search-consult Issue 10

The International Executive Search Magazine

20

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www.search-consult.com

How Chris Clarke and his team re-branded Boyden

Branding Boyden:Market Reviews:The Middle East and Italy

Research Techniques

Return on Leadership-Bringing Science to Search

Branding Boyden:How Chris Clarke and his team re-branded Boyden

Market Reviews:The Middle East and Italy

Research Techniques

Return on Leadership-Bringing Science to Search

S E A R C H - N E W S

3ISSUE 10 2002 search-consult

search-consultMANAGING DIRECTORJason Starr

[email protected]

EDITORIALBarbara Kwateng

Julia Harms

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PRODUCTIONMargaret Jaouadi

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UK and EuropeNorth and South AmericaSouth East Asia and Australia

Carol Crawford

Yann Le Leyour

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search-consult is published 10 times a year by

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Avenue, London, E2 7JP, United Kingdom and

printed by Printhouse Corporation, London NW10

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Front Cover: Chris Clarke, CEO, Boyden.

Photography courtesy of Boyden.

© Copyright 2002 Dillistone Systems Ltd

Glasford Portugal

joins the Neumann

International

GroupTHE PORTUGUESE OFFICE OF

Glasford is to join the NeumannInternational Group. The office isactually the largest independent andone of the three most respectedExecutive Search companies inPortugal.

Founded by Carlos Melo Heitor in1996, the company has built a verysolid and loyal customer base, frombanking and financial services, totelecoms, consumer products andtraditional industry sectors, all overPortugal.

The Neumann Group was foundedin Vienna, in 1971, and is actuallyone of the leading global ExecutiveSearch groups.

In Europe, the continent of itsorigin, the Neumann Group hasperceived itself as a companyespecially fit to understand themulti-cultural landscape of our time.

Its extensive coverage of officesmakes the Neumann Group the thirdin Europe. Globally, together with itsstrategic partners, the NeumannGroup is number one, with 100offices in 26 countries.

Commenting on this integrationDaniel Grenon, Neumann's Group

President, stated:"Neumann is celebrating its 30th

anniversary of superb world-wideservice for our clients, and we arevery happy to welcome Carlos Heitor,his Partners José Rodrigues andRoque de Pinho, and his team, in theNeumann family.

We are very enthusiastic to havePortugal in our Group, and I believethat we have got simply the bestteam of Executive Searchprofessionals in Portugal."

Commenting on this integration,the Managing Partner of GlasfordPortugal, Carlos de Melo Heitorstated:

"We are very proud of beingaccepted as Partners of the NeumannGroup and we hope that we willcontinue to perform at the highestdemanding criteria. Neumann is oneof the leading international groupsand have been pioneers in manyaspects of our profession, namelywith the creation of internationalPractice Groups. Our clients will bethe first to benefit from our increasedcapacity for performing at thehighest quality standards and alsofor the introduction of new services,based on successful practices inother European countries".

www.search-consult.com NEWS


4 search-consult ISSUE 10 2002

HEIDRICK & STRUGGLES HAVEissued reduced expectations forWorldwide revenues in Q4 2001. Thefirm believes that in the quarter toDecember 31, 2001 revenues will hit$85-$88 Million.

"It is important to note that throughour considerable efforts to reducecosts, and because of the variability ofcertain elements of our compensationstructure, we do not expect to reportincreased losses on the lowerrevenue," said Piers Marmion, ChiefExecutive Officer of Heidrick &

Struggles International. "The fourthquarter typically represents the lowestpercentage of total annual revenue forus, and this will indeed be true in2001. Although revenue is nowexpected to be below our originalthinking, we believe the state of theworld economy magnified the normalseasonality of the business. However,given the uncertainty that continuesto exist in the business environment,we acknowledge that we will have tomove further into the new year beforethis opinion can be confirmed."

BNB RESOURCES, THE PARENTof Norman Broadbent Internationalhas resigned from the London StockExchange and joined the AlternativeInvestment Market. The company hasannounced plans to issue over 12million new ordinary shares with theobjective of raising £3.2 Million. Thegroup has closed its loss makingFrench business and has also soldBarkers Communications Birminghamto McCann - Erickson Central Ltd.

The company warned shareholdersthat if the share offer does notproceed, "BNB will be left in afinancial position where it may beunable to service its working capitalneeds as they fall due." In itsannouncement, the company alsowarned its 2001 results will bedisappointing but said barring anyfurther market deterioration it expectsto trade at or beyond cash breakevenin 2002 following an operationalreview that has significantly cutmonthly losses.

COMING UP IN FUTURE ISSUES:

TRANSEARCH International

An Exclusive Interview withAlain Tanugi.

Market reviews:

China, Hong Kong and Singapore.

Financial Services

A Major New Survey.

And much, much more !

Heidrick revenuesdrop to 1999 levels


IN A COST CUTTING MEASURE,Korn/Ferry International has ended itsthree-year branding relationship withThe Wall Street Journal. Under thearrangement, believed to be costingKorn/Ferry International around$4,000,000 per annum, Korn/Ferry werecommitted to purchasing a minimumamount of print and online advertisingfrom the newspaper. The firm was alsoentitled to associate the Wall StreetJournal name with Futurestep. Bothparties describe the parting as amicable.



Korn/FerryInternational endsWall St Journalrelationship

Signium opens in Chile

SIGNIUM INTERNATIONAL, THESearch network formerly known asWard Howell, has announced a newmember in Santiago, Chile. Numbering27 offices in 18 countries, SigniumInternational continues to expandthroughout the Americas, Europe andAsia Pacific.

VEM/Signium International ofSantiago Chile joins the networkproviding capabilities in consumerproducts, IT - Telecom and financialservices. Partners JacquelineValenzuela and Eugenia Espinosafounded the firm in 1996 and are joinedby Senior Consultants Mr. FernandoMoure and Ms. Pia Puebla.


BNB Moves to AIM

To receive search-consult on a regular basis subscribe at www.search-consult.com

Cornerstone inScandinavia

S E A R C H - F E A T U R E

7ISSUE 10 2002 search-consult6 search-consult ISSUE 10 2002


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Return onLeadership

By Jason Starr

Executive Search firms are inthe business of developingleadership. They are in the

business of bringing in talent that willtake a business and improve itsperformance.

Interestingly, there is little researchon the factors that make a leadershipteam successful. Is there a correlationbetween the type of executives hiredby a firm and its performance? Dohigher paid executives performbetter? Are graduates of top tieruniversities more effective? Do CEO'spromoted from within perform betteror worse than those brought in fromthe outside?

This is an area that Searchprofessionals from Ray & Berndtsonand professors from the HarvardBusiness School having beeninvestigating over the last few years.In an exclusive interview with search-consult, Chief Executive Paul Ray Jrdiscusses the research and analyseswhat it means for the Search industry.

The approach taken by Ray &Berndtson is two fold; firstly, the bestperforming leadership in anyparticular industry sector is identifiedby calculating the "Return onLeadership" - a proprietary index

calculated on relative total returns toshareholders divided by the totalcompensation paid to the five highestpaid executive officers at 1600 largestU.S. public companies. Industrieswere ranked on the index , to identifywhich organizations had been mostsuccessful. Correlative analysis andinterviews with top leaders at some30 leading companies then took placeto understand what the underlyingreasons were for the success of anorganization. The research focusedon the composition of the leadership

team and the operational practicesused by the team.

"We looked into a host of differentfactors to see if there was a singlegene which made an executive teamsuccessful. We considered wherethey had come from, years ofexperience, academic background, butno single factor showed a particularlystrong correlation. There is no simpleformula for success. What matteredmore was how the team operated."

Research revealed that those firmsthat were successful were those that

TRANSEARCH INTERNATIONALhas opened an office in Santiago, thegroup’s ninth office in Latin America.

Oscar Anwandter and Cristián Duarte,

founders and partners of AnwandterConsultores will manage the office.

Oscar has extensive experience in theFMCG sector and was the CEO ofHipermercados Jumbo for about 20 years.He has also held numerous positionsbusiness consortiums and speaks,Spanish, English and German.

Cristián has held positions as HumanResources Director for more than 10 yearsin leading companies of variousindustries, such as: HipermercadosJumbo, The Hyatt Regency Hotel inSantiago, and Home Depot Chile.



CORNERSTONE HAVE ANNOUNCEDa new member firm - Humanet ApS withoffices in Copenhagen and Vejle, Denmark.The firm is described as a generalistbusiness and is the network's second officein the region - Professionel Management,an IT and Telecommunications specialistbeing the existing member.

