www.search-consult.com SUBSCRIBE ON-LINE 2004 / ISSUE 20 COMING UP IN FUTURE ISSUES: Search in the Middle East Executive Search Associations Focus on Life Sciences IM in Developing Countries The International Executive Search Magazine The International Executive Search Magazine The Largest Search Firms in the World - 2004 The Largest Search Firms in the World - 2004 Search in Canada Talent in the Oil & Gas Sector Horton International - Establishing the Right Relationship Executive Recruitment in Australia Search in Canada Talent in the Oil & Gas Sector Horton International - Establishing the Right Relationship Executive Recruitment in Australia
Transcript
www.search-consult.comS U B S C R I B E O N - L I N E
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COMING UP
IN FUTURE
ISSUES:Search
in the Middle EastExecutive Search
AssociationsFocus
on Life SciencesIM in Developing
Countries
The International Executive Search MagazineThe International Executive Search Magazine
The Largest Search Firmsin the World - 2004The Largest Search Firmsin the World - 2004
Search in Canada
Talent in the Oil & Gas Sector
Horton International - Establishingthe Right Relationship
Executive Recruitment in Australia
Search in Canada
Talent in the Oil & Gas Sector
Horton International - Establishingthe Right Relationship
Every year search-consult compiles the ranking of The Largest Search Firms in theWorld and in this issue we are sharing our recent findings with you. Most analysisof the size and importance of search firms use revenues as the basis for the research.At search-consult, we believe this approach is flawed; issues such as exchange ratesand cross-charging mean that these numbers prove little. Therefore, we take theapproach of measuring the largest firms on the basis of office locations. Criteriafor inclusion are as follows: each office must provide a retained search service thatis responsible for at least 51% of its revenue and must have at least one full timeemployee and a “local” telephone number. Paul McMahon, former COO of The AmropHever Group and former independent consultant on Executive Search networkissues, in his article on page 9 that accompanies our research, is providingan in-depth analysis of factors that helped search firms survive and even growduring the tough times, and a way forward to succeed in an increasingly competitivemarketplace.
In every issue of search-consult we focus on the Executive Search industry in adifferent region – this time we focus on markets in two opposite sides of the world.On page 4, Pilar Gumucio explores the nuances and cultural challenges of conductingsearches in various parts of Canada. On page 22, Peter Waite, Executive Chairmanof Waite InterSearch, uncovers the qualities of Executive Talent in Australia, whileJennifer Grove, Associate in Gerard Daniels Australia, in her article on page 24,examines the trends and movements in the Executive Search industry in Australia.
As the global economy recovers, talent management and strategic partnershipsare becoming vital in the success or failure of a company. search-consult has beentalking to Gerard Dietrich, Chairman of Horton International, about how establishingthe right relationship is paramount for the continued success of his organization.You can read about it on page 20.
And finally, we start the series of articles focusing on specific industries witha closer look at the Oil & Gas Exploration and Production sector. On page 18, StephenSheal and Kevin Davidson of Maxwell Drummond International share the resultsof their recent study into the sector their company specializes in that found“Oil is Not the Only Scarce Resource”. The next issue of search-consult willfocus on Life Sciences.
As always, we hope you will enjoy this issue of search-consult. Your feedbackis greatly appreciated, so please continue to email us [email protected].
For manuscript/ photographic submissions, pleasee-mail our Editorial department or write to theaddress above to obtain author/ photographicguidelines.
search-consult is published by Dillistone SystemsLtd, Calvert House, 5 Calvert Avenue, London, E27JP, United Kingdom and printed by Mr. Bloom Ltd,Sopot, Poland, www.mrbloom.com.pl.All statements, opinions, and expressions are thesole responsibility of the authors and the Publishersreserve the right to amend/alter articles asnecessary. The Publishers cannot be held responsiblefor any loss or damage, however caused, of anymaterials supplied. Any materials supplied maynot always be returned. No part of this publicationmay be reproduced in any format without priorwritten consent of the Publishers.
Chairman & Chief Executive Officerof Christian & Timbers
Brian Sullivan was previously Vice Chairman of Heidrick & Strugglesand prior the founder and CEO of
Sullivan & Company, a financial services search firm
Corey Roberts, Donna Karnal and Georgina Tremayne ofRoberts Management International led the search
Roberts Management International is an executive search firm thatspecializes in recruiting senior level professionals for all areas of the
Human Capital Industry in multiple geographic locations
1 West Street, Suite 2000, New York, NY 10004 Tel 212-217-9964www.rminternational.com
anada, ranked the eighth largesteconomy in the wor ld , i sreputable for its pioneer spirit as
advances in technology and anincreased globalisation of markets arechanging the way bus iness i sconducted. Canada’s economic well-being is tied to many factors, mostno tab ly : the wea l th o f na tura lresources, a diversified industry base,a modern infrastructure and a well-educated workforce that boasts highliving standards and an impressivequality of life.
It is highly integrated with the USeconomy, which absorbs 85% of its
exports. As a result, the United Statesare pivotal for Canada’s continuedgrowth. Moreover, 85% of Canadianslive within about 200 miles from theborder wi th the Uni ted Sta tes ,reinforcing many characterist icscommon with their Southern neighbour.For instance, almost 70% of Canadiansshare the same language, facilitatingan easy and constant exchange ofi n f o r m a t i o n . I n f a c t , w i t h t h eestabl ishment of NAFTA (NorthAmerican Free Trade Agreement), thepercept ion o f one huge Nor thAmerican market has increased theleve ls o f t rade and economic
integration between both countries.According to Carl Lovas, Chairman
of Ray & Berndtson Canada, “Canadamirrors the US, but scaled down to10%. The only exemption is that thepublic sector and non-profits play alarger role in Canada.”
Canada is definitely moving towarda knowledge-based economy as theservice sector accounts for 2/3rds ofthe country ’s output and providesemployment for nearly 3/4th of theworking population. The primarysector continues to play an importantrole in economic activity, as it isresponsible for over 1/4th of the
4 search-consult ISSUE 20 2004
Landof Opportunities
Canada:
By Pilar Gumucio
S E A R C H - M A R K E T R E V I E W
C
Canada:
Landof Opportunities
Margaret
is
S E A R C H - M A R K E T R E V I E W
5ISSUE 20 2004 search-consult
country’s total exports and is the mainsource of income for several provinces.
A COUNTRY WITH DIFFERENTSCENARIOS
Retained execut ive search inCanada is an important part of thebusiness community, being used bythe large multinationals for more than50 years. Now the concept is widelyextended and used in metropolitanareas, such as Toronto, Montreal,Calgary and Vancouver as well as inmore rural areas. It is used in allsectors as clients range from largemultinationals to small start-ups.
Steven Pezim, Founding Partner &Managing Director of The BedfordGroup (which is the Toronto office ofTRANSEARCH) explains that, “Thereare ver y di f ferent scenar ios inexecutive search. There is a top tier,based in Toron to tha t i s ver ycompetitive and has an internationalreach. In fact, Toronto is what drivesCanada because there is a highconcentration of companies as theheadquarters of multinationals andmid-tier companies operate in thisarea.”
According To Carl Lovas, “While inthe Greater Toronto area, 40-50% of thepopulation works here as 70% of allbusiness operates from this highlydiversified economic hub,
Canada hasa regionally broadbased economywith key centres in Vancouver, Calgary,Ottawa, Montrealand Halifax.”
As a result, virtually all sectors areimportant as all the large global searchfirms have offices in Toronto. Someprefer to operate nationwide from here.Meanwhile, others have openedadditional offices in select cities to beable to offer their clients a better
service. For instance, Ray & Berndtsonhas chosen to open 6 o f f icesthroughout Canada, and as such, aimsto offer clients the necessary expertise,resources and reach to attain the bestavailable talent.
Then there are search firms such asArmstrong Day International, locatedin Manitoba. According to SearchPractice Leader Paul Croteau, “Thereare only two national search firms withoffices in Manitoba, as most of thenational firms see Winnipeg as toosmall a market to warrant an office.Most of our clients, however, prefer towork with local consultants. Having alocal presence provides clients withthe options of working with consultantswho really understand the Winnipegmarketplace and can successfully sellit to out of province candidates.”
“What differs is the size and industryof the client,” states Carl Lovas. “Forexample, in the West clients are innatural resources and the energys e c t o r s . Q u é b e c i s s t r o n g i naerospace, pharmacy and technology.Maritime is also growing.”
Michael Stern, President of MichaelS tern Associa tes , repor ts tha t ,“Currently there are some companieslooking to expand their operations intoMontreal. Therefore they are lookingfor French-speaking executives whocan lead their companies’ expansionsinto Québec.”
S o m e o f t h e c l i e n t s a r emultinationals looking to open an officein Québec. The majority are Canadiancompanies that previously were notinterested in exploring their options inthis province, but are now looking togain a competitive edge.
THE BILINGUAL FACTORIt is important to highlight that
Québec is a unique marketplace andtherefore, it is not just the languagethat differs. Companies venturing intoQuébec today should be well awareof the linguistic, social and culturalchallenges that lay ahead.
Carl Lovas, Steven Pezim andMichael Stern all describe that, whenexecuting a search assignment in this
area, their firms take into account thebilingual and cultural factors required.
Jean Gaudry, Partner of Québec-based GSL Executive Search, statesthat, “Many search firms that operatefrom Toronto or the US do not fullyunderstand the business culture” norhave “the sufficient local knowledgeto select outstanding talent for thisprovince.”
