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2002 / ISSUE 10

The International Executive Search Magazine

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

Market Reviews: The Middle East and Italy Research Techniques Return on LeadershipBringing Science to Search

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search-consult MANAGING DIRECTOR Jason Starr jason@search-consult.com EDITORIAL Barbara Kwateng Julia Harms editorial@search-consult.com PRODUCTION Margaret Jaouadi margaret@search-consult.com

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Glasford Portugal joins the Neumann International

ADVERTISING/ SUBSCRIPTIONS/REPRINTS UK and Europe North and South America South East Asia and Australia Carol Crawford Yann Le Leyour enquiries@search-consult.com or log on to www.search-consult.com

search-consult.com Calvert House, 5 Calvert Avenue London, E2 7JP, United Kingdom Tel: +44 (0)20 7749 6102 Fax: +44 (0)20 7729 6108 www.search-consult.com

For manuscript/ photographic submissions, please e-mail our Editorial department or write to the address above to obtain author/ photographic guidelines.

search-consult is published 10 times a year by Dillistone Systems Ltd, Calvert House, 5 Calvert Avenue, London, E2 7JP, United Kingdom and printed by Printhouse Corporation, London NW10 6ST, www.printhouse.co.uk. 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.

Front Cover: Chris Clarke, CEO, Boyden. Photography courtesy of Boyden. Š Copyright 2002 Dillistone Systems Ltd

Group www.search-consult.com

NEWS

THE PORTUGUESE OFFICE OF Glasford is to join the Neumann International Group. The office is actually the largest independent and one of the three most respected Executive Search companies in Portugal. Founded by Carlos Melo Heitor in 1996, the company has built a very solid and loyal customer base, from banking and financial services, to telecoms, consumer products and traditional industry sectors, all over Portugal. The Neumann Group was founded in Vienna, in 1971, and is actually one of the leading global Executive Search groups. In Europe, the continent of its origin, the Neumann Group has perceived itself as a company especially fit to understand the multi-cultural landscape of our time. Its extensive coverage of offices makes the Neumann Group the third in Europe. Globally, together with its strategic partners, the Neumann Group is number one, with 100 offices in 26 countries. Commenting on this integration Daniel Grenon, Neumann's Group

President, stated: "Neumann is celebrating its 30th anniversary of superb world-wide service for our clients, and we are very happy to welcome Carlos Heitor, his Partners JosĂŠ Rodrigues and Roque de Pinho, and his team, in the Neumann family. We are very enthusiastic to have Portugal in our Group, and I believe that we have got simply the best team of Executive Search professionals in Portugal." Commenting on this integration, the Managing Partner of Glasford Portugal, Carlos de Melo Heitor stated: "We are very proud of being accepted as Partners of the Neumann Group and we hope that we will continue to perform at the highest demanding criteria. Neumann is one of the leading international groups and have been pioneers in many aspects of our profession, namely with the creation of international Practice Groups. Our clients will be the first to benefit from our increased capacity for performing at the highest quality standards and also for the introduction of new services, based on successful practices in other European countries".

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Heidrick revenues drop to 1999 levels www.search-consult.com

NEWS

HEIDRICK & STRUGGLES HAVE issued reduced expectations for Worldwide revenues in Q4 2001. The firm believes that in the quarter to December 31, 2001 revenues will hit $85-$88 Million. "It is important to note that through our considerable efforts to reduce costs, and because of the variability of certain elements of our compensation structure, we do not expect to report increased losses on the lower revenue," said Piers Marmion, Chief Executive Officer of Heidrick &

Struggles International. "The fourth quarter typically represents the lowest percentage of total annual revenue for us, and this will indeed be true in 2001. Although revenue is now expected to be below our original thinking, we believe the state of the world economy magnified the normal seasonality of the business. However, given the uncertainty that continues to exist in the business environment, we acknowledge that we will have to move further into the new year before this opinion can be confirmed."

Korn/Ferry International ends Wall St Journal relationship www.search-consult.com

NEWS

IN A COST CUTTING MEASURE, Korn/Ferry International has ended its three-year branding relationship with The Wall Street Journal. Under the arrangement, believed to be costing Korn/Ferry International around $4,000,000 per annum, Korn/Ferry were committed to purchasing a minimum amount of print and online advertising from the newspaper. The firm was also entitled to associate the Wall Street Journal name with Futurestep. Both parties describe the parting as amicable.

Signium opens in Chile

BNB Moves to AIM www.search-consult.com

NEWS

BNB RESOURCES, THE PARENT of Norman Broadbent International has resigned from the London Stock Exchange and joined the Alternative Investment Market. The company has announced plans to issue over 12 million new ordinary shares with the objective of raising ÂŁ3.2 Million. The group has closed its loss making French business and has also sold Barkers Communications Birmingham to McCann - Erickson Central Ltd.

The company warned shareholders that if the share offer does not proceed, "BNB will be left in a financial position where it may be unable to service its working capital needs as they fall due." In its announcement, the company also warned its 2001 results will be disappointing but said barring any further market deterioration it expects to trade at or beyond cash breakeven in 2002 following an operational review that has significantly cut monthly losses.

www.search-consult.com

SIGNIUM INTERNATIONAL, THE Search network formerly known as Ward Howell, has announced a new member in Santiago, Chile. Numbering 27 offices in 18 countries, Signium International continues to expand throughout the Americas, Europe and Asia Pacific. VEM/Signium International of Santiago Chile joins the network providing capabilities in consumer products, IT - Telecom and financial services. Partners Jacqueline Valenzuela and Eugenia Espinosa founded the firm in 1996 and are joined by Senior Consultants Mr. Fernando Moure and Ms. Pia Puebla.

COMING UP IN FUTURE ISSUES:

TRANSEARCH International

Market reviews:

Financial Services

An Exclusive Interview with Alain Tanugi.

China, Hong Kong and Singapore.

A Major New Survey.

And much, much more !

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

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TRANSEARCH International opens in Chile www.search-consult.com

NEWS

TRANSEARCH INTERNATIONAL has opened an office in Santiago, the group’s ninth office in Latin America. Oscar Anwandter and Cristián Duarte,

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founders and partners of Anwandter Consultores will manage the office. Oscar has extensive experience in the FMCG sector and was the CEO of Hipermercados Jumbo for about 20 years. He has also held numerous positions business consortiums and speaks, Spanish, English and German. Cristián has held positions as Human Resources Director for more than 10 years in leading companies of various industries, such as: Hipermercados Jumbo, The Hyatt Regency Hotel in Santiago, and Home Depot Chile.

Cornerstone in Scandinavia www.search-consult.com

Business Cards: Executive Research Firms

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Return on

NEWS

CORNERSTONE HAVE ANNOUNCED a new member firm - Humanet ApS with offices in Copenhagen and Vejle, Denmark. The firm is described as a generalist business and is the network's second office in the region - Professionel Management, an IT and Telecommunications specialist being the existing member.