TRANSEARCHInternationalopens in Chile

ROL INDEX - THE FORMULA

Excess Total Returns to

ShareholdersStock Price

Appreciation/Depreciation

Dividends

TotalExecutive

PayBase Salary

Bonuses

Fringe Benefits

Equity Grants

Stock Options

÷ROL =

we believe that this will be veryhelpful for our clients."

What does this mean for the Searchindustry? Well, if accurate, itweakens the notion of the "CelebrityCEO" and emphasizes teamleadership. The success of a businesswas shown to transcend the tenure ofits top leaders, so long as the firmmaintained a competitive advantagemodel that aligns with the leadershipteam's philosophy. Logically, thismeans that the idea that Search firmsmay develop into "talent agencies" forCEOs could be flawed.

"The model of the executive talentagency is hugely over-simplistic.However good an executive is, he orshe will only perform at their optimum

in certain types of organizationsurrounded by the right kind ofmanagement team. A systems basedCEO running a talent-drivencompanies will fail."

"The logical extension of this is thatExecutive Search firms need todevelop services that are basedaround organizational performance,not individual coaching. Our missionis to build great leadership teams.That is not to say that the CEO is notimportant, but how the whole teamoperates is critical..."

S E A R C H - S T R A T E G Y


S E A R C H - F E A T U R E


We are the

BrandWhy Branding is a key factor in Boyden's renaissance

By Bernard W. Walker

Sid's image loomed large in Boyden.There was justifiably great pride in hisachievements and in the longevity of afirm built to last. Boyden's more than 60offices around the world had Sid's portraitin their entrance halls. When Boydenprofessionals talked about the firm, theopening sentences nearly alwayscontained the words, "Sid Boydenfounded our firm in 1946."

But time had moved on. From itsnumber one position in 1971 Boyden hadcontinued to grow, but at a slower ratethan some newer competitors. In the

industry rankings, it had slipped from itsnumber one slot. Being in the top 20 wasstill high in a fragmented industry withmore than 5000 firms, but urgent actionwas needed to catch up on the newindustry leaders. Clients, who knewBoyden, respected its work. Clientfeedback surveys gave high quality

ratings, but an image survey showed thebrand as a fading star, with oldergeneration managers remembering thefirm better than the upcominggenerations. Competitors had a more up todate image. It was difficult to attractSearch professionals to Boyden from firmswhere strong brands led to significantover the transom business.

Recognizing that re-launching theBrand was central to an overall changeprogram, Chris and his team beganresearching the best thinking in branding,reading widely and screening specialistbrand consultants. In professional firms itis vital to carry major producers andleaders along with any significantinitiatives. Some of professionals arethemselves true experts in branding, fromtheir previous significant roles in bigbrand, industrial and commercialcompanies. There are also those whoseegos lead them to believe they areexperts. Some professionals embrace newideas and others feel comfortable withminimal change. Boyden was no differentin this and all needed to be brought onboard.

To gain wide involvement andcommitment from the beginning, Boyden'sboard was supplied with the best booksand with briefings on the branding. Itfeatured at the world conference in the

“The essence of the brand

was not a logo or

promotional material but...

the Boydenpeople...We are theBrand”

A NEW BROOM MEETS A GREATHERITAGE

In January 2000, Chris Clarke joinedBoyden Global Executive Search as itsPresident in New York. As part of

mutual due diligence, before he took thejob, he had made two round the worldtrips and interviewed with 17 seniorBoyden people in Asia Pacific, theAmericas and Europe. The Boydenchallenge was fascinating. The companyhad once been the world leader. It hadglobal reach, professionally excellentpeople, and great international clients. Yetthere was a clear need for corporaterenewal and change.

Sid Boyden had left Booze AllenHamilton, the management consultants, tofound one of the first executive Searchfirms in 1946. As a pioneer in theindustry, Sid had the persistence toconvince clients of the need for the newservice of Retained Search. He had theglobal vision and force of personality toestablish a Search firm, 'built to last', withstrong ethics, a well-developed Searchprocess and common internationalstandards. As a result, multinationalclients could get the same, quality serviceanywhere in the world. By 1971, Sid hadforged a global institution, which was theleader in the Search industry. In that yearhe retired, passing away in 1990.

boasted a "focused and disciplinedmanagement team" that fitted withinone of two "Competitive AdvantageModels". In formulaic terms, ROLPerformance could be defined usingthe formula in Table 1.

Focus and Discipline, was identifiedas a key factor that all high ROLleadership teams had in common.These teams "rigorously apply focusand discipline to executive decisionssuch as selection criteria, planningprocesses, resource allocation,organization structure,accountabilities, mergers, rewardsystems and leadership activities."

The competitive advantage modeldid not, as the name may suggest,relate to the strategy of the company,yet rather on whether the model fordeveloping human capital was talentor systems based. Firms which weredriven by systems and procedureswere following a model labelled "TheSystem Advantage Model" whereasfirms which achieved success throughthe leveraging of talent (and mostSearch firms are examples of this)were following the "The TalentAdvantage Model"). Different modelswork well in different environments.The research also identified NotablePractices which "differentiate" onebusiness from another and can have asignificant contribution to the successof the firm.

"Our research showed that thefundamental issue was that strategy isimportant, but adherence to thecompetitive advantage model is vital -it is the macro model of how youmanage a company. Strategychanges, your competitive advantagemodel is intrinsic."

Ray believes that this approach haspractical benefits for the firm's clients.

"At a practical level, this gives us atool that we can use to better assessfit between a client and a candidate.Our process will involve determiningwhat drives a business and from thatthe type of person that will besuccessful. We are excited because


For more information, visit:

Web: www.rayberndtson.com

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Shareholder

Quadrant 3

HigherReturns

Higher Comp

Quadrant 4

HigherReturns

Lower Comp

Quadrant 1

LowerReturns

Higher Comp

Quadrant 2

LowerReturns

Lower Comp

Returns

INTERPRETING THE RESULTS

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EXAMPLE OF INDUSTRY RANKING & LOCATION OF COMPANIES ON THE ROL® MATRIX





EVALUATE THE CURRENT SITUATIONDuring the review of competitor's

websites, materials and press statementsone team member said.

"They all look like Zebras to me.Searchers can recognize differences, butclients probably can't."

Indeed, all large Search firms claimed tohave worldwide coverage, specialistpractices, strong ethics and rigorousmethodologies. The superior lookingpeople in smart suits stared impressively

out of their brochures in a uniformsameness.

The team found that lots of clientsdisliked the arrogance of some searchersand related better to pictures of searchersworking, sleeves rolled up, in teams withclients, rather than staring severely fromthe page in lordly isolation. In reviewingBoyden's then current material, onesenior client VP in a focus group askedwhether Sid Boyden were still with thefirm underlining the need for a newapproach.

The overall news was reassuring. Fivefirms had well-recognized brands, but theirimages were fuzzy. The remaining largeand small firms had images specific to theirclients rather than being well known in thewider business marketplace. Boyden'sbrand recognition was stronger than someof its larger competitors and it had no realnegatives. It was ripe for revival.

GENERATE BRAND CONCEPTS SHR were hired because of their

strength in this area. They worked withthe team using thousands of visualimages and photographs, of people,watches, chairs, bridges, buildings andabstract forms. The approach was tocluster these as reflecting a perception ofBoyden now or as it should be. Otherimages were used to reflect images ofparticular competitors. Words were addedto describe why choices were made. Thiswas great fun for those involved. Theresults were distilled into a number ofvisual and verbal images. Theserepresented Boyden and its competitorsand translated into concepts and ideas.Of the many ideas generated four corethemes and related visuals wereidentified for further testing anddevelopment. The basis of selection wasto match concepts and ideas againstclient needs, Boyden brand aspirationsand differences from the themes, whichcompetitors were using. The four themeschosen were.● Global Commitment - Many clients

need searches in their internationalbusinesses or seek leaders from theglobal talent pool for domesticassignments. Most of the 5,000competitors have no internationalpresence. Of those that do, only ahandful cooperate effectively acrossborders and can deliver the samequality and consistency of servicearound the globe.

● High Touch - Clients and candidatessee Search is a very personalized andtailored service. Most Search firmsdeliver it this way in practice, butfortunately for Boyden, many are soexcited by databases, on linerecruiting, one stop shopping and whizbang technology, that these things arebeing emphasized to the exclusion ofthe high touch service which clientswant.