Moreover, there is the factor ofbilingualism. Almost 70% of Canadiansare purely English-speakers while15%speaks only French; but these forma majori ty in Québec, which isCanada’s second-largest and second-most-populous province. Within thiscontext, it is important that searchconsultants and clients understand thata French-speaking execut ive isimperative to enhance their businessesin Québec.
Jean Gaudry reports, “It is extremelyr a r e t o f i n d E n g l i s h - s p e a k i n gCanadians that speak French properlyto work in French. The majority ofFrench-speaking executives speakvery good English and can and dowork in English out of necessity.”
What prospects do French-speakingcandidates have outside of thisprovince? According to Jean Gaudry,“Bilingualism is for the most part a one-way affair in Canada”. Most English-speaking Canadians that speak Frenchas a second language are perceivedto add value, and therefore, theiropportunities for placements withinand outside of Canada are greatlyenhanced. Meanwhi le , French-speaking Canadians that speak Englishas a second language are not fullyappreciated outside of Québec.Nevertheless, he admits that as a newgeneration of executives take over,they are giving these candidates moreopportunities to prove their worth.
M e a n w h i l e , i n s o m e o t h e rp r o v i n c e s , s u c h a s M a n i t o b a ,bilingualism is not an obligatoryrequirement. Paul Croteau comments,“We are not often called upon to searchspecifically for bilingual candidates.When that is a requirement for a role,it can be a real challenge to find
Margaret
to
S E A R C H - M A R K E T R E V I E W
6 search-consult ISSUE 20 2004
suitable candidates. Many of ourcandidates are not bilingual. Thefurther East we search, the morebilingual candidates we find.”
Canada is a huge country and evena m o n g t h e E n g l i s h - s p e a k i n gprovinces, there are significant culturaldifferences that affect the way businessis conducted and must be taken intoaccount when carrying out a searchassignment.
Carl Lovas describes, “ thesedifferences are similar to those thatpresent themselves between New Yorkand California in the US.”
Fo r S t e v e n Pe z i m , “C u l t u r a ldifferences must be taken into account,but in the end, the execution ofexecu t i ve search i s the sameeverywhere as being able to deliverresults is what really counts.”
A BRIGHT HORIZON
Despi te the recent economicrecession, there is much optimism forCanada’s growth prospects.
Carl Lovas explains, “The state ofthe market reflects the global trendsas the industry is stabilizing and thedemand for our services picks up.”
According to Steven Pezim, “It hasnever been busier than now. We arehiring staff and we are continuing totake market share based on good work
and perfecting a new executive searchmodel.”
Michael Stern describes howcompanies’ confidence levels arereturning. “Companies that have beensitting on the fence for months are atlast going into action, launchingambitious searches for new seniorexecutives. They are not just replacingpeople who have le f t , but arebeginning to create new positions tojump-start growth.”
Steven Pezim believes that,
“There is a greater
impact in technologyand this is tricklingdown in all industries,impacting everyfacet of business.”
In fact, in Canada the most dynamicindustries in executive search arec u r r e n t l y i n : t e c h n o l o g y a n dcommunications, pharmaceutical,h e a l t h c a r e , n a t u r a l r e s o u r c e s ,consumer and retail.
Carl Lovas would add the publicsector as an important area since ahigh percentage of senior rankingofficials are retiring and therefore, thedemand for recruiting for those postsis increasing.
BEYOND THE FRONTIERSAlthough the exact amount of cross-
border searches varies greatly fromfirm to firm, what is evident is that theamount of cross-border searches inCanada is increasing.
Steven Pezim and Carl Lovasexplain how their search f i rmsconduct a high percentage of cross-border searches within differentregions in Canada. Within this context,Carl Lovas differentiates betweenconducting national searches andregional searches, both evenlydistributed.
When executing international cross-border searches, all the consultantsinterviewed informed search-consultthat they source primarily from the US,then followed by Europe – mainly fromthe UK, Germany and France - and thenAsia.
Michael Stern explains that theamount of international cross-bordersearches is increasing as globalizationintensifies. In fact, all the search firmsboasted local knowledge with aninternational alliance as key elementsthat improve their resources and theircapabilities to service their clientsbetter.
THE BRAIN DRAINSteven Pezim explains that with
globalization gaining ground, “Globalexperience is an important requisiteto further an executive’s career. As aresult, there are many Canadianexecutives going abroad, especiallyto the US since generally they arebetter paid.”
Our research indicates that there isa flow to the South, a brain drain ast o p t a l e n t i s l u r e d b y m o r eopportunities, higher pay and lowertaxes. Nevertheless, there is alsoevidence that the brain drain is alsobeginning to flow in the oppositedirection as well.
Steven Pezim reports how, “ManyCanadian companies are attractingand recruiting US candidates thatcame to Canada as par t o f anassignment in a US multinational andhave been persuaded to remain inCanada because there is more of awork-life balance here.”
Moreover, Michael Stern describeshow there is an increasing amount ofCanadian expats that are returningbecause after September 11th manyexecut ives pr ior i t i zed more o fa work-life balance and believe thatCanada offers executives a betterchoice.
Although the tax level is higher inCanada, Jean Gaudr y explains ,“Companies are structuring theremuneration in such a way that thisdifference is minimized.”
S E A R C H -
6 search-consult ISSUE 20 2004
Michael Stern
S E A R C H - M A R K E T R E V I E W
7ISSUE 20 2004 search-consult
THE WAR FOR TALENT:IGNITING THE FLAME
All the consultants interviewedreported on how companies are, onceagain, prioritizing top talent as a meansto gain a competitive edge.
Michae l S te rn exp la ins , “Ascompanies ramp up their investmentst o a c h i e v e h i g h e r l e v e l s o fperformance, they need to regain theirc o m p e t i t i v e e d g e i n t e r m s o frecruiting, retaining and developinghigh calibre employees. A global warfor talent will re-emerge marking areturn to the hiring mode as searchfirms compete aggressively to find thebest talent.”
Carl Lovas reports that as
”The economy recovers,
the war for talentissue will havea fuller impact.”
S t e v e n Pe z i m r e v e a l s t h a t ,“Companies are paying more attentionto, and valuing, leadership. Clients aremore enlightened and recognize thisimportance. Many companies arenurturing, investing in the individualas a precious resource and not acommodity.”
Carl Lovas describes how clientsare “evolving from occasional to fullservice clients. They know howto discriminate better and have a bettersense of value. Candidates area lso growing and evo lv ing insophistication as it relates to managingtheir careers. They are increasing theirexpectations and demanding goodservice.”
The stakes for recruiting the rightleaders are high and going higher asorganizations are demanding thats e n i o r e x e c u t i v e s a d d v a l u eimmediately. In fact, the average tenureof an executive within an organizationis becoming increasingly short.
This coincides with the retirementof the baby boom as many companies
are increasing the pressure to replacethese executives.
Michael Stern informs,
“A client previously
would invest 6-12 months
in an executivebefore expectingtangible results,now it’s importantthat they showresults immediately.”
The competit ion is so intensethat more companies are placingcounteroffers. Within this context,S t e v e n P e z i m r e p o r t s h o whe, as an exper ienced searchconsultant, makes sure the offerpresented is “realistic to expectations.O u r f i r m m a k e s u r e t h a t t h eclient can place a great offer the firsttime.”
As a result, executive search firmsare pressed to reduce cycle times, becrea t ive and innova t ive , showexpertise, be accountable, better theirservices and deliver outstandingresults.
Steven Pezim comments, “We wantto sell a quality service, we arereinventing the search process,perform better searches, minimize therisks of a wrong hire and deliverresults.”
Michael Stern is so confident in hisfirm’s work that they offer a freereplacement guarantee in writing. “Wehave been asked to honour thisguarantee on only three occasions overour 20-year history — this recordattests to our ability to completesearches to our cl ients ' last ingsatisfaction.”
As a result, executive search firmsare offering cutting edge approachesto ta lent acquis i t ion, providingassessment tools, individual and team
assessments, succession planning andother complementary services thathelp deliver superior leadershipsolutions to clients.
Carl Lovas explains how “It is vitalto create the appropriate resourcebase to be able to service clients.As the largest search firm in Canada,we use all our collective resourcesand expertise to serve clients andgain market share and thus, enhanceboth our clients and our searchfirm’s abilities to become leaders inour respective industries.”
THE NEXT GOLD RUSHCanada is a very diverse and
dynamic market, creating numerousopportunities for headhunters. As theeconomy continues to improve andexecutive search further develops,the level of competition will intensify.Canada’s pioneer spirit will permitleading search firms to be creative andinnovative, setting higher qualitys tandards and ident i fy ing newopportunities for growth as theyprepare for the next gold rush.
www.search-consult.com
For more information, contact:
Web: www.search-consult.com
Carl Lovas
Margaret
it
Boyden
Boyden...IndustryPractice specialistssince 1946
• Board Search
• Management Assessment
• Interim Management
• Financial Ser vices
• Global Risk Management & Security
• Technology
• Human Resources
• Life Sciences
• Energy & Natural Resources
• Public Sector/Government
• Not for Profit
• Automotive
• E-Business
• Consumer Goods
• Transpor tation & Hospitality
• Professional & Business Ser vices
global executive search
Africa Asia/Pacific Europe Nor th America South America
62 Offices in over 40 countries and continuing to grow…visit a Boyden officenearest you via our website, www.boyden.com.
S E A R C H - F E A T U R E
9ISSUE 20 2004 search-consult
t one t ime i t was easy tocategorize Executive Searchfirms as either an integrated
firm or a network. Then two of theintegrated f irms, Korn/Ferry andHeidrick & Struggles, became publiccompanies and commenced acquiringsmaller private search firms. TMP -also a public company - appeared,made substantial acquisitions, and thendisappeared. Although much attentionhas been focused on this, the finalchapter is yet to be written.
