search-consult issue 6

The International Magazine for Search Professionals

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Acquisitions, layoffs and restructuringAn exclusive interview with Pat Pittard

Heidrick & StrugglesAcquisitions, layoffs and restructuringAn exclusive interview with Pat Pittard

Heidrick & StrugglesGermany's Top 25 Search Firms

Going Global - Options for Expansion

Executive Search -Management Consultancy ?

www.search-consult.com

Germany's Top 25 Search Firms

Going Global - Options for Expansion

Executive Search -Management Consultancy ?

S E A R C H - N E W S

3Issue 6 2001 search-consult

search-consult

MANAGING DIRECTORJason Starr

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EDITORIALBarbara Kwateng

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Front Cover: Pat Pittard, Chairman of Heidrick &

Struggles

© Copyright 2001 Dillistone Systems Ltd

Purchase online at www.search-consult.com

bookshopThe Board Book : MakingYour Corporate Board aStrategic Force in YourCompany's Success by Susan F. Shultz.

Susan Shultz is principal of SSAExecutive Search and arecognized speaker oncorporate governance.TheBoard Book is designed as apractical guide to recruiting andmanaging corporate boards. Itcertainly achieves its objective;packed with case studies -Motorola, Pepsi Bottling,Pinnacle West, Compaq andmany other major USbusinesses are quoted and theauthor also makes good use ofwisdom imparted by otherSearch Firms - research fromfirms such as Korn/Ferry andSpencer Stuart are quoted atappropriate moments.

Secrets of the ExecutiveSearch Expertsby Christian Schoyen and NilsRasmussen

Headhunters have a knack formaking "miracles." Out ofseemingly thin air they locatestar job candidates, folks whorarely materialize using theusual recruitment sources. Howdo they do it? This compellingbook reveals the strategies usedby top-ranking executive searchprofessionals. It focuses on thecrucially important researchprocess, explaining how tomaximize the power of bothtraditional and online resources.Plus, readers get tips on workingwith outside Search Firms, stepsfor locating candidates abroad,and explanations of industryterms: a full arsenal of valuableinformation.

Billing Power! TheRecruiter's Guide to PeakPerformanceby Bill Radin, Betsy Smith

The classic best-seller just gotbetter! Newly revised andexpanded, Billing Power is acomprehensive, easy-to-readguide packed with innovative,money-making techniques, time-saving tips and proven methodsfor increasing your billings.

The industry standard!Softcover, 224 pages, illustrated.Bill Radin is a top-producingrecruiter, manager and trainerwhose innovative techniqueshave helped thousands ofrecruiting professionals achievepeak performance and careersatisfaction.

Headhunters Revealed!Career Secrets forChoosing and UsingProfessional Recruiters by Darrell W. Gurney

Friendly and concise...awelcome resource. Gurneyexplains in upbeat, chummyprose all there is to knowabout the recruitment process."Publishers Weekly, May 29, 2000

"Gurney offers Web-savvy tipsthroughout."American Library Association'sBooklist,April 15, 2000

Winning the Talent Warsby Bruce Tulgan

"Every page will grab you andchange your thinking....greatsolutions to the greatestbusiness challenge in the neweconomy."Douglas McCracken, ChiefExecutive Officer, DeloitteConsulting

Tulgan artfully blends timelyinsights with innovativesolutions from the world's bestcompanies... a whole newperspective.Terrence R. Ozan, GroupManaging Director, Cap GeminiErnst & Young

Recruit & Retain The Bestby Ray Schreyer, John Lewis, Jr.McCarter

The signs on the road to thenew economy point to an all-out war for talent.Organizations increasinglyencounter difficulties inrecruiting and retaining toptalent because they have yet todeal with today's most criticalhuman resource issues.Toremain competitive, you mustcreate a talent poweredcompany consisting of highlymotivated, skilled, and loyalemployees.That's the centralmessage in Recruit and Retainthe Best.

The Global 200 ExecutiveRecruiters :An EssentialGuide to the BestRecruiters in the UnitedStates, Europe,Asia, andLatin America (JosseyBass)by Nancy Garrison Jenn

"The Global 200 ExecutiveRecruiters is another proof ofNancy Garrison Jenn's in-depthknowledge of the world'sexecutive recruitment market.Though interesting forrecruiting companies to learnabout their sector and theircompetitive position, the bookis particularly of help to theirclients and potential clients inassessing executive SearchFirms and the recruiters withthose firms.

