrome. All call for executives with a more creative approach to drug development, more creative dealmaking experience with biotech companies and very creative marketing capabilities. EXAMINING PHARMA If we take a closer look at the main sectors of this market, we can see that the pharmaceutical industry is currently the most dominant. This sector is facing massive changes in the productivity of its research and development activities. According to Michael Klingler, Partner of RSVP Management Consultants, “With the ever increasing pressure involved in product development and launch costs as well as governmental influences, pharmaceutical companies” are exploring strategies to sustain profitability. There is “a big move away from primary care drugs and a big move into developing specialty products to mitigate pricing and reimbursement issues,” Denise DeManWilliams explains. This sector has always been very conservative, where the way to do business was very traditional: invent a blockbuster drug (drugs with a sales revenue of $1 billion

plus) and sell it well in a market always in need of this product. Lisa Gerhardt reports how this business model was very effective and thus, big pharmaceutical companies were extremely profitable in the past.

Peter Woods

Today companies have to become more efficient in a very fast moving market. Dr. Peter Woods, Group Managing Director of Euromedica, describes the situation in more detail: “If you look at the 10 top pharmaceutical companies worldwide, they are losing patent protection on key products and have had sales hit by generic alternatives. At the same time, R&D [Research and Development] costs are escalating… In an era of litigation, the FDA [Food Development Administration in the US] approval process has become increasingly rigid as drugs now must be extremely well researched, developed and regulated with regards to both efficacy and safety. Companies must weigh up the risks and benefits very carefully and consider if the cost of approval is too great for the commercial return.” Furthermore, the expiration of patents means “a rise in opportunity for generic drug companies, a definite growth area, with products costing much less than their branded equivalents,” remarks Lisa Gerhardt. Christopher Seabourne describes how generic companies, mostly based in

Michael Klingler

developing countries, are expanding to Europe and North America. As a result, the opportunities for executive search are turning out to be very interesting. Cheryl Buxton sees generic companies having gained enormous respectability over the last five years. “At one time they could only attract B-level talent. Today they need to sustain huge growth numbers. M&A activity helps, but so does attracting A-class talent. They demand it and now they can get it.” According to Michael Klingler all these factors are “placing pressure on companies to reduce their margin of profits, increase innovation and find faster ways of developing products and delivering health services.” Christopher Seabourne reports that as a result of these factors, “life sciences organizations are looking for more sophisticated ways of management. This in turn, has increased the demand for searches across the border.” Dr. Peter Woods explains that within this context, specialists and technical executives are always in constant demand. “Companies are always updating, moving executives into new positions and looking for high calibre individuals with new technology skills. Since the start of 2003, there has been a definite pick up in R&D.” Sales and marketing has depicted a “mixed picture as companies are awaiting the approval of a new generation of drugs,“

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adds the Managing Director of Euromedica. “The commercial sector is not as buoyant as it used to be in the past because of the regulatory issues and a slowdown in new products being approved. The large profit margins of old are decreasing, which impacts on recruitment with selective hiring more the norm. What companies are focusing on is retention strategies, in particular how to keep their best executives incentivized.” Christopher Seabourne comments how some mid and smaller companies that are growing fast are hiring aggressively. As a result, they are turning to executive search to find them the most appropriate executives. Cheryl Buxton explains that many executives are seeking a higher degree of autonomy, responsibility and accountability. They want to feel that they have left a legacy in a company. Big pharma is far less attractive than it used to be in this regard, and this is to the advantage of the smaller companies. Yet, this can change at anytime. Steven P. Hochberg reports that, “as biotech/pharmaceutical companies’ portfolios mature and progress through the development pipeline toward commercialization, those executives who can bring a keen understanding of product life cycle management will be increasingly important and valuable to the industry.” Jocelyn Dehnert, Managing Partner at Heidrick & Struggles, sums up the situation as she explains how the pressure of the generic component, the need to increase efficiency in the production side of business and the regulatory environment becoming more demanding are all important factors that are currently influencing the life sciences industry worldwide. EXAMINING OTHER SECTORS Another important sector within this industry is biotechnology, where firms must be able to obtain funding for their clinical trials while at the same time, be able to launch the best drug to the market before their competitors. Although this sector is having a strong recovery, Jocelyn Dehnert remarks that, “there has been a downturn in the last few years due to the decline in IT.

Francis P. Rolland

Venture capitalists are now increasing funding and as a result, demand is picking up pace. “ For Dr. Peter Woods, the greatest demand is in therapeutic products. “Companies specializing in platform technologies and specializations such as proteomics are going through a hard time.” He cautions that in 2005, “venture capitalists will be more selective in which companies they choose to invest in the future. In turn, recruiters should also be careful in which young companies they choose as clients.” Francis Rolland, Managing Partner at People In Health, agrees that second rounds of investment will become more selective. Nevertheless, he reports that there is substantial activity in this sector. “In fact, there are many US and Canadian firms looking to expand into Europe. Biotech companies are entering the clinical phase, which means they are now focusing on getting their products into the market. As a result, executives in sales and marketing as well as business development in services are in high demand.” The services sector, which pertains to those functions that service healthcare, is also showing signs of improvement. Francis Rolland describes how “these jobs are affected by outsourcing, externalization, and consolidation.” Therefore, the function that is most sought after is in business development.

