PinnacleAT THE

The Pinnacle Society / Recognizing Excellence in Recruiting

Fall 2008

Continued on page 4

Danny Sarch

From The PresidentMy Last Pinnacle President’s Column

Here we are in Amelia Island, six years after our last trip here (my favorite Pinnacle destination and a parting gift from our

HQPP; thank you Gail!), four years after my first

election as Pinnacle Poobah, and on the eve of another national election. I am actually writing this on a plane back from a family vacation (oxymoron?) in San Diego and Los Angeles. To my children’s chagrin, I discovered quite a few “parenting teaching moments” that also have some application to us as recruiters: On the main commercial drag along Venice Beach, I watched a fit looking 40-something male coasting along on a bike, balancing on one pedal. Over the course of a quarter of a mile or so, I watched him, with extraordinary ease, dexterity, and grace, take used cups of soda (you know, with the plastic lids and straws) out of the garbage. At the first garbage can, he would take one out, sip away at the leftover ice and soda mixture in time for the next garbage can, where he would discard it, in time to be ready for the third garbage can, where the cycle would begin again.

Tony Byrne Chair Danny Cahill

Continued on page 4

“I’m not an actor, I’m a movie star.” Peter O’Toole, My Favorite Year.

“My accountant said this is the worst time to do this. I have poor cash flow, or I’m not liquid or, I don’t know, something is not flowing…these guys have a language all their own.” Woody Allen, Manhattan

Recruiters love to make money. They sure know how to spend it. But dealing with it. The proper way to save, store, invest and

keep it, well, that makes us tired. Our eyes glaze over. We need a nap. Wake me when it’s over. In our early careers this is a badge of courage. We

brag about our ignorance. When we have money, we throw it away cavalierly, when we don’t, while other lesser humans have to beg for merit raises and hope for dividends or the demise of a wealthy relative, we “get on the phone and make more.” And then, and this day comes for us all, we wake up and say, “Oh my god, I have made all that money and have nothing to show for it.” And that’s not the bad part. The bad part is when on the same day we found we have nothing to show for it, we also don’t have it in us to “get on the phone and make more.” We’re tired, and “getting and spending, we have lay waste our powers.”

It doesn’t have to be that way.

With the exception of my quirky character flaw of giving away huge sums of money to ex-wives every few years, I am extremely fiscally conservative. I have survived and prospered in recessions because I piled it as high as I could as fast as I could. I never felt entitled to it, and I knew it could go away. And while I indulge in cars and have become a hotel snob, for the most part I live well, well below my means. I have achieved my financial goal, which was to have “screw it money.” I wanted enough money so if the world ended, as so many predict it will, my lifestyle will not be affected. If everyone in my firm quit, if I contracted some terrible disease and couldn’t work, or if I just woke up one day and said, “I’m tired and not nourished by this endeavor any more,” I could walk away and not worry. “Screw it.” The ultimate goal of any control freak who has had trust in others violated. Here are a few of the priniciples that helped me achieve “screw it” status:

No Equity Line. (Actually I have one but have never used it.) Other than 1)

“I’m not a business person, I’m a recruiter”

PinnacleTHE

Fall 2008

S O C I E T Y

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Profiles

Attaining The Pinnacle

Continued on page 12

Brock Boyd“Looking for work just after leaving school, I attended a job fair and met with a recruiter from Aerotek staffing. I liked what I heard, but I also interviewed for several other sales oriented jobs. In the end, I decided on Aerotek because of the company atmosphere: I was young, and the office was full of other twenty-somethings.” Toward the end of that first year, a recruiter friend asked Brock if he knew of potential sales candidates. “I said, ‘No,’ and he said, ‘Well, if you do come across someone, give me a call and we’ll pay you a fee.’ ” Brock referred a candidate and got the fee. During the same period, another friend told Brock to call his mother — she was an HR manager — to ask if Brock could fill any job orders for her. “She encouraged me, and I sent her someone she hired. That’s how I really got started in the business, while working for someone else! “At this point, I thought: ‘What I’ve been doing mostly is calling candidates and sending them to others to place.’ ” Urged by those first two “clients” to start his own company, Brock now determined to avoid the middleman and began cold calling any number of companies that would pay fees for the sales profession-als he’d find for them. “I promised myself that if only one agreed to work with me, I’d quit my job and go out on my own.” The first company he called gave him an order. Brock’s first office was in the basement of yet another friend’s

Our PurposeThe Pinnacle Society was estab-lished to honor high volume producers in the Personnel Contingency and Retainer Placement employment ser-vices industries. It provides an educational forum through which members share informa-tion and ideas.

PresidentDANIEL SARCH

Leitner Sarch Consultants, Ltd.(914) 682-4000 x 11

Vice President & Membership Chair

KATHLEEN KURKEStarbridge Group, Inc.