● Entrepreneurial Spirit - Many clientsare complaining about being dealtwith on an assembly line by someother large firms and of searches beinghanded off to 'factories' comprising

fall of 2000 An international team ofsenior and widely respected BoydenSearch professionals was motivated towork on the project. Many others becameengaged through interviews,questionnaires and internal reviews.

The branding team defined the brandas the way in which clients, clientcandidates, candidates for Boyden,Boyden people and outside influencers,such as the media and professionalorganizations, perceived Boyden. Theessence of the brand was not a logo orpromotional material. Indeed, a key earlyconclusion was that in a service industry,where personal trust and relationships arecrucial, the Boyden people, the way theylook, talk and interact with others are themain manifestation of the brand. "We arethe brand".

THE NEVER ENDING PROJECTThe selection of a branding

consultancy resulted in the rejection ofseveral well-known advisory firms,conveniently located in nearby NewYork, in favor of SHR Visual Perceptionsbased in Phoenix Arizona. SHR hadhelped put Volkswagen's brand onwheels with the immensely successfulVW Beetle revival. All the competingconsulting contenders' methodologiesstarted with benchmarking the brandagainst competitors and included clientfocus groups, but only SHR had aconvincing, creative and an excitingapproach to developing the new ideasneeded. This approach promised togenerate a compelling verbal andgraphic essence of the brand.

The Boyden team recognized that theproject would have a number of stagesand a tight timetable, with brand re-generation concepts in late 2000 androll out in 2001. However, the projectwould be eternal in that building andmaintaining a great brand is a journeyrather than a destination. In the Searchindustry, it requires the participation ofall firm members today and in the future.

The project had the five stages shownin the Exhibit ‘Branding Process’.

Sid Boyden

consistently chose them as superior.Much work was then undertaken to

develop images and copy for advertising,web sites, themes for PR and othermaterials. During this stage, the need todevelop variations in color and someimages to match the more conservativeneeds of some markets became clear andwas accommodated.

PLAN IMPLEMENTATION Getting the message to everyone and

engaging them with the new concepts isa challenge for a firm like Boyden withoffices all over the world. This was to beaccomplished through briefings at theworld and regional meetings and throughuse of web based and CD trainingmaterial.

The planning and scheduling ofproduction and dissemination, includingalso brochure material and websitecontent was a major task for Terri Flynn,Boyden's Group Marketing Manager.

IMPLEMENTATION AND FEEDBACKIn rolling out the program in 2001,

Boyden recognized the need to continuallyupdate content, monitor compliance andreview impact. A second branding team ofBoyden Search practitioners has beenestablished to keep ideas onimplementation rolling.

The impact of the branding program islike ripples moving outwards in a pool.The first people to get the spirit of change

and renewed vigor are Boyden's ownpeople. Despite tough markets in 2001morale is rising and there is a newconfidence in the future. The secondgroup to pick up the message is thecompetitors. Candidates from otherleading firms are increasingly seekingcontact, admittedly some of these may bestood on burning platforms, given thecatastrophic cut backs and collapses inmany major competitors. Clients are alsobeginning to pick up the messages andthis is the key area for future focus. Willthe brand investment result inmeasurable improvements in perception?Regular monitoring and brand audits arescheduled to enable changes of emphasisand direction.

At the end of 2001, Boyden hadrecruited 22% more searchers than itdid at the end of the record year of2000. This is indicative of the new spiritof confidence in Boyden, whilst otherfirms were slashing and burning theirteams during the 2001 industryrecession. A part of this has been theunity and self belief generated by thebranding project. The other parts ofBoyden's change program also played arole, but the brand is a banner behindwhich a firm marches.

inexperienced staff. One largemultinational reported an internalsurvey of completion of searches bySearch firms serving it. It reported only20% of searches filled by one of itsmajor Search firm suppliers, and only50% by another. Its boutique Searchfirms filled 80% of searches theyreceived. The Boyden team identifiedthe entrepreneurial spirit of Boydensearchers as being boutique-like in itsfocus on client delivery. It providedlocal knowledge and culturalcapability. Boyden's lack ofbureaucracy and decentralizeddecision making was seen as essentialto this and very attractive to Searchprofessionals

● Trusted - All professionals aspire totrusted relationships with clients. Bybuilding this into Boyden's brandconcept, the team conveyed all theunderpinnings of this ideal. Theseinclude: commitment to quality, strongethics, sharing ideas, and confidencesand providing additional added valuein the interest of relationships.

SCREEN, VALIDATE AND DEVELOPThe four concepts and visual images

tested well with client focus groupsinternationally. Some variations wererejected or improved. Those selected weretested as brochure and web site designs,against those of leading competitors andBoyden's existing image. Clients

Competitor Review

Client Perceptions

Boyden ProfessionalPerceptions

Brand Recognition& Perception Surveys

Explore AspirationalPerceptions

Identify visual signals

Develop concepts forfocus

Client Focus Groups

Internal Reviews

Finalize

Timetable

Training

Collateral Materials

Website

Monitor roll out

Monitor relativecompetitiveperformance

Update & modifyprogram

BRANDING PROCESS



Web: www.boyden.com

1. Evaluate currentsituation

2. Generate brandconcepts

3. Screen validate & develop

4. Plan Implementation

5. Implementation & feedback

Hadeed believes in what he is doing and isconfident that the market is changing.

"After the tragic events of 11thSeptember, everything stopped. Thebusiness community was shaken and, for awhile, the future was uncertain. Theimmediate reaction we encountered wasthat the majority of our clients placedprojects on hold. No one cancelled, but noone wished to proceed. However, in thelast week of November the pressure hasbeen back on again and clients wanted usto make up for lost time - 4 assignmentshad to be completed within 21/2 weeks. Wecannot say business is back to normal asyet, but we hope for noticeableimprovements in the near future.

"I strongly believe that this industry willbe the driving force in transforming MiddleEast business. Government agencies,industry leaders and other seniorexecutives do not as yet realize the gravityof the situation. But without finding andbringing the high level executive talents inthe form of new blood, and injecting it intoa large number of these decayingorganizations, institutions and businesses,many of these business operations willstagnate and quickly diminish. ExecutiveSearch is a key part of the solution."

S E A R C H - M A R K E T




in theRetained Executive Search

Middle EastBy Jason Starr

In the boardrooms of the West,Retained Executive Search is largelyaccepted, as is the value which it can

offer an organization. In many emergingmarkets, however, Search professionalsface an uphill battle trying to persuadeclients that the Search process can delivera quality of candidate unmatched by anyother recruitment technique.

The Middle East is one such market -and it is a market where the Searchpractitioner faces many more problems.Hasan Hadeed of TRANSEARCH MiddleEast speaks exclusively to search-consult about his experience in thisfascinating market.

Hasan Hadeed believes that the overallvalue of the recruitment market in theMiddle East is between US$250,000,000and US$300,000,000. The vast majority ofthis, however, is contingency basedrecruitment - Hadeed believes that Searchassignments account for less than 15% oftotal billing in the region. It is a bizarresituation; the market is desperate forexecutive talent, and yet unwilling to payfor it.

"Most of the so-called Executive Searchassignments are awarded on acontingency basis and very few clients

would understand the value or appreciatethe benefits of working with true ExecutiveSearch consultants. The internationalstandard of paying professional fees of athird annual compensation is rarelyconsidered an acceptable practice here,even by the major multinationals in theregion."

The major problem is one of education.Hadeed shows me examples of thebusiness press in the region - publicationssuch as Al-Ahram of Egypt, Khaleej Timesof Dubai and the UAE, Al-Nahar of Beirutand Al-Sharq Al-Awsat of Saudi Arabia.The recruitment sections carry realms ofadvertisements booked by firms claiming tobe "Executive Search firms" and yetboasting, for example, "Free JobAdvertising." These firms offer database oradvertising services at a database oradvertising fee but operate under thebanner of Executive Search. It is nowonder that prospective clients baulk at athird of total compensation.

Yet Hadeed has dedicated much of hislife to proving that a market exists. Froman earlier career in HR roles within the Oilindustry, he moved into Executive Searchin the 1970s. He set up his first Searchbusiness in Lebanon in the 70s with Jim

Johnston and Lebanese national SamiNaufal. This firm, Johnston, Naufal, HadeedAssociates had been established for onlytwo months when the Lebanese Civil Warbegan. Today, his business is part of theTRANSEARCH International group.

