search-consult Issue 22 by margaret jaouadi

2005 / ISSUE 22

The International Executive Search Magazine

Search-To-Search Search in Life Sciences - part 2 What Do Your Clients Want? - first in a series of interviews with top HR Professionals - Bruce Ralph from Videojet Diversity in German Boardrooms Technology in Executive Search

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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.

RRD Search is pleased to announce our new partnership with James D. Swartz and RRD Capital Advisors. RRD Capital Advisors is a New York-based investment bank focused on the Human Capital Industry including staffing, executive search, information technology services and outsourcing. NEW CORPORATE OFFICES RRD Search (formerly Roberts Management International Inc.) and RRD Capital Advisors have recently moved into our new corporate offices. 15 Maiden Lane, Suite 705 New York, NY 10038 +1 212 627 7200 RRD Search Inc. provides senior-level retained search services to the executive search industry. Some of our recent completions include: Christian & Timbers, LLC Brian Sullivan, Chairman and CEO. The Hennessy Group Inc. Henrik Aarre, Managing Director, Life Sciences. Sheffield Haworth Stephen Spagnuolo, Managing Director, Financial Services. Ray & Berndtson Dan Friedman, Partner, Financial Services.

www.rrdsearch.com ISSUE 22 2005 search-consult

The Trainer: Jill Dillistone – arguably the Search industry’s leading trainer with over 20 years experience of conducting research for a number of premier search firms in the UK and Europe as well as delivering training courses internationally for major search firms such as Russell Reynolds, Heidrick & Struggles and Whitehead Mann.

The Approach: On-the-job training within small business units is the pattern in the Search industry. This tends to mean – particularly in smaller firms – that Search Professionals are not exposed to the techniques and approaches developed in other firms. All workshops are as participative as possible with role-plays using case studies and “real” examples and materials are provided to refresh memories!

EXECUTIVE SEARCH TRAINING WORKSHOPS a series of 1-day training seminars for Search Professionals

THE WORKSHOPS:

Research and Candidate Development Workshop – 18 May 2005, London This 1-day workshop is for less experienced researchers and consultants. The three themes covered during the day are research skills, telephone techniques and administration and project management. You will learn: • How to be creative in solving your search • Five techniques to screen candidates effectively • How better to set priorities and manage your time • The secrets of getting to the best candidates fast

Search Execution and Client Management Workshop – 20 May 2005, London This 1-day workshop is for professionals involved in the search execution process and focuses on effective and successful client management and liaison (including progress reporting), candidate interviewing and referencing and the preparation of candidate reports and package negotiation. You will learn: • How to get the real story behind the CV • Five techniques to add value in the search process • How better to manage client meetings • The secrets of developing long term client relationships

The workshops take place in Central London and cost only £250 / $460 / C360 if booked before 30 March 2005 (normally £299 / $560 / C430). Maximum 16 attendees per workshop. To book, please complete the booking form available online at www.dillistone.com/workshops and send it with the payment to (please make the cheques payable to Dillistone Systems Ltd): Executive Search Training Workshops, Dillistone Systems Ltd Calvert House, 5 Calvert Ave, London, E2 7JP, UK If paying by credit card, please fax it back to us on +44 (0)20 7729 6108. Refreshments will be provided throughout the day.

Cancellations have to be made in writing up to 30 April 2005 and are subject to cancellation fee of £50 / $90 / C70. We regret that cancellations received after this date cannot be accepted and will be liable for the full fee. Replacements can be made at any time.

For more information, please visit our website www.dillistone.com/workshops or send an email to marketing@dillistone.com

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Part 2

LifeSciences: a Market in Search of Good Health by Pilar Gumucio

n the first part of this article, we discussed how the life sciences sector is undergoing massive structural changes that are placing enormous pressure on companies to shorten their research and development cycle while at the same time exploring how to better sell and market their products. In turn, companies are making strategic alliances in the hope of broadening their product base, increasing their market share and generating greater revenues. Within this context the factor of talent is increasingly important, as organizations within life sciences are raising their expectations and redefining the executive profile that is required to be able to effectively manage all these challenges. Finding the right top performers becomes even more difficult as the candidate pool is becoming much smaller. Greater globalization is increasing the demands clients are placing, requesting that search consultants quickly present them a shortlist of international candidates.

Michael Klingler

How are search consultants responding to meet their client’s expectations? First, let’s explore how the executive profile is developing. WHAT TYPE OF MANAGEMENT IS REQUIRED? Michael Klingler, Partner of RSVP Management Consultants, indicates that due to parallel imports the same product will eventually be priced the same worldwide. “This will have a huge impact on human capital since the profile of the senior executive will evolve and be quite different than it is now.” Christopher Seabourne, Vice-President at A.T. Kearney Executive Search, explains how globalization is affecting the profile as “few senior jobs are now confined to one country as international experience is vital.” “In fact, most clients insist that candidates be able to operate in several international key markets,” states Francis Rolland, Managing Partner at People in Health. Dr. Richard Eidinger, Co-Head of the Global Life Sciences Industry Group at Heidrick & Struggles, comments that intellectual agility and experience are both requirements in a rapidly changing business environment. Caution and conservatism on the part of hiring managers make those with these skills and a track record of success highly desirable. This translates into both broader opportunity and higher compensation. In fact, Steven P. Hochberg, President of Caliber Associates, describes how “the successful executive today must be able to demonstrate tangible records of achievement in their functional areas of expertise. Companies are less willing to bet on individuals’ potential, and instead, are looking for leaders with proven track records that will support strategies for growth and success.”

“Competition is very intense,” remarks Jocelyn Dehnert, European Regional Managing Partner at Heidrick & Struggles, “Consolidation is increasing the demand for strategic thinkers. You are looking not only how they are able to articulate, but also how they deliver and how they plan their strategies.”

Chris Seabourne

Attracting visionaries who can clearly articulate a company’s mission to the marketplace is essential. According to Marc Lewis, President of North America at Morgan Howard, “It is a difficult and critical stage as executives must have experience beyond just healthcare and pharmaceuticals. They must be able to bridge healthcare, information and business decision-making.” Steven Hochberg describes: “As biotech/pharmaceutical companies’ portfolios mature and progress through the development pipeline toward commercialization, those executives who can bring a keen understanding

ISSUE 22 2005 search-consult

Working in partnership with the leaders of today and tomorrow

Stanton Chase International provides executive search, organisational planning and recruitment consulting services. Our seasoned consultants combine local insight with specific industry expertise in eight dynamic sectors of the global economy: • Board and Corporate Governance • Consumer Products &Services • Financial Services • Healthcare &Pharmaceuticals • Manufacturing &Engineering • Professional Services • Natural Resources &Energy • Technology

Established in 1990, Stanton Chase International has grown consistently to be ranked among the top 1% of global executive search firms.Our growth has been built on solid performance, consistent delivery and quality service, with longstanding clients. Our forward thinking and long-term dedication to our clients set us apart. No matter where you are and whatever the need, we can work with you to provide executive search and leadership capital solutions to foster the success of your organisation. To speak with an industry practice search specialist or find a location near you, go to www.stantonchase.com

www.stantonchase.com

North America

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

Asia /Pacific

Marc Lewis

of product life cycle management will be increasingly important and valuable to the industry.” Dr. Tony Chandler, Executive Chairman for Talentmark Search & Selection, reports that there is a “stronger emphasis on commercial outlook, even in non-commercial functions, and generally a deeper knowledge of wider functional areas, such as IT, HR and Finance.” Companies are looking for broader experiences, states Dr. Peter Woods, Group Managing Director of Euromedica. “They not only are looking for expertise in their area, but line management skills, strategic skills and to be able to communicate well with all levels of management.” For example, Research & Development executives must effectively create a strategic research platform. They must understand what drugs are available to treat unmet needs in the market and also the devices available that can serve as the delivery method for these drugs. They must be able to combine product development, business strategies and corporate alliances under one role. CLIENTS’ EXPECTATIONS Nick Stephens, Managing Director of RSA Search &Selection, explains how clients broadly fall into two camps. On one hand, there are those who view the process as a transaction. “These clients tend to use metrics such as time from brief to start or percentage fee as measures of success”. On the other hand, there are those