ISSUE 21 2004 search-consult

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Jocelyn Denhert

Services, which traditionally have had a stronghold in the US, are also beginning to pick up in Europe. The Managing Partner at People In Health explains that this is “partly as a result of North American operations expanding into Europe and also partly as a result of Europe developing private health systems.” With the exception of Spain, Christopher Seabourne explains that the demand in Europe for physicians is greater than the current supply. As a result, search consultants must look outside their borders to fill this void. The area of medical devices, diagnostics and distribution is growing thanks to escalating home healthcare services for aging populations, as well as by new therapies, procedures and diagnostic tools. Jocelyn Dehnert explains how “medical devices in Europe are performing extremely well, especially with the emergence of Central and Eastern Europe as a source of manufacturing these products.” Francis Rolland concurs, and perceives increasing assignments in sales, marketing and especially in executives that have experience in risk management as companies expand their operations into new countries, regions and on a global basis. LISTENING TO THE PATIENT The changes in this market are being experienced at all levels, as traditional

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pharmaceutical marketing is one more illustration of how the pressures on this industry are constantly in motion. Lisa Gerhardt reports that “while ethical (prescription) drugs are not advertised, there is a push to raise awareness of the consumer through various sophisticated techniques. The consumers, particularly in the US are better informed, have access to information via the Internet, and are pushing their choice of treatment to prescribing physicians.” She adds that, “the sales force or field force effectiveness programmes are being rolled out across most of the major pharmaceutical businesses, and are following in the medical device sector. The effect this is having on search is to increase the level of sophistication required for senior sales and marketing professionals. New roles are also being created because of the need for change management and influencing skills rather than the traditional sales management.” This new trend affects the entire business as more and better expertise and competitive intelligence regarding customer interface is required. Executives that can deliver real value to the costumer and improve a company’s performance are highly sought after. MAKING THE PATIENT HEALTHIER In the search for more efficiency, life sciences companies are also looking at ways to consolidate themselves or even grow through associations. Lisa Gerhardt explains, “With the estimated cost of bringing a drug to market being in the region of $1.7 billion, including the commercialization, the need for a blockbuster potential is essential. The paucity in many company’s pipelines is driving consolidation within the market, with pharmaceutical companies needing to add product and strong development pipelines into their portfolios.” According to Michael Klingler, “During the last 30 years life sciences organizations have enjoyed two-digit growth. However, companies can no longer continue producing 3 or 4 blockbusters. As a result, they are now looking for group alliances.

For example, most pharmaceutical companies are contracting biotech firms to produce their products.” This is occurring between the areas of pharmaceuticals, biotechnology, medical supplies/devices and healthcare delivery. Lisa Gerhardt reports how “the outsourcing trend can be seen in drug discovery and development, “with an anticipated 36% of the market being outsourced in 2004.” In fact, Francis Rolland describes how outsourcing is spreading to countries that are in development. “For instance, biometrics and clinical research have traditionally been in-house operations. Now, in an effort to streamline, they are outsourcing these jobs. This is a trend that is growing and will definitely have an impact on the industry as well as recruitment in the future.” The Managing Partner at People In Health admits that this trend may not be currently affecting the amount of senior executives hired. “However, it is affecting the way businesses are strategically organized, and therefore, it is affecting the type of executive hired.” Michael Klingler reinforces this statement as he describes that as organizations are becoming more global, the use of strategic alliances is increasing. As a result, more complex business models are being created. This Partner of RSVP Management Consultants reports, “The most successful companies in life sciences will be those that combine their scale with global reach, creativity and entrepreneurial spirit. Within this context, it is vital that human resources be a strategic partner and be highly involved in overseeing the future of the company in terms of recruitment, development, communication and retention.” How is all this process affecting the executive profile? How are executive search firms responding to the latest trends within this market? We will explore these answers in our next issue. www.search-consult.com For more information, contact: Web: www.search-consult.com

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Secrets of a

“Nice Girl” Corporate Headhunter by Denise DeMan Williams

enise DeMan Williams is the Founder of the oldest retained search firm exclusively dedicated to the pharmaceutical and biotechnology industries. Bench International, established in 1974, has offices in Los Angeles, New York, and London. Denise is a member and Hall of Fame Inductee of the National Association of Women Business Owners, and is the Membership Director for the West Coast Chapter of the Healthcare Businesswomen’s Association. She is the Founder of ALIGN, A Management Forum™, a team building and human asset retention program, and Co-founder of the S*T*A*R Solution™ (Strategic Talent Acquisition and Retention), dedicated to identifying, recruiting, and retaining toptier talent among women and ethnically diverse populations.