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Leadership By Jason Starr

TO ADVERTISE HERE contact Carol Crawford or Yann Le Leyour enquiries@search-consult.com

Working in Partnership… Persona is a well-established research company providing highly proactive search solutions purely to recruitment companies. Our experienced in-house research team have knowledge of a wide range of industry sectors and research methods enabling us to deliver the results you need. …to deliver Solutions Our services include: Target List Compilation; Candidate Identification; Candidate Approaching International Assignments; Company/Departmental Structures; Bespoke Research Assignments For further details or a copy of our company brochure, please contact Michelle Whitfield-Speed at:

Tel: (+44) 1423 529087 Fax: (+44) 1423 507466 e-mail: persona@personauk.co.uk Claro Way, Harrogate, North Yorkshire HG1 4DE England

ROYCE ASSOCIATES (est. 1994) Independent Executive Research Candidate identification and screening. Assignments cover a range of industries, functions and levels from junior managers to board level. Cross-border research in French, German and Spanish. Tel:+44 (0) 20-8682 4027 Fax: +44 (0) 20 8672 6808 email: GeorgeRoyce@cs.com

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Annabel Hodgson Newton Research Associates, Unit A6, Hatcham Mews Business Centre, Hatcham Park Road, London SE14 5QA Telephone: +44 (0)20 7639 4844 Fax: +44 (0)20 7639 4833 Mobile: 07957 659103 e-mail: a.hodgson@newtonresearch.co.uk

xecutive Search firms are in the business of developing leadership. They are in the business of bringing in talent that will take a business and improve its performance. Interestingly, there is little research on the factors that make a leadership team successful. Is there a correlation between the type of executives hired by a firm and its performance? Do higher paid executives perform better? Are graduates of top tier universities more effective? Do CEO's promoted from within perform better or worse than those brought in from the outside? This is an area that Search professionals from Ray & Berndtson and professors from the Harvard Business School having been investigating over the last few years. In an exclusive interview with searchconsult, Chief Executive Paul Ray Jr discusses the research and analyses what it means for the Search industry. The approach taken by Ray & Berndtson is two fold; firstly, the best performing leadership in any particular industry sector is identified by calculating the "Return on Leadership" - a proprietary index

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calculated on relative total returns to shareholders divided by the total compensation paid to the five highest paid executive officers at 1600 largest U.S. public companies. Industries were ranked on the index , to identify which organizations had been most successful. Correlative analysis and interviews with top leaders at some 30 leading companies then took place to understand what the underlying reasons were for the success of an organization. The research focused on the composition of the leadership

team and the operational practices used by the team. "We looked into a host of different factors to see if there was a single gene which made an executive team successful. We considered where they had come from, years of experience, academic background, but no single factor showed a particularly strong correlation. There is no simple formula for success. What mattered more was how the team operated." Research revealed that those firms that were successful were those that

ROL INDEX - THE FORMULA

ROL =

Excess Total Returns to Shareholders Stock Price Appreciation/ Depreciation Dividends

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Total Executive Pay Base Salary Bonuses Fringe Benefits Equity Grants Stock Options

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boasted a "focused and disciplined management team" that fitted within one of two "Competitive Advantage Models". In formulaic terms, ROL Performance could be defined using the formula in Table 1. Focus and Discipline, was identified as a key factor that all high ROL leadership teams had in common. These teams "rigorously apply focus and discipline to executive decisions such as selection criteria, planning processes, resource allocation, organization structure, accountabilities, mergers, reward systems and leadership activities." The competitive advantage model did not, as the name may suggest, relate to the strategy of the company, yet rather on whether the model for developing human capital was talent or systems based. Firms which were driven by systems and procedures were following a model labelled "The System Advantage Model" whereas firms which achieved success through the leveraging of talent (and most Search firms are examples of this) were following the "The Talent Advantage Model"). Different models work well in different environments. The research also identified Notable Practices which "differentiate" one business from another and can have a significant contribution to the success of the firm. "Our research showed that the fundamental issue was that strategy is important, but adherence to the competitive advantage model is vital it is the macro model of how you manage a company. Strategy changes, your competitive advantage model is intrinsic." Ray believes that this approach has practical benefits for the firm's clients. "At a practical level, this gives us a tool that we can use to better assess fit between a client and a candidate. Our process will involve determining what drives a business and from that the type of person that will be successful. We are excited because

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INTERPRETING THE RESULTS

We are the

Brand

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Median ▼

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Executive Compensation

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[ X

▲ Median

Shareholder Returns

Why Branding is a key factor in Boyden's renaissance

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

Quadrant 1

Quadrant 3

Lower Returns

Higher Returns

Higher Comp

Higher Comp

Quadrant 2

Quadrant 4

Lower Returns

Higher Returns

Lower Comp

Lower Comp

Executive Compensatio n

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Shareholder Returns

we believe that this will be very helpful for our clients." What does this mean for the Search industry? Well, if accurate, it weakens the notion of the "Celebrity CEO" and emphasizes team leadership. The success of a business was shown to transcend the tenure of its top leaders, so long as the firm maintained a competitive advantage model that aligns with the leadership team's philosophy. Logically, this means that the idea that Search firms may develop into "talent agencies" for CEOs could be flawed. "The model of the executive talent agency is hugely over-simplistic. However good an executive is, he or she will only perform at their optimum

in certain types of organization surrounded by the right kind of management team. A systems based CEO running a talent-driven companies will fail." "The logical extension of this is that Executive Search firms need to develop services that are based around organizational performance, not individual coaching. Our mission is to build great leadership teams. That is not to say that the CEO is not important, but how the whole team operates is critical..."

www.search-consult.com

For more information, visit: Web: www.rayberndtson.com

By Bernard W. Walker A NEW BROOM MEETS A GREAT HERITAGE n January 2000, Chris Clarke joined Boyden Global Executive Search as its President in New York. As part of mutual due diligence, before he took the job, he had made two round the world trips and interviewed with 17 senior Boyden people in Asia Pacific, the Americas and Europe. The Boyden challenge was fascinating. The company had once been the world leader. It had global reach, professionally excellent people, and great international clients. Yet there was a clear need for corporate renewal and change. Sid Boyden had left Booze Allen Hamilton, the management consultants, to found one of the first executive Search firms in 1946. As a pioneer in the industry, Sid had the persistence to convince clients of the need for the new service of Retained Search. He had the global vision and force of personality to establish a Search firm, 'built to last', with strong ethics, a well-developed Search process and common international standards. As a result, multinational clients could get the same, quality service anywhere in the world. By 1971, Sid had forged a global institution, which was the leader in the Search industry. In that year he retired, passing away in 1990.

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Sid's image loomed large in Boyden. There was justifiably great pride in his achievements and in the longevity of a firm built to last. Boyden's more than 60 offices around the world had Sid's portrait in their entrance halls. When Boyden professionals talked about the firm, the opening sentences nearly always contained the words, "Sid Boyden founded our firm in 1946." But time had moved on. From its number one position in 1971 Boyden had continued to grow, but at a slower rate than some newer competitors. In the

“The essence of the brand was not a logo or promotional material but...

the Boyden people...We are the Brand” industry rankings, it had slipped from its number one slot. Being in the top 20 was still high in a fragmented industry with more than 5000 firms, but urgent action was needed to catch up on the new industry leaders. Clients, who knew Boyden, respected its work. Client feedback surveys gave high quality

ratings, but an image survey showed the brand as a fading star, with older generation managers remembering the firm better than the upcoming generations. Competitors had a more up to date image. It was difficult to attract Search professionals to Boyden from firms where strong brands led to significant over the transom business. Recognizing that re-launching the Brand was central to an overall change program, Chris and his team began researching the best thinking in branding, reading widely and screening specialist brand consultants. In professional firms it is vital to carry major producers and leaders along with any significant initiatives. Some of professionals are themselves true experts in branding, from their previous significant roles in big brand, industrial and commercial companies. There are also those whose egos lead them to believe they are experts. Some professionals embrace new ideas and others feel comfortable with minimal change. Boyden was no different in this and all needed to be brought on board. To gain wide involvement and commitment from the beginning, Boyden's board was supplied with the best books and with briefings on the branding. It featured at the world conference in the

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fall of 2000 An international team of senior and widely respected Boyden Search professionals was motivated to work on the project. Many others became engaged through interviews, questionnaires and internal reviews. The branding team defined the brand as the way in which clients, client candidates, candidates for Boyden, Boyden people and outside influencers, such as the media and professional organizations, perceived Boyden. The essence of the brand was not a logo or promotional material. Indeed, a key early conclusion was that in a service industry, where personal trust and relationships are crucial, the Boyden people, the way they look, talk and interact with others are the main manifestation of the brand. "We are the brand". THE NEVER ENDING PROJECT The selection of a branding consultancy resulted in the rejection of several well-known advisory firms, conveniently located in nearby New York, in favor of SHR Visual Perceptions based in Phoenix Arizona. SHR had helped put Volkswagen's brand on wheels with the immensely successful VW Beetle revival. All the competing consulting contenders' methodologies started with benchmarking the brand against competitors and included client focus groups, but only SHR had a convincing, creative and an exciting approach to developing the new ideas needed. This approach promised to generate a compelling verbal and graphic essence of the brand. The Boyden team recognized that the project would have a number of stages and a tight timetable, with brand regeneration concepts in late 2000 and roll out in 2001. However, the project would be eternal in that building and maintaining a great brand is a journey rather than a destination. In the Search industry, it requires the participation of all firm members today and in the future. The project had the five stages shown in the Exhibit ‘Branding Process’.

