When Cisco floated a proposal this year to whip 50 to 100 execs into C-level shape, the corporate coaching industry was at a loss. This was a huge contract from a respected company, but only a few players were big enough to fill the order.
Then along came search firm Heidrick & Struggles. It had already been trying to snag some Cisco search business. And it had just announced a partnership with the coaching firm Lore International Institute, which offered exactly what Cisco needed: a consistent coaching method and the capacity for big projects.
But business is never that tidy. There's the price, for one thing. Cisco pays Lore around $20,000 per employee. But the actual coaches see only about 40% to 50% of that, according to Lore. (Others in the industry report that the coaches' take is closer to 20%.)
Isn't Cisco getting, um, ripped off? Cisco argues that even if it cut 160 deals with individual coaches, it couldn't get the consistency and accountability it does with Lore.
But there's another problem. Cisco's deal, some recruiters say, creates potential for an unholy alliance between Heidrick's search and coaching arms. By its nature, coaching may tend toward executive turnover, creating the sort of vacancies Heidrick is in the business of fixing. Andrew Holtvedt, Heidrick's account manager for Cisco, says no such cross-selling takes place. But soon after Lore closed the Cisco deal, Heidrick ended up getting some of Cisco's search business after all.
A version of this article appeared in the October 2003 issue of Fast Company magazine.