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clients that “recognize the added value in what we do - so that we almost become an integrated part of their business. As a result, cost, time and other pressures tend to reduce considerably and they measure you on the value the person you provided them has contributed to their team.” Although search is very client focused and tailored to individual clients' needs, it is evident that clients are raising their expectations. Therefore, they are placing more demands on their search providers. Dr. Tony Chandler describes: “Clients are requiring candidates who already have at least two years’ experience in every key facet of the job they seek to fill. A moment’s reflection will indicate that the best candidates who have all that will be looking for the next rung up. Put differently, the client risks excluding some of the best candidates from its shortlist. But still they ask it. So we still, surprisingly, have a big educative task here.” Jocelyn Dehnert describes how there is a far greater emphasis on cultural fit and leadership competencies. “What is the decisive factor, more than the qualifications, are the executive's leadership competencies... how they assess, assert and deliver.” Within this context, Nick Stephens explains that it is vital that “clients understand that a successful person will thrive dependent on his or her environment – not only the skill sets that he or she can provide.” As a result, it is vital that search consultants “focus on individuals and how they will ‘fit’ in a particular environment. In order to do so, it is essential that we look at the profile, understand the values and aspirations of the client and then find matches to fit this unique environment.” Dr. Peter Woods reports how margins are being heavily cut and as a result, it is “the first time that companies are paying greater importance to administrative costs and therefore, recruitment budgets are tight culminating in selectivity when using Executive Search firms.” Dr. Richard Eidinger indicates how “because of risk aversion, clients are hiring selectively and looking for executives and consultants that will have an immediate impact on business. The bar has been raised for both.” WIDENING THE SCOPE According to Christopher Seabourne, search consultants are expected to be experts within various areas, know or can quickly identify and

evaluate the right talent, provide access to international candidates and accomplish these tasks as quickly as possible. Francis Rolland notes that clients are expecting quicker responses since “they are working with tighter budgets and shorter time

Peter Woods

frames. Another factor is because the decisionmaking process takes much longer. However, once they have made the decision to hire your services, they want the profile filled very fast. And as a result, they are willing to approve a high premium to obtain the right individual.” Michael Klingler explains how the “search process in life sciences is becoming more global, and as a result, is becoming more complex. There are different markets, we have to interview various backgrounds, search in various countries and verify the executive’s performance in various cultural environments.” Whether the firm is a large global firm or a niche boutique, all the consultants indicated that increasingly their searches are trans-national in scope. As a result, the search process has become more rigorous. Dr. Richard Eidinger reports how clients expect consultants to make sure the candidate’s background is fully vetted as early as possible as there is more of an emphasis on proven track records and prior results. Dr. Tony Chandler explains how “clients expect better value for money, more speed and more transparency. Such challenges keep us on our toes and keep us competitive.” ISSUE 22 2005 search-consult

SELF-MEDICATION At the same time, there is an increase in clients seeking to perform their own search activities. Dr. Tony Chandler describes, for example, how some firms are using freelance researchers to present lightly screened candidate shortlists. Some of these firms are using these services to hurry the process along. Others prefer them because they want to cut costs and hope that by using in-house recruiters or by outsourcing certain tasks they will save money and time. Many of the search consultants describe how search is coming under strong price pressure and demands from larger companies to reduce costs and perform retained search on a contingency fee. However, some consultants question if cutting costs on how to hire the best people is the most

Jocelyn Dehnert

appropriate move, taking into consideration that the life sciences industry is facing enormous regulatory pressures, financial constraints and an increased level of competition to get products out there first - especially when that top talent is a company’s best option to turn the situation around. CREATIVE TREATMENTS With the executive profile being redefined, the pool of candidates is getting smaller as companies compete to attract and retain the top performers. According to Dr. Peter Woods, the last 3-5 years has seen the market increasingly

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becoming candidate driven, which is why it is vital that search consultants deliver the right candidate to the client. To ensure this occurs, “it is critical to explore career aspirations at the very outset of the recruitment process. By nature, executive search is assignment driven and focuses on the assignment and how an individual can fit into it rather than the other way around.” He elaborates: “When interviewing a candidate we not only assess if the candidate fits the current role offered but explore his or her career aspirations so that the search consultant can really evaluate the potential contribution this individual can bring to the client company. If the candidate’s career development corresponds with the client’s, then a match can easily be made. Sometimes candidates are encouraged down a route knowing full well that they may be reticent. This wastes everybody’s time and leads to failure.” Jocelyn Dehnert notes that there is a requirement for executive search consultants to think more laterally and to be more creative. Although this is a very conservative industry, in certain areas clients are beginning to request candidates from ‘outside the box’. Marc Lewis affirms that, “There are certain large companies bucking the trend and becoming more visionary.” “CareFirst, which is a holding company for Blue Cross of MD/DC, “ is a perfect example. “This company hired a SVP level CIO who not only has healthcare IT experience with two other large competitors; but this executive, Ted Dellavecchia, also has multi-functional experience which includes sales management obtained at IBM early in his career and multiple industry experience obtained at WiFi innovator Starbucks, where he was CIO.” “Ted Dellavecchia is an example of a new millennium CIO who doesn’t just talk business, he actually links business and technology to yield results for what has historically been a slower moving non-profit healthcare insurance provider,” states Marc Lewis. Francis Rolland explains that as companies are requiring more direct contact with consumers/patients, they are beginning to recruit from FMCG, food, agro, and retail as the knowledge and skills in dealing directly with consumers/patients as well as distribution channels are, and will become more necessary over time. He states, “As generic companies from India

Francis Rolland

and Korea continue to expand into Europe and the US, companies, whether they feel comfortable with it or not, will have to adapt if they wish to continue competing in this fierce environment.” In fact, even boards, especially NonExecutive Directors, are beginning to select top performers from the marketing, logistics and manufacturing sectors, hoping that this move will enhance their companies’ strategies. Dr. Tony Chandler also reports: “There are some executives coming into specialist functions, such as Procurement and Supply Chain Management, from sectors such as the FMCG, motor and white goods industries, in order to drive deep cost-cutting.” Nevertheless, Nick Stephens describes that because this is a very heavily regulated industry some roles can't be filled by people from outside the industry. “With development projects costing $800 million or more, a small mistake can have dramatic effects to the bottom line.” He notes that looking outside the box is occurring, but mainly in specific functional areas such as HR, Finance, Legal, and IT and in companies with strong OTC portfolios. Christopher Seabourne explains that clients “talk about the desire to bring on board people who think differently, but more often than not, they will go back to the traditional, known commodities.” “Most clients are not willing to look outside the box for candidates,” reports Francis Rolland, “because when they look at the short list of people you provide, they start wondering how ISSUE 22 2005 search-consult

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long that person will have to be trained and how much time will pass until they can provide positive results. In the end, they will select the person that they think will show immediate results. In fact, the real top positions usually are chosen internally or from the group, and this trend will probably continue.” DOCTORS’ PRESCRIPTIONS Steven Hochberg has been operating in the life sciences market for close to 20 years and describes how “the environment has clearly become more competitive.” Some search firms have taken a more aggressive stance towards pricing and many new search consultants are entering the life science field following the .com bust. Within this context, how do search consultants continue to attract and retain clients? The key for Christopher Seabourne is to achieve a balance between the scope (referring to the geographic spread and optimizing a company’s resources to cover that spread) and the space (referring to a selective portfolio of clients which will not hamper a company’s ability to search for talent because of the off limits issue). Marc Lewis says: “We don’t do discounts, but we deliver what our clients pay for - personal involvement with our partners, a collaborative model that is able to leverage our firm to the fullest across four continents.” For Dr. Richard Eidinger it is vital for search firms to provide a variety of alternatives, each helping to solve the client’s business problems and impact their business strategies. “Together