Q u i e t l y t h e n e t w o r k s w e r ethemselves changing. Raided of theirlarger members by the publicly tradedsearch firms, buffeted by the worstrecession in the industry, one wouldexpect many Execut ive Searchnetworks would disappear. None have,and these tables i l lustrate theirresiliency as they can adapt andchange quickly. Change continues,but more is necessary if networks areto become a major force in theExecutive Search profession.
RECENT CHANGES
Smaller networks have changed themost. Three years ago, IIC adopted agrowth strategy in the midst of theindustry downturn. “Jim Conroy was
a good leader", said Urs Wüthrich,Chairman of IIC. “Jim established asystematic process to identify qualityfirms which would fit our culture",Wüthrich continued. Increasing themembership by 50% was the visiblechange, but other changes occurredas well. During the industry downturn,IIC outsourced the development of awebsite and an intranet to a firm inCalgary which had no experience insearch, but did have a thorough
understanding how appropriatetechnology could support internalcommunications in widely dispersedoperations.
“This has become a virtual homefor our members. I ask them tocontribute at least one article per yearon developments in their country orpractice groups, and our members canuse this when talking to potentialclients", said Wüthrich. Brian Burke,who developed this for IIC, said: “Thissecure intranet is designed to look andfeel like a newspaper. When newinformation is posted, a broadcaste-mail goes to all employees of allmember firms. Especially attractiveare two features, new and activetransborder assignments...(so thateveryone can see the scope and detailof network activity)...and a continuouslyupdated regional client list whichallows members to check their ownsearch assignments against those ofIIC partner firms.”
IIC was not alone in growing theirnetwork in troubling times. EMAadded three new firms in Canadaduring 2003 to bring their total to fiveand recently admitted a new memberin India. Chairman George Maddenof Vancouver-based Pinton Forrest &
Paul McMahon
By Paul McMahon
TheLargestSearch Firms
in the World - 2004
A
Madden is in discussion with severalUS search firms to complement theexisting seven US members.
S tan ton Chase subs tan t ia l l yincreased its global footprint, adding16 offices with the admission of Bó L¯Associates in Hong Kong and WardHowell Euroselect in Vienna.
Thirteen firms met outside Londonin May 2002 to form a new network, TheTaplow Group. Several firms hadwithdrawn from another consortium andknew what they did not want. TerryHannock, Chief Operation Officer ofTaplow and a founder of Flynn, Hannockin Hartford, Connecticut spent a greatdeal of time constructing a constitutionthat would encourage collegiality, alloweach firm to maintain its independence,keep overheads to a minimum and offera full range of human capital services. “We must have the formula right as wehave attracted 40 high quality firms,including a dozen in the US. GeorgeGriffith and his team have done anoutstanding job of membershipdevelopment.” That is no meanaccomplishment in a down market.
But adding up revenues of memberfirms, putting more flags on the map,and holding annual conferences inexotic locations matters l i t t le tomultinational companies and is anunconvincing proposition to many inthe US search community.
COMPETING FOR US CLIENTS
“I am not aware that
any of my clients
have retaineda search networkas a preferredprovider",
sa id David Lord, founder o fExecutive Search Information Services,a specialized consultancy designed toassist major multinationals in engagingthe right executive search consultant. “ To be success fu l w i th ma jor
multinationals a search network must:
• Empower an account manager withthe authority to make things happenin a network environment;
• Demonstrate a consistency ofp r o c e s s e s a n d p r o c e d u r e sworldwide, and;
• Possess a brand that will attract atalented candidate pool.”
You should not dismiss this as oneman’s opinion and point to work yourfirm or network has obtained frommultinational clients. David is thefaci l i ta tor for Execut ive SearchInformation Exchange (ESIX), “…anetwork (of over 60) corporate talentofficers advancing best practices inexecutive recruiting worldwide.” Thisgroup meets 11 times a year and Davidhas the best vantage point to commenton the Executive Search profession.
On the agenda at every searchnetwork meeting I have attended hasbeen business development with majormultinationals. David has offered clearadvice on what is necessary topenetrate this large, primarily USmarket. But only those networkswilling to cede sovereignty to anaccount manager, take their ownnames off the door in order to createa brand, and willing to adopt a commonway to conduct searches and interactwith clients can hope to crack thismarket.
Not surprisingly, the view is differentoutside the US.
Networks have had more successpenetrating major mult inationalsheadquartered outside the US. StantonChase recently announced a preferredprovider agreement with Novartis andinvited them to address all membersat their recent meeting in Vienna. TedMuendel, Stanton Chase Chairman,said, “We are very proud to be selectedby Novartis as one of four preferredproviders. This will be a challenge toperform to their demanding standards,but it will be good for our network.” Several search networks report having
p e r f o r m e d m u l t i p l e r e p e a tengagements for European-basedmultinationals. “Three years ago westarted with two key accounts", saidDan Parker, Chairman of the 2004Amrop Hever annual conference. “Today we have 20 key accountsworldwide with significant cross-border activity and that is a majorbenefit of Amrop Hever membership.”
Granted, these are not preferredprovider agreements, but they are away to leverage the multiple locationsof a network to make the whole greaterthan the sum of the parts.
COMPETING FOR US MEMBERS
The US search market representsapproximately one half of the worldwidemarket, yet, except for Accord Group,not a single network derives half theirrevenues from the US.
Why have networks not beensuccessful at tract ing US searchconsultants?
• “I am looking for a network whichwill help me improve my business. I want to see metrics on how myoperations compare with searchf i rms o f a s imi la r s i ze " , ane x p e r i e n c e d F l o r i d a s e a r c hprofessional told me. “I haven’tfound that yet.”
• A Chicago based consultant said,“In Russell Reynolds I knew thevalues and the culture in each officewas very s imi lar. I could beconfident that when I referred aclient to another office, they wouldreceive exactly the same treatmentthey received in my office. I cannotbe sure of that in a network.” ABoston-based consultant managinga multi-location US firm echoed thissentiment.
• A Bay area consultant who has beenmember of two search networkssaid, “I left the last network becausethey were imposing bureaucracyfrom the secretariat and I could notsee how that was going to help meserve my clients better”
S E A R C H - F E A T U R E
11ISSUE 20 2004 search-consult
search-consult prof i led threeemerging search firms in Issue 18. None mentioned an internationalaffiliation, though all three firms werefounded by individuals who hadworked in in ternat ional searchorganizations.
“Look at allthe boutiques
recently formed bythose leavingthe majorintegratedsearch firms.None found itnecessaryto join a searchnetwork",
said David Lord.
THIS IS NOT JUSTA US PHENOMENON.
• Two young search consultants whoestablished a new firm in London in2002 told me they had both attendedm a n y i n t e r n a t i o n a l n e t w o r kmeetings because their former firmfounded one of the large networks. “We are focused on serving ourc l ien ts , and unt i l a ne tworkcan demonstrate how they will helpus do a better job, we will go italone.”
• An experienced Brussels consultantsaid, “The network model ofgeographic sovereignty is not theway my clients think, nor how I haveorganized my business.”
Fellowship, collegiality and a weakbrand are not enough to attract theseand many other search consultants. There has to be a value propositionthat helps them run their businessesbetter and serve their clients moreeffectively. This may be especiallyimportant now as Janet Jones-Parker ofJones-Parker/Starr, points out. “Only
in the past few days I have beencontacted by four US search firmsenquiring about networks. As theeconomy improves and the searchmarket rebounds, smaller firms areexploring ways they can scale up a bitwithout losing their identity, revenuestream or independence. Most arelooking for a high quality globalboutique.”
A WAY FORWARD
Should Executive Search networksturn their back on the lucrative USsearch markets and the interestingboutique firms popping up all over? No!
McKinsey recently studied 16US-based federations. They definea federation as “…a network of localaffiliates that share a mission, a brand… but are legally independent of oneanother and the national office.” (This sounds very similar to ExecutiveSearch Networks.) McKinsey arguesa f e d e r a t e d s t r u c t u r e w o r k swell in a fragmented market and incertain circumstances is an effective“ … r e s p o n s e t o t h e c l a s s i cm a n a g e m e n t t e n s i o n b e t w e e ncentralization and decentralization.” But only if the federation provides valuein four key areas: brand management,performance improvement, sharedservices, and revenue generation.
Can any network accomplish this? Several can and a few will. But it willtake leadership, determination andfocus. Here are some examples anda few suggestions.
C h r i s C l a r k e , Pr e s i d e n t o fBoyden said “…we hate being calleda network. Our ownership structure isa similar to that of PricewaterhouseCoopers and other large accountingand law firms. Would you call themnetworks?”
Clarke continued, “Our firm iseffective because we have a powerfuland democratically elected Board, towhich I am responsible. This reflectsthe collective views and needs of thewhole worldwide firm and gives us thelegitimacy and authority to ensureintegration.”