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EVALUATE THE CURRENT SITUATION During the review of competitor's websites, materials and press statements one team member said. "They all look like Zebras to me. Searchers can recognize differences, but clients probably can't." Indeed, all large Search firms claimed to have worldwide coverage, specialist practices, strong ethics and rigorous methodologies. The superior looking people in smart suits stared impressively

Sid Boyden out of their brochures in a uniform sameness. The team found that lots of clients disliked the arrogance of some searchers and related better to pictures of searchers working, sleeves rolled up, in teams with clients, rather than staring severely from the page in lordly isolation. In reviewing Boyden's then current material, one senior client VP in a focus group asked whether Sid Boyden were still with the firm underlining the need for a new approach. The overall news was reassuring. Five firms had well-recognized brands, but their images were fuzzy. The remaining large and small firms had images specific to their clients rather than being well known in the wider business marketplace. Boyden's brand recognition was stronger than some of its larger competitors and it had no real negatives. It was ripe for revival.

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GENERATE BRAND CONCEPTS SHR were hired because of their strength in this area. They worked with the team using thousands of visual images and photographs, of people, watches, chairs, bridges, buildings and abstract forms. The approach was to cluster these as reflecting a perception of Boyden now or as it should be. Other images were used to reflect images of particular competitors. Words were added to describe why choices were made. This was great fun for those involved. The results were distilled into a number of visual and verbal images. These represented Boyden and its competitors and translated into concepts and ideas. Of the many ideas generated four core themes and related visuals were identified for further testing and development. The basis of selection was to match concepts and ideas against client needs, Boyden brand aspirations and differences from the themes, which competitors were using. The four themes chosen were. ● Global Commitment - Many clients need searches in their international businesses or seek leaders from the global talent pool for domestic assignments. Most of the 5,000 competitors have no international presence. Of those that do, only a handful cooperate effectively across borders and can deliver the same quality and consistency of service around the globe. ● High Touch - Clients and candidates see Search is a very personalized and tailored service. Most Search firms deliver it this way in practice, but fortunately for Boyden, many are so excited by databases, on line recruiting, one stop shopping and whiz bang technology, that these things are being emphasized to the exclusion of the high touch service which clients want. ● Entrepreneurial Spirit - Many clients are complaining about being dealt with on an assembly line by some other large firms and of searches being handed off to 'factories' comprising

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BRANDING PROCESS

1. Evaluate current situation

Competitor Review

2. Generate brand concepts

Explore Aspirational Perceptions

Client Perceptions

3. Screen validate & develop

4. Plan Implementation

Client Focus Groups

Timetable

Monitor roll out

Internal Reviews

Training

Finalize

Collateral Materials

Monitor relative competitive performance

Identify visual signals Boyden Professional Perceptions

Develop concepts for focus

Website

Brand Recognition & Perception Surveys

inexperienced staff. One large multinational reported an internal survey of completion of searches by Search firms serving it. It reported only 20% of searches filled by one of its major Search firm suppliers, and only 50% by another. Its boutique Search firms filled 80% of searches they received. The Boyden team identified the entrepreneurial spirit of Boyden searchers as being boutique-like in its focus on client delivery. It provided local knowledge and cultural capability. Boyden's lack of bureaucracy and decentralized decision making was seen as essential to this and very attractive to Search professionals ● Trusted - All professionals aspire to trusted relationships with clients. By building this into Boyden's brand concept, the team conveyed all the underpinnings of this ideal. These include: commitment to quality, strong ethics, sharing ideas, and confidences and providing additional added value in the interest of relationships. SCREEN, VALIDATE AND DEVELOP The four concepts and visual images tested well with client focus groups internationally. Some variations were rejected or improved. Those selected were tested as brochure and web site designs, against those of leading competitors and Boyden's existing image. Clients

5. Implementation & feedback

consistently chose them as superior. Much work was then undertaken to develop images and copy for advertising, web sites, themes for PR and other materials. During this stage, the need to develop variations in color and some images to match the more conservative needs of some markets became clear and was accommodated. PLAN IMPLEMENTATION Getting the message to everyone and engaging them with the new concepts is a challenge for a firm like Boyden with offices all over the world. This was to be accomplished through briefings at the world and regional meetings and through use of web based and CD training material. The planning and scheduling of production and dissemination, including also brochure material and website content was a major task for Terri Flynn, Boyden's Group Marketing Manager. IMPLEMENTATION AND FEEDBACK In rolling out the program in 2001, Boyden recognized the need to continually update content, monitor compliance and review impact. A second branding team of Boyden Search practitioners has been established to keep ideas on implementation rolling. The impact of the branding program is like ripples moving outwards in a pool. The first people to get the spirit of change

Update & modify program

and renewed vigor are Boyden's own people. Despite tough markets in 2001 morale is rising and there is a new confidence in the future. The second group to pick up the message is the competitors. Candidates from other leading firms are increasingly seeking contact, admittedly some of these may be stood on burning platforms, given the catastrophic cut backs and collapses in many major competitors. Clients are also beginning to pick up the messages and this is the key area for future focus. Will the brand investment result in measurable improvements in perception? Regular monitoring and brand audits are scheduled to enable changes of emphasis and direction. At the end of 2001, Boyden had recruited 22% more searchers than it did at the end of the record year of 2000. This is indicative of the new spirit of confidence in Boyden, whilst other firms were slashing and burning their teams during the 2001 industry recession. A part of this has been the unity and self belief generated by the branding project. The other parts of Boyden's change program also played a role, but the brand is a banner behind which a firm marches.

www.search-consult.com

For more information, visit: Web: www.boyden.com

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Retained Executive Search

in the

Middle East By Jason Starr n the boardrooms of the West, Retained Executive Search is largely accepted, as is the value which it can offer an organization. In many emerging markets, however, Search professionals face an uphill battle trying to persuade clients that the Search process can deliver a quality of candidate unmatched by any other recruitment technique. The Middle East is one such market and it is a market where the Search practitioner faces many more problems. Hasan Hadeed of TRANSEARCH Middle East speaks exclusively to searchconsult about his experience in this fascinating market. Hasan Hadeed believes that the overall value of the recruitment market in the Middle East is between US$250,000,000 and US$300,000,000. The vast majority of this, however, is contingency based recruitment - Hadeed believes that Search assignments account for less than 15% of total billing in the region. It is a bizarre situation; the market is desperate for executive talent, and yet unwilling to pay for it. "Most of the so-called Executive Search assignments are awarded on a contingency basis and very few clients

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would understand the value or appreciate the benefits of working with true Executive Search consultants. The international standard of paying professional fees of a third annual compensation is rarely considered an acceptable practice here, even by the major multinationals in the region." The major problem is one of education. Hadeed shows me examples of the business press in the region - publications such as Al-Ahram of Egypt, Khaleej Times of Dubai and the UAE, Al-Nahar of Beirut and Al-Sharq Al-Awsat of Saudi Arabia. The recruitment sections carry realms of advertisements booked by firms claiming to be "Executive Search firms" and yet boasting, for example, "Free Job Advertising." These firms offer database or advertising services at a database or advertising fee but operate under the banner of Executive Search. It is no wonder that prospective clients baulk at a third of total compensation. Yet Hadeed has dedicated much of his life to proving that a market exists. From an earlier career in HR roles within the Oil industry, he moved into Executive Search in the 1970s. He set up his first Search business in Lebanon in the 70s with Jim