Steven Hochberg

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with the client, we help them with their problem solving, challenge the client’s expectations and make sure the profile of the candidate they choose is worthy of the company and the opportunity.” For some clients human capital strategies are becoming an important issue. As a result, search firms are broadening their services. Dr. Tony Chandler explains how talent management and succession planning processes, along with senior leadership development programmes, are some of the tools being offered. “In stronger strategic partnership with our clients, we anticipate our industryfocused in-house Leadership, Management and Organizational Development programs and consultancy will become of increasing interest and integral value to our clients over the next 5 years.” Nick Stephens explains how some of his firm’s responses include helping with internal assessment processes, by benchmarking surveys, building an interim management business to help support gaps in succession planning or a resource need and offering a consulting business that provide bespoke advice and solutions to business problems - all focused around how individuals perform in particular environments. Dr. Peter Woods describes how Euromedica meets on a quarterly basis with some of its clients to strategically partner together and to identify future hirings six months before they are needed thereby expediting the process, improving their efficiency and keeping the costs down. He describes: “Knowing the specific projects our clients are interested in filling helps us anticipate the vacancies that will need to be filled, while providing us plenty of time to identify a shortlist of candidates for our clients to review and then ultimately select the most appropriate individuals to add value to their companies.” Moreover, a deep knowledge of the market, specialization and above all a high level of professionalism are vital tools to retain and attract clients, reports Michael Klingler. He continues, "As Life Science specialists with a global reach we offer faster delivery. We personally oversee the entire process and have direct communications with the candidates and the client. We offer an in-depth knowledge of the market, flexibility, and creativity that is based on our 35-year long association with the major players in the industry."

Nick Stephens

Nick Stephens sums it up best when he states that the key is to “mirror your customers. You must learn to add value on a long-term basis. It’s about listening to your customers and developing new services that center on the assessment, optimization and development of individuals in organizations. As a result, it is vital that search firms invest in people and that does not only mean in selecting the top candidates, it means having the vision to select the right consultants, invest in IT and create a positive environment where all involved can perform their tasks appropriately.” A FINAL DIAGNOSTIC The life sciences sector is undergoing massive structural changes that are obviously placing enormous pressure on these companies to hire the right executive that can prosper in this particular environment. Clients, in turn, are increasing their demands placed on their search consultants. In order to succeed consultants must permanently update their industry knowledge; know or quickly identify and evaluate the top performers; provide access to international candidates and accomplish these tasks very quickly. Competition is intense as the search consultants that can add value and create strategic partnerships are the ones that will continue to thrive in good health. www.search-consult.com For more information, contact: Web: www.search-consult.com

Knowledge - FREE with every record. Opening a company record in FILEFINDER will present the user with both the ‘data’ from the database and the very latest news on that company – delivered automatically from the Web.

This gives users a benefit in terms of both business development and research. In turn, this will help your search business perform better. FILEFINDER software is designed for Executive Recruitment and is supported by people who understand Executive Recruitment. To find out how your business can benefit, book your FREE demonstration TODAY! US: +1 (201) 653 0013 UK & Europe: +44 (0)20 7749 6100 Germany: +49 (0)69 27 40 15 807 Australia/Asia: +61 2 9006 1194 Rest of the World: +44 (0)20 7749 6100 sales@dillistone.com www.dillistone.com U S A

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Helping you develop your Search Business

"Your Next Fee!" As the Search industry returns to growth, do you need to grow your team? search-consult/talent offers you a unique advertising opportunity to target the search professionals that your business needs to grow.

Advertise your Executive Search positions at www.search-consult.com/talent for as little as US$120 / £80 / C120 per week and be exposed to over 18,000 Search Professionals across the world. There are a number of different advertising options available to suit your needs and budget - from magazine advertising to our monthly email newswire. To learn more, simply email Yann Le Leyour at Yann@search-consult.com or call him TODAY on +44 (0)20 7749 6102.

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AWizard’s Game

Search to Search:

by Pilar Gumucio

he search-to-search industry is relatively new, yet it is very dynamic and developing quickly. In fact, in today’s fast paced world, talent is highly sought after, and finding the right search consultant at the right time is pivotal. Michael Moonesinghe, Managing Director of Glover Daniels Executive Search, remembers 6 years ago when he established his firm after working a decade in search; he was one of the first in the business in the United Kingdom. “I worked in executive search and realised that there was a lack of finding proper search consultants. As a frustrated candidate and client, I decided to set up my business and be able to fill this void.” “In the beginning, I spent a lot of time educating people to the benefits of using an independent search consultancy. Eventually large global firms and smaller niche boutiques began to realise the advantages and began retaining my services,” states Michael Moonesinghe. Donna Karnal, Senior Vice President of RRD Search Inc, explains that it is a sector “that is evolving… based on relationships built, industry knowledge and the consultative approach we – as search-to-search providers – offer our clients and candidates.” In order to do this successfully, “it is crucial that we provide our clients with a diverse network, invaluable knowledge and act as an ambassador for our clients in the market,” reports Nicky Coffin, Director of JPA Search. The last couple of years the search industry - and therefore the search-to-search industry - had been going through hard times. Michael Moonesinghe explains that during the hardships, search firms were able to directly approach candidates without the need of an independent consultant. “Many candidates were distributing their CVs readily throughout the market as new opportunities were being negotiated. As the search market

improves, this way of obtaining top performers is becoming more rigorous as search firms are using search-to search providers because they are realising that extensive databases and circulated CVs are simply not as effective as they were in the past.” Donna Karnal indicates that now all the sectors are experiencing growth. "As a result, search firms are looking to hire consultants. Therefore, they are turning to us to provide them with the right consultant as well as strategic information” that will help them move forward. Although all the sectors are showing signs of recovery, the three most in demand are: Financial Services, IT and Pharmaceuticals/Life Sciences.

Donna Karnal

WHY ARTHUR NEEDS MERLIN Today many companies are increasing their expectations about the executive profile. Consequently, clients are raising their expectations required from their search consultants. They are expected to understand the power of networking and provide their

clients with an added value. Therefore, search firms are increasingly looking to search-to-search providers to find them these rainmakers. Donna Karnal explains how “the candidate pool is becoming much smaller as search consultants are being approached from multiple firms.” She also describes how “clients are placing a greater emphasis on cultural fit and leadership competencies.” “Clients hire us to get them the star performer, states Michael Moonesinghe. “It is also our role to inform those top performers of opportunities that arise with our clients that they may otherwise not have known about.” All the consultants report how clients expect them to provide valuable market information, such as market conditions, company remuneration structures, benchmarking, psychometric testing, M&A assessment, and other key strategic indices. Michael Moonesinghe states: “It’s about creating a partnership. It’s about understanding the different roles, having industry knowledge, be able to source, resource, and consult. In order to do so, we must know our clients expectations, help them articulate the executive’s profile, assimilate the information accordingly and present them with a selection of top candidates. Then it’s about negotiating on their behalf and obtaining the top performer.” Intense competition, globalisation and the demand for industry knowledge and expertise have contributed to clients requesting their searches be broadened. Michael Moonesinghe explains how search firms traditionally turned to searchto-search providers to obtain the firm’s toplevel performers. “Now they are requesting searches for a wider scope of roles that range from the President or Managing Director of a firm to Senior Partners, Junior Consultants and Researchers.”

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Many would agree that the past 2 years have certainly been challenging to say the least! Many established companies and talented individuals have sadly not survived the downturn. If you have not only survived but have continued to be successful in difficult market conditions then now is the right time to take a health check on your own career and future prospects. The market is recovering fast and we are currently working with several established professional recruitment organisations across a wide range of sectors both in the UK and Internationally who are seeking to recruit those talented few who have not only survived the downturn, but who have continued to be successful in spite of all the economnic difficulties and limitations presented by the market and maybe also their current employers. Opportunities exist at all levels from experienced Search Researchers to Consultants, Management and Partner level roles within established and prestigious search consultancies. So call Michael today for an initial and totally confidential discussion on your own career. You owe it to yourself to be in the right place to take the fullest advantage of the market recovery.