TRANSEARCH INT 8 6 28 7 2 51 (41)9 EMA PARTNERS 12 7 26 5 50 (45)
SPENCER STUART 18 5 19 7 1 50 (52)10 THE TAPLOW GROUP 15 6 19 6 46 n/a11 RAY & BERNDSTON 7 4 25 5 41 (41)12 ACCORD GROUP 6 1 21 11 1 40 (32)13 DHR INT 37 37 (38)14 AEA INT SEARCH 5 1 23 6 35 n/a IMD 4 24 7 35 (28) WORLD SEARCH GROUP 13 1 14 6 1 35 (34)15 RUSSELL REYNOLDS 12 2 12 6 32 (31)16 HORTON INT 2 3 20 6 31 (29)17 AT KEARNEY 12 1 12 4 29 (28)18 CFR Consulting 24 2 26 n/a SIGNIUM 4 1 15 6 26 (27)19 NEUMANN INT 23 23 (27)20 ITP WORLWIDE 6 7 7 1 21 (20)21 GLOBE SEARCH GROUP 5 14 1 20 n/a22 HIGHLAND Partners 11 1 3 3 18 (36)23 PENRHYN INT 2 1 10 3 16 (15) TOTAL 286 101 613 216 16 1232 (1104)
NO NAME N AMERICA OTHER AMERICA EUROPE SE ASIA OTHER TOTAL
TABLE 1: Leading firms by number of offices
The Largest Executive Search Firms in the World - 2004.
S E A R C H - F E A T U R E
13ISSUE 20 2004 search-consult
Boyden has many of the elementsfor success:
• Common brand used consistentlyworldwide
• Standardized procedures
• Standards of performance
• Account management role defined,and a Quality assurance program.
This organizational model is differentfrom other groupings of ExecutiveSearch firms.
Richard Boggis-Rolfe, Odgers Ray& Berndtson’s CEO also has a differentmodel. He owns both the Odgers andthe Ray & Berndtson brands, and is
quietly re-establishing Ray & Berndtsonin the US market while scouting theAsian market. Many will challenge thevalue of the Ray & Berndtson brand inthe US having slipped from the 10thlargest US search practice in 2000 tovirtually non existent today. Don’t beso quick to dismiss this move. Richard’saccomplishments in London sinceacquiring the tired Odgers brand a fewyears ago are to be admired. TodayOdgers r ight fu l ly boasts majorcompleted searches for BBC, FTSE andthe Welcome Trust and many othercoveted clients. If he can repeat thisin the US market, his purchase of theRay & Berndtson brand could be seenin retrospect as a very canny move. Watch especially if Richard re-buildsand re-brands the US operation, Odgers
Ray & Berndtson; then convinces otherRay & Berndtson entities to follow.
Neither of these organizationalmodels is necessarily the answer forlarger firms. More than one multi-officefirm complained privately that theirinterests do not align with those ofsmaller, single office firms in theirnetworks. Many are seeking a new wayto compete internationally with thelarger integrated firms and some areforming new networks.
John Kins of Cook Associates inChicago is one who did just that. Heexplained, “Our first search networkwas composed of very nice individuals,fine professionals actually, but as amulti-office firm we needed to knowo u r c l i e n t s w o u l d b e s e r v e dconsistently when we referred them toanother firm. We found that in formingAEA in 2001. Alexander Hughesheadquartered in Paris with 21 offices,Michael Stern in Canada and ExecutiveAccess with five offices in Asia.”
Recently, Christian & Timbers, the10th largest US search firm with 14offices announced a strategic alliancewith Renoir Partners, a London-basedboutique firm focused exclusively onfast-growth technology companies. Renoir rebrands as Renoir Christian &Timbers. This appears to mark the endof Christian & Timbers internationalexpansion as Renoir absorbs theirLondon office and both firms committo working through the Christian &Timbers Alliance. But what it alsomarks is the formation of a groupfocused on one industry, technology.
NEXT STEPS
First, decide what you want. If it iscollegiality, friendship and the abilityto assist the occasional client with theirneed for talent in another area,continue your present course and keepyour central costs low.
If on the other hand, your vision isto create a formidable competitor thenI suggest you:
• Adopt a single brand
• Synchronize processes andprocedures
1 DHR INT 37 372 KORN / FERRY INT 23 10 24 15 1 733 SPENCER STUART 18 5 19 7 1 504 HEIDRICK & STRUGGLES 17 7 22 11 1 585 BOYDEN 16 6 32 16 1 716 THE TAPLOW GROUP 15 6 19 6 467 STANTON CHASE INT 14 8 16 18 56
NO NAME N AMERICA OTHER AMERICA EUROPE SE ASIA OTHER TOTAL
Table 2: DHR International leads in North America
1 THE AMROP HEVER GROUP 5 12 44 15 3 792 KORN / FERRY INT 23 10 24 15 1 733 STANTON CHASE INT 14 8 16 18 564 EMA PARTNERS 12 7 26 5 50
NO NAME N AMERICA OTHER AMERICA EUROPE SE ASIA OTHER TOTAL
Table 5: Stanton Chase leads in Asia Pacific Region
Leading Executive Search Firms in Respective Regions.
Stanton Chase International providesexecutive search, organisational planningand recruitment consulting services. Ourseasoned consultants combine local insightwith specific industry expertise in eightdynamic sectors of the global economy:
Established in 1990, Stanton ChaseInternational has grown consistently to beranked among the top 1% of globalexecutive search firms.Our growth hasbeen built on solid performance, consistentdelivery and quality service, withlongstanding clients.Our forward thinking and long-termdedication to our clients set us apart. Nomatter where you are and whatever theneed, we can work with you to provideexecutive search and leadership capitalsolutions to foster the success of yourorganisation.To speak with an industry practice searchspecialist or find a location near you, go towww.stantonchase.com
www.stantonchase.com
56 offices in 36 countries
North America Latin America Europe/Middle East/Africa Asia /Pacific
Working in partnership with theleaders of today and tomorrow
• Board and Corporate Governance
• Consumer Products &Services
• Financial Services
• Healthcare &Pharmaceuticals
• Manufacturing &Engineering
• Professional Services
• Natural Resources &Energy
• Technology
S E A R C H - F E A T U R E
15ISSUE 20 2004 search-consult
• Choose and implement a commontechnology platform
• Share operating information freelyand copy other members’ goodideas
• Form a group of your most valuedclients, ask their advice, listen to it,implement what makes sense andexplain what you have done andwhy.
Branding will be the most emotionalissue, especially if the founders, whosenames are on the door, are at the table. Once a firm adopts the worldwidebrand, and only uses that name, it ismuch more difficult for them to leavea network and re-establish theirbusiness.
Amrop Hever and Signium are bothaddressing branding. At their annualconference Amrop invited Dick Hellerof the Tom Peters Group to discusshow to build a global brand. There ismovement to adopt a global brand. Ulrich Dade, former Chairman ofAmrop Hever and a senior partner inDelta Management Consultants, theirlarge German member reported, “Wehave told our clients that we will soonoperate as Amrop Hever in Germany. We think it is the right thing for ourpartners and our clients to adopt theglobal brand at this time.”
Former members of Ward Howellcreated a new brand, Signium, in 1999. Members were slow to adopt the newname and even today many membersidentify themselves as former WardHowell. Signium Chairman BerndtPrasuhn intends to change that. “Weare tracking brand awareness intargeted sectors and countries. Todaywe are known primarily as generalistsand we are working on specific marketpositioning as experts.”
US members have frequently beenthe most reluctant to adopt a globalbrand. Alain Tanugi, Chairman ofTRANSEARCH reports a uniquesolution. “We created a differentcategory of members and called them
affiliates. We have been able to attractsix US members, two in Canada, aKorean and an Australian member.”
It is not surprising branding is amajor focus for Amrop Hever, Signiumand TRANSEARCH. Chris Clarkeexplained in this magazine (issue 10)why branding was a key factorin Boyden’s renaissance. Chriscautions that branding alone will nots u f f i c e w i t h o u t s t a n d a r d i z e dprocesses, agreed standards ofperformance, account managementprotocols and recurr ing qual i tyassurance to ensure compliance withthe infrastructure.
A number of companies interviewedfor this article are involved in ITprojects. Most Executive Search clientsare addressing how technology willchange their business.
And if there is a desireto work with multinationalclients on a consistent basis,
they will demandaccess to search statuson a real-time basis. No search networkcan afford to bewithout that if theychoose to compete in themultinational market.
The publishers of this magazineand their competitors offer provensoftware to manage the search processsuitable to both large and small firms.
David Maister consistently urgesprofessional firms to listen to theirclients. Few search firms do in a formalway.
R o g e r Ke n n y o f B o a r d r o o mConsultants does. Their advisoryboard is a virtual Who’s Who ofcorporate America.
Other members of the GovernanceConsulting Network he launched aredeveloping similar advisory boards inEurope. Any search network candevelop an international advisoryboard which will bring insight andchallenges for a very small investmentof time and money.
FINAL THOUGHT
For those who argue change is notnecessary, benefits will not justify theeffort, this will never work in thisfragmented industry, or we are not likeaccountants or lawyers, I suggest youlook at a modern day guild, Tatum CFOPartners. In 8 years they have growntheir firm from a single location,Atlanta, to 29 locations, and theirpartner complement has grown from10 to almost 500. They may be thelargest US provider of temporarymanagement in their sector. Theirsecrets to success: consistent brand,client focus, information freely shared,leads shared whi le maintainingcollegiality. Few search firms candemonstrate that track record in thepast decade!