(703) 691-3900 x 202

SecretarySTACY ETHUN

Park Avenue Group, Inc.(407) 629-2424

TreasurerJIM ASHWORTH

Marshall Career Services, Inc.(817) 737-2645

TechnologyDAVE STAATS, CPC, CSP

SearchPartner(615) 312-8210

NewsletterKEVIN SAN JUAN, CPC

Advanced Medical Resources(800) 393-2674 x 227

Hospitality ChairGAIL KAPLANKaplan & Jass

(617) 422-5678 x 224

PR ChairTED KONNERTH

Egret Consulting Group(847) 970-5949

Charity and CPC CEU ChairBRIAN WRIGHT, CPC

Executive Leadership Solutions, Inc.(800) 485-9726 x 200

Continued on page 11

Michael Honer

Honer and AssociatesP.O. Box 129

Wildwood, Missouri 63040636-733-7585

mike@honerandassociates.com

Brock Boyd, CPC

CMI8605 Westwood Center Drive

Suite 506Vienna, Virginia 22182

703-356-2190brock@cmicareers.com

Michael Honer Mike left college after his junior year — “I just wasn’t interested” — unsure of what to do next. Since high school, he’d worked part-time in a family pharmacy, so he took a job with a company that inventoried drug stores. Not content with employee status in a “high-mileage position,” Mike soon started his own company in direct competition with his (by then former) employer. “I’d been reading a lot of motivational material and I wanted to make money, but I wasn’t one of those guys looking for a salary and security. I was a risk taker. “At first, I didn’t do too well. I had no capital and no profit, and the reward for my effort was a pile of accounts receivable.” Mike decided to go into sales. “Everything I’d read said, ‘that’s where the money is’, and I was all about working hard for the money. I saw a want ad that seemed vaguely about sales, and went for an interview. It turned out to be what today you’d call an employment agency.” They gave Mike a desk in the data processing department, where “going to work turned out to be a more positive experience than my personal life at the time. In fact, beginning there marked a turning point for me. The guy that ran the place was a great sales-man and motivator. He exuded what everybody wanted to be as a producer. But he had rules. He’d say, ‘Those who hoot with the owls fly with the eagles,’ which meant that, if you went out and got drunk the night before, you’d still better show up on time. He sometimes turned up at 7:30 in the morning looking pretty bad, but he’d be fine by 8:00. He’s still my best friend. He told me not to go out to

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Pinnacle Members Speak on the “Business” Side of the Business

Continued on page 9

Carl Coco“Our organization consists of four producing partners (including Pinnacle member Jeff Gies, who joined me in 1996); two senior account managers; two recruiters who work only on the partners’ and account managers’ searches; one researcher; one split network coordinator; an administrative manager; and an accountant who works two days a week. The partners go to lunch every Monday to discuss issues and make sure we’re on the same page. We have a weekly meeting every Tuesday with our staff to go over jobs, candi-dates, strategies, and potential placements, searches, and problems. The nice benefit of developing partners and senior recruiters is that any one of them could have a $50,000 month. “We’re now looking to grow — a consultant is helping — and we want to hire a manager, one who’s not also a producer, to help us do this. The partners are too busy making placements and selling new searches. This preoccupation has also prevented us from fully implementing our marketing plan. (Danny Cahill has given us good feedback on dealing with these issues.) Growth will be self-financed, through production, although we have a substantial credit line (that we just paid off); we use it for short term borrowing only. “We’re not going to franchise. We like all of our folks working out

Ed Bradstreet Ed Bradstreet, the sole owner of Bohan & Bradstreet, employs two senior VPs, two associate VPs, a senior search consultant, five search consultants, an office administrator, and one-and-a-half support people. The recruiters do their own research and fill their own orders. Ed plans to grow selectively. “I’m probably not as aggressive as some, with the need always to be bigger and have more loca-tions, although we’re always looking for additional associates. If I come across good people, I’ll hire them, but not indiscriminately. I want to be sure about them before I spend a lot of my personal time to develop, culture, and mature them.” Ed proved his willingness to do this by adding several new people during the past year. As to marketing, Ed distinguishes between “formal” and “informal.” On the one hand, he continues a forum he began more than two decades ago, inviting CEOs, COOs, CFOs, and CMOs from clients and new business targets to speak to invited audiences of investment bankers, CPAs, attorneys and securities

Ralph Protsik“BSG Team Ventures/Boston Search Group, Ralph reports, is a 100% retained firm that depends on the partners to develop the business, several full- or part-time recruiters to work with the candidates (and, in most cases, manage client relationships), and anywhere from three to six researchers.” The variable number stems from BSG’s use of “virtual” recruiters. These are part-time people brought in “as needed” and paid an hourly rate. Some of the virtual recruiters also work for other search firms; a few are at home raising families. The job of BSG researchers — both full time, in the office, and

of one office, and ninety-five percent of our searches are out of Cincinnati. We’ve been in a split network since 1979, which is a good benefit because we’re very job- order driven. We use the network to fill jobs for which we don’t have candidates or jobs we’re not experienced at filling. In 2005, we switched from a network we belonged to for 25 years and went with Top Echelon, which is definitely the best. They have 1,700 recruiters we can utilize on straight commission: no draws, salaries, benefits, or overhead. One split per year pays for the cost of the network.“ The seven-year lease on Carl’s office was up in April, “and we planned to buy our first building. But our landlord (the best one we’ve ever had) sold us on the idea of re-signing when he reduced our rent, put in new carpeting, installed a garbage disposal in our kitchen, and repainted. I’m glad we decided to stay; in 34 years, Professions has been in five locations, and every time we move we lose a couple of beats.”