It is likely that by writing this article I will be drummed out of the inner sanctum of retained search laureates. That’s going to have to be okay with me, given that I’m a Founder and CEO of a retained search firm and happen to be a woman. The inner sanctum likely, in my lifetime, would never be known to me. After 30 years in the business, I have come to realize my profession is broken. Few in our service sector will admit it. We have image, revenue, and our very existence to protect. Yet it is our own clients who recognize that the system we have co-

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Denise DeMan Williams

conspirited to create is one of the least truly client-focused service industries in the forprofit world community. In truth, where is the sanity in going to a high-end designer, purchasing a customdesigned suit, making 3 payments as it is being completed, and emerging from the transaction with nothing, or, at best, an empty suit bag? The religious doctrine of a traditional retained search has within its pro-forma commandments a payment structure of 1/3 upon contract execution, 1/3 due 30 days later, and the final 1/3 due 30 days after the second payment. So let’s be clear: The customer often has paid 3/3

for something they have yet to receive. Is it then any wonder why we are branded with all sorts of interesting names, at times to our faces, more often behind our backs? This whole model has always bothered me, which is why my firm offers performancedriven retained search as a way to mitigate this. Still, I don’t think it’s enough. In order for performance standards and metrics to have any fundamental impact on our clients, the “buyers,” would have to insist this be instituted as an industry-wide practice. Truth Time. No search firm – none, neither the large, multi-office global, nor the “boutique” player – has all the answers or can do it all 100% of the time. My firm has been a market leader in our own rather narrow space of pharmaceuticals and biotechnology for 30 years and, while we are very proud we hit the target better than 95% of the time, there is that 5% that keeps me up at night! So how does a truly client-focused search firm protect its clients’ interests during that 1-in-20 times, hoping this ensures their bet? Many clients seek refuge in using large multi-nationals. On a onedimensional level, this would seem to be logical. I wish I could believe it was that easy. The truth is that several of these are publicly traded with their focus on the stockholder, not the “stakeholder,” aka the client. Firms try not to air their own internal laundry; however, what lies beneath the mystique of their “global” brand is more

often an internally competitive fight for both candidate and client control. My Dad taught me, “A deal is never a good deal unless all parties are bettered by it once they leave the table.” In the context of retained search, clients deserve to have 100% of their retained searches filled, as long as everyone has agreed, up front, that the searches are real and they are fillable. With that said, let’s look at 3 “what can be” scenarios in favor of better serving the client: (1) “It’s not about one deal, it’s about a long-term relationship.” This is where the readers may divide by gender, but, as an old-fashioned girl and business founder, this is my thinking, for better or for worse. In this scenario, there are times, given the intervention of human foible, that even the most well-intended search firms can run dry on an assignment. Therefore, what measurement ensures the clients are served and get what they need? In the pharmaceutical industry, losing months without pivotal hires can translate to a loss of time to market, revenue, and, more importantly, to loss of human lives and quality of life. In this scenario, you have a search firm that has given its all, a client company that has paid a dear price, and we’re still at a lose-lose. Does it really have to mean, after exhausting all known resources, a search firm is committing a form of relationship “hari-kari” if they take their client by the hand and open the door to other options, including their own competition? Far too many times, a client could be well-served by being introduced to someone who is not a candidate of the retained firm’s. This usually means the client goes unsatisfied or pays 2 fees. What a pathetic and expensive barrier to achieve win-win. If what we are talking about here is a long-term relationship and partnership, and not just a deal-by-deal focus, then is it really a failure if the retained firm ultimately has to share part of their fee with another in order to respond to the need of the client? (2) “ You can’t kiss everybody and, if you do, you won’t be respected.”

(Yes, Gen-X, -Y, and future –Z’ers, this is what girls and boys were taught when I was a tween and a teen). Here’s the deal… All retained search firms have, in some way, committed to “hand’s-off” provisions. If they have not, they are not in your competitive space. What this means for a client is that there are anywhere from a handful to a long list of clients’ competitors where they can’t “poach” talent for their clients. Therefore, little math has to be calculated to understand how limiting this can be for a client. Free-think a possibility: What would happen if a client were to say, “Go pick another firm to partner with who has different hands off limitations from yours. You two work together and make sure you cover and deliver our candidate options from an entire market.” Some strategicthinking client companies have done this, however, it has most often meant they’ve had to pay two fees. Would you be happy paying twice for the same item? I don’t think your stockholders would, either. So, what are the possible risks and rewards here? The risks are glaring and require an honest assessment of the clientservice partner relationship. At the table are issues around fear of revenue loss, loss of control, as well as being seen as having lost one’s “edge”. “It’s about the client, stupid.” The focus, from beginning, middle, to end must be about the client’s needs. How fast search firms can get on the bus and learn to work in partnership for their client’s interests, including collaborating with other search firms where necessary to get the job done, directly determines when search firms will earn confidence and trust from their clients who will know it is their best interests, not self-interest, that drives our industry. There you have the difference between earning the name “partner” versus being treated as a “vendor.” Someone tell me how anyone can find intrinsic reward, professional motivation, satisfaction, meaning, or legacy in the word “vendor”? As a culture, we have made humans and serving humans a commodity. Can anyone defend this? Can you do it with pride? “ Vendor,” “ Vendor Management,” “Commodity,” “Purchasing”… These are