Michael Moonesinghe

Nicky Coffin also describes that because of the candidate shortage, the candidate pool is being expanded to include consultants from various countries. “For example, our clients are requesting candidates from the UK, Continental Europe, Australia and Asia Pacific. There is also a demand from clients to open offices in the Middle East, such as Dubai.” Donna Karnal reports how European and Asian search firms are increasingly contacting them to find the top performers that can open up their offices in the US. THE RISKS OF MAGIC When discussing the key challenges search-to-search providers face, all the consultants mentioned the most difficult as matching the candidate’s availability with the client’s expectation of when the role should commence. Donna Karnal admits that “hiring firms will need to be creative in how they attract the talent and some money may have to be left behind, “ especially as business picks up. “This task becomes more rigorous when you factor in the ‘off limit clause’. This means you have to not only consider the candidate’s expectations, targets and bonuses, but also the client’s as too much of a delay can affect their relationships with their clients and potential clients,” reports Michael Moonesinghe. Judging the best time to make a career move is hard in any industry, but in the search

business, where compensation plans are structured and bonuses held back to try to hang on to the best performers, it is especially difficult, states Nicky Coffin. Another challenge is being able to manage client expectations. Although search consultants as clients can be very beneficial because they understand the process and the pressures search-to-search providers face because they are experiencing the same pressures from their clients, there are also drawbacks. Michael Moonesinghe reports: “You would assume that they would be easier to deal with, however, sometimes their expectations can be unrealistic. For example, they can complete a complicated search in 3 months, but they expect you to complete one in 4 weeks. We often have to remind clients of the complications this process can entail.” Nicky Coffin comments that because they really do understand the business, “clients expect the best, which means there is zero room for error.” Moreover, there are a number of new companies opening up offices and therefore there is an increase in the number of competitors offering this service to search firms. Michael Moonesinghe notes that there is also an increase in the number of failed searches. “The reason is because the barriers of entry are low and virtually anyone can call himself or herself a search-to-search consultant. Many are opening up offices claiming to offer retained search, but in reality they are no more than a supplier of CVs. They often do not have the previous search experience to perform this role appropriately.” There is also a lot of competition emerging from contingency firms, trying to convince search firms that their service is more cost-effective. Nevertheless, cheaper is not necessarily better. All the consultants indicate that they must remind some clients that retained search implies different tools to be able to identify the right candidate and then negotiate on the client’s behalf until the selected candidate joins the client’s team. Michael Moonesinghe advices search firms to “look at a consultant’s credibility, qualifications, experience and standards of

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Nicky Coffin

professionalism, when selecting their searchto-search provider. Find out about his or her previous successes, test his or her industry knowledge and look at his or her recruitment experience. Does he or she really understand the tasks required?” Donna Karnal, who has been in the search industry almost 20 years, said that experienced business consultants are pivotal to be able to fully understand the company's unique operating model, culture and competitive landscape. It is critical that search firms look at their provider’s completion record. In fact, if you take a look at “RRD's completion record, it is significantly higher than our clients have with their clients,” demonstrating how effective they can be. Nicky Coffin, who has been in search-tosearch for 3 years, explains that experience is very important yet reports that there is a new wave of younger consultants emerging that “bring creativity to the whole process.” In sum, the search-to-search market is mirroring its clients, as this industry is becoming more specialised and sophisticated. As the search industry improves and expands across borders, this industry will follow suit as search firms realise the added value that these wizards can offer them. www.search-consult.com For more information, contact: Web: www.search-consult.com

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Introducing

FILEFINDER 7 by Jason Starr or this issue of search-consult, I would like to blur the dividing line between information and advertising by talking about the latest version of the market leading application for executive search, FILEFINDER 7. I should point out that search-consult is published by Dillistone Systems, developers of FILEFINDER and that the writer is associated with both entities. Having admitted to a degree of bias, I can comfortably say that – in my opinion - FILEFINDER 7 is stunning. I’d like to demonstrate this in the style of the TV series ‘24’. In this hit show, good-looking hero Kiefer Sutherland (who looks a lot like the author of this article*) spends 24 hours saving the World. The series is unusual in that everything happens in ‘real time’. I’m a little busy to spend 24 hours saving the World, so I’m going to spend just 1 hour using FILEFINDER to help me prepare to pitch for a new search. I am writing this article at 10.50 East Coast US time on December 30, 2004. Imagine, I take a call from a corporate recruiter at Boeing. Looking up the Boeing record in FILEFINDER, I see that the aircraft manufacturer has announced a deal to sell 10 7E7 Aircraft to Continental Airlines. This was announced earlier this morning. According to FILEFINDER, as of 52 minutes ago, shares were up 0.3% to $52.25. How does this information appear in FILEFINDER? It appears there because FILEFINDER pulled it down from the web on my behalf. No preparation is required. In seconds the information is delivered to my fingertips as the click of a mouse. Anyway, I drop this industry knowledge into the conversation and it helps to position me as somewhat knowledgeable about the Aerospace sector.

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The conversation is over and it is about 11am. This is an interesting opportunity for my imaginary search firm but there is one small problem. My knowledge of the Aerospace sector could be written on the wing of a paper airplane. A very small paper airplane. I need to do some research. I go to one of the many websites, which offer information on Companies and Executives, and download this information. This is then simply and easily imported into FILEFINDER using our new CSV to XML Import tool. Of course, all the information – on both people and companies – is fully validated against the database. The information is now in FILEFINDER. I run a comb through my full head of hair and continue. I’d like to print off a report on these firms. FILEFINDER has over 80 reports as standard, but I’m a contrary devil and so I want something different. I open the new, built-in report generator and click on the fields that I wish to show in my report. In seconds, the report is created. I save it to MS Word. The time is now 11.45. I turn to my emails and see I have received a message from my new prospective client. I click the ‘F’ button in Outlook and the appropriate FILEFINDER record is immediately opened. A couple more clicks and the email – and any attachment – are stored in my FILEFINDER database. No typing, no manual looking up. Everything is done for me. So, in an hour or so, FILEFINDER has achieved the following: • Presented me with up to the minute news on a prospective client, during the course of a phone call.

• Created dozens of new records in FILEFINDER from CSV file downloaded from the web. • Produced a completely ‘off-the-cuff’ report containing this information in a layout to my specification. • Imported an email from the client contract into FILEFINDER – without the need for any typing. • I’ve also combed my hair, but FILEFINDER was not involved in that particular project. This is just a small example of the power of FILEFINDER 7. In practice, the system is packed with time-saving functionality like this and, we believe, it will help any search firm operate more effectively. Now for the bad news. We are now rolling out FILEFINDER 7, but your business can’t have it yet. This is because – and it’s good news for us – demand for FILEFINDER software is now at record levels. This surge in demand for FILEFINDER means that we are already scheduling implementations to go live in April and so, if you can see how 21st century technology could benefit your business, I suggest you email sales@dillistone.com to arrange a demonstration sooner rather than later! * The author looks nothing like Keifer Sutherland. That was a blatant untruth for which I can only apologize and blame on over-indulgence over Christmas. However, the good news is that everything else in this article is accurate** ** Apart from the bit about the full head of hair.

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

The FILEFINDER USER CONFERENCE 2005 May 19, 2005 – London, UK Dillistone Systems is pleased to announce the 2005 User Conference to take place in Central London on May 19, 2005. EARLY BIRD DISCOUNT OFFER - £150 / $285 / C215 if booked before 30 March 2005 (normal rate £195 / $370 / C285)

Highlights of the event include: Guest Speakers: David Hurst - Publisher, Online Recruiter Magazine - will analyse the impact of the Internet on senior level recruitment. Jill Dillistone - one of Europe’s most experienced Search Trainers - will talk about how to get to the best candidates fast! The latest FILEFINDER Functionality: demonstrations of FILEFINDER 7 and all the latest tools for getting the most out of your system. The Master Panel: ask questions to a panel of Dillistone Systems trainers, developers and support team. Share ideas and experiences with other FILEFINDER users from across the World. FILEFINDER beyond the office – everything from remote access to online interaction with candidates and clients. The event will last all day and refreshments will be provided. To book simply visit www.dillistone.com/workshops Please print a booking form and post it with the cheque to:

Dillistone Systems Ltd, Calvert House, 5 Calvert Avenue, London E2 7JP, UK Further information can be obtained by sending an email to marketing@dillistone.com