executives about the evolution of their businesses, current operations, and fu-ture strategies. Ed also convenes, every six weeks, a group of executives from small to medium size non-competing companies to discuss a range of busi-ness topics and challenges. “We also have a monthly one-page e-mail ‘Em-ployment Trends’ letter we send to a list of 7,000, including candidates, potential candidates, and clients.” Ed’s informal marketing is, as he puts it, “a result of our long-term formal marketing among current and former clients. Since we’ve made placements at more than 250 companies in our region [an area within 35-miles of his southern Connecticut offices, which he rents], they come to us, unbidden. We don’t have to knock on their doors anymore.”

virtual, part-time people — is to identify potential candidates. The virtual researchers have included college students and a Ph.D. psychologist with spare time who does free lance work for other firms as well. BSG has only one full-time salaried administrator. Ralph explains: “It’s hard for a retainer firm, with the typical ups and downs in volume, to staff up, so we look for part-timers, people who are flexible. If we don’t need them, we don’t have to pay them, but we hope they’ll be there when we do need them.”

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Lesson to my children: Study your butts off so you can make something out of your life and you’re not drinking from garbage cans. Lesson to Recruiters: Sometimes we spend the most time, with the most grace and skill, on seemingly menial tasks. But we do what we have to in order to survive. On the morning of our departure from LA, we had to get up at 5:00 am in order to be on the road by 5:45, in order to make our 8:30 flight. We were staying in my buddy’s guest house (not the Ritz, but not exactly roughing it either). We had worked out all the logistical details for such an early departure so as not to disturb our hosts. What they had neglected to tell us was that the sprinklers would be on that early in the morning. Our final thirty yards or so from the path in the backyard to the front was going to be a wet trip. Lesson to my children: We might get a little wet, but we’re not waiting for the sprinklers to turn off, because we might miss our flight, and we’re not waking up our hosts so friggin’ early in the morning because of a little water. Suck it up and start running. Lesson to Recruiters: I might get a little wet, or hurt, or down along the road, but there’s no way on Earth that I’m not getting where I want to go. We spent an afternoon on the beautiful beach at La Jolla Cove, just north of San Diego. Our beach bag had our suits, some snacks, goggles — everything but towels. Whoops. It was warm, we rationalized, so who needs towels in the hot San Diego sun? Well, body surfing begets sand in a lot of nooks and crannies, and my

My Last President’s Column Continued from page 1

girls were not happy with the lack of something suitable to wipe away the sand. Lesson to my children: Mom and Dad are not perfect. You can cry and moan about bad circumstances but you still have to make do with the hand that you were dealt. Lesson to Recruiters: There’s sand in the nooks and crannies of every deal. The more you can anticipate them, the more likely the deal will still happen. It was a fun vacation, but all in all, I’d rather go skiing.

Epilogue/Note to the MembersWow, the four years have gone fast. I want to thank the Membership at Large for your suggestions, your constructive criticism, your occasional rant. All of it made the job more interesting and fun. There have been some bumps, but a day on the ski slopes without any moguls is a day without challenge or fulfillment. The past four years, for me professionally, have been the most productive of my career. While I can only hope that the next few years are as productive as the last few, with the help of the people in Pinnacle, at the conferences and between, I know that I will have access to the best solutions and be on the cutting edge of whatever resources are out there I especially want to thank the Pinnacle Board: Kathleen, Gail, Jim, Stacy, Kevin, Dave, Ted, and Brian. They have been true partners in managing our unprecedented growth. Their wisdom, hard work and humor have made it a wonderful pleasure to serve.

one car lease, Hobson has no debt. I hire recruiters and pay them out of operating expenses. Never go into debt to hire recruiters. For the first decade, I wouldn’t hire a recruiter until I had made so many placements I could take two weeks off my desk to train.Build a firm that runs independent of you. I was blessed with 2) high energy. But I knew myself. I knew how easily I got bored. People kept me passionate. I needed their energy, their ambi-tion, their billings. When I am at Pinnacle, the Hobson machine churns. I am no longer THE business. Pay them well, train them constantly and create a culture of 3) learning, give them quality tools. Offer loyalty and expect it in return. Treat them with dignity and respect. And get out of their way and let them make you wealthy.Profit is incidental to a small company. It’s not what you make, 4) its how much you keep. Every year, our goal is 15-20% profit based on our revenue. And then my accountant and I figure out how to dispose of the profit so that we show as little as possible for purposes of corporate taxes, which are larger than personal taxes. So at year end, I buy what we will need for the next year, pay my partners, pay myself, and then we announce profits. To the government, Hobson seems to be marginally profitable. To my money manager at Merrill Lynch, I run a Colombian drug cartel. (There are some Hobson events when I think so too.)