Data Source:The majority of information in this
survey has been provided by the searchfirms, and a sample of this has beenvalidated. In some cases, firms have beenunwill ing/unable to provide theinformation we solicited, in which casesearch-consult staff has undertakenresearch directly.
Therefore, while every effort has beenmade to ensure that all the information isaccurate, no guarantee can be made.
The tables contain data valid on August31, 2004. These tables only contain firmsexclusively involved in Executive Search.Other organizations l ike KPMG,Cornerstone etc, which may doSearch along other services, are notincluded.
www.search-consult.com
For more information, contact:
Web: www.search-consult.com
Advertise your Executive Search positions atwww.search-consult.com/talentfor as little as US$120 / £80 / C120 per weekand be exposed to over 18,000Search Professionals across the world. There are a number of different advertising options availableto suit your needs and budget - from magazine advertising to ourmonthly email newswire.To learn more, simply email Yann Le Leyour [email protected] call him TODAY on +44 (0)20 7749 6102.
Helping you develop your Search Business
"Your Next Fee!"As the Search industry returnsto growth, do you needto grow your team?search-consult/talent offers youa unique advertisingopportunity to targetthe search professionals thatyour business needs to grow.
S E A R C H - T E C H N O L O G Y
15ISSUE 20 2004 search-consult
ver recent issues of search-consult, I have looked at howIT can have a positive impact on
the performance of a search firm. Inthis issue, however, I’d like to take aslight tangent and talk about theimportance of selecting the correctsupplier.
Initially, however, it is important thatI admit to a degree of bias. search-consult magazine is published byDillistone Systems and your author isPresident of that firm. Having said that,I’ll endeavor to focus on generalpoin ters and wi l l t r y to avoidmentioning that more search firmsuse our FILEFINDER system than anyother product. Well, not too often,anyway.
Your software system will be abusiness critical application. If youhave problems – whether during, orafter implementation – you need toknow that your supplier will be bothwilling and able to resolve those issuesbefore they impact on your business.Here are some questions you may wishto ask potential suppliers:
Does the supplier understand mybusiness?
Are you prepared to be trained bya software trainer who spends most ofhis or her time training in a businessprocess that is completely different toyours? Post-implementation, do youwant to spend an excessive amount oftime talking to support staff who need
to have your business processesexplained to them?
OK, so they understand mybusiness. Will they be around tosupport me in 2 years’ time?
The software industry is transient. Firms come and go. At DillistoneSystems, we regularly hear from clientswith applications that are no longersupported – and who find themselveshaving to switch systems and suppliersat short notice. Check your supplierhas a client base. Ask how longthey’ve been in business. Check thatit is profitable and has a decentbalance sheet.
OK, they will be around in 2 years’time. What about 2 hours’ time?
This may seem like an odd question,but it is vitally important. How is thesupplier able to support the hours thatyou work? If the client boasts “out-of-hours” service, test it – ask your salesrepresentative for an “out-of-hours”support number/e-mail address andcall it, unannounced. If you don’t geta call back for 24 hours, you shouldprobably ask yourself how you wouldhandle 24 hours of system downtime! Keep in mind that, whatever the pre-sales spiel, if you are a “typical” 7-usersearch firm, the supplier is not likelyto start a night shift “just for you!”
Is my system “future-proof”?
Your software system is a long-term
investment. You need to be sure thatthe system wil l cont inue to beupgraded on a regular basis, andthat your business will be able toboth influence and take advantageof these upgrades. Be wary offirms with one very large client – youmay find that development is overlybiased in favor of that firm. On whatbasis are upgrades provided? Howmuch do they cos t? Are theymandatory? Don’t allow your businessto be signed up to a bottomless pit ofinvestment!
In summary, the evaluation of thesoftware supplier is just as importantas the selection of the software productitself. I would strongly suggest thatyou take the time to do your “duediligence” but, if you can’t, I have onemore suggestion….. take refuge withthe crowd and go with the marketleaders (and we can be contacted [email protected]!).
Dillistone Systems is the leading
global supplier of software to thesearch industry. Offices in the USA,UK, Germany and Australia providesupport to search f i rms in 42countries. Full contact information maybe found at www.dillistone.com.
How to ensure your search firm is not tied to a sinking ship….
O
www.search-consult.com
For more information, contact:
Web: www.dillistone.com
By Jason Starr
forThe Searcha Supplier
S E A R C H - I N D U S T R Y F O C U S
18 search-consult ISSUE 20 2004
a x w e l l D r u m m o n dInternational is one of thefastest growing specialist Oil
and Gas sector Search and Selectionfirms in Europe and North America.The firm has an international presencewith offices in Houston (US), Aberdeen(Scotland) and London (England).
Recently the firm conducted aninternational study into the Oil and GasExploration and Production (E&P)sector.
search-consult caught up withMaxwell Drummond’s Houston boss,Kevin Davidson, and UK BusinessDevelopment Manager, Stephen Sheal,to discuss the implications of theirfindings for their own business strategyand the prospects for their business.
search-consult - Your study found
that major E&P companies are
beginning to compete aggressively
to find and retain highly qualified
and experienced professionals. Why
is this trend significant?
Kevin Davidson – “This is aseemingly innocuous finding but thetrend is significant because historicallyE&P companies have had a larger poolof talent from which to draw. Now theymust work harder to attract and retainthe best people and we believe thatthis will ultimately create a tremendousbottom line performance differentialwithin the industry. One area in whichE&P firms will have to work harder isin devising more imaginative hiringpractices and retention strategies.
Those companies that continue to bereactionary in their recruitment andretention practises will find themselvesincreasingly under threat.”
search-consult - There is an
acknowledged structural labour
market threat within the E&P sector,
a so called ‘demographic time-
bomb’. The oil and gas industry
workforce is ageing and many other
surveys point to an average age of
E&P staff in their late forties. Do your
findings suppor t this general
perception? Stephen Sheal – “Absolutely. Our
survey shows that amongst drilling andcomplet ion profess ionals , f romgraduate trainees to drilling managers,average industry experience isapproximately 20 years. The reality isthat the E&P labour market isstructurally weak in the 25-40 agegroup, with shortages across alldisciplines. Our conclusions are onlyreinforced by the age profile statisticsproduced by the Society of PetroleumEngineers (SPE) in 2001, whichconfirmed that only 25% of SPEmembership is less than 40 years ofage.”
Kevin Davidson – “Furthermore, ifyou work on the basis of an averageretirement age in the industry of 55,it’s been estimated that 13% of thecurrent workforce will have retired by2007 and 33% by 2012. The intake ofengineers into US and WesternEuropean universities is also down and
individuals on average now remainwith employers for a much shorterperiod of time.”
search-consult - What are the
immediate implications of these
trends?
Stephen Sheal – ”Well, the long-term trends are well known but theshort-term effect we have identified isthe emergence of a highly f luidinternational labour market with themost mobile people in the sectortypically between the ages of 30 and40. This group is not only the mostm o b i l e b u t a l s o t h e m o s tentrepreneurial and as such the mostvulnerable to ‘poaching’ from allgeographical locations, across alldisciplines and from all other corporatebodies.”
Kevin Davidson – “True, the E&Psector has always been an internationalbusiness, but the last 20 years has seenthe rise of the sophisticated, globallyaware and h igh ly mobi le E&Pprofessional. E&P Majors are currentlyoperating in some forty-six countriesaround the globe and they requirehighly mobile E&P professionals tomove to new oil provinces, often atshort notice. Within the 30 to 40 agerange, E&P professionals who are keento move internationally are increasinglybecoming targets for predatorcompanies . E&P pro fess iona lsdisplaying internationally attractiveattributes such as technical skills,internat ional mobil i ty, l inguist ic
M
Oil & Gas:Oil is Not the Only Scarce Resource
S E A R C H - I N D U S T R Y F O C U S
19ISSUE 20 2004 search-consult
capabilities, cultural awareness, localknowledge and experience are highlyvaluable and must be considered inany retention strategy.”
search-consult - Are there any
particular skills that are currently
in global demand?
Stephen Sheal – “Yes, there are.Oil and gas fields that once wereconsidered out of reach becauseof prohibitive development costsor excessive water depth can nowbe developed, thanks mainly tosignificant technological advances inthe field of drilling and deepwaterproduction techniques. Deepwater,mature and margina l f ie lds inextremely remote locations requiree x t r e m e l y w e l l q u a l i f i e d a n dexperienced E&P professionals tomake them successful. There is also apremium for individuals with mixedskills, most notably where there is ac o m b i n a t i o n o f t e c h n i c a l a n dc o m m e r c i a l o r m a n a g e m e n tcompetence. As a result, any E&Pprofessional with skills in the new andemerging technologies associated withdeepwater E&P or any of the ‘newfront iers ’ wi l l be vulnerable topoaching by competitors.”
Kevin Davidson – ”All this hasbeen exacerbated by the rise of theI n d e p e n d e n t E & P C o m p a n i e soperating internationally. Although noty e t f u l l g l o b a l p l a y e r s , t h e s ecompanies have moved into attractivemature and frontier oi l and gasprovinces around the world and arenow driving change in the E&P labourmarket. This is mainly because theyc a n o f t e n o f f e r f l e x i b i l i t y, a nentrepreneurial culture and superiort e r m s , c o n d i t i o n s ( e i t h e r i nremuneration or equity participation)and career progression prospects.”