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the words that keep those of us who love and honor our profession up at night, as do the machinations around them. Yet, if we earned client partnership and then continued to earn and deserve the title and role of “true partner,” can you even imagine how much more of an ROI for search fees both client and search firm would gain? Here’s a third scenario: (3) “Kiss me, respect me, and you can still have everything you want and need.” At the end of the day, I am still an oldfashioned girl. My mother and husband will be proud. Our children will be embarrassed, because they still think in terms of “either-or”. Old-fashioned is not cool. Yet, here I am, the Long-TermRelationship Maven, preaching the dark side of walking hand-in-hand with a client into a relationship with a direct competitor. If it’s another search firm run by someone who looks exactly like Meg Ryan or Ashley Judd, then even I might have a problem, but it won’t be about the deal or the client. Otherwise, it is my job and my responsibility to my team and to our clients that I believe more in collective needs than in my own. Here’s what I mean: It is up to me, as the leader, to maintain the gift of generosity of spirit, belief that the more you give, the more you effectively serve, the more joy and professional satisfaction you receive. It’s my job to teach it, to train it, to communicate it to my team, to our clients, and to live it. By sharing, by seeking, by trusting, by growing up, and by losing - we gain, we grow, we enrich, we provide, we renew. Will there come a time when the corporate sector imposes limits on how search firms serve them? Of course they will and they do! It’s already happening. Will there come a time when search firms choose to earn and, therefore, deserve the honorable title “Partner”? I hope so, and I hope it is in my professional lifetime.

www.search-consult.com For more information, contact: Web: www.benchinternational.com

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New Breaking

Ground By Nadim El Said

xecutive Search was first introduced to the Middle East (ME) during the oil boom years of the mid-70s to mid80s when multinational companies and banks called upon Executive Search firms out of Western Europe or the US to find them top talent. At the time, most of the candidates were expats and there were no search firms that operated in the Middle East. Twenty years on and Executive Search is still a relatively new concept in the ME as there are only a handful of respected search firms that operate here. Today in the ME both multinational and local businesses are beginning to use Executive Search. In fact, Rasd Ltd pioneered the introduction of this concept to local companies in 1989. As we had expected, the demand for Executive Search is growing much faster with native players than with multinationals. Currently, the business community is hiring both expats and local players, and this trend will continue as more locals prove their worth. In fact, the economies of the ME have tremendous potential for growth, as the pressure for modernization is compelling. Changes are required to create dynamic and viable economies in the region. There are several catalysts for this change. For example, there is the impact of the World Trade Organization on the economies of the region, affected by the ensuing effect of modernization and the liberalization of the markets. Within this context, the private sector and family-owned businesses will play a vital role in the new Middle East economies. Many family-held businesses today are increasingly emerging as developed and well-structured companies. They recognize the importance of sound

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professional management in order to grow, develop in an increasingly competitive environment, and in case of some of them, prepare their companies for the prospect of going public. This dynamic is expected to create a strong demand for executive leadership at various levels in Middle Eastern corporations. The retainer Executive Search market in the region is still virgin but has strong prospects for growth. The most promising sectors for Executive Search in the Middle East are: a wide spectrum of financial services, manufacturing industries as a whole and in particular the food industry, healthcare, retail and real estate. There is strong potential for significant commercial rewards from Executive Search in this region. Nevertheless, a lot of hard work is required to foster growth of this specialized profession and establish its effectiveness as one of the key elements in the economic development of the ME markets. UNDERSTANDING THE HARDSHIPS Several challenges face the Middle East search business today. A large part of the market is still a bit skeptical of an intricate specialized consulting service it does not truly understand. Large portions of businesses are still unable to discern the utility of Retainer Executive Search versus conventional contingency recruitment. There is also the problem of contingency recruiters posturing as retained Executive Search consultants, further confusing client firms that are still trying to grasp the whole concept of Executive Search. Furthermore, the information structure in Middle East markets requires significant development.

As a result, research requires a considerable amount of time, which in turn reflects the length of time and costs required to complete a search and produce the desired results. Information about the financial position and the senior management structure for many of the family held businesses is not readily available to the public. This poses a great challenge for the Executive Search firm, especially in target company prioritization and candidate identification. At the same time, search consultants must assist potential candidates in evaluating the new career opportunities presented. Within such a structure, the executive search firm has to rely on its informal network of contacts as well as lessons learnt from earlier contacts with senior executives in a particular company to build knowledge of key players & their respective level of organizational development. Let me say from the outset, that many of the ideas presented here could be characterized as evident basics of retainer Executive Search. While this is a valid remark, it is also true that some of the most obvious things are often taken for granted and very frequently overlooked. In a virgin search market like the ME, articulating the needs of some clients and ensuring their active collaboration in search assignments requires concerted and focused attention. There are a number of fundamentals that in our view underscore the success of Executive Search in the ME markets. First of all, in order to succeed in penetrating the ME market the retained Executive Search organization must understand the language and recognize the cultural makeup and values of the region - in the general