Johnston and Lebanese national Sami Naufal. This firm, Johnston, Naufal, Hadeed Associates had been established for only two months when the Lebanese Civil War began. Today, his business is part of the TRANSEARCH International group. Although TRANSEARCH is not the only Retained Search firm to operate in the region (Nicholson International, for example, also boast an office in the region) the majority of the recognized Retained Search firms in the area operate out of the UK. 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 offer management recruiting services. Ernst & Young, KPMG, PricewaterhouseCoopers and Arthur Anderson are all well established in the region having entered the business through filling of positions such as Chief Accountant, Financial Controller and Finance Manager. Today, these firms will offer to fill an array of positions. The consultancies are understood to typically charge between 12.5% - 20% of annual compensations. Below this level local agencies are operating on a purely contingent basis,

typically earning between 7.5% - 12.5% of total annual compensation. There is also a growing online recruitment sector which has developed over the last 3-4 years. Whilst the region's recruitment industry is not regulated per se - and Hadeed believes that a number of "cowboys" take advantage of this - local legislation does have an impact on the market. Inward investment is not allowed without a local partner in the targeted country and this makes it difficult for many of the established international firms to set up a local presence. This means that many 'local' players in the region are actually firms based in the Indian sub-content, operating through local agents. The agents are not actually involved in the recruiting process - rather they act as sponsors in return for which they collect a certain percentage of the gross generated revenue, normally 7.5% - 12.5%. "Most of the lower level firms operate on the basis of volume. They regularly advertise in their own local media, the clients pay upfront for an agreed advertising budget, they send tons of CVs to clients to screen and select a number of candidates to be interviewed by the client. Upon the selection of candidate/s the client will pay the consultants a fee, ranging from U.S.$ 500 to US$2000 per head. From our perspective, we wish that they would stop calling themselves Executive Search and Management Selection consultants specialists firms, and stick to the label of manpower supply and recruitment bureaus." "Some of these firms are bringing a bad name and reputation to the practice of Executive Search, which is not fully understood and appreciated as a value added process as yet, in this part of the world. " These market trends make it very difficult for Hadeed to maintain his fees at the a third of total compensation level. "People find it hard to understand the concept of the retainer - they take the viewpoint that they should only pay for what they receive. They have to learn that our time is money. We have premises, staff,

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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 was amazed and said that it was too expensive - that he could take his entire family on holiday to Germany for three months, for such an amount!" Despite these problems - and there can be few Search firms that find themselves competing with the German Tourism industry - Hadeed is able to work on a retainer of 80% of his projects (TRANSEARCH executed 28 assignments in the region during 2001). His typical fee levels are between 25% - 35%. This percentage may be reduced on projects involving multiple assignments or those where the client is willing to pay an unusually large slice of the fee upfront. "We have had experiences where clients have refused to pay until they have seen how well the candidate works out. This "evaluation" can last for several months, and is not something that we would have agreed in advance." "Basically, people think that they are clever if they don't pay. It's a bizarre mentality. This happens even with senior positions in multinationals. I have worked with regional financial services organizations that try to renegotiate after the placement has been made." The lack of a large amount of local bona fide competition is another cause of concern for Hadeed. He is keen to develop his business, but he is given the tough choice of bringing in inexperienced local recruiters and training them up or recruiting experienced consultants from overseas. He admits his experience when hiring ex-pats has not been entirely positive. "A number of the ex-pat consultants that we have hired have been very disappointing. They tend to look for quick success in a short period of time; some treat it as a holiday, and even with a good ex-pat there is the risk that he or she will not settle. However, we have little choice - there is little local competition that we would be willing to take expertise from." Despite the sheer difficulty of running a Search operation under these constraints,

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Hasan Hadeed Hadeed believes in what he is doing and is confident that the market is changing. "After the tragic events of 11th September, everything stopped. The business community was shaken and, for a while, the future was uncertain. The immediate reaction we encountered was that the majority of our clients placed projects on hold. No one cancelled, but no one wished to proceed. However, in the last week of November the pressure has been back on again and clients wanted us to make up for lost time - 4 assignments had to be completed within 2 1/2 weeks. We cannot say business is back to normal as yet, but we hope for noticeable improvements in the near future. "I strongly believe that this industry will be the driving force in transforming Middle East business. Government agencies, industry leaders and other senior executives do not as yet realize the gravity of the situation. But without finding and bringing the high level executive talents in the form of new blood, and injecting it into a large number of these decaying organizations, institutions and businesses, many of these business operations will stagnate and quickly diminish. Executive Search is a key part of the solution." www.search-consult.com

For more information, visit: Web: www.transearch.com

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Introduction

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Recruitment Research By Simon Stephenson, SRA

his is the first of five articles on the subject of recruitment research and it is important to realise that like economists everyone has their opinion on how best to conduct research. Nailing my colours to the mast I have both a background as a consultant, as well as experience in researching and running a team of researchers. I therefore understand the pressures that all sides are under and have developed a simple process that if rigorously followed will produce the required results. That it not to say that there is not room for the occasional flash of inspiration and the support of a large number of contacts. It is always important to remember that we are dealing with individuals and therefore we cannot predict how they will react and so we must appreciate that we are disturbing the even path of their lives every time we contact them in order to sound them out for a new role. We must always listen carefully, be sensitive of their privacy and not promise what we cannot deliver; above all we must keep our word.

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These articles are a personal view of the research market and the researchers role and methods. The relationship with

“.... The relationship with a consultant is symbiotic and neither can survive without

it must represent a win-win partnership.� the other,

a consultant is symbiotic and neither can survive without the other, it must represent a win - win partnership. THE ROLE OF THE RESEARCHER Researchers can either sit hidden in a back office occasionally appearing in a self satisfied haze clutching yet another list of potential candidates or they can be much more pro-active and valuable partners in the recruitment process. When the call comes in for the consultant to attend a meeting with a

potential client, the researcher should be able to provide a short brief identifying market trends, where the company is positioned in it's market sector and key industry personalities. Such an overview ensures that the consultant will appear knowledgeable and adds value to the meeting. Having the researcher attending the meeting will also add credibility as to the scale of the commitment of the consultant and his team to achieving a successful outcome on a project. At the same time the researcher is fully in the picture as to what is required and by asking those questions that the consultant might feel exposes a lack of knowledge on their behalf, will bring greater clarity to the requirement. We will examine the process of research in much more detail in later articles, however in outline the researcher must prepare a list of companies in which likely candidate might lie, they must identify and approach likely sources of information, they must identify potential candidates within companies and by speaking to

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those individuals qualify them for the role under consideration. There must be constant feedback between consultant and researcher with a policy of "no surprises". Vital market information on issues such as salary levels, other recruitment activity in the sector and perception of the client must all be recorded and discussed as it may alter the direction of the research activity or change the profile of the person being sought. Maintaining a record of all conversations, on whatever database is being used is vital to the success of both the current project as well as future assignments. ETHICS The issue of ethics is the cause of a great deal of soul searching within the industry. Researchers are sometimes placed in the same sort of category as Estate Agents i.e. loved when they are being used but reviled at all other times for their dubious morals and practices. It is always conveniently forgotten that when you are actually working for a

