Retained Search Firm Diversity Video

Retained Search Firm Diversity Video

Retained Search Firm Diversity Video

It is reasonable to wonder whether the lack of retained search firm diversity has a bearing on the diversity of the senior executives and board members that they recruit.  That’s what I talk about in our latest video, a follow-on to my recent blog post Search Firm Diversity Impact on Executive Hires. In that post, I featured a table detailing retained search firm diversity. In the absence of self identification, we made educated guessed as to the gender and ethnic/racial diversity of those leading the most highly regarded retained executive search firms in the world.

Search FirmNameTitleGenderDiversity
Heidrick & StrugglesTracy R. WolstencroftChief Executive OfficerMaleWhite
Spencer StuartKevin M. ConnellyChief Executive OfficerMaleWhite
Russell ReynoldsClarke MurphyChief Executive OfficerMaleWhite
Korn FerryGary D. BurnisonChief Executive OfficerMaleWhite
DHR InternationalGeoff Hoffmann Chief Executive OfficerMaleWhite
Egon ZehnderRajeev VasudevaChief Executive OfficerMaleAsian
Witt/KiefferCharles W.B. Wardell, IIIChief Executive OfficerMaleWhite
Caldwell PartnersJohn N. WallaceChief Executive OfficerMaleWhite
Diversified SearchDale Elton JonesChief Executive OfficerMaleBlack/African-American
Stanton ChaseMickey MatthewsInternational Chairman
Managing Director
MaleWhite
BoydenTrina GordonPresident & CEOFemaleWhite
Herbert Mines AssociatesHal ReiterChairman & CEOMaleWhite
Slayton Search PartnersRichard SlaytonManaging Partner & CEOMaleWhite
Ferguson PartnersWilliam J. FergusonChairman & CEOMaleWhite
On PartnersTim ContiCo-Founder & Managing PartnerMaleWhite
JM SearchJohn C. MarshallChief Executive OfficerMale White
Morgan SamuelsBert HensleyChairman & CEOMaleWhite
Odgers BerndtsonRichard Boggis-RolfeChairmanMaleWhite
Allen AustinRob AndrewsChairman & CEOMaleWhite

Is Retained Search Firm Diversity Really the Problem?

Some well-meaning, enlightened retained search firm partners and hiring executives may be discriminating against those who do not resemble the power elite — which last I checked remains white and male. Moreover, common sense suggests there is likely a correlation between the lack of retained search diversity and the paucity of diverse candidates in the executive suite. However, it is crazy complicated.

Retained Search Firms Are Part of the Solution

Other data suggest that retained search firms are very much part of the solution. If it weren’t for them, they’d likely be fewer diverse candidate than the few we have at the senior executive and board level. Case in point? A study by the Silicon Valley law firm Fenwick & West entitledGender Diversity in Silicon Valley A Comparison of Silicon Valley Public Companies and Large Public Companies. On page 14, it goes on to report:

nominating committees and board members as a whole often start their search for board candidates by looking in their own networks of contacts (even if a professional search firm is also retained), and smaller companies often do not retain a professional search firm to find board candidates — reducing the chance that women will be represented in the candidate pool for some boards due to idiosyncratic network effects.

When You Check Your Network, Check Yourself

By depending their own networks — when one’s own networks tend to be homogenous — boards of directors are perpetuating the white male status quo. The utter irony is that they are perpetuating the status quo when the members of those boards are among the most politically progressive and enlightened leaders of the free world. I trust that the majority of the really do want diverse leadership.  Checking your own network for referrals is a natural impulse. It is fast, It is easy. You get pre-referenced candidates that speed through to hire. In so many ways, it makes sense. It is a senior level employee referral and employee referrals are among the most effective way to recruit, right? That’s what HR consultants advise. Yet by turning to our own networks, leaders are unwittingly discriminating against those who do not run in our same circles. It is a form of unconscious bias. Just when we thought we were evolved and become a better version of ourselves, unconscious bias comes back to bite us in the end.

Unconscious Bias Consciousness

Everyone has unconscious bias. It is what makes us human.  The trick is to become aware of that tendency and, as leaders, to check ourselves. We have the power, collectively, to fix this thing so all deserving candidates get a fair shot.  If we believe those who have worked hard to become the best of the best deserve the best opportunities, then let’s prove it.  If we believe in meritocracy, then check ourselves and and the companies we lead to make sure that all those who merit consideration really are considered. Let’s make sure the best person for the job really gets it — especially at the senior executive and board level.

Idiotic Questions Not to Ask Executive Search Firms

Idiotic Questions Not to Ask Executive Search Firms

Questions Not To Ask Executive Search Firms

If you are shopping for an executive search firm to conduct an important senior-level executive search, don’t be fooled by the lists of search firm screening questions available for download on the Internet. Those lists are not entirely objective. Retained search firms have cleverly marketed lists of screening questions, that when answered, will lead you directly to their doorstep. Even human resources associations and other seemingly independent organizations often get spoon fed the same questions by a friendly search partner or firm. In other words, we suggest those cooked lists contain questions that are not in your best interest.