community sense and in the specific business sense. This is crucial since the business culture is undergoing transformation from conventional trading to manufacturing and services. For example, the Executive Search firm must be aware of the legal restrictions that impact the movement of skills within key markets in the region. In some countries in the region expatriate workers have to be “sponsored” by their employers to obtain a work permit. Therefore, they would require approval from their employer to relocate to another job in the same country or obtain a visit visa to travel for interviews with a search firm or a new prospective employer in a different country. Secondly, the emerging search profession in the ME markets must communicate to specific industry and service sectors the added value of retainer Executive Search and the significant impact it could bring to the success of the operation of any enterprise. It is a prerequisite that organizations within the ME market understand the added value of the executive; it is incumbent upon the search profession to achieve such understanding in their endeavor to assist in creating and growing this specific market sector. It is especially difficult when the business community is skeptical about retainer funding in (Executive Search) consulting while it is acceptable in, for example, medical care or the legal profession. We must educate the market about the significant value of the retainer approach as compared to the contingency approach. In many cases, particularly with traditional family held groups seeking to build a structured & developed organization, the Executive Search firm will have to spend considerable amount of time assisting the client to clearly articulate their firms’ requirements. Requesting information about decision-making processes or financial information is sometimes viewed with skepticism. The search consultant must be very tactful and diplomatic in persuading the owners/decision-makers that providing this information is crucial to the success of the search assignment, and therefore, the success of their own companies. We must

also deal with issues, such as how do you impress upon your client that corporate governance attracts high fliers but neglecting this issue can have the opposite effect. Finally, the search firm must be aware of the intricacies of ME markets in order to identify and introduce culturally matching candidates locally and internationally, whose adaptability to the host client company can be established and a relationship with whom could be sustainable. THE ROLE OF A CONSULTANT The retained Executive Search consultant serves as a management consultant to the client; the relationship must be based on trust. This is vital to the success of the search from the perspective of both the client and the consultant. A client will listen to a consultant’s counsel only if the latter is able to impress the client with their expertise, objectivity and capability. The consultant must convince the client that the best available talent can only be secured if the consultant is appointed and adequately funded as a credible “ambassador” representing the client in the marketplace. A consultant must therefore possess and exercise a large amount of professional integrity to achieve the necessary trust and the capability to achieve the desired results swiftly and successfully. Search consultants should: • Rally and persuade the client accordingly during the pitching stage for a search project and then demonstrate added value to search objectives during its execution. • Carefully manage the client’s expectations and establish clients’ understanding of the deliverables and accountabilities of the Executive Search process. • Encourage the client to manage the project in a pragmatic manner and counsel the client to deliberately evaluate the consequences of latter’s decision relating to the criteria and parameters of the search. • Persuade the client to recognize the realities of the market and the inherent

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constraints and challenges of search. The search profession must impress upon the client that to secure successful results from the retainer Executive Search process the client should select a search firm that has bona fide credentials to undertake the mission; a firm that has pervasive knowledge of and network of contacts in ME markets and in which the client can develop trust. The retainer Executive Search model is only “economically feasible” if the position the client is seeking to fill is a leadership executive role. The client should also assure compatibility between the attributes and bench of candidates they seek with the search firm’s ability to motivate & attract such executive/professional talent. Paramount to the success of the search is adequate and economically feasible “funding”. This is essential to achieve success for two reasons, (a) search projects are tailor-made to fit each specific client’s situation; and (b) when adequate funding is assured, the search endeavor is focused on success and sustainability of relationship between client and selected candidate(s) rather than the uncertainty regarding adequacy and remittance of funding for producing the best results. BEYOND THE HORIZONS The future of retainer Executive Search in the Middle East is promising. Active economies are modernizing as industries and services continue to grow. Middle East societies are hungry for goods and services in all sectors. Companies in the Middle East will find themselves competing for exceptional talent, for leaders that are capable of bringing their organizations to new levels. Within this context, it our responsibility as search consultants to search for, develop and introduce outstanding talent to assist our clients in realizing their business objectives in an increasingly competitive environment. www.search-consult.com For more information, contact: Web: www.amrop-me.com

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Executive Search

in the Middle East Research by Peter Samaha Written by Rosalyn Rahme agdy El Zein and Jei Matt of Dubai-based executive search firms Morgan and Banks Middle East and Synergy Executive Search speak to searchconsult. Executive search companies have been operating in the Middle East since the oil boom of the last century however the ‘obvious local choice’ for firms seeking to recruit executive level talent across the Middle East is yet, if ever, to be established. With banking and oil as the two major industries requiring search in the ME we must recognise that these industries draw and require an international talent pool, and as such many of the requirements across the Middle East are just as likely (and as easily) to be filled from a search consultant in New York as in Dubai or Beirut! This article takes the experiences of two leading search consultants in the Middle East examining some of the hurdles they have overcome from their initial stages of development to the current day and how these executive search companies are distinguishing themselves from other available recruitment tools for the local business community.

