In a mid-January 2009 article in Business Week, L. Kevin Kelly, the CEO of Heidrick & Struggles said, "the business model for the executive search industry is broken." In Heidrick’s most recent earnings call, he elaborated by stating that leadership advisory services represent "the evolution of the search business going forward."
In their most recent earnings call, Gary Burnison, Korn Ferry’s CEO, outlined one of their key strategic imperatives to "create a more consultative solutions based workforce to drive integrated revenue growth."
Welcome to my world, Kevin and Gary, and "better late than never". But please don’t hold it against me if I listen to your pronouncements of a new model of search with a healthy dose of skepticism.
I founded Selker Leadership in 2002 because I knew then that the executive search model was broken, and it needed to be fundamentally altered to deliver actual value. This realization led to the development of our patent-pending PVA™ (Performance Values Assessment™) methodology. (see: Believe What We Say, Not What We Do; How Should I Know? I’m Just the Search Consultant!; What have you done for me lately and why it doesn’t matter, and Values Based Hiring as the Leverage to Building a High-Performance Organization).
I wanted to address the travesty that executives universally report that regardless of whether they’ve used retained or contingency search, internal recruiting, networking or Monster.com, their personal track record at hiring is 50/50. Translation: 50% of the money spent on executive search has resulted in a hiring mistake. (P.S. you will want to multiply your wasted money by a factor of 7X to include the intangible costs.) It really is crazy when you think about it. In your businesses, 50% failure would be unacceptable, so why would you accept it when you are dealing with the most important asset – the talent.
Some firms may augment executive search with leadership services, and change their overall mix of business. This will certainly allow them to maintain their earnings and price/share, and please their partners and shareholders, but it won’t alter the fact that their retained executive search processes are still a crap shoot. Bottom line, until executive search firms begin to seriously address the core processes and methodology of their business, hiring a great executive and leader will continue to be a coin toss.
What’s the solution? Well, first, stop spending your hard earned money on a process that fails at least 50% of the time. The economy is finally forcing many of you to come to this conclusion.
Then, find a search partner who delivers more than empty promises, but the onus is on you. You’ll have to pay greater attention in the selling process, become a discerning buyer who looks for firms that add qualitative value through their processes, and sees the proof by analyzing sample search deliverables and through your own reference checks.
Or, you can just call us. We’ve got a seven year jump on the rest of the crowd.