Get a money manager. Not a broker. Someone who is paid on 5) the growth of your portfolio, not to hawk stocks. And then pick a number and forget about it. I have been sending an amount in the high four figures every month, recession or boom times, for 20 years. Over the long haul, stocks will make you wealthy. And yes, I sent my check this month, in the face of Armageddon.Buy your building. We own part of our current building, which 6) is a large corporate building, and we owned all of our previous building. Rent being paid to yourself is a separate, saleable revenue stream.Team Danny, as my people teasingly like to call it. I have 7) assembled a world class group of support, my lawyer, my accountant, my money manager, my nutritionist, my therapist, my osteopath, my web hosting company, my IT developer. The best film directors use the same editors and cinematographers and ensemble cast of actors. The best bands know which improv riff is coming by a nod. I use the same people. They know me, they care about me, and they have a vested interest in my success. I do business with people who do business with me. I can track dozens of placements from this team.

“I’m not a business person” Continued from page 1

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A Lesson from DadMichael Goldman, CPC

Watching the sunset at the end of a day is a beautiful, reflective thing. Thinking about the day and lessons learned, experiences had. And just sitting there gazing out at the gift we’ve received. I had

the privilege of being with my father during his last year of life—his own sunset—while he slowly faded from our presence with the onset of dementia. It’s a sad, very painful time for many of my generation now who are facing the reality of aging and our parents. But it’s also a time to reflect on the beauty that was our parent’s life, and how it has impacted us. In the past year, and with even more depth since he passed away last February, I’ve been able to see his life in all its vibrant colors, energy and beauty—who he was and how it impacted me as a person and professional. Ideas and perspectives are unfolding within me now that were handed down from Dad over my lifetime as if they were once ingested like time capsules, ready to take effect when he could no longer speak them. As if he gave them to help me live my life more fully once he was no longer here to “kibitz.” One of these many perspectives relates to how and why I do business—something I shared briefly with those in attendance at the last Pinnacle meeting. Back in 1964, Dad left the Goldman family business to enter life insurance sales and financial planning with a major firm in NYC. He set up his office down in our basement in the suburbs and disappeared during the day to make cold calls from his pump files. He spent the nights traveling to the homes of strangers to make investment presentations in their living rooms. While most in his firm focused on selling business to large, wealthy clients, Dad decided to bring his expertise to small families. It wasn’t about making a lot of money. It was his profession, and he needed to earn an income. But it was about bringing his expertise, honesty and energy to people who couldn’t afford much, didn’t have much to invest but would benefit from his help. He wasn’t just a “salesman.” He was a true “counsel” to his clients. The people he did business with became long-time contacts. As a Rotarian and local businessman, Dad was a public speaker and networker. He was “Good Neighbor Sam,” the quintessential Jack Lemmon character. We never had a lot of money, but we as a family were wealthy. When I began my career in the recruiting business, in 1980, I know Dad was proud of my continuing in his footsteps in selling service and expertise. As I became successful, he loved reading the articles I wrote and listening to my war stories of the business.

He took personal pride in any awards I earned. But I believe he took most joy from seeing me teaching and training others in the industry, speaking before groups and talking about my business philosophies. And now I know why. The old saying is very true: “The acorn doesn’t fall very far from the tree.” Dad gave me the gift of truly understanding what it meant to be a counsel to your clientele. There’s an old Zig Ziglar quote that’s framed and hanging on my wall and on the template of every email sent out—but most importantly permeating how I do business with people as an executive recruitment professional: “You become successful by helping others become successful.” And that’s not just a naïve, altruistic phrase. It’s a genuine philosophy upon which to build one’s success, by conducting myself within the context of that philosophy, whether I’m participating in a search project, conducting a seminar, or speaking before people. This is a true “life approach” to what one does with one’s career. It’s how you deal with the ups and downs, successes and failures. What we do ceases to be a matter of “volume calls” or “job orders” or “placements” or “wins” and “losses.” It’s a bigger picture—about impacting people’s lives and leaving a legacy, about being a true counsel, not a clerk. A number of years ago, I stopped talking about my “billings” and submitting my numbers for production awards. I still make a fine living in this business, but over the years it’s ceased to be about the dollars. It’s become about building influence, not importance —about being a person of influence rather than importance. Thanks to my dad, I’ve been able to understand why I’m actually in this business, why I’m a professional—and what success in life truly is. And when I’m in a position to do so, I love to share these perspectives with new and junior recruiters. It helps to understand who you are while you’re figuring out how to become successful. I’m benefitting from the influence of my father’s life long after his sun has set. I have made a decision, as he did, to be a person of influence rather than importance. And Dad has been that person of influence in my life. I hope my daughter will feel the same about me some day. Thanks, Dad. Be talking with you in the morning.