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Rosalyn Rahme

Jei Matt of Synergy Executive Search explains that initially most Middle Eastern companies (as opposed to the international firms with ME offices) were not accustomed to the practice of using executive search firms. They relied on the local market and n e t w o r k i n g . H o w e v e r, M a t t emphatically states, “This has slowly but definitely started to change.” He goes on to explain that employers are now looking to hire a candidate who is a Strategic Fit to their requirements and that employers are realising and

prepared to pay for the benefits that a hire can bring. Companies are using Executive Search firms with a clear vision of the person/candidate they are looking to hire. However, Matt does warn that in the Middle East employers are very demanding with respect to the competencies they are looking for in their prospective executive employees. Matt goes on to explain that localization is evident to a certain extent, but not across all sectors. In his experience, cultural adaptability and industry specific experience are highly valued and clients welcome introductions from outside the ‘local’ candidate pool. As an illustration of this point, he provides the example of a large local company looking to hire a General Manager for their Travel Business. They were looking to recruit an executive with a thorough understanding of the travel industry as well as the ability to seek and create opportunities in one of the world’s most vibrant markets – Dubai. They found the successful candidate from one of the UK’s largest Travel Firms who did not have one years’ Middle Eastern experience. The client hired him over someone with a strong Middle East bias mainly due to his completive

outlook and his aggressiveness. Matt concludes that sourcing candidates globally is accepted; it is just a question of what the key competency requirements are. In an executive search market that is still undergoing maturity El Zein says that although local firms tend to rely on their existing social and business networks for potential candidates, once they try the [executive search] service and see the results they tend to stick with it. Although the fees associated with executive search can be initially daunting to the local business community (especially when compared with those of contingency recruiters or adverting firms) the challenge is to show the client who is unaccustomed to the pricing structure the differences between the available services and the advantages/added value of a search. Search consultants must show these local firms that they add the value of making what has often been an opportunistic hire into a strategic one. Justifying the fees is an added burden but part of the executive search business in the Middle East. However, Jai Matt says that this justification is quickly and easily accomplished - and need only be done once. The fees are comparable to the UK and US. In the case of Morgan and Banks the fee for successfully filling an assignment is an initial retainer fee followed by one third of that candidate’s first year salary and accommodation allowance. El Zein also concedes that the companies often “find it expensive to start with both the size of the fee and the retainer element”. Parting with some money upfront can meet with cultural/habitual barriers but El Zein adds confidently that once the client is updated weekly on the process and progress of the search, they begin to feel more comfortable with the process and price of the service. Barriers to the Search service in the ME do not stop at fees. El Zein points out that many would-be Middle Eastern

clients are unaware of the differences in service between the executive search firms and contingency recruitment. He shares his own company experience in having had to educate, clarify, distinguish and promote his search company service over and above other recruitment services so that his client can decide whether a requirement requires a search or not. There is the temptation to be “all things to all men” in the executive search business in the Middle East. El Zein adds, “There are lots of companies in the Middle East who claim to do everything - from advertising, selection, Internet based recruitment to executive search and selection… if the decision maker of a company is not aware of the differences, they will go out and use an advertising company first. We spend a lot of time educating the market on the advantages and benefits of the executive search process (where needed).” El Zein explains that the market in the Middle East is currently made up of no more than two serious Middle Eastern executive search firms, with the rest of the market open to global firms. He goes on to say that a competitive market would help to regulate the pricing structure of the industry as well as draw much needed attention to the existing search firms. We are seeing an influx of search and recruitment firms to the ME and in particular to Dubai. Jei Matt points out that some of the globally Renowned Search Firms are setting up offices in the hub of Dubai and are possibly lacking the sensitivity to the cultural constrains, and in some cases the ability to understand the market dynamics within the region. Many have already set up and been daunted by the ‘uphill task’. Success for search firms in the Middle East is on the ability to sell the value of the search process clearly and r e s p o n s i b l y. Fu t u r e c l i e n t s a n d

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opportunities lie with their understanding and appreciation of the value of executive search and the role it can play in the development of businesses in all sectors. El Zein believes that there is a definite future for the executive search industry in the Middle East and is confident that it will find its rightful place in the Middle Eastern business environment.

“This industry is in the process of gaining

especially as the Middle East is becoming more and more open and in touch with the business dynamics of Europe and North America.” recognition,

El Zein goes on to note that “There are certain economic reforms taking place with which will come a liberalisation of economies -- and the executive search and selection business will become more and more a standard in the Middle Eastern market place.” Executive search needs recognition and appreciation for the value it can offer companies. How long this will take is uncertain, but professionals like El Zein and Matt strongly believe that there is a great deal more of opportunity and business to be done in the executive search market of the Middle East.

www.search-consult.com For more information, contact: Web: www.goldjobs.com

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Technology and Your Business By Jason Starr erhaps more than any other business, Executive Search is about people. Good people in the Search business tend to have strong personal skills – insight, judgment and so on. Compared to many industries, Search is one in which the role of technology is largely invisible. Having said that, the fact is that Search firms today rely more on technology than ever before. The database has developed from the level of being a ‘telephone list’ to being a fundamental part of how a firm operates. In practice, however, many of the executives at mainstream search firms have little or no knowledge of how other firms use technology. Managers in the Search industry tend to be owners, and as such tend not to change firms regularly. Therefore, they tend to only be exposed to how other firms are using technology when a new researcher or a consultant joins from a competitor. The objective of this article, therefore, is to provide a brief insight into just three ways in which technology is being used in the Search industry. CANDIDATE INTERACTION Given my comments about the importance of personal skills, it is perhaps surprising that technology plays much of a part in client communications. In practice, however, technology has dramatically reduced the overhead associated with managing ‘write-ins’. Early examples of this were websites such as eKorn/Ferry which allows candidates to register online. Today, however, this technology has