Of course, you might wonder, who are we to talk? That is a perfectly reasonable question. The Good Search is a retained search firm, after all.  However, we do not benefit from criticizing the concocted lists of screening questions — not when they promote the kinds of services we offer. However, The Good Search believes it is good business to help executive search buyers become more informed consumers.  I founded this practice because I believe there is a better way to recruit top talent. Executive search has to get smarter.

Still, when you get right down to it, it doesn’t matter who we are or what we believe. We simply suggest that you be on the lookout for bias in search firm questions and think about more relevant screening questions to ask. Draw up your own list of questions. To that end, I’d like to share my thoughts on a few of the common screening questions. Sometimes the obvious answer isn’t always the best.

Questions Not to Ask Executive Search Firms

  • How many searches have you conducted for this kind of role in the few years?

The implied preferred answer is that the more executive searches a firm has done for a similar role the better. Yet, that’s not necessarily the case. In retained executive search, the more identical searches a firm conducts, the more likely it is that they’ve done business with the companies you’d want to recruit out of for your engagement. Because they’ve done business with those target companies, they are likely off-limits to that firm.  In other words, retained search firms can’t recruit out of target companies that happen to be their clients. When they can’t go there then you can’t go there. Too many identical searches are not a good thing. In fact, search firms that rattle off a long list of similar engagements should be screened out, not in.

  • Will the executive search firm consultant I meet with actually be the one doing the work?

The implied preferred answer is “absolutely”, leaving the buyer with the impression that the partner is elbows deep in the engagement each and every day. However, every major retained search firm works on searches in conveyer belt fashion. First come the researchers who identify candidates, then come junior associates who qualify the candidates; and after that come the consultants and partners who do more in-depth interviews, assessments, and manage the engagement through its successful completion. Smaller firms and boutiques may cut out a layer or two, but teamwork in executive search is pretty standard practice. In our view, what is more important is whether those working on the engagement offer serious research expertise, business acumen, and added reach — the ability to tap candidates out of the grasp of other search firms.

  • What is your time-to-complete?

The most frequently measured metric cited by executive search clients is how long it takes to complete an engagement. But here, one must ask why that is. Often, a search firm has little control over how long it takes a company to schedule interviews and, ultimately, to make up its mind. A more telling metric is how long it takes a search firm to present the candidate who ultimately is hired. Without a doubt, finding, recruiting, and getting a top executive onboard in a timely fashion is tremendously important. Vacant executive positions exact a real cost in lost revenues, lost opportunities, overworked team members, poor morale, and increasing customer dissatisfaction. However, time-to-hire dominates because it is an easy metric to capture. Value is much harder to measure because it is qualitative. Yet value remains the most important metric of all.

 

The End of Men and Retained Search’s Patriarchy

The End of Men and Retained Search’s Patriarchy

This year, women become the majority in the workforce for the first time in American history. It is a critical milestone, one that we in executive search ought to pause to consider by reading an intriguing article in the Atlantic Monthly entitled “The End of Men”. The reason? 75% of the 8 million jobs lost in the recession were lost by men, as testosterone dominant blue collar and Wall Street jobs have gone the way of the dodo bird. At the same time men are having a tougher time getting by, women appear to be on the rise. One reason may be that companies that employ woman leaders are simply more profitable. (Do I have your attention yet?)

A 2008 study attempted to quantify the effect of this more-feminine management style. Researchers at Columbia Business School and the University of Maryland analyzed data on the top 1,500 U.S. companies from 1992 to 2006 to determine the relationship between firm performance and female participation in senior management. Firms that had women in top positions performed better . . .”

At a time when excessive risk nearly drove our global economy to its knees, studies also suggests that men may be hormonally inclined to make reckless mistakes. Ironically, women’s hormones — the very chemicals held against us for so long — appear to make us better decision-makers, especially in today’s economy.

Researchers have started looking into the relationship between testosterone and excessive risk, and wondering if groups of men,in some basic hormonal way, spur each other to make reckless decisions. The picture emerging is amirror image of the traditional gender map: men and markets on the side of the irrational and overemotional, and women on the side of the cool and levelheaded.

In fact, women’s recent majority win in the workforce may be just the beginning because women are graduating in higher numbers from college. “For every two men who will receive a B.A. this year, three women will do the same.” The article goes on to explain the implications:

IF YOU REALLY want to see where the world is headed, of course, looking at the current workforce can get you only so far. To see the future—of the workforce, the economy, and the culture—you need to spend some time at America’s colleges and professional schools, where a quiet revolution is under way. More than ever, college is the gateway to economic success, a necessary precondition for moving into the upper-middle class—and increasingly even the middle class. It’s this broad, striving middle class that defines our society. And demographically, we can see with absolute clarity that in the coming decades the middle class will be dominated by women.