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ERA, which is the industry representative organisation in the UK, signs up to a code of practice. In simple terms they undertake not to misrepresent themselves, to ensure strict confidentiality and not to allow conflicts of interest to occur. The above undertaking should frankly be regarded as a minimum. Yes it will test the ingenuity of the researcher to get information and yes it is all too easy to lower standards and to attempt to take a shortcut, when under pressure to deliver results. However, the ability to get around these issues and to stay on the right side of the fence is the hallmark of a true researcher and not just a gatherer of information. THE NEXT ARTICLE In the next article I will examine the Development of a Research Strategy. Simon Stephenson www.search-consult.com

client, the result is the only thing matters to them. Every researcher that is a member of the Executive Research Association,

For more information, contact: Email: simon@exec-research.co.uk

SEARCH-TALENT Dedicated to careers in Executive Search

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 :

talent@search-consult.com or visit www.search-consult.com/talent

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revenue streams is one of the reasons behind a restructuring that the business is about to undertake. Whilst Mr. Clery-Melin is not prepared to reveal his plans in full, he explains that he plans to remodel the way in which clients are served. In a step beyond the

Whitehead Mann

Serving

“It is our intention to move forward under this identity

Board

the

By Jason Starr he public executive search firms are suffering. Heidrick & Struggles, Korn/Ferry and TMP Worldwide are all making swinging cutbacks, with profits becoming losses as revenues collapse. This is a reflection of the tough economic climate and of errors made during the boom of two years ago. At least, that is the generally accepted view. One public Search firm, however, has so far bucked the trend. The British based Whitehead Mann Group has recently announced interim figures which show revenues to be up by 34%; whilst much of this rise can be put down to acquisitions, even the adjusted quarter on quarter figures show a small increase. In an exclusive interview with search-consult, Gerard CleryMelin, Chief Executive, accounts for this performance and reveals his plans for the future. The fundamental difference between the strategy of Whitehead Mann and that of the US public firms is that, whilst all have looked to expand beyond the traditional offerings of

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Retained Executive Search, Whitehead Mann has looked to deepen its relationship with clients at the level of the boardroom. "Our strategy is to provide real value to our clients by addressing their highlevel leadership needs. This means more than recruiting people for roles. It means advising on the relationship

The new Whitehead Mann logo is designed to reflect the group strategy:

between business strategy and the leadership capabilities needed to deliver that strategy. It means benchmarking leadership teams against market peers. And it means developing people in order to get the best out of them. This is what clients need and want. It is no coincidence that our management asset valuation

and coaching services are enjoying growth in a challenging market. Their performance testifies to the ongoing need for high level, value adding services." The management asset valuation service combines the insights of search consultants with observations from the Group's in-house commercial psychologist to benchmark and profile an organisation's top team. Executive coaching is a newer service for the Group - a business that they entered following the acquisition of The Change Partnership in February 2001. "Today, 80% of our fees relate to search. This is similar to the split 12 months ago, but it would have been closer to 75/25 had we not acquired Baines Gwinner. We are doing a lot more non-search work than we did in the past and there is no question that this will become more and more important to us - I would predict that within 3 years a third of our revenues will come from non-search business lines." The desire to grow these newer

as we seek to establish

global player in leadership consulting.�

ourselves as a

idea of "Practice Groups", Whitehead Mann is hoping to develop its best consultants into the role of "Leadership Consultants". The concept is straightforward : the individual becomes expert in the leadership needs of the client whilst being able to manage the delivery of any and all of Whitehead Mann's services. The result is a deeper working relationship that generates value for the client and a larger, more consistent income stream for Whitehead Mann. Though the company has made significant steps forward over the past 12 months, Mr. Clery-Melin is honest enough to acknowledge that the firm still has some way to go before it can claim to be offering all its services on a genuinely global basis. The firm has an excellent position in the UK, dominating the boardroom of FTSE100 companies and regularly being named as the firm behind major appointments (the new Chief Executives at British Telecommunications and retailer Marks and Spencers being high profile examples). It has someway to go, however, to achieve this level of penetration in the other markets. This strength is reflected by the makeup of revenues - in 2001, 70% of Revenues came through UK based clients. "The acquisition of Baines Gwinner

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gives us an excellent platform in Hong Kong and reinforces our position in New York. We have also just hired a high profile team in Germany (the company has offices in Frankfurt and Munich). France is well ahead on last year." "However, we do need to strengthen our US platform, of that there is no question. We are looking to recruit aggressively, and this is a good time to do it. Our strategy, our culture and our values are attractive to top-flight US search consultants disillusioned with

Gerard Clery-Merin their role as 'transactors'. Consultants at Whitehead Mann are positioned as advisors to clients, not processors of assignments." "Beyond Search, we may well look to acquire. We have resigned from the Global Coaching Partnership (of which The Change Partnership was formerly the founding member) but we still have excellent relationships with many of the members. There are few coaching businesses of any size, but it is an area that we are looking at." That Whitehead Mann is not averse to growth through acquisition is selfevident. During the past two years it

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has acquired four businesses - GKR, Pendleton James, The Change Partnership and Baines Gwinner. All of these brands are currently extant, but from 4 February the Group will trade under the single brand 'Whitehead Mann'. "Whitehead Mann is the dominant UK brand in leadership services. It is our intention to move forward under this identity as we seek to establish ourselves as a global player in leadership consulting." In support of this effort, the Group has recently embarked on joint venture with Economist.com. The launch of the 'Global Executive' website provides Economist subscribers with access to high-level content in the area of human capital management, recruitment and development. "Some people believe that the Economist link is about generating candidates. It is not. Our partnership with Economist.com to create Global Executive is significant for two reasons. First, it provides us with a platform for the Whitehead Mann brand in our key markets, especially North America. Second, it gives us access to a subscriber base that represents our core target market: business leaders and other key decision-makers." The success of Whitehead Mann in 2001 has, in a significant part, been brought about by the fact that so much of its business is in the UK - Mr CleryMelin admits that the firm's US business has suffered - the fact is that the core strategy on focusing on the Board room is one that many of the industry majors scoffed at 18 months ago - and many are now desperately trying to follow. The strategy appears to be right - the objective now is to develop a genuinely worldwide structure as the different international markets comes out of recession. www.search-consult.com

For more information, visit: Web:

www.wmann.com

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World of Search In this issue of search-consult we introduce our new "World of Search" column - where we ask Search Professionals from around the World to comment on a topic or issue relevant to the Search industry.

In this issue we ask about the impact of the economy on Search which sectors are suffering, which are surviving and what of the future?

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USA

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JAPAN

Janet Tweed Gilbert Tweed

Arne Askautrud Smart People

Judith v. Seldeneck Diversified Search

Andrew Simpson TMP Worldwide Executive Search

Jari Hara Spencer Stuart

"In the last 8 weeks we've seen an enormous change. Firms can no longer wait to hire executive talent. There are companies such as General Motors who are laying off 20,000+ but are still issuing

"All sectors are suffering, but the international tourism industry, insurance and IT sectors are suffering most…. The health, pharmaceutical and finance sectors are performing well internationally."

"Healthcare is very strong. The Biotech sector is also doing very well, as is Not for Profit. Financial Services are starting to comeback…. Search is often the first industry to feel the effects of the slowdown and a rebound in the economy.

"Investment and Private equity are solid, as is Asset Management. Healthcare and Insurance are both strong. IT & Telco saw weakness at the beginning of 2001. Public sector has been especially strong."

"Currently Financial Services and Technology are suffering. Our Life Science sector is growing - reflecting industrial deregulation in the region and we are capturing emerging markets - the ageing population is creating a need for more efficient health-care, new pharmaceutical products etc - and so we are seeing increasing demand for these sectors. In Japan, the Mobile Communication Markets are also booming - VC firms are investing heavily in the next generation of technology and in content."