Although TRANSEARCH is not the onlyRetained Search firm to operate in theregion (Nicholson International, forexample, also boast an office in the region)the majority of the recognized RetainedSearch firms in the area operate out of theUK. Others are mostly contingency firms,often branches of businesses in Britain,South Africa or Australia.

Local competition takes many forms.Many of the large audit firms offermanagement recruiting services. Ernst &Young, KPMG, PricewaterhouseCoopersand Arthur Anderson are all wellestablished in the region having enteredthe business through filling of positionssuch as Chief Accountant, FinancialController and Finance Manager. Today,these firms will offer to fill an array ofpositions. The consultancies areunderstood to typically charge between12.5% - 20% of annual compensations.

Below this level local agencies areoperating on a purely contingent basis,

typically earning between 7.5% - 12.5% oftotal annual compensation. There is also agrowing online recruitment sector whichhas developed over the last 3-4 years.

Whilst the region's recruitment industryis not regulated per se - and Hadeedbelieves that a number of "cowboys" takeadvantage of this - local legislation doeshave an impact on the market. Inwardinvestment is not allowed without a localpartner in the targeted country and thismakes it difficult for many of theestablished international firms to set up alocal presence.

This means that many 'local' players inthe region are actually firms based in theIndian sub-content, operating through localagents. The agents are not actuallyinvolved in the recruiting process - ratherthey act as sponsors in return for whichthey collect a certain percentage of thegross generated revenue, normally 7.5% - 12.5%.

"Most of the lower level firms operate onthe basis of volume. They regularlyadvertise in their own local media, theclients pay upfront for an agreedadvertising budget, they send tons of CVsto clients to screen and select a number ofcandidates to be interviewed by the client.Upon the selection of candidate/s the clientwill pay the consultants a fee, ranging fromU.S.$ 500 to US$2000 per head. From ourperspective, we wish that they would stopcalling themselves Executive Search andManagement Selection consultantsspecialists firms, and stick to the label ofmanpower supply and recruitmentbureaus."

"Some of these firms are bringing a badname and reputation to the practice ofExecutive Search, which is not fullyunderstood and appreciated as a valueadded process as yet, in this part of theworld. "

These market trends make it verydifficult for Hadeed to maintain his fees atthe a third of total compensation level.

"People find it hard to understand theconcept of the retainer - they take theviewpoint that they should only pay forwhat they receive. They have to learn thatour time is money. We have premises, staff,

expenses - we can't wait for people to pay." "I recall one client for whom I quoted a

fee of around US$40,000. The client wasamazed and said that it was too expensive- that he could take his entire family onholiday to Germany for three months, forsuch an amount!"

Despite these problems - and there canbe few Search firms that find themselvescompeting with the German Tourismindustry - Hadeed is able to work on aretainer of 80% of his projects(TRANSEARCH executed 28 assignments inthe region during 2001). His typical feelevels are between 25% - 35%. Thispercentage may be reduced on projectsinvolving multiple assignments or thosewhere the client is willing to pay anunusually large slice of the fee upfront.

"We have had experiences where clientshave refused to pay until they have seenhow well the candidate works out. This"evaluation" can last for several months,and is not something that we would haveagreed in advance."

"Basically, people think that they areclever if they don't pay. It's a bizarrementality. This happens even with seniorpositions in multinationals. I have workedwith regional financial servicesorganizations that try to renegotiate afterthe placement has been made."

The lack of a large amount of local bonafide competition is another cause ofconcern for Hadeed. He is keen to develophis business, but he is given the toughchoice of bringing in inexperienced localrecruiters and training them up orrecruiting experienced consultants fromoverseas. He admits his experience whenhiring ex-pats has not been entirelypositive.

"A number of the ex-pat consultants thatwe have hired have been verydisappointing. They tend to look for quicksuccess in a short period of time; sometreat it as a holiday, and even with a goodex-pat there is the risk that he or she willnot settle. However, we have little choice- there is little local competition that wewould be willing to take expertise from."

Despite the sheer difficulty of running aSearch operation under these constraints,

Hasan Hadeed



Web: www.transearch.com

S E A R C H - S K I L L S


those individuals qualify them for therole under consideration. There must beconstant feedback between consultantand researcher with a policy of "nosurprises". Vital market information onissues such as salary levels, otherrecruitment activity in the sector andperception of the client must all berecorded and discussed as it may alterthe direction of the research activity orchange the profile of the person beingsought.

Maintaining a record of allconversations, on whatever database isbeing used is vital to the success of boththe current project as well as futureassignments.

ETHICSThe issue of ethics is the cause of a

great deal of soul searching within theindustry. Researchers are sometimesplaced in the same sort of category asEstate Agents i.e. loved when they arebeing used but reviled at all other timesfor their dubious morals and practices. Itis always conveniently forgotten thatwhen you are actually working for a

client, the result is the only thingmatters to them.

Every researcher that is a member ofthe Executive Research Association,

ERA, which is the industryrepresentative organisation in the UK,signs up to a code of practice. In simpleterms they undertake not tomisrepresent themselves, to ensure strictconfidentiality and not to allow conflictsof interest to occur.

The above undertaking should franklybe regarded as a minimum. Yes it willtest the ingenuity of the researcher toget information and yes it is all too easyto lower standards and to attempt totake a shortcut, when under pressure todeliver results. However, the ability toget around these issues and to stay onthe right side of the fence is thehallmark of a true researcher and notjust a gatherer of information.

THE NEXT ARTICLEIn the next article I will examine the

Development of a Research Strategy.Simon Stephenson


For more information, contact:

Email: [email protected]

S E A R C H - S K I L L S


toIntroduction

Recruitment ResearchBy Simon Stephenson, SRA

This is the first of five articles onthe subject of recruitmentresearch and it is important to

realise that like economists everyonehas their opinion on how best to conductresearch. Nailing my colours to the mastI have both a background as aconsultant, as well as experience inresearching and running a team ofresearchers. I therefore understand thepressures that all sides are under andhave developed a simple process that ifrigorously followed will produce therequired results. That it not to say thatthere is not room for the occasional flashof inspiration and the support of a largenumber of contacts.

It is always important to rememberthat we are dealing with individuals andtherefore we cannot predict how theywill react and so we must appreciatethat we are disturbing the even path oftheir lives every time we contact them inorder to sound them out for a new role.We must always listen carefully, besensitive of their privacy and notpromise what we cannot deliver; aboveall we must keep our word.

These articles are a personal view ofthe research market and the researchersrole and methods. The relationship with

a consultant is symbiotic and neithercan survive without the other, it mustrepresent a win - win partnership.

THE ROLE OF THE RESEARCHERResearchers can either sit hidden in a

back office occasionally appearing in aself satisfied haze clutching yet anotherlist of potential candidates or they canbe much more pro-active and valuablepartners in the recruitment process.When the call comes in for theconsultant to attend a meeting with a

potential client, the researcher shouldbe able to provide a short briefidentifying market trends, where thecompany is positioned in it's marketsector and key industry personalities.Such an overview ensures that theconsultant will appear knowledgeableand adds value to the meeting. Havingthe researcher attending the meetingwill also add credibility as to the scale ofthe commitment of the consultant andhis team to achieving a successfuloutcome on a project. At the same timethe researcher is fully in the picture as towhat is required and by asking thosequestions that the consultant might feelexposes a lack of knowledge on theirbehalf, will bring greater clarity to therequirement.

We will examine the process ofresearch in much more detail in laterarticles, however in outline theresearcher must prepare a list ofcompanies in which likely candidatemight lie, they must identify andapproach likely sources of information,they must identify potential candidateswithin companies and by speaking to

“.... The relationship with a

consultant is symbiotic and

neither can survive without

the other, it mustrepresent a win-winpartnership.” Know your career

Know search-talent Our unique access to search leaders in 26 countries ensures that we are uniquely placed to help

you manage your career. We have clients who are recruiting now. In the first instance, contact :

[email protected] visit

www.search-consult.com/talent

SEARCH-TALENTDedicated to careers in Executive Search

gives us an excellent platform in HongKong and reinforces our position inNew York. We have also just hired ahigh profile team in Germany (thecompany has offices in Frankfurt andMunich). France is well ahead on lastyear."

"However, we do need to strengthenour US platform, of that there is noquestion. We are looking to recruitaggressively, and this is a good time todo it. Our strategy, our culture and ourvalues are attractive to top-flight USsearch consultants disillusioned with

their role as 'transactors'. Consultantsat Whitehead Mann are positioned asadvisors to clients, not processors ofassignments."