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been surpassed in many countries by ‘Résumé Extraction Technologies’. In essence, this powerful technology will extract information from a résumé – everything from contact information to employment history and educational background – and use it to populate a database record without the need for typing it in. This dramatically cuts the cost associated with data entry while also increasing the volume of knowledge held (why not carry all employment history, given the time it takes to enter it is virtually negligible?) and without typing errors. RESEARCH AID Search is about knowledge, about networking and about depth of knowledge. Modern search systems are much more than repositories of data – modern products allow detailed analysis of the relationships between people and companies. For example, with our FILEFINDER application, from the record of a person, it is a single click to draw up a list of people who that candidate may know. This will include people who may have mentioned him, or been mentioned by him, or even people who worked alongside him. WORKING WITH THE CLIENT Most systems have been able to automatically produce reports for many years. A number of Search firms today, however, go one step further and actually offer web-based access to controlled assignment information via the Internet. Heidrick & Struggles first introduced the extranet concept but many firms now offer similar facilities. And, the good news is, the fact that this

type of application has gone ‘mass market’ means that the implementation costs are extremely low. RETURN ON INVESTMENT? Putting these technologies together can make a big difference to your business. Here is an example of what a typical user of FILEFINDER can do in around 1 minute: • Receive an electronic résumé for a person not currently on the database. • Create a validated, populated record in FILEFINDER. • Add the original résumé as a fully searchable document. • Produce a skeleton profile report, containing details from the original resume, but in the ‘house format’. • Identify people who worked alongside the candidate, through his or her employment history. How much time would it take one of your staff to do this with your current system? How many résumés do you receive every year? The numbers quickly add up and many Search firms see a return on investment within the first year of implementation. Jason Starr is President of Dillistone Systems, suppliers of the market leading FILEFINDER executive search application. Dillistone Systems is also publisher of search-consult magazine. www.search-consult.com For more information, contact: Web: www.dillistone.com

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IMs Face Up To Third World Challenges By Nigel Corby lacing high-level management staff permanent or interim - in third world countries presents more than its fair share of problems. For a start, not everyone wants to enjoy the dubious benefits of potential political instability, health issues, the yawning gap between western cultures and those in developing countries, the economic situation and the lack of home comforts, particularly if they can opt for the relative cushiness of a posting in their home countries. Okay, so it’s not quite as glamorous-sounding as working in Africa but at least a supermarket is only ever a five-minute drive away. Educational establishments many and varied, and from a social point of view colleagues and friends at least speak the same language. And if you don’t get on with your neighbours, well, the couple round the corner will share your interests. But firstly, why would a third world organisation want to employ a western interim manager anyway? The national hospital in Abuja, Nigeria is one such operation that, having made a disastrous beginning decided to call in experts on dealing with overseas hospitals to help it claw its way out of the mess it had made. The hospital was built in 1999 with the aim of being run to international standards. By 2002, it was running at a massive deficit. Medical staff were being used to handle the commercial and marketing side of the hospital – something for which they were plainly not suited - which had the added disadvantage of taking away medical care from the patients. It needed a massive injection of medium term western management expertise to set it on an even keel and enable it to be self-managing within a few years. Cue International Hospitals Group (IHG), a specialist organisation that handles all areas of healthcare management for overseas clients.

Although IHG was appointed in the late spring of 2002, no funding was in place until October at which point it wanted a team of directors in place immediately. Having a team of potential permanent employees waiting in the wings isn’t feasible in these circumstances, making the appointment of a team of interim managers who are available at the drop of a hat the ideal option in the first instance. IHG uses a range of different suppliers for the various specialities required – one for health professionals, another for IT experts and a third - Global Executives - for financial directors. IHG has developed a strong relationship with Global Executives, which has a reputation for supplying high-level interim managers for overseas projects. Global Executives understands how IHG works, the nature of the projects it oversees in a host of third world countries, and the need for immediate top flight, culturally and linguistically fluent managers. Ideally IHG was after a qualified accountant with Nigerian and healthcare experience. “But,” explains Paul Llewellyn (the man appointed

Nigel Corby

through Global Executives as commercial director for the Abuja project), “that person didn’t exist.” It was vital that whoever was selected had experience of working in Africa as well as an excellent track record in financial directorship. Global’s selection process involves shortlisting a number of carefully matched candidates, of whom a handful will be interviewed. Then it is down to chemistry and personality between the IM and the client company – another crucial ingredient for a perfect match. Paul’s criteria all fitted perfectly. “I was in Nigeria for ten years in the 80s and 90s. IHG revised their requirements to include a qualified accountant with Nigerian experience. I had spent ten years in Nigeria and quite fancied the idea of returning.” Paul implemented a number of strategies that helped streamline the commercial side of the hospital, including installing computerised recording systems and ensuring efficient billing procedures and the hospital’s deficit was reduced by 70% within the first year. “Whatever I did had a significant impact quickly,” explained Paul. “That’s the key thing with IM. There were four areas I had to look at financial, marketing, medical records and IT. These were all fairly crucial. One of the key requirements was that the hospital became more commercial in its approach and achieved financial stability. It was very important that whatever I did had a massive impact.” “There were intangible benefits too such as the installation of extensive computerisation and the integration of computer systems. We bought forty computers and printers and computerised a lot of processes. We can’t quantify the improvements in a finite way, but can say, for example, that the chances of fraud, revenue not being recorded or making errors are less. No statutory accounts had been made since the hospital was opened. We introduced ISSUE 21 2004 search-consult