Give Back. There is Karma. In the Relay for Life in Con-8) necticut, we usually come in 9th or 10th as far as the most money raised. The eight companies ahead of us are Fortune 1000 companies literally thousands of times our size.

“Screw you” money takes a long time. I wanted to achieve it so that I would never have to rely on anyone else, so that I would

never be in need. And now that I have achieved it, I find, to my great joy, that I need my people and rely on my business, not for money, but for all the other things in life. Comraderie. Laughter. Friendship. Compassion. I worked so hard so I could walk away, and I find myself never giving walking away a thought. Turns out real “screw you” power is not in making enough money to walk away, but in realizing, money aside, you want to stay.

“I’m not a business person” Continued from page 4

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Pinnacle Spring 2008 — Marina del Rey

“By Day”

CAPS Queen

Spellbinding speaker

How sweet it is!

“Good morning class”

Great reading!

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More ›

Pinnacle Spring 2008 — Marina del Rey

“By Night”

“No, really — you need to go to my rookie retreat.”

Look at those shoes!

Pinnacle Ladies

Drag Danny in for credibility

“By Late Night”

“Pinnacle Pals”

HQPP and President-Elect

Show off!!Late night crunches

Lost her contact

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Pinnacle Members Speak continued from page 3

Commenting on BCG’s approach to recruiting, Ralph says: “As a fully retainer firm, we’re not organized like most of our Pinnacle colleagues, who don’t have to disaggregate a search the way we do — with separate client managers, researchers, and recruiters. Our fees are high, but so are our overhead expenses. Recruiters from most other Pinnacle firms handle the process from soup to nuts, that is, they get the order and they fill it. I actually do very little recruiting.” As to marketing: “Each partner develops a yearly marketing plan: what sectors business is going to come from; what particular companies we’ll be focusing on — and what the priorities are among these; what industry conferences to attend; and, of course, what billings we expect to achieve. Our progress against these goals is

then tracked throughout the year. BSG also has long-range growth plans. One is internal and organic. “We want to hire more partner-level people capable of bringing business to our offices in Boston (which BSG owns) and New York City, and the one planned for San Francisco. But we’re also looking beyond our corporate borders for partnerships and acquisitions. We currently have a partner in the U.K., with the possibility of expanding further in Europe, and a potential partner in the Far East.”

Chip Goode Chip and his partners, who manage three 100% retained offices (Boston, Charlotte, and Denver) in the style of “player-coaches,” also recruit from their own desks. “We’re a passionate and results orientated com-pany,” says Chip. “We have clear qualitative and quantifiable goals and objectives — weekly, monthly, quarterly, annual — with several ad-ministrators to support the effort. Over the past 22 years, we’ve grown methodically and purposefully by giving our people the opportunity to develop and grow along with our client base. We may open another office in the future, probably in the Palm Beach area. “We review our annual business plan and marketing strategy sev-eral times during the year, measuring our achievements to date against the goals and objectives we set. All of our growth is based on internal cash flow. I strongly believe that people providing a service like ours are kidding themselves if they have to borrow money to pay salaries/commissions. I have seen many businesses go out of business because

Veronica RamirezVeronica’s Joseph Chris Services consists of JCR Executive Search, working entirely on retainer, including international clients, and Jo-seph Chris Partners, which operates in both retainer and contingency modes. The difference is this: JCR recruiters work fewer but longer lived searches than their JCP counterparts, who may each be involved in 25–30 at once. “We formed JCR Executive Search,” says Veronica, “when we decided to reinvent ourselves, and it worked. We wanted to hit our industries at a different angle, with a more detailed, profes-sional, higher end approach than in the past. Both companies place the same level positions, but we work through JCR Executive Search with companies who didn’t previously pay attention to Joseph Chris Partners. “In addition, as our core real estate industry market in the U.S. has been devastated, we’ve created Energy Executive Search to take advantage of the growth in that sector,” says Veronica, speaking from her Texas office. “And we continue to have many searches with international real estate firms. In fact, most of our marketing now is concentrated in countries taking advantage of the cheap dollar.” (Veronica recently made a “huge” business development presentation to her own company on markets to “attack.”) “The shift in concentration domestically from real estate to energy has forced us to ‘slim down’ from 50 employees to 25. We’re now rebuilding and rehiring with people who have positive attitudes and fresh ambition in a challenging market. I want to make sure my

they either paid themselves too much or over-expanded by taking on way too much debt. When times got tough, they got buried. You have a lot more staying power and strength as a professional services firm by not borrowing. You’re forced to stay focused on the effort. In any case, the overall capital investment requirements in this business are not significant relative to other businesses. It’s a people investment.” Chip hasn’t entered into alliances or become involved with split organizations. “Working with them, you can’t be sure of consistently high quality, or that you’ll get the job done quickly enough. We have plenty of op-portunities, and our philosophy is : ‘Do it all in house.’ ”