"We believe that it will be more important than ever to get

assignments." "Financial Services has been hit harder than I've seen in over 20 years. However, we do see marvellous signs that the sector is coming back… Legal is coming back. Biotech is surfacing too, but this year's big star is High-Tech. The High-Tech industry just took off too fast, but I believe that it will always be on the cutting edge of society and it's coming back.… International is not suffering nearly as much as the US. We're doing work in Brazil, Asia Pacific, Germany, France and England."

people with the right professional and social skills, and that the recruiter must be a specialist in knowing the critical factors of the client's business. There is no longer room for the generalist."

"Everyone is talking about a pickup this year. We believe that technical and financial services will lead the pickup…. Some sectors will recover faster than others - probably parallel to what's going on in the economy. Those which are really hurting are housing, construction, entertainment and airlines…. They will come back but will be structured differently and will come back slowly."

"All sectors will recover whether they will recover to their previous level is the essential question. For example… look at capital marks - clients may no longer be prepared to pay for retainers… Markets may become more contingent over time as clients start to examine costs per hires. There will be more pressure on fees… We want Search to be seen as a more consulting role, not just a transaction."

"We are expecting reform in a number of industries banking, and financial services and this will drive consolidation. This will, as consolidation always does, open up a search market"

THE CONTEXT A survey released this month by the AESC (www.aesc.org) asked the CEO's of 160 Executive Search firms for predictions on the market in 2002. The figures were positive - 78% of respondents anticipate that 2002 will be better than 2001 with only 13% arguing that times would be tougher. Tellingly, however, one respondent replied "How could it be worse?". The

answer is - with great difficulty. The latest figures from Execunet (www.execunet.com) revealed that year on year demand for executives fell by 38% in Q4 of 2001. The worst hit industry was, unsuprisingly, High-Tech, which saw a drop of 65%; on the other hand, the Pharmaceutical / Healthcare sector continued to boom, growing by 34% over the period.

Do you have a question for a future panel? Email editorial@search-consult.com 18

search-consult ISSUE 10 2002

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Profile:

&

Eric Salmon Partners he culture of a firm does not appear accidentally. When founded, firms are often goaloriented. The founder has an idea for a new organisation and brings in others who share his/ her vision. Eric Salmon followed this principle. After 20 years with Egon Zehnder International, the French national decided to set up his own firm. In this article, we discuss how organisational culture is formed and retained in a search firm. In an interview with Eric Salmon, he said, "It got to the point where I felt that Egon Zehnder had grown too big, too bureaucratic. I was leading the Western European practice and had reasonable autonomy to form strategy. Yet I felt restricted when I wanted to branch out into searches in the US or Australia, for example. So I left and set up my own firm". At this time Eric Salmon was already 50, and felt that he had 'more to lose than win' in this gamble. However, at the same time, through the realisation of what he felt were disadvantages within his previous firm, he formed a principle that would remain in the firm that he founded, Eric Salmon & Partners. "We have a limited bureaucracy, we've kept it to a minimum. We have no accountants

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or anything. Everything is outsourced, we simply concentrate on our clients". When asked about the merits of bureaucracy, such as checking change, and aligning group members interests around a decision, Mr. Salmon gave this reply, "We do have annual conferences and partners’ meetings where we make strategy decisions. But that's not a bureaucracy, that's democracy". This is a perfect demonstration of the 'limited

“.... It got to the point where I felt that Egon Zehnder had grown too big,

too bureaucratic.” bureaucracy' principle upon which the firm was founded. The firm was founded in 1990 with the aim to recruit colleagues and obviously clients. Mr. Salmon's own history played a part in the company's initial structure. "At Egon Zehnder, I had spent two 2 years in Italy so I spoke the language and was familiar with the country. From day one 1 of Eric Salmon & Partners, we had an office in Paris and one in Milan. The language of communication was English

By Barbara Kwateng

and we became immediately international through this." "I wanted to create something a bit different, something new. I had an idea of a special spirit. That would be our competitive edge." Interestingly, despite being a new firm, Eric Salmon & Partners did not recruit people from the Search business but rather from firms outside the industry, such as like management consultancies and or industrial companies. The company cements its culture by bringing in people who share a common vision with the founder. Recruitment is key in the formation of culture. However, employees do not bring their search techniques from their previous firms. "Everyone learns search from Eric Salmon & Partners. Joiners like the firm before they like the industry. Its then easier to manage culture and yet inspire creativity". This follows the principle that it is easier to manage culture than change it. Culture is realised not only in the firm, but also its members. Thus a change in culture would have to encompass both the firm's culture and that of its members. "People come to join a culture which already exists". Yet with 5 offices worldwide, how can the company compete with national

cultural characteristics to form one 'Eric Salmon & Partners culture'? To ensure that the Eric Salmon & Partners’ culture is retained, all consultants interview every potential member of the firm. "We're very clear in describing out culture. It's not just because we want to avoid making wrong recruitment decisions but we also feel responsible for the person leaving another firm to join us. Both sides need to feel 100% comfortable with the environment". As the firm's founder, Eric Salmon may have created an atmosphere where measured risktaking is not discouraged. For example, the founder started his own firm later in his career which more or less coincided with a recession. "Even if you have a business plan, you need to realise that you cannot predict everything that lies ahead". Equally, Eric Salmon & Partners unusually started out with 2 offices in different countries. Yet the risk taking seems to have paid off. In 2000, the golden year for many search firms, Eric Salmon & Partners collected $12.5 Million in revenues (2000). The firm now has offices in Frankfurt, London and New York all with the same system. The way this is achieved is through 'team working', the buzzword of the last decade. All firms claim they work in a team, search or otherwise. Eric Salmon realises this himself. "People would never say 'we're not a team' but seriously, we really do feel that we are. Two years ago, we had a big assignment to do in the UK. The person in charge of the search fell sick yet the search had to be continued. Therefore, someone in Paris took over, travelling to the UK every week. The merit and the financial compensation for the search went to London. We find this typical of team spirit". Yet doesn't team working conflict with the individualistic nature of the search industry? "We understand that these may be opposites and that some firms might not want to really work as a team. This is probably why you need leadership to make it work. It's the same in any field; politics, media or research-

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people need leadership. Without leadership, you lack direction". As its founder, Mr. Salmon does not believe that the firm's culture should remain static. In fact, he argues that the firm started "with a few very clear and simple yet consistent principles. These principles cannot be changed. The culture itself can adapt to external factors. Most importantly, the founder needs to be able to take advice. If you recruit good people, you need to be able to take on board the advice they offer you. You need to share beliefs to retain your legacy". The structure of the firm is set so that the partners have a say in how the business is in run. There are 25 consultants in the firm worldwide,

Eric Salmon around half of which are partners. These are co-owners by shares. "Partner is not just a title for us", says Mr. Salmon. The partners co-own the holding entity. "If it were any different and they were partners of a local office, then our team approach would be severely weakened". Partners have on average, no less than 3 years at Eric Salmon because "becoming a partner is an act of loyalty". Their rights extend to decisions on the company's strategy. The team principle is evident in how partners can vote to change the agreement itself. Also "partners can vote on whether we sell

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the firm or not. In the year 2000, we were approached several times to sell. About 80% to unanimity is required to push through a decision like that." "I think you can forget about your culture the moment you sell to a much larger organisation. As the smaller firm, you need to adjust to the larger firm's culture. Pretty soon, your name begins to disappear and the original principles that the smaller firm started may vanish. If you like your principle, believe that it is possible to make a good living and make people in the organisation happy, my question would be, why sell?" Increasing in size can create pressure on a company to retain its basic principles, in the same way that a merge does or going public would. "From 19992000, we doubled in size but we were very choosy in who we picked and made some good decisions. The culture hasn't been diluted, its been reinforced." Mr. Salmon goes back to the point about leadership in discussing how much size can change a firm. The stronger the leader, the more able he or she is to retain the original principles. Eric Salmon believes going public introduces a whole different set of pressures. "It's a different story. You introduce factors which you cannot control. Market shareholders are not necessarily interested in quality but quantity. The principles are totally transformed". Eric Salmon feels that his firm is still in its 'entrepreneurial phase' yet acknowledges that there will be a point when it enters its 'managerial phase'. There are still a lot of juniors in the company and he accepts that the company needs to be pragmatic. "When the world around you changes, you need to change too. Your principles however need to remain the same. For us it is important to strike a balance between entrepreneurial spirit, taking risks and achieving our goals". www.search-consult.com