"Beyond Search, we may well look toacquire. We have resigned from theGlobal Coaching Partnership (of whichThe Change Partnership was formerlythe founding member) but we still haveexcellent relationships with many ofthe members. There are few coachingbusinesses of any size, but it is an areathat we are looking at."

That Whitehead Mann is not averse togrowth through acquisition is self-evident. During the past two years it

has acquired four businesses - GKR,Pendleton James, The ChangePartnership and Baines Gwinner. All ofthese brands are currently extant, butfrom 4 February the Group will tradeunder the single brand 'WhiteheadMann'.

"Whitehead Mann is the dominant UKbrand in leadership services. It is ourintention to move forward under thisidentity as we seek to establishourselves as a global player inleadership consulting."

In support of this effort, the Group hasrecently embarked on joint venturewith Economist.com. The launch of the'Global Executive' website providesEconomist subscribers with access tohigh-level content in the area of humancapital management, recruitment anddevelopment.

"Some people believe that theEconomist link is about generatingcandidates. It is not. Our partnershipwith Economist.com to create GlobalExecutive is significant for two reasons.First, it provides us with a platform forthe Whitehead Mann brand in our keymarkets, especially North America.Second, it gives us access to asubscriber base that represents ourcore target market: business leadersand other key decision-makers."

The success of Whitehead Mann in2001 has, in a significant part, beenbrought about by the fact that so muchof its business is in the UK - Mr Clery-Melin admits that the firm's USbusiness has suffered - the fact is thatthe core strategy on focusing on theBoard room is one that many of theindustry majors scoffed at 18 monthsago - and many are now desperatelytrying to follow. The strategy appearsto be right - the objective now is todevelop a genuinely worldwidestructure as the different internationalmarkets comes out of recession.





The public executive search firmsare suffering. Heidrick &Struggles, Korn/Ferry and TMP

Worldwide are all making swingingcutbacks, with profits becoming lossesas revenues collapse. This is areflection of the tough economicclimate and of errors made during theboom of two years ago. At least, that isthe generally accepted view.

One public Search firm, however, hasso far bucked the trend. The Britishbased Whitehead Mann Group hasrecently announced interim figureswhich show revenues to be up by 34%;whilst much of this rise can be putdown to acquisitions, even the adjustedquarter on quarter figures show a smallincrease. In an exclusive interviewwith search-consult, Gerard Clery-Melin, Chief Executive, accounts for thisperformance and reveals his plans forthe future.

The fundamental difference betweenthe strategy of Whitehead Mann andthat of the US public firms is that,whilst all have looked to expandbeyond the traditional offerings of

Retained Executive Search, WhiteheadMann has looked to deepen itsrelationship with clients at the level ofthe boardroom.

"Our strategy is to provide real valueto our clients by addressing their high-level leadership needs. This meansmore than recruiting people for roles. Itmeans advising on the relationship

between business strategy and theleadership capabilities needed todeliver that strategy. It meansbenchmarking leadership teamsagainst market peers. And it meansdeveloping people in order to get thebest out of them. This is what clientsneed and want. It is no coincidencethat our management asset valuation

and coaching services are enjoyinggrowth in a challenging market. Theirperformance testifies to the ongoingneed for high level, value addingservices."

The management asset valuationservice combines the insights of searchconsultants with observations from theGroup's in-house commercialpsychologist to benchmark and profilean organisation's top team. Executivecoaching is a newer service for theGroup - a business that they enteredfollowing the acquisition of The ChangePartnership in February 2001.

"Today, 80% of our fees relate tosearch. This is similar to the split 12months ago, but it would have beencloser to 75/25 had we not acquiredBaines Gwinner. We are doing a lotmore non-search work than we did inthe past and there is no question thatthis will become more and moreimportant to us - I would predict thatwithin 3 years a third of our revenueswill come from non-search businesslines."

The desire to grow these newer

revenue streams is one of the reasonsbehind a restructuring that thebusiness is about to undertake. WhilstMr. Clery-Melin is not prepared toreveal his plans in full, he explains thathe plans to remodel the way in whichclients are served. In a step beyond the

idea of "Practice Groups", WhiteheadMann is hoping to develop its bestconsultants into the role of "LeadershipConsultants". The concept isstraightforward : the individualbecomes expert in the leadership needsof the client whilst being able tomanage the delivery of any and all ofWhitehead Mann's services. The resultis a deeper working relationship thatgenerates value for the client and alarger, more consistent income streamfor Whitehead Mann.

Though the company has madesignificant steps forward over the past12 months, Mr. Clery-Melin is honestenough to acknowledge that the firmstill has some way to go before it canclaim to be offering all its services on agenuinely global basis. The firm has anexcellent position in the UK,dominating the boardroom of FTSE100companies and regularly being namedas the firm behind major appointments(the new Chief Executives at BritishTelecommunications and retailer Marksand Spencers being high profileexamples). It has someway to go,however, to achieve this level ofpenetration in the other markets. Thisstrength is reflected by the makeup ofrevenues - in 2001, 70% of Revenuescame through UK based clients.

"The acquisition of Baines Gwinner

Gerard Clery-Merin

Whitehead Mann

ServingtheBoard

By Jason Starr

“It is our intention to move

forward under this identity

as we seek to establish

ourselves as a globalplayer in leadershipconsulting.”



Web: www.wmann.com

The new Whitehead Mann

logo is designed to reflect

the group strategy:

S E A R C H - W O R L D O F S E A R C H

19ISSUE 10 2002 search-consult18

Wo r l d o fS e a r c h

In this issue we ask about the impact of the economy on Search -

which sectors aresuffering, which

are surviving andwhat of the future?

search-consult ISSUE 10 2002

USA Janet TweedGilbert Tweed

"In the last 8 weeks we'veseen an enormous change.Firms can no longer wait tohire executive talent. Thereare companies such as GeneralMotors who are laying off20,000+ but are still issuing

assignments." "Financial Services has beenhit harder than I've seen inover 20 years. However, wedo see marvellous signs thatthe sector is coming back…Legal is coming back. Biotechis surfacing too, but this year'sbig star is High-Tech. TheHigh-Tech industry just took offtoo fast, but I believe that it willalways be on the cutting edgeof society and it's comingback.… International is notsuffering nearly as much asthe US. We're doing work inBrazil, Asia Pacific, Germany,France and England."

NORWAYArne AskautrudSmart People

"All sectors are suffering, butthe international tourismindustry, insurance and ITsectors are suffering most….The health, pharmaceuticaland finance sectors areperforming wellinternationally."

"We believe that it will be moreimportant than ever to get

people with the rightprofessional and social skills,and that the recruiter must bea specialist in knowing thecritical factors of the client'sbusiness. There is no longerroom for the generalist."

USAJudith v. SeldeneckDiversified Search

"Healthcare is very strong. TheBiotech sector is also doingvery well, as is Not for Profit.Financial Services are startingto comeback…. Search is oftenthe first industry to feel theeffects of the slowdown and arebound in the economy.

"Everyone is talking about apickup this year. We believethat technical and financialservices will lead the pickup….Some sectors will recoverfaster than others - probablyparallel to what's going on inthe economy. Those which arereally hurting are housing,construction, entertainmentand airlines…. They will comeback but will be structureddifferently and will come backslowly."

UK Andrew SimpsonTMP Worldwide Executive Search

"Investment and Private equityare solid, as is AssetManagement. Healthcare andInsurance are both strong. IT& Telco saw weakness at thebeginning of 2001. Publicsector has been especiallystrong."

"All sectors will recover -whether they will recover totheir previous level is theessential question. Forexample… look at capitalmarks - clients may no longerbe prepared to pay forretainers… Markets maybecome more contingent overtime as clients start to examinecosts per hires. There will bemore pressure on fees… Wewant Search to be seen as amore consulting role, not just atransaction."

JAPANJari HaraSpencer Stuart

"Currently Financial Servicesand Technology are suffering.Our Life Science sector isgrowing - reflecting industrialderegulation in the region -and we are capturingemerging markets - the ageingpopulation is creating a needfor more efficient health-care,new pharmaceutical productsetc - and so we are seeingincreasing demand for thesesectors. In Japan, the MobileCommunication Markets arealso booming - VC firms areinvesting heavily in the nextgeneration of technology andin content."