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Superior Execution Leads

Client Satisfaction

earch firms compete every day to win new clients and maintain the old ones. They work very hard to create a close relationship and become an indispensable component for their clients’ organizations. However, are clients really satisfied with their current search providers? What are the main criteria they are looking for when selecting, and afterwards retaining their search providers? Do search consultants really understand their clients’ expectations? Finally, how does the client really perceive the search industry? Within this context, search-consult interviews Bruce R. Ralph, Vice President of Human Resources of Videojet Technologies Inc, so he could provide us with an 'insiders view'. “What we look for from our search providers is their ability to deliver results and that boils down to execution --- finding us the right candidate in the fastest possible timeframe,” reports Ralph. When asked how important complementary services were to selecting a search provider, Ralph indicates that information relating to “market compensation levels and how our company is perceived by candidates is always helpful, but in the end, finding the right candidate weighs much more heavily.” Finding the right people is no easy task, especially for a multi-million dollar company that is the world’s leading manufacturer of specialized product identification systems, fluids, and accessories. As experts in continuous ink jet (CIJ), drop-on-demand (DOD), binary array, thermal-transfer overprinting (TTO) and laser coding technologies, Videojet offers the widest range of technologies and the broadest range of service capabilities in the industry. With over

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Bruce R. Ralph

275,000 units installed worldwide, Videojet equipment applies codes to more than one trillion products each year. Sales, service, training and application support is provided through direct sales and service operations in 31 countries and through more than 250 distribution partners serving over 100 countries. Videojet Technologies has been in operation for more than 35 years, with a proven track record of understanding customers coding requirements, designing superior products to meet through requirements and providing outstanding after-market service. As part of the Danaher Corporation – one of the US most admired companies according to Fortune magazine’s 2004 edition – it prides itself on corporate values that place particular emphasis on recruiting, retaining and developing outstanding people. Achieving this objective is an immense task. Videojet’s Vice President of Human Resources comments on the added value

By Pilar Gumucio that search providers can contribute to helping his organization find those highly sought after top performers. Ralph describes how Videojet’s current search providers are a mix of large global search firms and smaller niche boutiques, because each offers unique advantages. “What really matters is that the search consultant must have a deep understanding of our company, our culture and our expectations.” He explains how some search firms try to differentiate themselves from their competitors by claiming that “they possess an extensive database, a unique search process, or an innovative evaluation technique --- but, in reality, there has been very little innovation in the search industry --- it still boils down to how well you execute.” “THEY HAVE TO REALLY KNOW US” When asked how satisfied Videojet was with the company’s current search providers, Ralph says, “We’re an extremely demanding client, so in reality we are rarely satisfied --we’re always looking for things that we could do better and we expect the same from our search partners. Those firms that really know us as a client, the ones that understand our culture, our candidate profile, and how to effectively sell us to the right candidate will always win out.” He explains that, as a client, it is vital that their search providers understand that he and his team have put a great deal of thought into drafting the job specification and candidate profile. This forms the basis for the search and selection process; and it is the search consultant mission to identify top performers who meet the criteria and then convince them to join the firm. “It takes a great deal of work because top performers

are highly valued by their current employers and are typically not actively looking for a new opportunity. He expects the search provider to “be able to develop an awesome network and really reach that top 3%.” Within this context, it is fundamental that search consultants be able to “effectively evaluate candidates based on the agreed profile. This requires the search consultant to dive deep into the candidates accomplishments and to separate those that truly drove results from those that simply went along for the ride.” Ralph explains that his firm reviews their search provider list on a regular basis. “Although some believe that you are only good as your last search, we like to evaluate our search firms on an ongoing basis. Everyone stumbles now and then; we’re more interested in firms that quickly learn from their negative experiences and are committed to continuous improvement.” “We use a detailed project. The advantage is that it breaks down the process into discernible steps and big issues, such as target interview dates, that are established well in advance. It helps us reduce cycle times and quickly eliminate barriers that might otherwise hinder the search process.” COMMUNICATIONS IS VITAL Ralph comments, “Throughout the assignment is it crucial to have a continuous flow of communications.” When asked about the level of communication required from their search providers, he explains that it is important to organize “biweekly conferences to review activities, candidates and next steps.” Ralph further describes how “we typically use a rigorous and structured interview process to evaluate candidates. Usually, we will form an interview team comprised of 45 key members, depending on the role being assigned.” Each member of the interview team assesses a different set of competencies, including technical skills, leadership capabilities and alignment with the company culture. Ralph further elaborates on this point with an example. “One member will focus on technical skills, another on his or her leadership qualities, another on his or her change management experience, and so

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forth. The interview team dives deep into specific areas to provide a thorough understanding of the candidate and the positive impact he or she can have on our company.” Currently some search firms offer clients guarantees that if within six months the company is not fully satisfied with the selected candidate, they will return total payment or find another candidate free of charge. When asked if this guarantee clause would persuade him to use a search firm that had this stipulation, he remarks, “Recruiting excellent talent is an awesome responsibility. Finding the right person for a key position in our company adds significant value to our customers and our shareholders. Conversely, making a bad hiring decision can be extremely costly to the business. We insist on have guarantees in our search agreements, but candidly they provide little benefit. That’s why we place so much emphasis on selecting the right search partner and rigorously managing the process. We simply can not afford to make a bad hiring decision.” “WE LOOK AT THE CONSULTANT” Search firms compete for new business, but according to Ralph, it is the individual consultant’s competence that makes or breaks the deal. “We want to know who is really going to be doing the work, who is going to be representing us when interacting with prospective candidates and we want to be very confident in their ability to deliver. More to the point, we think in terms of retaining the consultant not the firm.” Ralph admits that search firms are, and should be, considered more as strategic partners. Although presently search providers “are not considered strategic partners as much as they should, we are moving towards incorporating them into our business plans and asking them to help us on a more proactive basis.” How are they achieving this? He explains, “We have invited a few select search firms to help us further refine our project approach and we have invited preferred firms to spend a day at our offices for orientation, training and development. We share with them our strategic plans, our business systems, our leadership profile, our search approach and our compensation philosophies, and then

invite them to provide feedback. In sum, we want them to develop a deep understanding of our organization, our culture and what we expect them to provide us.” Those that listen to the client and are able to translate that information into a list of talented individuals will continue to be selected for further assignments. They must consistently demonstrate a precise understanding of the assigned role that needs to be filled, while at the same time comprehending the company’s present situation, where the company is heading towards as well as the corporate culture and philosophies the company embodies are all essential to meeting the high expectations of demanding clients. If these expectations are met, then an ongoing and positive relationship can develop, benefiting both the client and the search provider. An accomplished human resources executive, Bruce R. Ralph is Vice President of Human Resources of V ideojet Technologies Inc. and serves as Chairman of the Board of Directors of the Human Resources Management Association of Chicago. Mr. Ralph joined Videojet Technologies Inc. in 1993 as Vice President of Human Resources. In this capacity, Mr. Ralph oversees human resource strategy and execution across the company’s global operations. Prior to joining Videojet Technologies, Mr. Ralph served as Vice President of Human Resources for Kohler Company (Furniture Group) in Grand Rapids, MI. He also enjoyed a long and successful career with USG Corporation, in Chicago, where he served in various positions of increasing authority, including Plant Personnel Manager, Corporate Manager of Labor Relations, Corporate Manager of Organizational Development and Training and Director of Human Resources (L & W Supply Company, a $1B distribution subsidiary). Mr. Ralph holds a Bachelor of Business Administration from the University of Wisconsin at Madison and has participated in various Executive Development Programs at the J. L. Kellogg Graduate School of Management, Northwestern University.