top producers are overloaded with real searches, which have been harder to come by.” But the situation hasn’t moved Veronica to work much with split organizations. “We’ve tried a few deals, and they’ve been successful, but it’s not something that we are focusing on right now.” Veronica’s long term plan includes opening up two divisions in other in-dustries, and further pursuing her REGI program (Real Estate Grad International), a Joseph Chris marketing arm that sends instructors to places like Harvard, MIT, the Wharton School, and Clemson, where they assist real estate MBA and masters students prepare for the job market: the Joseph Chris people conduct mock interviews, reviews career paths, strategize for the job hunt, help develop profiles, and review compensa-tion expectations. “These future leaders,” Veronica explains, “are going to be our clients one day. We get paid for the service, although not much, but I consider it a long term investment.” (And sometimes, these institutions hire Veronica to market their student’s right out of school.) “This kind of marketing isn’t common in the recruiting industry, but as the baby boomer generation retires, there’ll be an increased need for new leaders. We’re just priming the pump in advance. It’s important to develop a relationship with them while they’re young.”

Continued on page 10

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Pinnacle Members Speak

Karen Russo“Like many who own a firm and run a desk, I do it all and I am still the rainmaker. I set the strategic direction of the company, create partner-ships with other recruiters and vendors, and assist my team of four with searches they’re working on. I have a hand in 95% of our deals — and still manage employee activities and production day to day.”

Karen’s chief administrator, Julie, is also a women of many parts. “She’s been with me 11 years (the company is 12), starting as my admin. Now, as Chief Administrative Officer, she handles everything to do with running an office: overseeing staff; billing; scheduling the recruit-ers; and managing the agreements between clients and candidates.” Julie is also responsible for the contract recruiting side of the business, coordinating all of the assignments, invoicing, and running the back office operation in Karen’s new research company, in Mexico. The reward: “I’m making Julie my managing partner.”

Karen herself develops partnerships “where we need to be seen,” including appropriate blogs and websites, and with institutions like Manhattanville College, near New York City, where “we give seminars on interviewing and résumé writing. All of this keeps us exposed in the community and enhances our reputation.

“I also have a communications specialist who researches, devel-ops, and implements our marketing plan, handles website manage-ment, and coordinates with our publicist on blogging, speaking

engagements, and the articles we write. He also takes care of our marketing out-reach to clients and candidates, usually through mass e-mailings, which frees recruiters up to concentrate on their personal interaction with those same candidates and clients. And, since he was once a researcher, he pinch hits for us in the Mexico business when we need a male voice for list buiding. I have always been a big believer in back office support. A direct revenue producer shouldn’t be doing things that bog you down. I don’t want to burn out from writing emails at 10:00 pm every night. We can edit what he writes in direct communications with people, so I delegate a lot.”

As for the future: “Since I don’t really like managing, I’m devel-oping my current talent into low maintenance rock star recruiters and encouraging them to create new teams of their own if their level of business justifies this kind of growth. I also want eventu-ally to make the Mexico research operation into search group. But I don’t want to franchise, although I’m considering both alliances and giving my employees equity.”

Brian Wright Brian’s Executive Leadership Solutions (ELS) works primar-ily on contingency searches. His Coleman Haley & Wright (CH&W) is a retained-only firm. (The two companies share ac-counting, database, and web services.) “We market under two names because one of my long term clients once told me the reason she didn’t use us for her high level searches was that ELS sounded too much like a contingency firm to impress certain hiring authorities. They feel more comfortable with recruit-ers sporting a name that sounds like a law firm,” says Brian. Employees total 29, six at CHW (with offices in Ken-tucky) and 20 at ELS (with offices in Florida), and three ad-ditional support people who serve both. Each company has a Chief Placement Officer, to whom recruiters report, while the CPOs report to Brian. “But I do talk to the recruiters if they have questions, or they’re stuck on a search, or need other help. It’s a small company and I have an ‘open door’ policy.” Brian has a staff meeting every Monday at 2:00 pm for ELS and at 3:00 pm for CHW. “At 4:00 pm, we all come together for a technical training meeting, via video, including the five who work from home. Everybody is looking at my computer desk-top and listening on conference audio. Each Friday, the CPOs conduct a training lunch in their offices. This involves watching a CDROM of one of Danny Cahill’s webinars or a production

from another industry trainer. Every year, the two firms come together, with their families, usually at a Florida resort. For the first three days, we do training in the morning and have free time in the afternoon. On Saturday and Sunday, we have fun events, like golf, trap shooting, and boating excursions.