"We are expecting reform in anumber of industries -banking, and financial servicesand this will driveconsolidation. This will, asconsolidation always does,open up a search market"

Do you have a question for a future panel? Email [email protected]

THE CONTEXTA survey released this month by theAESC (www.aesc.org) asked the CEO'sof 160 Executive Search firms forpredictions on the market in 2002. Thefigures were positive - 78% ofrespondents anticipate that 2002 willbe better than 2001 with only 13%arguing that times would be tougher.Tellingly, however, one respondentreplied "How could it be worse?". The

answer is - with great difficulty. Thelatest figures from Execunet(www.execunet.com) revealed that yearon year demand for executives fell by38% in Q4 of 2001. The worst hitindustry was, unsuprisingly, High-Tech,which saw a drop of 65%; on the otherhand, the Pharmaceutical / Healthcaresector continued to boom, growing by34% over the period.

In this issue ofsearch-consult weintroduce our new"World of Search"

column - wherewe ask Search

Professionals fromaround the Worldto comment on a

topic or issuerelevant to the

Search industry.

&S E A R C H - S T R A T E G Y




Profile:Eric Salmon

PartnersBy Barbara Kwateng

The culture of a firm does notappear accidentally. Whenfounded, firms are often goal-

oriented. The founder has an idea for anew organisation and brings in otherswho share his/ her vision. Eric Salmonfollowed this principle. After 20 yearswith Egon Zehnder International, theFrench national decided to set up hisown firm. In this article, we discuss howorganisational culture is formed andretained in a search firm.

In an interview with Eric Salmon, hesaid, "It got to the point where I felt thatEgon Zehnder had grown too big, toobureaucratic. I was leading the WesternEuropean practice and had reasonableautonomy to form strategy. Yet I feltrestricted when I wanted to branch outinto searches in the US or Australia, forexample. So I left and set up my ownfirm".

At this time Eric Salmon was already50, and felt that he had 'more to losethan win' in this gamble. However, atthe same time, through the realisation ofwhat he felt were disadvantages withinhis previous firm, he formed a principlethat would remain in the firm that hefounded, Eric Salmon & Partners. "Wehave a limited bureaucracy, we've kept itto a minimum. We have no accountants

or anything. Everything is outsourced,we simply concentrate on our clients".

When asked about the merits ofbureaucracy, such as checking change,and aligning group members interestsaround a decision, Mr. Salmon gave thisreply, "We do have annual conferencesand partners’ meetings where we makestrategy decisions. But that's not abureaucracy, that's democracy". This is aperfect demonstration of the 'limited

bureaucracy' principle upon which thefirm was founded.

The firm was founded in 1990 with theaim to recruit colleagues and obviouslyclients. Mr. Salmon's own history playeda part in the company's initial structure."At Egon Zehnder, I had spent two 2years in Italy so I spoke the language andwas familiar with the country. From dayone 1 of Eric Salmon & Partners, we hadan office in Paris and one in Milan. Thelanguage of communication was English

and we became immediatelyinternational through this."

"I wanted to create something a bitdifferent, something new. I had an ideaof a special spirit. That would be ourcompetitive edge." Interestingly, despitebeing a new firm, Eric Salmon & Partnersdid not recruit people from the Searchbusiness but rather from firms outsidethe industry, such as like managementconsultancies and or industrialcompanies. The company cements itsculture by bringing in people who sharea common vision with the founder.Recruitment is key in the formation ofculture. However, employees do notbring their search techniques from theirprevious firms. "Everyone learns searchfrom Eric Salmon & Partners. Joiners likethe firm before they like the industry. Itsthen easier to manage culture and yetinspire creativity". This follows theprinciple that it is easier to manageculture than change it. Culture is realisednot only in the firm, but also itsmembers. Thus a change in culturewould have to encompass both the firm'sculture and that of its members. "Peoplecome to join a culture which alreadyexists".

Yet with 5 offices worldwide, how canthe company compete with national

cultural characteristics to form one 'EricSalmon & Partners culture'? To ensurethat the Eric Salmon & Partners’ cultureis retained, all consultants interviewevery potential member of the firm."We're very clear in describing outculture. It's not just because we want toavoid making wrong recruitmentdecisions but we also feel responsible forthe person leaving another firm to joinus. Both sides need to feel 100%comfortable with the environment".

As the firm's founder, Eric Salmon mayhave created an atmosphere wheremeasured risk- taking is notdiscouraged. For example, the founderstarted his own firm later in his careerwhich more or less coincided with arecession. "Even if you have a businessplan, you need to realise that you cannotpredict everything that lies ahead".Equally, Eric Salmon & Partnersunusually started out with 2 offices indifferent countries. Yet the risk takingseems to have paid off. In 2000, thegolden year for many search firms, EricSalmon & Partners collected $12.5Million in revenues (2000). The firm nowhas offices in Frankfurt, London andNew York all with the same system.

The way this is achieved is through'team working', the buzzword of the lastdecade. All firms claim they work in ateam, search or otherwise. Eric Salmonrealises this himself. "People wouldnever say 'we're not a team' butseriously, we really do feel that we are.Two years ago, we had a big assignmentto do in the UK. The person in charge ofthe search fell sick yet the search had tobe continued. Therefore, someone inParis took over, travelling to the UK everyweek. The merit and the financialcompensation for the search went toLondon. We find this typical of teamspirit". Yet doesn't team working conflictwith the individualistic nature of thesearch industry? "We understand thatthese may be opposites and that somefirms might not want to really work as ateam. This is probably why you needleadership to make it work. It's the samein any field; politics, media or research-

people need leadership. Withoutleadership, you lack direction".

As its founder, Mr. Salmon does notbelieve that the firm's culture shouldremain static. In fact, he argues that thefirm started "with a few very clear andsimple yet consistent principles. Theseprinciples cannot be changed. Theculture itself can adapt to externalfactors. Most importantly, the founderneeds to be able to take advice. If yourecruit good people, you need to be ableto take on board the advice they offeryou. You need to share beliefs to retainyour legacy".

The structure of the firm is set so thatthe partners have a say in how thebusiness is in run. There are 25consultants in the firm worldwide,

around half of which are partners. Theseare co-owners by shares. "Partner is notjust a title for us", says Mr. Salmon. Thepartners co-own the holding entity. "If itwere any different and they werepartners of a local office, then our teamapproach would be severely weakened".Partners have on average, no less than 3years at Eric Salmon because "becominga partner is an act of loyalty". Theirrights extend to decisions on thecompany's strategy. The team principle isevident in how partners can vote tochange the agreement itself. Also"partners can vote on whether we sell

the firm or not. In the year 2000, wewere approached several times to sell.About 80% to unanimity is required topush through a decision like that."

"I think you can forget about yourculture the moment you sell to a muchlarger organisation. As the smaller firm,you need to adjust to the larger firm'sculture. Pretty soon, your name beginsto disappear and the original principlesthat the smaller firm started mayvanish. If you like your principle,believe that it is possible to make agood living and make people in theorganisation happy, my question wouldbe, why sell?"

Increasing in size can create pressureon a company to retain its basicprinciples, in the same way that a mergedoes or going public would. "From 1999-2000, we doubled in size but we werevery choosy in who we picked and madesome good decisions. The culture hasn'tbeen diluted, its been reinforced." Mr.Salmon goes back to the point aboutleadership in discussing how much sizecan change a firm. The stronger theleader, the more able he or she is toretain the original principles. EricSalmon believes going public introducesa whole different set of pressures. "It's adifferent story. You introduce factorswhich you cannot control. Marketshareholders are not necessarilyinterested in quality but quantity. Theprinciples are totally transformed".

Eric Salmon feels that his firm is still in its'entrepreneurial phase' yet acknowledgesthat there will be a point when it enters its'managerial phase'. There are still a lot ofjuniors in the company and he accepts thatthe company needs to be pragmatic."When the world around you changes, youneed to change too. Your principleshowever need to remain the same. For us itis important to strike a balance betweenentrepreneurial spirit, taking risks andachieving our goals".



Web: www.ericsalmon.com

Eric Salmon

“.... It got to the point

where I felt that Egon

Zehnder had grown too big,

too bureaucratic.”





As the sixth largest market in theworld, Italy has a similar economicstructure to that of most other

advanced economies, with a small anddiminishing primary sector and a largeservices sector. Tourism and design areimportant next to traditionally export-oriented manufacturing of high-qualityconsumer goods, including clothing,furniture, kitchen equipment and whitegoods. Small and medium-sized family-owned companies, mostly in the north-east and centre of the country, are thebackbone of "Made in Italy" and there areonly a few large private companies,although those that do exist play a majorrole in the economy, e.g. Fiat, controlledby the Agnelli family, and Pirelli.