Stephen Sheal – ”…And the entryof Independent E&P companiesinto the market is significant, as apartfrom improved remuneration, we havefound that E&P professionals want the
chance to be more directly connectedto the top of the company. They wantto play a key role and make adifference to the whole firm - all at anearlier age.”
Kevin Davidson – “Plus, over thepast decade, having super talentedstaff has become as important ashaving sufficient capital, a clearstrategy, or access to proven reserves.Under today ’s market conditions,noth ing is more s t ra tegic thanrecruiting and retaining talented E&Pprofessionals. When you think abouttraditionally recognised sources ofcompetitive advantage that companieshave, capital is accessible today forviable projects, strategies can becopied and technology is available onthe open market . So for manycompanies, that means that people arenow the only true source of competitiveadvantage.”
search-consult – So, given all this,
what advice are you giving to your
clients?
Kevin Davidson – “We are advisingall our clients not to be complacentabout retaining their key 30 to 40 yearold technical and managerial talentbecause if they are, they risk losingtheir competitive advantage.”
Stephen Sheal – “ We a lsoencourage clients to spend a lot ofenergy attracting, developing andretaining super talented staff within thespecific groups we have identified.”
search-consult – What trends can
you see emerging in your own
business sector?
K e v i n D a v i d s o n – ” T h e s edemographic changes and skillss h o r t a g e t r e n d s w i l l h a v e a nincreasingly negative impact on themore parochial search and selectionfirms. Those search firms that arep r e d o m i n a t e l y s i n g l e m a r k e tspecialists will find themselves unableto meet the needs of clients thatoperate globally. Maxwell Drummondhas responded to the challenge bygrowing internationally and nowoperates on a global scale. Today, thefirm is arguably one of the largestinternational search and selectionconsultancies operating in the oil andgas sector.”
Stephen Sheal is UK Business
Development Manager and holds aBA in Communication Studies and aMasters Degree in InternationalM a r k e t i n g . H e h a s 1 5 y e a r se x p e r i e n c e o f i m p l e m e n t i n ginnovative marketing strategies in theoil and gas pipeline engineering,software marketing and business-to-business consultancy sectors.
Kevin Davidson is Vice President(North America) and holds a BA(Honours) in Business Studies and aMasters in Economics. He has 10 yearsexperience in international oil and gasr e s e a r c h a n d c o n s u l t i n g a n dp r e v i o u s l y m a n a g e d M a x w e l lDrummond International's EasternHemisphere Operations.
www.search-consult.com
For more information, contact:
Web: www.maxwell-drummond.com
Kevin Davidson
S E A R C H - N E T W O R K
20 search-consult ISSUE 20 2004
s the global economy recovers, talentmanagement and strategicpartnerships are becoming vital in the
success or failure of a company.Gerard Dietrich, the current Chairman of
Horton International, explains to search-consult how “establishing the rightrelationship is paramount” for the continuedsuccess of his organization, clients as wellas candidates.
A LEADING GLOBAL FIRM
From the moment that Horton Internationalwas created in the early 1990's this firm haseffectively built its reputation around sourcinglong-term strategic relationships. In fact, withmore than 15 years in business, HortonInternational has developed from 7 foundingmember firms to currently comprising 30offices in Europe, the Americas and AsiaPacific.
He describes how Horton Internationalwas modelled on the global accounting firmswith separate partners in each country owningtheir local operation and reporting throughregional management committees to a globalexecutive.
“Each partner knows and trusts eachother. Horton International holds regionalmeetings twice a year and global meetingsannually. Thus mutual knowledge and respectunderpins everything we do,” said Dietrich.
In fact, the Chairman of HortonInternational strongly believes that this firm’s“Partners and Consultants (manyof whom come from the Big 5 search firms),combined with a truly effective global
capability, provide the right platform fordelivering consistent quality across bordersfor our clients.”
“A distinguishing feature is that in all thecountries in which we have offices, clientsand candidates recognise the HortonInternational name. The firm operatesas a single, flexible organisation, not as anetwork of affiliated independents,” statesDietrich.
Moreover, Horton has established astrategic alliance with Neumann Partners asa means to extend this organisation’s globaloffering into Central & Eastern Europe andthe former Soviet Union. Dietrich reports,“This alliance obviously helps us serve ourclients better and provides more jobopportunities for candidates.”
GREATER COMMITMENTWITH THE CLIENT
Horton International is very careful inselecting its clients, and through the years,has acquired many meaningful and long-standing client relationships. Dietrich explainsthat “within those relationships we can bemore flexible than the very large firms andoffer our clients greater commitment and anexceptionally high completion rate.”
Through the ongoing research conductedin support of its core executive searchfunction, Horton International has developeda wealth of intelligence about numerousindustries and markets.
According to Dietrich, for example, “Ourclients can leverage this knowledge base toidentify merger and acquisition targets, findstrategic partners, select distributors, andacquire agents. We also provide backgroundinformation on key executives, furnishcompetitive data, perform benchmarking,and offer market-specific compensationadvice. We help assess individuals' suitabilityfor particular assignments - for example, atransition from a state-owned enterprise tothe private sector.”
Horton International can also helporganisations develop optimal structures andprocesses for capitalising on emergingopportunities and challenges. “We evaluatethe composition of boards and managementteams, and recommend individual and groupdevelopment plans for achieving long-termbusiness objectives,” states Dietrich.
He explains how this global search firmalso assists organizations with managing
By Pilar Gumucio
A
Establishing the Right Relationship
Gérard Dietrich
HortonInternational
21ISSUE 20 2004 search-consult
talent, both on a corporate and individualbasis. Consultants provide strategic humanresources and organizational consultingservices, and can help clients selectappropriate psychometric tools for assessingcandidates and evaluating them.
Dietrich describes how HortonInternational understands the challenges ofmanaging an enterprise across bordersbecause they deal with this on a daily basis. Some of the key questions Horton Internationalpartners ask themselves, as well as adviceclients include:
• How do we communicate our aims andresolve business issues in an organisationthat encompasses thirty differentnationalities and for most of whom Englishis a second language?
• What is the best form of leadership?• How do we leverage our local strengths
into global solutions for our clients?• How do we improve our processes and
make them work better for us? Dietrich reports, “A great advantage that
we have is that we are privileged to see howour clients respond to similar challenges.Sometimes we learn from them and at othertimes we consult with them to help themmove outside their own areas of comfort.”
This client-focused strategy significantlybroadens access to executive talent,accelerates the search progress and providesclients with superior leadership solutions.
According to Dietrich, “Clients who knowus seem to like working with us and respondpositively to the quality and the value of whatwe do. We see it as important to nurture andenhance existing client relationships whilealso working to develop new business.”
CANDIDATES ARE MORE THAN NUMBERSHorton International also works hard to
select top talent, regardless of the industryor geographic location.
“With respect to candidates, we have longrecognised that this is the Achilles heel of theexecutive search industry, “explains Dietrich.“Often candidates are treated as numbers ina process – little understanding of their needsand a lack of feedback. Horton Internationalvalues its candidates as individuals with theirown careers, personal lives, interests andconcerns. We know that we initiate situationsthat often cause major disruption in people’s
normal lives so these need to be handled asquickly and as well as possible. A candidatetoday, and not always the one who landedthe job, is often a future client.”
Moreover, Dietrich informs thatincreasingly, Horton International is findingthat senior executives are approaching theirpartners individually or as members of teams.They are asking this leading global searchfirm to represent them to specificorganisations.
“We believe that this type of executive,who in their day-to-day lives have powerfulleadership roles, are no longer contentto wait for the headhunter's call, “reportsDietrich. “
Increasingly, they are trying to managetheir own careers and see firms like HortonInternational as partners who can help themachieve this objective. In fact, Richard Landolt,who heads Horton International’s Londonoffice, has developed a talent managementpractice to deal with this growing demand.
Horton International’s global reach is akey element that attracts both clients andcandidates, permitting information to beshared among various offices worldwide.This serves to widen the pool of candidates.
He states, “If a good candidate withexperience in China for example approachesus, we will evaluate that against ourknowledge of the market in that country andadvise him or her accordingly.”
Horton International is striving to improvethis process as Dietrich reveals how “HortonInternational is currently working togetherwith Dillistone Systems – the specialistsoftware supplier to Executive Recruitmentcompanies - to roll out a pilot programme tooffer our candidates direct access to ourcandidate database.”
Horton International also purposelymaintains Horton International as a mid-sizedfirm in order to have fewer clients in eachindustry segment, and therefore feweroff-limits restrictions.
“This means we can give our clientsaccess to much more of the candidateuniverse than the large firms. This is how wedifferentiate ourselves and is the real benefitwe offer,” explains Dietrich.
BEYOND THE BORDERSAll of these initiatives have been
fundamental in having Horton Internationaldevelop strategic partnerships with clientsand candidates. This vision has helped HortonInternational overcome the difficulties thesearch industry has encountered during thepast two years.
“We came through this without having toclose a single office – unlike many of ourcompetitors, a fact of which we are justifiablyproud, “affirms Dietrich. “Now we are backon the growth track.”
In fact, revenues for this year are expectedto reach close to US$25 million.
Horton International’s most significant areaof growth for this year is cross-border business- both within each of the three regions as wellas globally.
Dietrich describes “in the first six monthsof the year we have experienced almost 100%increase in cross-border assignments, whichrepresents 1 in 7 searches awarded to us.This underlines the fact that as internationalcompanies continue to evolve their own viewsof what is happening in the world, there willbe an ongoing need both for those who cangrow the top line, and for those who canenhance performance and effectiveness atregional and global levels.”