“We billed a total of $3.8 million last year, and that’s not good for as many recruiters as we have. So, we’ve hired a consultant to help us get to $12 million by 2012.” Brian, who owns his office space, has plenty of credit but he’s never borrowed long term, although he might in order to finance the new building he’ll probably need with expansion. “I believe in growing by cash flow.” As to split organizations: “I’m involved in one, but I believe they tend to make recruiters lazy, even though I’ve got one employee making his entire income working the Top Echelon network and doing splits with other recruiters in my office. The guy hates to do business development but he’s a magnificent researcher and finder of talent. I wouldn’t hire him today, but he was my third employee. I think testing would have revealed that he has ‘call reluctance.’ ”

Fernando Espinosa“My partner and I are both involved in all aspects of the business, but I’m primarily responsible for directing production operations, which includes managing and developing recruiters and research staff, identi-fying and integrating external resources into our production processes, and monitoring production targets. My partner focuses on directing our administrative staff, business development and marketing, and

strategic planning. We both also work our own search projects.“Growing a search practice while working a desk is a bumpy

ride. I believe the best way to grow in such circumstances is to keep focused on your niche (presuming it’s a strong one) and surround yourself with talented people who share your vision and passion for growth. We’ve developed in a gradual and

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Pinnacle Members Speak

measured way, retaining throughout a set of core values. We didn’t aim at a particular company size, but instead took baby steps, and then measured the results before taking the next step. “The first step in our aggressive growth plan, taken just after we formed our partnership, was a sizeable investment in an ATS, which quickly provided a competitive advantage. We’ve since evolved, through trial and error, into a niche practice that has the infrastruc-ture to rapidly respond to changing client and market demands. We went from sub-leasing our offices to purchasing 7,500 sq. ft. of space and sub-leasing the portion we don’t use, sometimes to our search clients. We can do this because we’re close to the U.S.-Mexico border and have the telecom system to support their businesses in Mexico. Our marketing strategy focuses on direct contact between

our partners and decision makers in the market, and we back that up with a web presence that’s constantly evolving. “We’ve always self-financed — with the exception of the recent building pur-chase — and we’ve disciplined ourselves to avoid debt in order to be prepared for market downturns. Franchising doesn’t fit the direction we’ve taken. Rather, we’re creating branch offices, as market demands dictate, and then only when we’re able to install credible recruiting talent at the new locations.”

Ken FriedmanSole owner Ken Friedman’s Primary Group has three divisions, all in financial services: a retained only section; a retained/contingency division, focusing on recruiting stockbrokers; and a staffing opera-tion. Together, they employ 20 recruiters — including Ken, Greg, who is the President, and two managing directors — all working out of a single location in an Orlando suburb and supported by a director of research, director of administration and projects, and three additional admin (two people in accounting and an IT person). “Recruiters do their own research,” Ken explains, “but they can get some help on retained searches. We don’t really work desks, as in many traditional recruiting organizations,” he adds. “Two of us bring in all of the searches and the others work them. I personally deal only in retained searches, and the recruiters who work with me do so strictly on a retained basis.” Ken doesn’t have a specified growth plan, “but we’re al-

ways looking to add more recruiters, probably one or two in the stockbroker division and another on the staffing side by the end of the year.” That’s how Ken’s done it all along. “It began with me sitting alone in an office and then discovering another person whom I thought would work well with me, and then adding another, and another, and another, over time. I’m not looking to franchise or make acquisitions — although I’ll consider something that makes sense in the context of our long term strategies for growth and expansion. But we do have placement partnerships with a number of other firms for splitting business.”

Brock Boyd continued from page 2

home. He had one phone line — housemates also used it, for their personal calls — and his parents’ fax machine. Soon, Brock moved the office into the bedroom of a townhouse (occupied by two other college friends), where his first two employees reported to him daily. A year later, in 1999, with his first fees, Brock bought his own fax machine, got another phone line — shared by both the fax and dial-up Internet! — and paid for construction of a website. Concentrating at first on placing senior level sales people, and beginning to focus, as he does now, exclusively, on technology sales and marketing candidates, the firm grew to ten in only a year and a half. In the early days, Brock hired his recruiters right out of school and trained them up himself. “We’re very hands-on with new hires in the first few months. Then, it’s informal mentoring and ongoing training by the partners for probably the first two years. “As the market got bad after 2001, we got better. We were forced to really hone our skills.” Six months ago, the DC area accounted for 95% of Brock’s business, but as job requests have slowed down once again, “our horizon has expanded. On a scale of 1–10, 2000 was a ‘10’, 2002 was a ‘3’ or ‘4’, and 2007 was a ‘8.’ Business is slower

this year, but we’re still very busy.” The slowdown in the early part of the new century forced a reduction in recruiters to six; now the number is back up to eight. Each has a desk and each is responsible for finding clients and candidates. Sixty percent of the deals are internal splits, facilitated by twice-weekly formal discussions about orders among the recruiters, “although it’s not a ‘forced’ environment,” says Brock, “and in any case, they’re in constant communication with one another.” Although he uses the Internet a great deal, this does not include job boards; yet his recruiters make good use of them. “The most important thing about Pinnacle for me is that it provides a forum of people producing at a high level with whom I can share ideas and complaints. There’s a difference between people billing $100,000 and those billing $500,000–$600,000. And the things you’re trying to improve are very different depending on which end of the scale you’re at. There isn’t a single person in Pinnacle who doesn’t know what you’re talking about. You know you’re dealing with successful people in Pinnacle, but each has a different way of doing things. They understand where my bitching comes from. People at the lower end of billings might not.”