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

ISSUE 22 2005 search-consult

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Germany Opens Boardrooms

Its

he German boardroom is changing, reflecting how globalization is affecting how companies operate their businesses. This is vital as the largest economy in Europe – and the third worldwide - prepares to take advantage of the upturn that is taking place. As German companies begin to bounce back and achieve double-digit growth, obtaining top talent is once again becoming a top priority. In an interview with search-consult, Ulrich F. Ackermann, Managing Partner of TRANSEARCH International Deutschland GmbH, describes: “Companies that understand this key difference are the ones that will enjoy long-term success.” When you look at the DAX 30 – the main index of the Frankfurt Stock Exchange – you can see that some 70% of the revenues of these top 30 German corporations are currently derived from outside of Germany. As a result, it is vital that German companies reflect the transformations that globalization is producing on their business dealings. Mr. Ackermann describes how clients are increasingly demanding more international searches be carried out. Mr. Ackermann, who also sits on the board of directors of TRANSEARCH International Partners plc, reports that up to 40% of all of their search assignments contain an international element, as more and more clients are frequently demanding searches to be conducted on a global scale. In fact, the tasks and roles of key figures - such as the CEO and Human Resource Director- are clearly being redefined. This means that search firms have to really operate internationally. Therefore, search firms really need to be able to establish international practice groups. Mr. Ackermann believes that tight networks such as TRANSEARCH have a

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by Pilar Gumucio and Jason Starr benefit over the integrated firms because the partners meet more often, tend to know each other better and establish a more trustworthy working relationship. As a result, clients can receive a better quality service throughout the world. Within this context, the composition, structures and even the way boardrooms have traditionally conducted business are beginning to mirror the levels of globalization and diversification that are currently taking place. TRANSEARCH’s Managing Partner reports clients are requesting a board of directors that have expertise in global corporate governance and financial transactions. Moreover, he explains that there is a growing need for a wider mix of experience, backgrounds and skills that the old boys’ network just simply cannot fulfill. According to Mr. Ackermann, “during the last 15-18 months equity firms from the US or from other European countries have increasingly been investing more in German

Ulrich F. Ackermann

mid-sized companies that earn approximately 2-4 million Euros a year. This trend is continuing to get stronger.” EXPANDING THE BUSINESS At the same time, he explains how during the last few years “the German industry has come under enormous pressure to strengthen their outsourcing processes” as a means of increasing their international competitiveness. Today, more and more German companies have been shifting their production into Eastern Europe, Far East/China and Mexico. This move has allowed them to take advantage of new opportunities. For instance, German companies that have a subsidiary in Mexico can now “be able to serve NAFTA under different terms and conditions,” and Mr. Ackermann reports how these companies are requesting searches for “Managing Directors, Production Site Managers and those types of roles over there.” This is particularly true for two major industries, which according to him, used to be the backbone of the German economical welfare over the last couple of years: Machinery and Automotive. “These two industries are flocking out and doing more production outside of Germany.” At the same time, in order to be able to really develop their products for a global market, they need to hire more global talent in Germany, not only at the level of product development but at all the top executive and non-executive positions. “During the last 3 years, 10% of the DAX 30 companies now have a CEO that is non-German,” states Mr. Ackermann. A MORE INTERNATIONAL BOARD TRANSEARCH conducted a board poll, interviewing firms listed at the DAX 30, the MDAX 50 and several unlisted mid-sized firms.

The results were quite interesting. Traditionally these boards were led by top executives of the “Deutschland AG”, which consisted of German male executives that operated the banking and finance sectors. It is very similar to the old boys’ network where most of the directorships were selected on the basis of personal relationships. There were many board members that sat on several of the same companies, often through cross-ownerships or cross-participations. In Germany, the boards of directors explains Mr. Ackermann - are composed of two levels: the supervisory board (which consists of non-executives directors) and the managing board (which is the executive board of directors). He describes that within the DAX 30 today 16 companies have managing boards with at least one international board member. “The trend is a bit slower at the supervisory board. Today only 8% of non-executive directors are non-German.” This figure alone may appear to be insignificant, but if you take into consideration that more than 50% of the boards have international managers, 10% of CEOs are nonGerman and 8% of non-executive directors have different nationalities, you can see that this trend is gaining ground. “These changes not only include the attitude of the boards, but the language – which is one of the problems we are facing in Germany,“ reports Ulrich Ackermann, who also serves as a Global Board member of the Association of Executive Search Consultants (AESC). “It is kind of difficult for people from France, Italy and Spain to sit on German boards when, obviously their German may not be so perfect as to participate constructively during board meetings. As a result, close to 50% of the top German corporations from the DAX 30 are beginning to adopt English as the corporate language, especially for board meetings. It is working well for them as this figure is expected to increase during the next few years.” Mr. Ackermann describes how German companies are broadening their board of directors’ profiles and are trying to obtain more of a balance between men and women as well as other cultures. “For example, it is important to not only have people from France, Spain, or Italy” but to widen the scope to be able “to include people from other countries, such as

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Israel, Cyprus and Argentina. In fact, today German companies have up to 15-16 different nationalities represented on their boards.” For instance, he explains that “one of our major clients, adidas Salomon AG, which heads the list of firms of the DAX 30, has a managing board with 5 directors of 4 different nationalities: Germans, Swiss, Australian and American. Their headquarters boasts 46 different nationalities despite the fact that they no longer have production plants in Germany. These executives are all just in development, marketing and sales, administration and finance. If you want to sell to 120 different countries, you need people that understand the pace, the culture and the perception of these countries.” He notes that this trend is trickling down and can be observed even stronger at the MDAX companies, which are the top 50 companies below the companies listed on the DAX 30. FACING NEW CHALLENGES All these changes are bringing new challenges to both clients and search firms. Mr. Ackermann reports that the amount of board searches for NEDs (non-executive directors) that clients are requesting is increasing, but not as strong as many experts had predicted. The reason is because most of the boards of directors are still being selected by personal relationships. The good news is that the scope is widening and companies are trying to be more selective. “Many executives are today also more reluctant to accept a NED position due to the increased responsibilities. The compensation is not in proportion to the time and responsibilities required to fulfill this role accordingly. Therefore, it is more difficult to attract NEDs for the supervisory board,” he explains. The Managing Director of TRANSEARCH’s German operations also indicates that search firms are facing a direct competition from auditors because audit firms are also providing advice on the composition, structures and the ways to strategically add value to a company’s board of directors. He also explains that German boards have a unique distinctiveness: all the major firms must have supervisory boards that are appointed 50% by the shareholders and 50%

by the work council and union members which is caused by the Montanunion-law and co-determination. This particularity can cause some conflicts since many of the firms, although Germanbased, are geared from and for the outside. This can cause difficulties in balancing local and global needs at the time of establishing the boards of directors as well as overseeing these companies’ strategies. “Lets look at Daimler Chrysler, where more than 50% of the company is based outside of Germany. Yet 100% of the NEDs placed by the works council/unions have been German. How can they seriously represent the global workforce or even the shareholders interests, especially if it comes to difficult decisions about shifting production globally, from one plant to the next, from one country to another? This discrepancy shows the need for companies to mirror their customer base, company strategy and logistic base. It depicts the need for a catalyst for changing boards," Mr. Ackermann reports. TO BE AND THINK INTERNATIONALLY Globalization is impacting German companies in all of its facets. From the selection of executives to the composition of boards, the firms must now look beyond their borders. Boards of directors are redefining their selection, composition, structures and even the language used. This is occurring because companies are becoming aware that in order to succeed in today’s markets, your perception has to truly become international. The transformation will take a great deal of time, but the first steps are showing great promise. This is a task that must be coordinated at all levels, within business as well as with the government and union leaders. The process – as Mr. Ackermann points out – is giving great opportunities for search firms. They must help their clients really understand this development as well find the right individuals so that the client, the executives and the board of directors can obtain longterm success. www.search-consult.com For more information, contact: Web: www.transearch.com

ISSUE 22 2005 search-consult

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Latin America:

Searching Opportunities

for

By Pilar Gumucio atin America has had a very good 2004. The region has experienced its best growth in many years, thanks to its exports and a very favorable international environment. This year the region expects to continue its recovery path. Many businesses are back on track and this could open new opportunities for the search industry. In an interview with search-consult, Eduardo Antunovic, Global Practices Managing Partner of Heidrick & Struggles, provides us his insight on Latin America, what opportunities are emerging and the challenges search consultants have to deal with in this region that is in the process of recovering from a severe economic crisis. He describes how “the region has undergone massive economic reform over the last decade, opening up to regional and global markets. This implies both opportunities for companies to expand regionally and globally, as well as for international companies coming into local markets offering their products and services.” In fact, according to the United Nation’s Economic Commission for Latin America and the Caribbean, this region grew by 5.5% in 2004 and for 2005 is projected to come in at about 4%. “This dynamic environment has forced companies to improve their service and product quality to meet global standards.