For more information, visit: Web:

www.ericsalmon.com

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Italian country Survey:

Executive Search

“Made in Italy� By Julia Harms s the sixth largest market in the world, Italy has a similar economic structure to that of most other advanced economies, with a small and diminishing primary sector and a large services sector. Tourism and design are important next to traditionally exportoriented manufacturing of high-quality consumer goods, including clothing, furniture, kitchen equipment and white goods. Small and medium-sized familyowned companies, mostly in the northeast and centre of the country, are the backbone of "Made in Italy" and there are only a few large private companies, although those that do exist play a major role in the economy, e.g. Fiat, controlled by the Agnelli family, and Pirelli. Another Italian reality is that of a peculiar labour market: the paradox of well above average unemployment in the south contrasted with a lack of skilled labour in the north, exists next to a higher number of lawyers in Rome than in all of France.

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BEGINNING OF EXECUTIVE SEARCH According to some sources, the first Italian Search and Selection assignment was done in 1958 by the Italian company Orga, who were charged with finding staff for a local client. More importantly, however, true Executive Search took off in

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Vittorio Anfossi the early 1980s when branches of the big international networks/firms took a foothold there. Initially, their clients were in turn branches of foreign multinationals. Like in other European countries, the liberalisation of the state monopoly on employment services, deregulation and privatisation of state-owned businesses gradually changed the scenery. The body of clients started to expand to national corporations. And the "missionary" work of the pioneers, coupled with an opening of the mindset, created an environment where nowadays, traditional family-

owned mid- and smaller-size companies may also take advantage of Executive Search services. Anders Lindholm, Managing Director of Mindoor Executive Search in Milan and active on the southern European search market since the late 1980s, calls the Executive Search marketplace of the period "a virgin market: the scene was quite sleepy and it was easy to take business away from the competition" due to its lackadaisical approach. The 90s, like in the rest of the Executive Search world, were the fat years, partially due to deregulation and privatisation. This in turn provided a small niche for some local selection firms who were moving quite aggressively, to take part of the cake that had previously been held by the established international firms. While Executive Search in other European countries was growing in the double digits, things in Italy happened in slow motion or rather with a slight time lag from the rest of the world. There was the boom of the telecomms in the late 90s but as the Italian economy was and is still less technology-oriented the surge was not as extreme as in the rest of Europe. This, luckily, also meant that the downturn was not felt as acutely as in other countries, either. Lindholm calls this

the "Latin buffer". Today, the number of true Executive Search companies in Italy is rising, and was fixed at 21 in 2000 by IlSole24ore, the Italian financial newspaper. This figure is from a number of approximately 700 Search and Selection companies counted by ASSORES, the Italian Association of Search and Selection firms. Lindholm suggests that there are about "a dozen Executive Search operators excluding the mom&pop-firms". In line with the very strong north-south divide of the country, 75% of all Search and Selection companies are situated in the north of Italy, of those the largest part is to be found in Lombardy and of those in turn, approximately half are situated in its regional capital, Milan. Vittorio Anfossi, President of ASSORES and Managing Director of Studio Vittorio Anfossi, confirms this statistic: "most companies are in Milan, some have offices in Rome." Developments in Italian Executive Search and the economy, in general mirror global trends, albeit with some delay. As our study shows, the growth of respondents was between 9.5% and 20%. However, as Pierpaolo Morelli points out, while a few years ago the time delay between economic trends/events happening in the US and the Italian economy was up to 5 years, nowadays, especially in sectors such as high-tech, the delay has shortened dramatically to a maximum of one year. "You can count the large Italian corporations on the fingers of two hands," says Pierpaolo Morelli, Director at Spencer Stuart's Rome office, and the economic reality is made up of small and medium enterprises, often family businesses. More often than not, these latter do not use Executive Search, but at the most engage local selection agencies. On the other hand, cases of local one-man shows providing everything from top executives to teams of specialists, HR consultancy, etc. to large companies are not unheard of. Umberto Bussolati Dell'Orto, formerly of Korn/Ferry and Heidrick & Struggles and now Director at the Milan office of

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Spencer Stuart, calls the Italian market "provincial" but also asserts that this is changing. Globalization does not halt for Italian Executive Search, although there are still some clients who believe that executive recruitment is about "why don't you show me some candidates and I will then think about paying you". Nowadays, the client is not looking for search services alone, the client needs assistance to deal with various aspects of HR related matters. It is not enough to find a candidate with profile ABC but also to give guidance and "that is why a team approach is important - no one person can be an expert in all areas". DEALING WITH PEOPLE Generally the Italian (business) culture also pervades Executive Search: flexibility, creative thinking, and new solutions in challenging business situations are all found here. On the other hand, for instance, mobility of candidates is limited due to the very strong family ties, typical to this Latin country. In comparison to other European business environments, clients want to be approached more formally than in other cultures and directness is shunned which sometimes makes it difficult to know how close one is to striking a deal. Bussolati also mentions that clients have some "bad habits" for example, using more than one Executive Search firm, albeit not for the same search. TECHNOLOGY The fact that none of the respondents of our survey were using Internet-based recruitment confirms the suspicion that using technology to interact with candidates or clients beyond email is not accepted in a Latin market where face-toface interaction is still valued very highly. According to Anders Lindholm, erecruitment or job matching does not have a future in Italy. Similar to other European countries, approaching candidates via the internet or expecting them to insert their data on an internet form or portal is more acceptable for the younger generation but still less acceptable at the higher segment

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of Search and Selection. Despite the preference for a human touch in interaction with clients and candidates, technology as an internal tool for Executive Search is a very important backbone of many firms. The cost of developing such systems in-house is high, but as Lindholm points out, it is even higher in terms of time spent developing and implementing it. Despite this, both Lindholm and Bussolati talk about how indispensable such systems are and how they can work as a tool for quality control, and in the end give one an edge over competitors. ASSOCIATIONS There is no association representing Italian executive recruitment exclusively , but there is ASSORES, the Italian Association for Search and Selection firms that includes recruitment down to the mid-management level. ASSORES has been in operation since 1989 and is in constant contact with the relevant government institutions, such as the Ministry of Labour and it has had input into legislation concerning all types of recruitment activities. In some quarters ASSORES is perceived as a platform for local firms specialising in advertising and selection and affinity is felt more with international bodies like the AESC. There is nevertheless, a need for such an association to represent this particular group of people in discussions about professional standards and ethics, Lindholm finds. In his opinion, the Italian mindset does not lend itself to associations but rather, informal discussions about issues are more common. All this said, the current Italian legal framework is, in reality, not very much different from that of other European countries. Some positive constraints are seen in the privacy or data protection legislation, which are very strong and monitored by a state authority. In agreement with the findings from our study, legal constraints to Executive Search work are not acutely felt by any of the respondents. However, as Vittorio