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financial reporting. All these improvements are pretty intangible but further the aims of the hospital,” he added. IHG Finance Director Milind Pradhan added, “The hospital was running at a huge deficit. There were issues over the quality of patient care. Very few patients were being treated so we looked at the problems. We increased the turnover by making sure patients were billed properly, ensuring money was collected correctly, that drugs were properly charged for, that the hospital changed its procurement methods by going out to tender rather than buying things as a one off. It was run by civil servants before. They were not necessarily the best equipped to run a hospital. The doctors ended up running the hospital, which wasn’t right.” Global Executives Managing Director Nigel Corby explained, “Although there are a number of people who could have handled the business side of the operation, few could have tackled the cultural side or handled the indigenous staff in the effective and non-confrontational way Paul did. Nigerian experience was critical. The knowledge of overseas culture is as vital as the technical and managerial abilities required.” One of the challenges for providing high level management staff for third world projects is that the economic situation there is such that there is often a considerable time gap between appointing an organisation to supply managers to run the project and finding funding for it. This means it’s not financially viable for a company to have a bank of top managers waiting in the wings on the off chance a project might arise. Additionally, the skills required and the range of third world countries demanding such expertise are usually so precise and so diverse that having a team ready and waiting would never provide precisely the right fit – in terms of management and sector expertise, and linguistic and cultural match – which is why IMs are a perfect solution all round. “Lack of management expertise and experience, political tensions and financial difficulties mean operations in developing countries are often uneconomic and inefficiently run. Western expertise is sometimes required to point them in the right direction, train up existing staff and put new systems in place to enable the business to fund itself after a few years.”

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”Working in a third world country – or indeed any country whose culture is alien to our own, is a tough call. Many people simply cannot cope with it and give it up,” explained Paul. "It was important to be aware that when working in a team overseas, all the members are foreigners abroad and expected to integrate with each other both in and out of the workplace. IMs working abroad need particular personal qualities such as patience, cultural understanding, and adaptability. “For example, it’s normal in Nigeria for people to have a TV set or radio in the office or collect their children from school during working hours. We don’t have this in the UK and it fazes a lot of people. This is a trivial example but you would be seen to be imposing UK values on them unfairly if you tried to change this. There are ways of getting round this, ways of introducing international business practices without upsetting them. An IM needs to look at situations in a flexible way that complement local cultures and working practices whilst at the same time getting the job done.” It's very important to be hands on, particularly in developing countries. You need the ability to alternate from a high-level role such as giving a presentation to government officials to first level bookkeeping. IMs have to be flexible and adaptable. Another problem for many IMs is being away from your family. It is important to organise things such as leave and regular phone calls to minimise the effect of being away from home. More so than in the UK it tends to be more difficult to differentiate between work and personal time. It is therefore necessary to come to terms with these issues quickly and early in the assignment by focussing on the advantages and positively managing the downsides. When Paul left after around 15 months the hospital was heading towards sustainability. The deficit had been growing throughout 2002, was curbed during 2003 and was further reduced during 2004. Financial control of the hospital was handed back to its own managers and it is hoped that processes put in place during Paul’s tenure will point it in the right direction for future success. www.search-consult.com For more information, contact: Web: www.globalexecutives.com

International Hospitals Group IHG handles all aspects of healthcare management for overseas clients in locations such as Nigeria, Ghana, Angola, Libya and Kazakhstan from feasibility studies to project management, construction and management. The IHG group whose sister companies are also involved in the leisure industry, turned over £16 million last year and employs around 250 staff. IHG Finance Director Milind Pradhan explained, “We don’t go to nice parts of the world. Recruitment is difficult although the remuneration is good.” Fo r m o r e i n f o r m a t i o n v i s i t www.ihg.co.uk Global Executives Global Executives’ unique European focus is among three key areas setting it apart from other interim management supply companies. Its determination to concentrate on supplying proactive interim managers exclusively, rather than offer a range of recruitment services, along with its personal and hands-on approach, combines effectively with its ability to interpret a client’s problems and deliver a workable executive solution in less than three weeks. Global Executives supplies interim directors, executives and managers across Europe, including the UK and beyond and has a burgeoning worldwide database. Nearly 50% of its work last year came from overseas with almost 90% of that in Europe. More than a third of the interim managers on Global’s database are fluent in a second language, with 35% of those fluent in three or more languages. Assignment locations so far include Romania, Holland, Kosovo, France, Spain and Germany. Vietnam and Nigeria are featured in its worldwide operating locations. It is essential that companies expanding into other countries take on someone who is not only bilingual, but also bicultural. Understanding the culture of the people and how business practice operates in the host country is vital. Using culturally aware and fluent speakers boosts credibility with customers, local employees and peer group managers. For more information call 01276 671535 or visit www.globalexecutives.com

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