The domination is also being expressed in gender selection at fertility clinics. Based on anecdotal evidence, parents seeking assistance in getting pregnant are choosing girls over boys three-fourths of the time. While that particular fact and the idea of women’s collective rise to power may be shocking to some, it is yesterday’s news to my teenage daughter and others her age raised on a steady diet of girl power videos from artists that include Beyonce who tours with an all-female band. In song after song (Irreplaceable, If I Were a Boy, and her earlier Destiny Child’s Survivor), she conveys that rather than being worthless or worth less than men, we of the female persuasion are actually worth something — at the very least, a ring.

 

Beyonce’s Single Ladies (Put A Ring On It) begat a flash mob in Piccadilly Circus in London . . .

 

. . . and morphed into a gay power subplot on the Fox show Glee . . .

 

If Justin Timberlake feels secure enough in his manhood to don a leotard and high heels in a Single Ladies send-up, then perhaps we have, indeed, arrived. However, the major retained search firms yet to come to that realization when you examine the percentage of women they employ. I actually stopped and counted the women listed at each of the U.S. offices. The unofficial tally is as follows:

  • Korn Ferry: SeniorLeadership: 20% women – 3 of 15, U.S. Consultants: 24% women – 75 of 311
  • Heidrick: Senior Leadership: 16% women – 1 of 6, U.S. Consultants: 25% women – 46 of 184
  • SpencerStuart: Senior Leadership: 0% women – 0 in 7, U.S. Consultants: 38% women – 54 of 141
  • Russell Reynolds Senior Leadership: 0% women – 0 of 1*, U.S. Consultants: 39% women – 41 of 108

Despite the paucity of women in top leadership roles, the retained search industry hates, hates, hates to discuss sexism as if closing its eyes to gender bias will make it all go away. It is the same kind of wishful thinking practiced by a toddler who thinks covering his eyes with his hands makes him invisible. The old boys that remain of the Old Boys’ Network are Masters of Denial, an impulse rooted their privileged white male DNA.

The retained search industry emerged in the 1950s as firms spun off from professional services companies. Gardner Heidrick and John Struggles were both veterans of the management consulting firm Booz Allen Hamilton. Spencer Stuart worked for them for a year before leaving to found his own search firm. Lester Korn and Richard Ferry met at accounting company Peat, Marwick, Mitchell. Russell Reynolds worked for a time for William Clark, a firm that had been spun off from another accounting firm Price Waterhouse. Sid Boyden was ahead of all of them, founding his firm in 1946. However, in the decades since their founding, not a single firm has chosen to name a woman as their CEO. That paticular glass ceiling has yet to shatter, mirroring the vast majority of the Fortune 500 firms that they serve.

Understandably, gender bias has long been topic that most people would rather not discuss. Most of us prefer to focus on the positive, because sexism, like any other kind of ism, is such a bummer. Besides, people get all squirmy and uncomfortable in much the same way people don’t like to talk about race, which is why President Obama rarely goes there. However, the bias now appears to be getting turned on its head. Whatever was working against women now appears to be working for us as a gender. More important, it appears to be working for our society as a whole. It isn’t that women benefit: we all benefit. The End of Men article by Hanna Rosin goes on to point out:

Up to a point, the reasons behind this shift are obvious. As thinking and communicating have come to eclipse physical strength and stamina as the keys to economic success, those societies that take advantage of the talents of all their adults, not just half of them, have pulled away from the rest. . With few exceptions, the greater the power of women, the greater the country’s economic success.

In other words, countries where women are on the rise simply make more money. (Do I have your attention yet??) That capitalistic truth should be reason enough to pursue gender neutrality within our own ranks, and to inspire us to help our clients usher deserving, hardworking women up into middle and upper management where they have yet to enjoy their fair share. The reason is as simple. To quote a campaign slogan of former Bill Clinton, “It’s the economy, stupid.” The End of Men, as a thesis, simply means that whenever a woman advances and gets more, it’s not that she get a male colleague’s slice of pie — the pie actually grows. That fact alone ought to be enough to inspire even the most serious among us to break out in dance. Of course, Ms. B is going to help us do it in style. To learn the Single Ladies dance, simply study her dance routine below, slowed to half time.

Retained Search Firms: How the Mighty Have Fallen II

Retained Search Firms: How the Mighty Have Fallen II

In my last post, I described how the mighty trees that toppled in a recent storm reminded me of how the mighty have fallen. In the wake of our financial crisis, retained search firms have had a comeuppance for charging too much and delivering too little. Score one for the good guys.