Rather than add new countries so as tohave more flags on the ground, HortonInternational plans to strengthen theorganisation’s existing offices by addingqualified and professional consultants.Moreover, Dietrich explains, “We have alsojust initiated a study group to see how wecan improve and integrate our worldwidestructure and organisation better. Theobjective as always is to improve the qualityand consistency of our service for our clients.”
In sum, Horton International’s long-termsuccess has, and continues to be, based onthe premise that establishing strategicrelationships are vital for both clients andcandidates. This strategic partnership allowsHorton International to be able to provide aconsistent personalized approach, while atthe same time, using its global reach,resources, expertise and experience toachieve superior leadership solutions.
www.search-consult.com
For more information, contact:
Web: www.horton-intl.com
S E A R C H - N E T W O R K
inS E A R C H - M A R K E T R E V I E W
22 search-consult ISSUE 20 2004
Executive Talent
ustralia has a global reputation asone of the most highly-skilled andwell-educated labour forces in the
world. Accordingly, organisations continueto favour recruiting such talent fromAustralia.
The ongoing interest can be attributedto three main reasons including:availability (i.e. Australia ranks 2nd in theworld in the availability of skilled labour- IMD World Competitiveness Yearbook2001); affordability (i.e. salaries inAustralia are much lower than in HongKong, Japan, Singapore, Germany, USAor UK); and education (i.e. 50% of theAustralian workforce holds a tertiaryqualification while 90% of Australia’s highlyskilled professionals participate in furtherprofessional developments each year).
In addition to the above-mentionedreasons, most Australians have a goodwork ethic. Australians take pride inworking hard and getting the job done,even in adverse conditions. Australia inparticular is a multicultural country,therefore most Australians have alreadyexperienced working with othernationalities and have fewer problemswith cultural dif ferences. Manyprofessionals and executives havetravelled extensively and have goodinternational experience.
Australian Financial Services
Workforce - More specifically, accordingto Axiss Australia’s publication, ‘ExecutiveBriefing’ (January 2003) Australia’sfinancial services workforce is consideredunique especially when compared toother countries in the Asia Pacific region.
The publication reports that Australia’sfinancial services workforce is regardedas one of the World’s best in terms of skilland talent as shown by the number ofAustralian executives posted to toppositions within global finance firms, andthe high level of educational attainmentamongst industry personnel. Australia’sfinancial services workforce is large andhas a good supply of talented personnel,with around 350,000 people employed inthe finance and insurance sectors. Acomprehensive training system and alarge number of expatriates returning toAustralia each year ensures that the supplyof highly skilled labour is maintained.Within the Australian financial servicesworkforce, personnel can be employedat some of the most competitive rates in
the Asia Pacific region. The plentifulsupply of skilled labour also reduces theneed for firms to relocate large numberof staff.
Australian Employment Market - TheAustralian employment market is currentlyin good shape. Recent media has reportedAustralia’s unemployment rate falling toa 23-year low in May. The May joblessrate of 5.5% was down from 5.6% in April.Nevertheless the decline is reported tobe due to lower participation in the labourforce rather than in new jobs. In the pastten years only four out of ten majorindustry groups have accounted forcontributing towards the 1.9 million jobscreated. These industries include:construction and property services;community and health services; businessand innovation; and tourism, retail andrecreational services. It is understood thatthese same four industries are projectedto do likewise for the next decade.
Along with the general trend towardsslowing overall job growth, someindustries are more exposed to thebusiness cycle than others. That meansjob growth will remain variable over time,especially in some sectors and can haveimportant implications for planning futuretraining needs. For example, constructionis highly cyclical, so the current activityis often not a good guide of what we needto do now to cater for future training needs.
L o o k i n g a h e a d , Au s t r a l i a ’ sdemographic destiny also implies slowingoverall job growth – population growth isslowing, the baby boomers are aging, andthe unemployment rate is already
By Peter Waite
A
Peter Waite
Australia
23ISSUE 20 2004 search-consult
www.search-consult.com
For more information, contact:
Web: www.waite.com.au
relatively low. Future employment demandby industry depends on factors such asexposure to the Australian Dollar andinterest rates, sources of competition andtechnological change.
Despite the above, Australianeconomists have indicated that Australia’semployment market reflects continuedstrength in the overall labour marketdespite the economy incurring a modestslowdown when compared to the previousperiod. Some are confident there are moreemployment gains to come.
Attraction to Australia - There is stilla strong willingness to import talent inAustralia and Australia’s employmentmarket continues to attract overseasworkers, especially UK expatriates, to itsshores. The desire for career developmentin Australia’s warm and friendly climateis still a major draw card for overseas blueand white-collar workers. Australia is agreat place to live and to raise a family.Australia’s popularity with expatriates andlow cost of living means that salarycompensation in terms of a locationpremium is generally not required, furtherreducing the business costs for firmslocated in Australia.
Australia’s Comparative Advantage
in World Markets – In summary,according to Australian National TrainingAuthority’s: National Industry Skills Report(15 April 2004) a key Australiancomparative advantage is that we are theWorld’s best practice in supplyingindustrial inputs to developing Asia. Andwe can maintain that by fostering a skilledworkforce to apply new technologies toour ‘old’ industries. Today’s rapidindustrialization in China and India maysuggest Australian businesses can expectmuch more of the same ahead. Theopening up of the Asian market providesenormous opportunities for Australianindustry and requires the Australianworkforce to have leading-edge skills andknowledge in order to compete.
Recruitment Trends - Recentdevelopments within the Australianexecutive search industry include tightercontrols on candidate screening. In thisera of increased litigation, escalatinglevels of white-collar crime and enhancedregulation of the Australian financial
services industry through the newFinancial Services Reform Act, employersare becoming more cautious about whomthey recruit. Finance industry licensingrequirements now almost always insist onprobity, including police checks. Mostroles in the financial services industrycarry an enormous duty of care and therecruitment industry has joined with theirclients and taken steps to reassureemployers that the candidates put forwardfor roles are honest and will perform theirjobs with integrity.
Probi ty checking enta i ls aninvestigation into the candidate’sbackground, usually by the RecruitmentConsultancy on behalf of the client.Typically, the investigation will cover thecandidate’s work history, education andprofessional qualifications, criminalhistory, eligibility to work in Australia,credit history and personal details suchas current address. Probity checking mayalso include a search of the ASIC Registerof banned and disqualified persons andbankruptcy checks. Probity checking, ofcourse, includes the usual referencechecking that is carried out by theRecruitment Consultant as part of therecruitment process. All informationcollected is kept in the strictest confidencein line with the Australian National PrivacyPrinciples.
In addition to adopting an executivesearch approach for recruitment needs,advertising for positions in print mediaand on the Internet still remains strong.Typically, the more senior/executivepositions are advertised in state andnational media publications such as theSydney Morning Herald, The Age, TheAustralian and The Australian FinancialReview, while most other roles are placedon Internet job boards such as seek.com.
These days, in addition to the businessacumen of consultants, ‘state of the art’technology should be a key componentof any executive search business. Theintegrity of information to be stored andsafely retrieved is essential – it can neverbe underestimated. In January 2003 WaiteInterSearch implemented FILEFINDER*.By upgrading to this particular searchsystem, not only is it more user-friendly,but we now have real-time access to
information. It has proved itself to besophisticated and powerful - allowing usto not only accurately register the detailsof candidates but also accommodatingfor efficient and immediate identificationof suitable candidates against specificcriteria provided - not to mention itsextensive and broader marketingapplications.
Diversity: Balance of the Workforce
– Australian organisations continue notonly to be aware, but many are employingstringent business practices to embracediversity in relation to race, gender, age,religion, marital status, education, sexualorientation, and cultural background.Entities in both the public and privatesectors (i.e. government departments,financial institutions, ‘blue chip’ corporatesetc) are introducing policies to ensure agreater balance is addressed. More thanjust ‘filling a quota’, Australian employersare keen to create the ‘right’ culture -being the fabric of an organisation.Accordingly consultants and othersinvolved in the recruitment process arebecoming increasingly accountable forthe issues. Diversity is becoming animportant part of Australian corporate life.
Visas - To work in Australia a visa isrequired. Australia has entry optionsdesigned to meet the specific needs ofbusiness. There are a number of programsdesigned to make entry as smooth aspossible including bulk visa processingfor businesses needing to relocate a largenumber of staff quickly. Visas for entryinto Australia are issued by the AustralianDepartment of Immigration & Multicultural& Indigenous Affairs (DIMIA). DIMIAoffices are located all over the world anddetailed information is available from thewebsite www.immi.gov.au.
* Specialist software for executive search fromDillistone Systems, publisher of search-consult.
Peter Waite is the Executive Chairman of WaiteInterSearch (Australian partner of InterSearchWorldwide). Headquartered in Melbourne,Waite InterSearch also has an office in Sydneyand Dubai.
S E A R C H - M A R K E T R E V I E W
Executive Searchin Australia:
– Trends and Movements
xecutive search firms in
Australia reflect global
trends– it’s all about
relationships, with both clients
and candidates. However, there are issues emerging
– a shor tage o f h ighly sk i l ledexecutives and a difficulty attractingand securing international candidates,reports Jennifer Grove, an Associatewith Gerard Daniels Australia.