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lunch with anyone from the office for the first 30 days — to avoid bad influences, I think — and to just concentrate on the job. “I really didn’t know what recruiting was all about, but I did the training and did what I was told to do (which many newcom-ers don’t). If the boss said: ‘Make 30 calls a day’, I made 32. I said what he told me to say and I worked my rear off. I had no wife and no kids. I was totally focused.”

Mike made VP within 18 months, far surpassing the company’s annual billing record and number of deals in a single month. In 1977, he set a personal goal of making $30,000 annually by the time he was

30. “This may have seemed unreasonable at the time, since the most I’d made in a year previously was $10,000.” Yet by 1978 he was at $50,000 (and only 28 years old). Following his promotion to VP, he built a ten-recruiter division that billed $1million-plus annually (at a time when the average fee was $4,000!). And, despite 100% turnover in his recruiters — the result of the firm’s policies — he succeeded in building the division back up to the same level of personnel and billings that had earlier made him such a valuable asset to the owners. By the mid ’80s, however, “The company was having prob-lems, and my people were once again turning over too fast. I decided to get out of management and become an individual contributor” (where, on his own desk, he billed $250,000-plus for the remainder of the decade). By then, he was also looking for another job. The company CEO was keeping two sets of books and underpaid the IRS. “I saw the writing on the wall and left before the company declared bankruptcy.” Now, working under his own company name, Mike attached himself to a firm run by a fellow who’d previously worked for him. “He wanted my production and clients, of course, and gave me a draw and a rich commission, but he also wanted me to help run the office.” Unknown to Mike when he signed on, that firm, too, was already in deep financial trouble. When he got wind of the situation, “I said to myself: ‘I’m basically on my own already, I don’t need the draw, and I’ve got money in the bank. I’m going it alone.’ ” At first, “alone” meant running a desk and placing IT special-ists from a suite of offices rented by a holding company he set up with three other refugees from the old firm. Two years later, Mike and one of his former staffers joined forces to create a new entity. They grew fast during the first two years, running a business that did both contract and full-time placement. Needing money to fuel further growth, they brought in a third partner. Almost a decade

later — with company income reaching $6–8 million annually — Mike sold his interest to his partners. “I wasn’t enjoying running such an operations-intensive business, having to handle everything myself because of internal company issues. I was stuck. I wanted to sell the contract part of the business, keep the recruiting LOB, and place full-time IT em-ployees. Thankfully, the other two were happy to buy the contract side and let me go on my way. I was willing to accept the downside of the full-time staffing business: you start at zero every month and there’s no passive income.” So, Mike started a new venture with several other recruit-ers. Unfortunately, it immediately faced a series of hurdles he couldn’t leap: 9/11, Enron, recession, and the high tech downturn of ’01–’03. In 2001, Mike laid off all of his employees and went solo. “I thought: ‘Just to be standing at the end of this downturn would be great.’ ” When the tide turned in ’04, Mike was still standing, but in a changed marketplace, where he had virtually no regional competition placing IT leadership candidates. “As a sole practitioner, I’ve lost the enjoyment I gained from training. But working with inexperienced newcomers takes too much time away from my production, and I generally don’t trust the evaluations of candidates made by people new to the business. I do, however, enjoy the deal-making and client business-building aspects of what I do.” Mike still relies on a “virtual” part-time administrator and uses consultants for special projects and technology assistance. “My ideal is to have one client with 150 hiring managers un-der one roof, not 150 customers, each with one hiring manager. Sure, the big guys are harder to get, and harder to do business with, but once I’ve penetrated and placed some people, it’s very rewarding. But whatever their individual and corporate personalities, “My clients have to be growth companies, because they provide more opportunity for candidates as well as future business.” One result: “This year has been up for me, with more and bigger jobs, although I’m not working harder. Thanks to 31 years of network building, I’m the only one doing what I do in town (St. Louis).” But it’s not just about filling orders. Mike believes that the most important thing a Pinnacle-level recruiter can do is become a client’s trusted advisor. “I don’t want to work with companies that fail to take advantage of my experience. I provide information they can’t get anywhere else. That’s fulfilling to me. “Meeting with other Pinnacle members has been especially good for me because I’m a sole practitioner without local colleagues to provide creative stimulation. I’m usually the teacher when it comes to talking about recruiting. At Pinnacle, I’m the student.”

Michael Honer continued from page 2

Our PurposeThe Pinnacle Society was established to honor high volume producers in the

Personnel Contingency and Retainer Placement employment services industries. It

provides an educational forum through which members share information and ideas.