Another Italian reality is that of apeculiar labour market: the paradox ofwell above average unemployment in thesouth contrasted with a lack of skilledlabour in the north, exists next to a highernumber of lawyers in Rome than in all ofFrance.

BEGINNING OF EXECUTIVE SEARCH According to some sources, the first

Italian Search and Selection assignmentwas done in 1958 by the Italian companyOrga, who were charged with finding stafffor a local client. More importantly,however, true Executive Search took off in

the early 1980s when branches of the biginternational networks/firms took afoothold there. Initially, their clients werein turn branches of foreign multinationals.

Like in other European countries, theliberalisation of the state monopoly onemployment services, deregulation andprivatisation of state-owned businessesgradually changed the scenery. The bodyof clients started to expand to nationalcorporations. And the "missionary" workof the pioneers, coupled with an openingof the mindset, created an environmentwhere nowadays, traditional family-

owned mid- and smaller-size companiesmay also take advantage of ExecutiveSearch services.

Anders Lindholm, Managing Director ofMindoor Executive Search in Milan andactive on the southern European searchmarket since the late 1980s, calls theExecutive Search marketplace of theperiod "a virgin market: the scene wasquite sleepy and it was easy to takebusiness away from the competition" dueto its lackadaisical approach.

The 90s, like in the rest of theExecutive Search world, were the fatyears, partially due to deregulation andprivatisation. This in turn provided a smallniche for some local selection firms whowere moving quite aggressively, to takepart of the cake that had previously beenheld by the established internationalfirms.

While Executive Search in otherEuropean countries was growing in thedouble digits, things in Italy happened inslow motion or rather with a slight timelag from the rest of the world. There wasthe boom of the telecomms in the late 90sbut as the Italian economy was and is stillless technology-oriented the surge wasnot as extreme as in the rest of Europe.This, luckily, also meant that thedownturn was not felt as acutely as inother countries, either. Lindholm calls this

the "Latin buffer".Today, the number of true Executive

Search companies in Italy is rising, andwas fixed at 21 in 2000 by IlSole24ore,the Italian financial newspaper. Thisfigure is from a number of approximately700 Search and Selection companiescounted by ASSORES, the ItalianAssociation of Search and Selection firms.Lindholm suggests that there are about "adozen Executive Search operatorsexcluding the mom&pop-firms". In linewith the very strong north-south divide ofthe country, 75% of all Search andSelection companies are situated in thenorth of Italy, of those the largest part is tobe found in Lombardy and of those inturn, approximately half are situated in itsregional capital, Milan. Vittorio Anfossi,President of ASSORES and ManagingDirector of Studio Vittorio Anfossi,confirms this statistic: "most companiesare in Milan, some have offices in Rome."

Developments in Italian ExecutiveSearch and the economy, in generalmirror global trends, albeit with somedelay. As our study shows, the growth ofrespondents was between 9.5% and20%. However, as Pierpaolo Morelli pointsout, while a few years ago the time delaybetween economic trends/eventshappening in the US and the Italianeconomy was up to 5 years, nowadays,especially in sectors such as high-tech,the delay has shortened dramatically to amaximum of one year.

"You can count the large Italiancorporations on the fingers of two hands,"says Pierpaolo Morelli, Director at SpencerStuart's Rome office, and the economicreality is made up of small and mediumenterprises, often family businesses. Moreoften than not, these latter do not useExecutive Search, but at the most engagelocal selection agencies. On the otherhand, cases of local one-man showsproviding everything from top executivesto teams of specialists, HR consultancy,etc. to large companies are not unheardof.

Umberto Bussolati Dell'Orto, formerly ofKorn/Ferry and Heidrick & Struggles andnow Director at the Milan office of

Spencer Stuart, calls the Italian market"provincial" but also asserts that this ischanging. Globalization does not halt forItalian Executive Search, although thereare still some clients who believe thatexecutive recruitment is about "why don'tyou show me some candidates and I willthen think about paying you". Nowadays,the client is not looking for searchservices alone, the client needs assistanceto deal with various aspects of HR relatedmatters. It is not enough to find acandidate with profile ABC but also togive guidance and "that is why a teamapproach is important - no one person canbe an expert in all areas".

DEALING WITH PEOPLEGenerally the Italian (business) culture

also pervades Executive Search: flexibility,creative thinking, and new solutions inchallenging business situations are allfound here. On the other hand, forinstance, mobility of candidates is limiteddue to the very strong family ties, typicalto this Latin country.

In comparison to other Europeanbusiness environments, clients want to beapproached more formally than in othercultures and directness is shunned whichsometimes makes it difficult to know howclose one is to striking a deal. Bussolatialso mentions that clients have some "badhabits" for example, using more than oneExecutive Search firm, albeit not for thesame search.

TECHNOLOGYThe fact that none of the respondents of

our survey were using Internet-basedrecruitment confirms the suspicion thatusing technology to interact withcandidates or clients beyond email is notaccepted in a Latin market where face-to-face interaction is still valued very highly.According to Anders Lindholm, e-recruitment or job matching does not havea future in Italy. Similar to other Europeancountries, approaching candidates via theinternet or expecting them to insert theirdata on an internet form or portal is moreacceptable for the younger generation butstill less acceptable at the higher segment

of Search and Selection. Despite the preference for a human

touch in interaction with clients andcandidates, technology as an internal toolfor Executive Search is a very importantbackbone of many firms. The cost ofdeveloping such systems in-house is high,but as Lindholm points out, it is evenhigher in terms of time spent developingand implementing it. Despite this, bothLindholm and Bussolati talk about howindispensable such systems are and howthey can work as a tool for quality control,and in the end give one an edge overcompetitors.

ASSOCIATIONSThere is no association representing

Italian executive recruitment exclusively ,but there is ASSORES, the ItalianAssociation for Search and Selection firmsthat includes recruitment down to themid-management level. ASSORES hasbeen in operation since 1989 and is inconstant contact with the relevantgovernment institutions, such as theMinistry of Labour and it has had inputinto legislation concerning all types ofrecruitment activities.

In some quarters ASSORES is perceivedas a platform for local firms specialising inadvertising and selection and affinity isfelt more with international bodies likethe AESC. There is nevertheless, a needfor such an association to represent thisparticular group of people in discussionsabout professional standards and ethics,Lindholm finds. In his opinion, the Italianmindset does not lend itself toassociations but rather, informaldiscussions about issues are morecommon.

All this said, the current Italian legalframework is, in reality, not very muchdifferent from that of other Europeancountries. Some positive constraints areseen in the privacy or data protectionlegislation, which are very strong andmonitored by a state authority. Inagreement with the findings from ourstudy, legal constraints to ExecutiveSearch work are not acutely felt by any ofthe respondents. However, as Vittorio

Vittorio Anfossi

Executive Search“Made in Italy”

Italian country Survey:

By Julia Harms

Subscriptionsand back issues!Recent and upcominginterviews include:• Hobson Brown Jr. - President

and CEO, Russell ReynoldsAssociates

• Russell S Reynolds Jr -Chairman - The DirectorshipSearch Group

• Regional Focus reports lookingat Australia, Spain, Portugaland France

Back IssuesCopies of back issues of search-consult are available for £15 perissue. E-mail [email protected] for furtherinformation

“Our readers include

executive search

professionals from firms

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ISSUE 1● Dr Jürgen Mülder -

Heidrick & Struggles● Executive Search and

Management Appraisal

ISSUE 2● Steve Potter -

TMP Executive Search● Executive Research -

The Outsource Option

ISSUE 3● Jeff Christian -

Christian and Timbers● Focus on the

Whitehead Mann Group

ISSUE 4● Windle Priem -

Korn/Ferry International● Chris Clarke -

Boyden Global Executive Search

ISSUE 5● Paul Ray Jr -

Ray & Berndtson● Search in Germany -

The Law

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Heidrick & Struggles● Germany's top 25 Search Firms

SOLD OUT

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Directorship Search Group● Search in South Africa ● Corporate Governance

ISSUE 8● Hob Brown Jr. -

Russell Reynolds Associates● Global Leaders● Maintaining Quality in Search


20

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9


Gene Shen, CEO of A.T. Kearney ExecutiveSearch on the restructuring of his firm

Management of Change:Gene Shen, CEO of A.T. Kearney ExecutiveSearch on the restructuring of his firm

Management of Change:Competition from within?Can HR departments reallycompete with Search firms?