After surviving the battering of theearly 1990s and the more recentdownturn in the first part of the newcentury, Executive Search in Australiais buzzing. After slow years in 2002and 2003, 2004 is proving to be far more
fruitful – and the future is lookingbrighter than it has done for some time.According to Debbie Cozart, GeneralManager of Gerard Daniels Australiaand Alan Wilson, Principal of AlanWilson Consulting, there is a demandfor high-level executives in a numberof sectors and disciplines includingengineering, accounting, finance andIT – which are recovering from the2000 slump.
“Our first few months in 2004
were record months – andthe outlook continuesto be very bright,”
Ms. Cozart said, "This is a sentimentthat has been expressed across theExecutive Search industry in Australia– after a quiet couple of years followingSeptember 11 2001, the tech wreck andsome high-profile corporate collapses,such as HIH and OneTel – thingsare definitely looking up. As 2003ground to a close, there was anoticeable shift upwards – and 2004has been busy fulfilling expectations.Views are mixed in regards to thereasons for the slowness in 2002/2003as well as for the more recent upwardswing."
Dennis McDonald, ManagingPrincipal of McDonald MonahanAssociates, stated that part of the
S E A R C H - M A R K E T R E V I E W
24 search-consult ISSUE 20 2004
By Jennifer Grove
E
Executive Searchin Australia:
– Trends and Movements
25ISSUE 20 2004 search-consult
reason for the positive move in 2004was the lack of activity in the prioryears. “Some of it is a reaction tocompanies sitting on their hands – it’sa natural response to filling the needsthey now have,” he said.
Others put the move down togeneral economic growth and arecovery af ter the September 11attacks. According to Ms. Cozart,demand for some posit ions wasdef ini tely on the up - she hadparticularly noticed this in regards toclients looking for high level, strategicChief Financial Officers (CFOs). “Wehave been experiencing a big jump indemand for Chief Financial Officers,two or three jobs continually on thego,” she said. Ms. Cozart said shebelieves this was an indication that –in line with global trends – companiesin Australia were moving away fromthe “traditional” concept that the CFOwas merely a well -remuneratedaccountant. “CFOs are now hired asmuch for strategic and businessabilities as for actually accounting,”she said.
“Becoming a CFOis also now seen
as a way to get to CEO level
– and many executivesare taking that routeto the top.”
Mr. Wilson said it was clear that anumber of companies were focusedon growth – hence the increase innewly created positions. There werealso a number of people looking tomove on and having the confidence todo so, compared to their more cautiousbehaviour during the past two years.“The interest in opportunities meanspeople are actively looking for newjobs – and are not afraid to take achance as the risk aversion that existedlast year is no longer there,” explainedMr. Wilson. “One person goes, it opens
another opportunity.”Ms. Cozart and Mr. Wilson also
noted that with economic growthcomes the confidence to recruitexternally – although successionplanning and internal development ofstaf f plays an important role inAustralia.
INTERNATIONAL CANDIDATESAustralia is a net exporter in a
number of industr ies and manyAustralian resource companies arecontinuing to look for highly technicallyspecialised individuals to take uppositions as Project Directors for verylarge billion dollar projects in veryremote sites. Conducting searches fort h e s e c a n d i d a t e s o f t e n t a k e sconsultants to, literally, “the end of theearth.” Advances in technology helptrack down suitable candidates – viaemails and mobile phones – butthat has not always made it easy toattract people to Australia, and thissituation exists in industries across theboard. While a somewhat clichéd viewabout the world being full of peopleseeing Australia as the place theywould most like to live exists – thisdoes not mean that Executive Searchfirms on global searches find it easyto place international candidates inAustralia.
Michael McAnearney, Director ofGerard Daniels Australia, believesthere are a number of reasons for this.“One issue is the cost of relocation toAustralia, which can be substantial duethe dis tances f rom places l ikethe United Kingdom, United States andothers,” he said. Executive SearchFirms in Australia rely heavily onthe desire of expatriates – aware of therecent turbulence in the United Statesand Europe after 9/11 – as a reasonto return home. Mr. Wilson said thatthis was particularly evident in thefinancial services market where word-of-mouth was enough for companiesto fill positions. “One Sydney-basedinternational bank filled more than10 sen ior pos i t ions th is way,”he remarked. “The ready availabilityo f r e t u r n e e s a c t i v e l y l o o k i n gfor work in a generally slow marketmeant that firms had little need to resortto Search.” International candidates –with no ties to Australia – sometimesrepresented a particularly expensiveoption for Australian companies.“These candidates expect costsmet that go beyond relocat ion,such as schools for children and otherexpenses,” said Ms. Cozart. “There is also the issue of the so-called'trailing' spouse – who may alsohave a high powered career of theirown.”
Executive Search companies inAustralia offer services to spouses ifthey need assistance in locating a jobopportunity for themselves, but it canbe difficult. Both Ms. Cozart and Mr.Wilson agreed that the difference inpay scales – particularly in financialservices – plus the high level ofpersonal income tax in Australia, madeit difficult to attract the top internationalcandidates. This is an issue theInternational Monetary Fund haswarned Australia about. In a reportp u b l i s h e d i n 2 0 0 2 , t h e I M Frecommended Australia adopt a toppersonal rate of 30 cents in the dollar- versus the current 48 cents - in orderto boost productivity and reduce taxavoidance.
Jennifer Grove
S E A R C H - M A R K E T R E V I E W
It also suggested the level at whichthe top rate cuts in ($60,000 a year)should be "substantially raised".
As well as paying a higher level ofpersonal income tax, salary levels arealso a concern for internationalcandidates, with Australian salarieslagging behind the rest o f thefirst world in many areas. Adding tothe issue – for a high profile listedcompany – bringing in an expensivei n t e r n a t i o n a l C E O c a n h a v ea devastating impact if it doesn’t work.“ T h e r e c a n b e a v e r y s t r o n gbacklash against the company if aninternational appointment doesn’tgo to plan – along the lines of whydidn’t you bring in an Australian – orsomeone already living here?” saidMs. Cozart.
FIRMS IN AUSTRALIAFirms in Australia are very diverse,
ranging from the Big 5 global executivesearch f irms to large Austral iancompanies to smaller boutiquesconcentrating on one industry, such asm i n i n g . W h i l e m u l t i n a t i o n a lcorporations based in Australia haveu s e d E x e c u t i v e S e a r c h f i r m s–particularly the global recruitmentcompanies - for making crucialappointments it is still a slightly newscience to some of the emerging firmsin Australia.
Ms. Cozart pointed out that, leavingaside the multinational corporations,many Australian firms are still learningabout the Executive Search process,what i t is and how that processcan help their company grow andprosper. Ms. Cozart said many sizeableAustralian companies are “tryingand buying” the Executive Searchexperience and are coming backfor more. “ We are f inding thatcompanies, from both Boards andManagement perspectives, are beingpleasantly surprised at just how mucheasier i t is to make these keyappointments when the process ismanaged by a competent and thoroughExecutive Search firm,” Ms. Cozartsaid.
“These companies
are really beginning
to understand the valuesuch a processcan bring to thesuccessfuloperationsof their business.”
THE FUTURE OF EXECUTIVESEARCH IN AUSTRALIA
Lloyd Smith, Director of GerardDaniels Australia, said that, like mostexecutive search firms, has seenparticular growth in recent years in therecruitment of non-executive directorsand, along with that, Board reviews,corporate governance issues andexecutive remuneration reviews.“Companies, where publicly listed ornot, are now looking beyond the, ’whodo you know to fill that spot?’ thinkinginto treating the opportunity to find anindividual who can value and balancethe skills of a Board,” explained Mr.Smith. “Part of that thinking is linkedto the need for Boards to truly assessthe skills and abilities of its Boardmembers and make sure they arealigned to the needs of the client.”
Ms. Cozart stated that ExecutiveSearch firms in Australia are alsogrowing beyond the traditional client-service provider relationship andevolving into one in which theExecutive Search firm is a trustedadviser to their client on a number oflevels. Ms. Cozart said that, in fact, therelationship with a client deepens theservices able to be offered, coveringa range of organisational developmentissues. She explained, “This cani n c l u d e s u c c e s s i o n p l a n n i n g ,management deve lopment andgovernance evaluation- which are justas important as the ability to find oneindividual.”
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26 search-consult ISSUE 20 2004
www.search-consult.com
For more information, contact:
Web: www.gda.com.au
GERARD DANIELSAUSTRALIA (GDA)is one of Austral ia ’s leadingExecutive Search and Recruitmentcompanies based in Perth, WesternAustralia. GDA opened its doors in1986 and offers clients executivesearch, executive recruitment andperformance consulting across allindustries and professions. GDA isa “high touch”, heavily client-focused company that works inp a r t n e r s h i p w i t h i t s c l i e n t sto achieve the best results for them.I t s e n v i a b l e t r a c k r e c o r dis testimony to GDA’s experience,skills, processes and commitment.It takes the time to understandeach business and its particularrequirements in order to f indthe best candidates for eachposition.
JENNIFER GROVE- ASSOCIATE
Jennifer Grove joined GerardDaniels in 2003 from the Office ofthe Commonwealth At torney-General where she was an adviser.During more than three years withthe Attorney-General Jennifer wasresponsible for providing strategicpolitical policy and media adviceacross the 29 areas of the Attorney-General’s portfolio.
One of Jennifer’s crucial roles
was the coordination of the judicialand tribunal appointments made bythe Attorney-General.
Prior to that, Jennifer spent
several years as a journalist withThe West Australian newspaper.
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