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Eduardo Antunovic

They can only achieve this through better operational processes, better management and obtaining better efficiency,” says Antunovic. They must be able to improve their human capital pool to be able to compete and thrive in today’s fast paced global environment. According to the Global Practices Managing Partner of Heidrick & Struggles, the recent economic crisis has further accentuated this as global competition is becoming much tougher. For example, Mexico, which neighbours the US and is affected by NAFTA (North American Free

Trade Agreement) is one of the places that is on the spot. Brazil is another key area for multinational companies. He adds: “We cannot forget about Argentina and Chile. Argentina, which is the third largest economy in Latin America, has a great deal of potential. There are indications that this economy is beginning to recover. Meanwhile, Chile has the most stable economy and, even though it’s a small economy, for many international companies it is a serious business environment where they select to headquarter their South American operations.” As a result, there are various opportunities available, in business as well as in search. In fact, the most dynamic industries in search are Consumer, Financial Services and IT. A NEW BUSINESS The search business is relatively new, explains Antunovic, and “demand in Latin America is still relatively lower than other regions of the world. Recovery has been slow and is still dependent on foreign investment to grow.” In fact, most of Heidrick’s clients are multinational companies they serve across the world. At the same time, he notes, Latin American companies are beginning to be more regular users of executive search. Some, especially the smaller and mid-

sized companies, are still in the process of realizing the real value they can get from a well-conducted search process, and they are often still making decisions just based on the price per search. “At Heidrick & Struggles we explain to our clients and potential clients the advantages of executive search. The added value of our firm is our truly global range, in-depth understanding of local geographies, strong and solid Industry Practices, that allow us to always work around the concept of best possible team, offering knowledge of the available talent pool, particularly through the expertise of our Functional Practices and the support of our Knowledge Management Center.” A FLEXIBLE APPROACH Antunovic indicates that his firm in Latin America, as well as throughout the rest of the world, aims to create a strategic partnership. “We are always organized around our clients, respecting their unique necessities and company development.” For him, flexibility is very important. “We don't have a rigid approach. We have multi-entry possibilities to organize ourselves to better serve every client but, after we do, we always keep an organization in place that works and helps strengthen our relationship with them. The more we can learn about them, the better we can serve them, enhancing our partnership even further.” He explains that Heidrick & Struggles also provides Leadership Services. “Our experience demonstrates that there are many highly sophisticated local companies (particularly large ones) that operate under world class parameters and they utilize these services with the same frequency that multinationals in other more developed regions.” For example, Antunovic reports that some of the Spanish banks and firms are very active on the Leadership Services side. “They already staffed their organizations with the right people and now it’s time for them to grow the efficiency of those teams. Assessment and development plans are the name of the game for them now,” providing them a

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“serious competitive advantage.” NEEDING TALENT The Global Practices Managing Partner of Heidrick & Struggles indicates that world-class executive talent with cultural sensibility and/or adaptability is required in order to drive the necessary changes in Latin America. Nevertheless, he notes that some countries of the region are facing a growing gap of executive talent to be able to meet these requirements successfully. In fact, he describes how a number of executives left their home countries due to the economic crisis or internal problems. This is particularly true for executives from Argentina, Venezuela, Colombia and Peru. Antunovic admits that many of those executives did leave because “they had exhausted all possibilities to get a job in their home country.” Some found jobs within the region, others ventured off to the United States, Europe and even Asia Pacific. “This is a cycle that has occurred in Latin America before, and as the market recovers, some of these executives will return.” Antunovic states that what counts is that search consultants in the region need to have deep industry and functional knowledge. He explains that “candidate sourcing is increasingly becoming regional and knowledge of all relevant markets becomes essential.” As Latin America experiences its best growth in many years, many local and multinational businesses are taking advantages of the opportunities that are opening up. It is now up to the search industry to do the same. Heidrick & Struggles is among the search firms in Latin America that is taking the lead to bridge their local knowledge and their global resources to access a wider scope of candidates and help service their clients in all aspects of human resources. www.search-consult.com For more information, contact: Web: www.heidrick.com

LETTER TO THE EDITOR Dear Sirs, Denise Williams' claim in your last issue that the search profession is broken is not substantiated by the growth of retained executive search over the past 20 years, nor by the great resurgence in demand for search since the recession ended. The reason that search firms are employed is to advise and consult and to do their professional best to solve a problem. Comparing executive search with high-end tailoring is surely inappropriate. Perhaps legal advice or brain surgery might be more correct, the point being that the professional has years of experience and skill to bring to solving the problem. They may or may not be completely successful - no professional can guarantee success. Compromising best practice is not usually in the interest of the client and may not solve the problem either. A good example of this is contingency payments for work or commissioning two search firms to cover the market. The goal should be to help the client resolve their problem but in a way that is efficient, effective, appropriate to the level of assignment and does not compromise the core elements of best practice. If, in order to complete an assignment, the search firm is blocked by off limits then the assignment should never have been accepted in the first place and it is probably correct to bow out and forego some or all of the fee. If the only way to satisfy the client is to work on a contingency payment basis then the retained search firm is in the wrong business. In some respects the search profession has been slow in achieving optimum client relationships - we may have been too transaction driven, but then in many instances so have the clients. I believe that what is needed is a reevaluation of, and greater investment in, the relationship between search firm and client by both parties so that the outcome is improved performance and behaviour on both sides. This is the only way to achieve truly effective management consulting. If the search firm turns itself inside out trying to "please" the client it may find that it is, in fact, doing itself and the client a disservice. Peter M. Felix, CBE President The Association of Executive Search Consultants The Worldwide Association for Retained Executive Search Consulting Firms pmf@aesc.org, www.aesc.org

ISSUE 22 2005 search-consult

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The Rise

ofInterim Managers in Asia By Paul McGrory n rebounding and emerging Asian economies, interim managers are increasingly being utilised to satisfy a range of project needs. Paul McGrory of E.L Consult discusses the supply and demand factors that are driving the growth of this evolutionary approach to flexible management resourcing in Asia, and shares E.L’s experiences with some interim demographics and case studies.

Within a recovering global economy, Asia is enjoying a return to economic prosperity after several difficult years. With healthy regional stock markets and continued foreign investment, the outlook is bright for companies operating or trading in Asia. Yet, despite increasing revenues and order books, a conservative optimism within Corporate Asia has seen a discrepancy between business growth and staffing, with unemployment still at high levels in many Asian countries. The need for flexible staffing in Asia, particularly at the most senior levels, has never been greater. New business opportunities and operational growth demands a range of competencies and experiences that often do not exist internally, but the ferocity of change sees different skills being required at different stages of the business life cycle. A rare but growing breed of selfemployed professionals has begun to emerge throughout the region. While still embr yonic in Asia, the interim management industry is quickly evolving

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as demand and supply factors create multiple opportunities for interim managers to rapidly demonstrate their value.

Paul McGrory

THE CURRENT DEMAND Opportunities • China The economic emergence of China has seen an increase in foreign direct investment into the region, and it now plays a key strategic link in the global supply chain. Joint Ventures or WOFEs are being set up in all industries, causing complex financial and management structures. China’s GDP continues to outperform most countries, as multinationals seek to set up low-cost local operations and attempt

to access a growing consumer market. Hong Kong (and even Taiwan) is still undergoing structural changes to its role in servicing China, but is benefiting from the increased two-way throughput of economic activity. Southern China is being developed as the ‘entertainment capital’ of Asia. A new Disney Theme Park, casinos, Formula One racing and huge golf complexes are currently being constructed on a grand scale. • Other Countries Japan and Singapore are slowly recovering and their renowned companies still hold considerable power in the global economy. Korea and Indonesia have seen dramatic increases in foreign investment, as foreign companies seek to acquire interests in privatised utilities. Most Asian countries have been slowly opening their trading borders to the Western world, resulting in import and export opportunities for local and international firms alike. In fact, Standard & Poor’s rating for Asian Emerging Markets is at its healthiest since late 1997. • Privatisation With emerging markets embracing free market economies, many stateowned enterprises and public utilities are being privatised. Existing workforces lack modern management and technical skills, particularly the ability to lead such large-scale restructuring or shareholder accountability.