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Anfossi points out, there is a fairly recent law (388 of 2000) which obliges all search and selection companies to seek accreditation with the Ministry of Labour. In reality only very few companies have actually done this and it seems that enforcement is not yet an issue. This and other related laws change the fact that Search and Selection was until recently, a free profession and apart from the accreditation also prescribes to a large extent, the services allowed and a minimum number of three consultants to those Search and Selection consultants accredited by the ministry of labour. This will have little immediate effect on medium and large executive recruitment companies, but will clean out the large number of micro-firms (those with 3 consultants or less), which are estimated at over 70%, which in turn is predicted to concentrate the market. STRATEGY Talking strategy, Lindholm advocates defined practice groups but advises not to get too narrow a horizon, as one may find that the best candidate is outside one's area of competence. Umberto Bussolati feels that you have to know the clients reality and therefore the whole "generalist approach" is not the way to go forward. He adds that to avoid the off limits trap it becomes more important to establish and care for long-term relationships with fewer clients, rather than trying to acquire as many clients as possible. These durable relationships may require the provision of other services, such as management consultancy, etc. As the search-consult survey shows, these types of services are delivered by many. To round off the picture, Anfossi notes that many of the larger Executive Search firms have a brand or subsidiary that supplies selection services. WHERE DO WE GO FROM HERE? According to a recent study by IlSole24ore only 25% of top managers are placed through Executive Search. Pierpaolo Morelli confirms this statistic: "The market still is not saturated or

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SEARCH IN ITALY Company revenues by type of search

management evaluation 10%

internet based recruitment 0%

Recent and upcoming interviews include: • Hobson Brown Jr. - President and CEO, Russell Reynolds Associates • Russell S Reynolds Jr Chairman - The Directorship Search Group • Regional Focus reports looking at Australia, Spain, Portugal and France

advertisement and selection 20%

Average Staff Distribution

Partners 21% retained executive search 70%

Other 30%

Researchers 22%

Consultants 27%

“Those who can demonstrate these qualities will no doubt be able to

challenges that are to come.”

adjust to the

specialized to the extent of, for instance, the Anglo-Saxon market." Recently the market has seen some concentration as well as some firms going public. The trend for concentration will continue, not least of all mirroring the global trend. Movement has also been seen within networks, where firms have switched from one affiliation to another. In the very recent past there were also some cases of price dumping where ridiculous retainers or discounted fees were used to maintain firms with high overheads. Morelli, who comes from a career in the high-tech industry is of the opinion that there is so much energy dormant from the high-tech and telecomms boom that it has to explode at some point. Bussolati adds, "there is still a lot of liquidity in the market

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and so there is an upward curve for reinvesting these monies". A further cause for optimism is that, historically, Italy is behind other countries in terms of infrastructure. With several large-scale projects planned and more expected this should have a knock-on effect in inducing other economic activity and of course, necessitating Executive Search services. Insiders like Marco de Gasperi, partner of Hunters Strategic Executive Search, are optimistic about business picking up in the latter half of the year. He points out that, according to an independent study of 250 Italian companies conducted by his firm, the qualities most looked for in an Executive Search consultancy are professional reliability, Timeliness and good management competence. Those who can demonstrate these qualities will no doubt be able to adjust to the challenges that are to come.

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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 5 ● Paul Ray Jr Ray & Berndtson ● Search in Germany The Law

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ISSUE 4 ● Windle Priem Korn/Ferry International ● Chris Clarke Boyden Global Executive Search

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The International Executive Search Magazine The International Executive Search Magazine

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

www.search-consult.com

Scandinavian Search: Results of an exclusive survey by search-consult

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

Competition from within? Can HR departments really compete with Search firms?

www.search-consult.com www.search-consult.com

ISSUE 7 ● Russell S Reynolds Jr. Directorship Search Group ● Search in South Africa ● Corporate Governance

ISSUE 8 ● Hob Brown Jr. Russell Reynolds Associates ● Global Leaders ● Maintaining Quality in Search

How to succeed in tough times and mushy markets

ISSUE 9 ● Gene Shen - A.T. Kearney Executive Search ● Competition from within - in house executive search


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Key moves in Executive Search this month Didlier Vuchot, Chairman of Korn/Ferry in Europe, has been elected as the new Chairman of AESC Europe. AESC (Association of Executive Search Consultants) is an association that represents 160 executive search firms worldwide. Vuchot succeeds Anthony Saxton. Roger Stoy, Managing Partner of Heidrick & Struggles, has been confirmed as AESC's Global Chairman. He will be succeeding Eric Vautor, Managing Partner of Russell Reynolds. EMA Partners International has announced that Wolfgang Gloderer, Managing Director of EMA Partners Deutschland, has been elected the Group President. As part of a strategic reorganization strategy, TMP Worldwide assigns several new management roles for executives in the Asia-Pacific office. Stuart McKelvey is to head Asia-Pacific as Group President. Alistair Sutherland has been named President of TMP Worldwide eResourcing and Executive Search, Asia Pacific. Libby Christie has been named President of Monster.com, Asia Pacific. Philip Beck has been named President of Advertising & Communications, Asia Pacific. TMP Worldwide names Pauli Overdorff as eResourcing Executive Vice President, North America. TMP Worldwide, with offices strategically located in 22 countries, is a leading player in recruitment. Ms. Overdorff's expertise in information technology and human capital management will be an important asset to its continued success. Michael Sileck will join TMP Worldwide as Chief Financial Officer. Mr. Sileck will assume his role in the first quarter of 2002. Previously, Mr. Sileck served as Senior Vice President and Chief Financial

Officer of USA Networks Inc. Heidrick & Struggles names Kevin J. Smith as its Chief Financial Officer. Mr. Smith previously served as Executive VicePresident and Chief Financial Officer for True North Communications. Gabriella Colantoni joins DHR International. Prior to this appointment, Ms. Colantoni had been Executive VicePresident with Korn/Ferry International, specializing in the sectors of media and entertainment, consumer and technology. DHR International, with offices in over 40 cities throughout the United States and over 30 countries around the world, is considered among the top search firms worldwide. Armstrong Craven, a leading executive search firm based in Manchester, appoints Michael Holford as Non-Executive Director. Mr. Holford retired from Spencer Stuart, having served there for 15 years. Richard Savior joins Canny Bowen as Managing Director. Canny Bowen, an executive search firm based in New York City, focuses on senior level assignments in the healthcare and technology sectors. Mr. Savior previously served as a Partner for Christian & Timbers. Slayton International, a Chicago based executive search firm, appoints Dirk A. Himes as Managing Director of Financial Services. Most recently, Mr. Himes served as Managing Director for Horton International. Swiss Pro International appoints Mr. Thomas W. Hofer as Managing Partner. Mr. Hofer has 13 years experience in the field of executive search, having run his own search firm for a decade. Windle B. Priem, former President and Chief Executive Officer of Korn/Ferry

International, has been elected to the board of directors of EMC Corporation. Mr. Priem currently serves as Vice-Chairman for Korn/Ferry. Paul C. Kreuch Jr. joins WJM Associates as Managing Director. He has been a former President and recently Chief Executive Officer of NatWest USA. Fisher Group International appoints Edward Snyder to its senior management team. Mr. Snyder, a former recipient of the SHRM Award of Professional Excellence in Human Resource Management, most recently served as a Managing Director for Horton International. Fischer Group International appoints Harry Clark as a Consultant. Prior to his appointment, Mr. Clark had served for Westinghouse/ABB Nuclear Business. Ambler Associates appoints Nancy Keene as Technology and Professional Services Partner. Ms. Keene previously served as a Director in the Global Technology Industry Group at Pricewaterhouse Coopers, in charge of business development operations in the Midwest and Southwest regions. Sheffield Howarth names four new appointments. Imke Rodriguez Messmer joins the Frankfurt office as Divisional Director in charge of developing its panEuropean expansion. Gaelle Le Camus joins the Paris office as an Associate. Simon Worhtington joins the Global Equities division as Senior Consultant in London. Miriam Hergendroder joins the Frankfurt office as a Research Consultant. Keith Tracy joins Intersearch as a Senior Consultant at their Cheltenham office. Mr. Tracy has worked 14 years in the recruitment industry, specializing in sectors of utilities, construction and civil engineering.

Keep us up to date with any corporate announcements! Email editorial@search-consult.com

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search-consult Issue 10