Scandinavian Search:Results of an exclusivesurvey by search-consult

How to succeed in toughtimes and mushy markets

Competition from within?Can HR departments reallycompete with Search firms?

Scandinavian Search:Results of an exclusivesurvey by search-consult

How to succeed in toughtimes and mushy markets

ISSUE 9● Gene Shen - A.T. Kearney

Executive Search● Competition from within - in

house executive search

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Anfossi points out, there is a fairly recentlaw (388 of 2000) which obliges allsearch and selection companies to seekaccreditation with the Ministry of Labour.In reality only very few companies haveactually done this and it seems thatenforcement is not yet an issue. This andother related laws change the fact thatSearch and Selection was until recently, afree profession and apart from theaccreditation also prescribes to a largeextent, the services allowed and aminimum number of three consultants tothose Search and Selection consultantsaccredited by the ministry of labour. Thiswill have little immediate effect onmedium and large executive recruitmentcompanies, but will clean out the largenumber of micro-firms (those with 3consultants or less), which are estimatedat over 70%, which in turn is predicted toconcentrate the market.

STRATEGYTalking strategy, Lindholm advocates

defined practice groups but advises not toget too narrow a horizon, as one may findthat the best candidate is outside one'sarea of competence. Umberto Bussolatifeels that you have to know the clientsreality and therefore the whole"generalist approach" is not the way to goforward. He adds that to avoid the offlimits trap it becomes more important toestablish and care for long-termrelationships with fewer clients, ratherthan trying to acquire as many clients aspossible. These durable relationships mayrequire the provision of other services,such as management consultancy, etc. Asthe search-consult survey shows, thesetypes of services are delivered by many.To round off the picture, Anfossi notes thatmany of the larger Executive Search firmshave a brand or subsidiary that suppliesselection services.

WHERE DO WE GO FROM HERE?According to a recent study by

IlSole24ore only 25% of top managers areplaced through Executive Search.Pierpaolo Morelli confirms this statistic:"The market still is not saturated or

specialized to the extent of, for instance,the Anglo-Saxon market." Recently themarket has seen some concentration aswell as some firms going public. The trendfor concentration will continue, not leastof all mirroring the global trend.Movement has also been seen withinnetworks, where firms have switchedfrom one affiliation to another. In the veryrecent past there were also some cases ofprice dumping where ridiculous retainersor discounted fees were used to maintainfirms with high overheads.

Morelli, who comes from a career in thehigh-tech industry is of the opinion thatthere is so much energy dormant from thehigh-tech and telecomms boom that it hasto explode at some point. Bussolati adds,"there is still a lot of liquidity in the market

and so there is an upward curve forreinvesting these monies".

A further cause for optimism is that,historically, Italy is behind other countriesin terms of infrastructure. With severallarge-scale projects planned and moreexpected this should have a knock-oneffect in inducing other economic activityand of course, necessitating ExecutiveSearch services.

Insiders like Marco de Gasperi, partnerof Hunters Strategic Executive Search,are optimistic about business picking upin the latter half of the year. He pointsout that, according to an independentstudy of 250 Italian companiesconducted by his firm, the qualities mostlooked for in an Executive Searchconsultancy are professional reliability,Timeliness and good managementcompetence. Those who candemonstrate these qualities will nodoubt be able to adjust to the challengesthat are to come.



Web: www.search-consult.com

“Those who can

demonstrate these qualities

will no doubt be able to

adjust to the challengesthat are to come.”

Company revenues by type of search

management evaluation

10%

internet based recruitment

0%

advertisement and selection

20%

retained executive search

70%

Average Staff Distribution

Partners

21%

Researchers

22%

Consultants

27%

Other

30%

SEARCH IN ITALY

Didlier Vuchot, Chairman of Korn/Ferry inEurope, has been elected as the newChairman of AESC Europe. AESC(Association of Executive SearchConsultants) is an association thatrepresents 160 executive search firmsworldwide. Vuchot succeeds AnthonySaxton.

Roger Stoy, Managing Partner of Heidrick &Struggles, has been confirmed as AESC'sGlobal Chairman. He will be succeeding EricVautor, Managing Partner of RussellReynolds.

EMA Partners International hasannounced that Wolfgang Gloderer,Managing Director of EMA PartnersDeutschland, has been elected the GroupPresident.

As part of a strategic reorganizationstrategy, TMP Worldwide assigns severalnew management roles for executives in theAsia-Pacific office. Stuart McKelvey is tohead Asia-Pacific as Group President.Alistair Sutherland has been namedPresident of TMP Worldwide eResourcingand Executive Search, Asia Pacific. LibbyChristie has been named President ofMonster.com, Asia Pacific. Philip Beck hasbeen named President of Advertising &Communications, Asia Pacific.

TMP Worldwide names Pauli Overdorff aseResourcing Executive Vice President,North America. TMP Worldwide, withoffices strategically located in 22 countries,is a leading player in recruitment. Ms.Overdorff's expertise in informationtechnology and human capitalmanagement will be an important asset toits continued success.

Michael Sileck will join TMP Worldwideas Chief Financial Officer. Mr. Sileck willassume his role in the first quarter of2002. Previously, Mr. Sileck served asSenior Vice President and Chief Financial

Officer of USA Networks Inc.

Heidrick & Struggles names Kevin J. Smithas its Chief Financial Officer. Mr. Smithpreviously served as Executive Vice-President and Chief Financial Officer forTrue North Communications.

Gabriella Colantoni joins DHRInternational. Prior to this appointment, Ms.Colantoni had been Executive Vice-President with Korn/Ferry International,specializing in the sectors of media andentertainment, consumer and technology.DHR International, with offices in over 40cities throughout the United States and over30 countries around the world, isconsidered among the top search firmsworldwide.

Armstrong Craven, a leading executivesearch firm based in Manchester, appointsMichael Holford as Non-Executive Director.Mr. Holford retired from Spencer Stuart,having served there for 15 years.

Richard Savior joins Canny Bowen asManaging Director. Canny Bowen, anexecutive search firm based in New YorkCity, focuses on senior level assignments inthe healthcare and technology sectors. Mr.Savior previously served as a Partner forChristian & Timbers.

Slayton International, a Chicago basedexecutive search firm, appoints Dirk A.Himes as Managing Director of FinancialServices. Most recently, Mr. Himes served asManaging Director for HortonInternational.

Swiss Pro International appoints Mr.Thomas W. Hofer as Managing Partner. Mr.Hofer has 13 years experience in the field ofexecutive search, having run his own searchfirm for a decade.

Windle B. Priem, former President and ChiefExecutive Officer of Korn/Ferry

International, has been elected to the boardof directors of EMC Corporation. Mr. Priemcurrently serves as Vice-Chairman forKorn/Ferry.

Paul C. Kreuch Jr. joins WJM Associates asManaging Director. He has been a formerPresident and recently Chief ExecutiveOfficer of NatWest USA.

Fisher Group International appointsEdward Snyder to its senior managementteam. Mr. Snyder, a former recipient of theSHRM Award of Professional Excellence inHuman Resource Management, mostrecently served as a Managing Director forHorton International.

Fischer Group International appoints HarryClark as a Consultant. Prior to hisappointment, Mr. Clark had served forWestinghouse/ABB Nuclear Business.

Ambler Associates appoints Nancy Keeneas Technology and Professional ServicesPartner. Ms. Keene previously served as aDirector in the Global Technology IndustryGroup at Pricewaterhouse Coopers, incharge of business development operationsin the Midwest and Southwest regions.

Sheffield Howarth names four newappointments. Imke Rodriguez Messmerjoins the Frankfurt office as DivisionalDirector in charge of developing its pan-European expansion. Gaelle Le Camus joinsthe Paris office as an Associate. SimonWorhtington joins the Global Equitiesdivision as Senior Consultant in London.Miriam Hergendroder joins the Frankfurtoffice as a Research Consultant.

Keith Tracy joins Intersearch as a SeniorConsultant at their Cheltenham office. Mr.Tracy has worked 14 years in therecruitment industry, specializing in sectorsof utilities, construction and civilengineering.

Key moves in Executive Search this month

Keep us up to date with any corporate announcements! Email [email protected]

S E A R C H - P E O P L E


search-consult Issue 10

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