• Investment According to “Pricewaterhousec o o p e r s G l o b a l Pr i v a t e E q u i t y Report 2004”, Asia accounted for 15% of global private equity investment in 2003. With a 40% increase on investments this year, Asia represents an exciting region for the investment community. The DLA Group reported in “Asian Private Equity 2004, Trends & Conditions Survey ” that the “lack of sound entrepreneurial management teams” continues to be a key obstacle to investment. Moreover, the volume and size of IPOs and Mergers & Acquisitions has increased in Asia. Aside from creating financial windfalls for bankers and shareholders, the difficulties of managing new entities and new cultures has unearthed a lack of credible professional executives to lead these major corporate change programmes. Potential Threats • Power of Families Many Asian companies are familyowned or controlled, with a traditionally centralised power base. While international investors or partners are keenly sought, the lack of trust or clarity creates concerns over corporate governance and risk management. • Trade Unions Emerging countries like China and Korea have seen major industrial disputes create negative sentiment among the local workforce and international investors. Trade unions continue to hold considerable power, and need to be effectively managed during any organisational change. • Continued High Unemployment Asian governments are still suffering from the impact of long-term high unemployment, as they continue to see an increasing discrepancy between economic growth and executive employment.

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• National Protectionism While foreign investment is actively sought, Asian governments promote the use of local labour and suppliers for new ventures. Immigration policies are becoming more difficult for importing expatriate staff, increasing the dependence on localised talent. • Lack of International Management Skills Local talents are increasingly well educated (often overseas) and hungry for career growth. However, the senior management generation in many Asian countries lacks international exposure and the experience of managing large investments for shareholders hungry for returns (many have only worked for stateowned enterprises). • Stretched Workforces need Injection of Expertise Despite business growth, many companies in Asia have not staffed up to relative capacity, leaving their workforce stretched at peak times or on key projects. Current IM Demands E.L has seen regular demand, from local and multinational clients, for interim managers in the following areas: • The set up and roll out of projects related to internal audit, compliance, risk management, corporate governance and financial systems. • Leadership of Business Process Reengineering and Supply Chain projects, creation of operational efficiencies, business entry to new markets or new product roll-out. • The development of business networks in emerging markets, creating introductions to influential contacts and guiding growth initiatives in new countries. • Project management in functional areas like IT, engineering, procurement, HR, marketing and event management. In E.L’s experience, the demand is for proven candidates, often with ‘grey hair or no hair’, who can quickly

parachute into a troublesome situation and gain control, then help the company source a local successor and leave them self-sufficient. The demand is for ‘hybrid’ candidates with a blend of Western and Asian experience, locally ‘streetsmart’ and highly adaptable. The demand is for proven Interim Managers in Asia. WHERE IS THE SUPPLY COMING FROM Surprisingly, many senior-level freelancers are currently servicing clients on a project basis around the region. They are not easily visible and they mostly provide their services in a discrete fashion. More professionals are entering the self-employed industry, by choice or by force, creating a growing talent pool to satisfy demand. Some of the factors contributing to a growing supply of Interim Managers in Asia include: • Unemployment Long-term unemployment is particularly problematic for middle and senior level managers. Multinationals and local companies continue to shed staff, destroying the local myth of lifetime employment, with only segmented or marginal increases in executive recruitment across the region. Thus, many capable professionals have been forced into self-employment and have surprisingly discovered a demand for their short-term services. • Disenchantment with Corporate Life Like executives all over the world, many individuals are coming to realise that their employer cannot guarantee an ‘iron rice bowl’. Particular types of individuals are fed up with office politics, involvement in conferences and corporate seminars. They seek motivation and satisfaction from delivering and achieving results, being purely focused on delivering a given project, then moving on. Such ‘nomads’ have passionately embraced selfemployment and will not return to the rat race. ISSUE 22 2005 search-consult

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• Ex Expatriates Several years after their multinational employer set up operations in Asia, these Western executives have found themselves displaced by local versions, yet they have refused relocation to their original country and opted to call Asia 'home'. As finding permanent employment is both undesirable and unlikely (localisation policies and cost implications), such individuals have found a willing market to provide their services on a self-employed basis. They bring a rare blend of Western upbringing, operational expertise and local experience, which is typically attractive to foreign firms entering a new market and local firms looking to develop overseas. • New Breed of Nomadic Asians Senior talent from more developed Asian countries (HK, Taiwan, Singapore and Malaysia) have an attractive mix of linguistic diversity (particularly in Mandarin), international exposure and technical competence. They are keenly sought after in China on a temporary base, as a cost and culturally effective alternative to Westerners, and are increasingly adapting to being regularly away from ‘home’. • ‘Technical’ Experts Replicating the worldwide pattern, individuals of all ages with demonstrable expertise in popular technologies, operational systems or management techniques are finding a rich market for their skills for corporate projects in Asia. As companies in Asia undergo recurrent growth and restructuring cycles, teams of freelance professionals are often preferred to consulting firms or vendors due to cost and experience advantages. Very senior interims are increasingly required to lead major change programmes and even manage outsourcing or off shoring projects for the client. However, this growing army of selfemployed professionals continues to struggle marketing their skills in an increasingly competitive and dynamic

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marketplace. For some, self-promotion is not their core competence and many suffer from prolonged periods ‘off the clock’ as they try to source new work upon completion of an interim assignment. For this reason, several interim management providers are beginning to appear throughout Asia. Some are divisions of executive search or consulting firms, others are dedicated to interim management. However, they are beginning to add value in providing their corporate clients with a wider choice of talent, while helping source new assignments and negotiate fair terms for the emerging freelance community. Such providers will hopefully continue to educate the business community, regulate and promote the effective utilisation of flexible management resources in Asia, while creating value for companies and interims alike. Growing demand in Asia for flexible management resources, fuelled by economic growth and operational complexities, is creating an emerging supply of passionate and competent selfemployed professionals. There is little doubt that this industry will continue to grow throughout Asia, with the help of interim management providers, replicating the successes seen in other parts of the world. Paul McGrory is a Principal Consultant with E.L Consult, responsible for E.L’s regional Interim Management business. E.L Consult is an Asian recruitment and resourcing consultancy. E.L. Consult has over 30 years experience and seven offices in the region and worked with clients in various industries and locations in sourcing professional talent for permanent and interim assignments. It has been awarded Hong Kong Recruitment Company of the Year and was one of the first companies to set up an executive search operation in China.

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

Case Study INTERIM PROCUREMENT MANAGER ELECTRONIC COMPONENTS MANUFACTURER PROBLEM This US-listed electronic components manufacturer has a production facility outside Shenzhen. Due to a rapid growth in business demand, the facility faced increasing productivity requirements with shorter delivery periods. Inconsistent supplier deliveries were creating production backlogs, while cost-efficiencies were n o t b e i n g r e a l i s e d f r o m l a rg e r purchases. The existing Procurement Manager was still young and did not have the experience to renegotiate supplier agreements or reengineer procurement processes.

CANDIDATE Within three days, E.L brought in a Procurement specialist with around 13 year’s experience within the Southern China region. This candidate was a leading member of the HK Procurement Professionals Association. He had recently created operational efficiencies and reduced purchasing costs for a Japanese component manufacturer in Dongguan. With a results-oriented approach and project management competencies, this candidate was a perfect fit.

RESULT Over this four month project, the Interim Procurement Manager helped set up new procedures and policies within the local Procurement Division, plus trained not only the departmental staff but also staff from manufacturing and finance departments. He streamlined operations throughout the supply chain, working closely with manufacturing to create a “Just In Time” production model. He was successful in renegotiating supplier contracts and reduced monthly recurring purchases by around US$2.5M by the end of the assignment.

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