Take the two felled trees on my property as a for instance. Let’s call one “Egon” and the other “Spencer”. Each weighed several tons. They were so heavy, in fact, we had to bring in a massive crane to remove them. But now that they’re gone, we have sun where there once was shadow. Quite literally, we have seen the light. And so too have a growing number of employers.

To be honest, trees are a sore subject in my household. My husband Crispin belongs to the just say “no” school of forestry. A year ago, I made the mistake of cutting down a couple of sickly, deformed trees in our backyard and he could barely stand to look at me and did not speak to me for a full three days. (Seriously. I am not making this up.) This year, I wanted cut down the the two trees along our driveway because the third had been “topped” — effectively ruined — by an electrical crew, breaking the “plant in threes” rule. I’d rather cut down the trees so that I could invite in the sunshine and more attractive plantings requiring full sun along with it. But I did want to risk another 72-hour-long silent treatment from His Husbandness. Then Mother Nature stepped in and did what I lacked the courage to do. She did a little landscaping of her own. (Thanks, Mom.)

The same thing has happened in search. While employers were growing increasingly frustrated by the high cost and high failure rate (40%) of traditional retained search firms, questioning their market dominance by using lesser known firms was risky business. In an unspoken quid pro quo, top executives often mandated using the very retained firms that placed them. Consequently, no one ever got fired for putting a search out to Korn Ferry or Spencer Stuart or Heidrick because that’s what everyone did. There was safety in numbers. So decade after decade, few questioned the enormous fees of retained search firms of up to 33% of first year total cash compensation plus expenses. Few objected to apparent industry-wide price fixing. Few objected when almost every other search came up short.

But necessity is the mother of invention. The recent financial storm has forced the change that so many secretly desired. Suddenly, employers can no longer afford to waste vast sums of money on retained search. So, at long last, they have found the courage to start asking tough questions of their retained search partners and to walk away when they don’t like the answers — shedding light where there once was only darkness. While it frightens retained firms and vampires, sunshine is always a good thing for the good guys. It helps the more innovative firms grow.

What Are The Greatest Myths of Search Firm Selection

What Are The Greatest Myths of Search Firm Selection

What Are the Greatest Myths of Search Firm Selection?

Search firm selection is tricky business. Over the years, retained search firms have provided guidance to prospective clients on how to select a search firm. That guidance is a one way they market their services. The search firm selection document recommends using search firms that resemble the search firm offering the guidance. Yet a number of their assertions have been adopted as the gospel truth, when that simply isn’t the case.

Moreover, the track record of traditional retained search firms is underwhelming. 40% of retained searches fail-to-complete. An estimated 40-50% the executives who are recruited don’t make it past their first year. Clearly, something needs to change. A good way to begin is by exposing some of the myths regarding what an employer should look for in selecting an executive search firm. To search smarter, we must begin to challenge old assumptions and to think for ourselves.

Myth #1: You need to specialize in our industry

On the face of it, specialization seems to make sense. Clearly, you want a firm that understands your business and its players. But beware. Industry specialization sets up client blockage. A search firm, particularly the larger firms, will not be able to recruit from all your favorite target companies. The reason? A number of those companies are already clients of the firm.

Of course, the search firm will promise to tell you whenever there is a conflict. But why should you believe them? If they base their fees on a percentage of compensation, they already have demonstrated they are comfortable with conflicts-of-interest. The best way to avoid client blockage is to do business with boutique search firms.

Myth #2:  30% Fee is Acceptable

Retained search firms, on average, charge 30% of annual first year total compensation of the candidate they place plus expenses. While it isn’t technically price-fixing, don’t you find it strange so many retained search firms charge exactly the same percentage? Moreover, percentage fee sets up an inherent conflict-of-interest. It rewards any firm that artificially inflates the salary of the candidate they recruit. That conflict could be avoided entirely with a fixed fee.

Myth #3 – Find a search partner who knows all the best candidates.

If a retained search partner tells you they know “all the best candidates”, that simply is not true.  Great retained search partners work their sources the way a great reporter does. (As a former award-winning investigative reporter, I know a great deal about the care and feeding of sources.) But there is a theoretical limit to the number of people with whom we can have a social relationship. Dunbar’s Number. We humans top out at about 150 people and that includes teachers from schools and family members. Moreover, just because a retained search partner knows an executive does not mean he can recruit that person. Executives do not accept jobs just because a golfing-buddy headhunter told him. Conversely, do not assume that a candidate will refuse to engage just because they’re hearing from a recruiter for the first time. Gifted headhunters have ways of getting their calls returned, regardless. In light of the many ways we can reach out and touch a candidate, what seems to matter most is the ability to uncover all viable candidates. You usually don’t do that work from the 19th hole.

More on the myths in future posts.