Executive Recruiters :A 5Step Power Strategy forUsing America's TopHeadhunters to AdvanceYour Careerby Scott W.Walmsley

Executive recruiters can be thekey to your careeradvancement. Professionalrecruiting firms are hired bymany of the world's top, mostdesirable companies to findprofessionals for what are oftenthe highest compensated andmost prestigious positions inbusiness.

The search-consult.com bookshop, inassociation with Amazon.com, brings you arange of books about executive recruitment -most below list price.

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The executive-search

2 search-consult Issue 6 2001

KORN/FERRY INTERNATIONAL have announced a series of businessrestructuring initiatives designed to reduceexpenses in response to the currenteconomic environment and to repositionthe company to take advantage of theincrease in executive demand when theeconomy improves.

In response to these initiatives,Korn/Ferry International will take a totalcharge against earnings of approximately$86 million, or $1.74 per share, which mayimpact earnings in both Q1 and Q2 of fiscal2002. The charge reflects costs associatedwith a decision to reduce the workforce by20 percent, or nearly 500 employees;consolidate all back-office functions forJobDirect, Futurestep and Korn/Ferry; andwrite down other related assets andgoodwill.

Additionally, the company announcedthat executive salaries have been cut by 10percent. As a result of these initiatives, thecompany expects to save approximately $38 million ofannualized costs.

Due to the weak international economyand a general slowdown in recruiting,revenue for the first fiscal quarter of 2002is expected to be approximately $114million. Revenues for the prior year first

fiscal quarter were $173.6 million. As a result of this drop in revenues, the

company expects to post a net loss, beforethe charge discussed above, in the range of$0.05 to $0.08 per share, compared withrecord quarterly reported earnings of $0.26per share in the prior year first quarter. Theexpected first quarter results include anapproximate $0.08 per share benefitattributable to the adoption of SFAS No. 142relating to the treatment of goodwill.

"The economy is having a profoundeffect on corporate hiring and, therefore,we are taking these necessary and prudentsteps to rightsize our business for theprospective economic recovery. We believethese measures will enable us to adapt tothe temporary slowdown in themarketplace and be competitively strongand well positioned for the upturn in themarket," said Paul C. Reilly, Chairman andChief Executive Officer of Korn/Ferry, whojoined the company on June 30, 2001. "Wedeeply regret the impact of these actionson our broad employee base, but our focusis on retaining our top fee earners andmaintaining our high standard of clientservice. Even though these actions havebeen difficult, I remain excited aboutbusiness prospects of Korn/Ferry and thelong term outlook of the human capitalmarket and am committed to drivingshareholder value."

www.search-consult.com NEWS

>>> STOP PRESS <<<

Korn/FerryInternationallayoff 500

TRANSEARCHInternationalopens office in Greece





Heidrick & Strugglesacquire SHP Associates,London

THE IMPACT OF THE SLOWDOWN ONHeidrick & Struggles (see feature, Page 13)was made very clear at the announcement ofthe firms Q2 results.

"Demand for CEOs and other criticalleadership positions remains solid among ourclient organizations around the world. Belowthe most senior level positions, however,business in the U.S. continues to be difficultand now is being compounded further by asoftening of business in other regions of theworld. In Europe, we're being affected bothby an economic slowdown as well asunfavorable valuations of Europeancurrencies against the U.S. dollar," saidPatrick S. Pittard, Chairman of Heidrick &Struggles International (HSI Group). "It's alsoworth mentioning that we're faced withdifficult comparisons against the 2000second quarter, which was extraordinarilyrobust in the dot-com sector. This year,business in that sector is practically absent."

EXECUTIVE SEARCH RESULTS(ALL FIGURES IN US$)

Revenue for Executive Search was $117.3million in the 2001 second quarter, down 27percent from $160.3 million in the 2000second quarter. Operating income was $8.9million in the 2001 second quarter, down 64percent from a year ago. Although fewersearches were conducted overall, CEOsearches represented a greater than typicalproportion of the total. While confirmedsearches decreased 40 percent from the2000 second quarter, fees per search

rose 21 percent because of this change inthe mix. At June 30, 2001, the companyemployed 492 executive search consultants,representing an increase of 15 percent over427 consultants as of June 30, 2000, and a10 percent decrease from 546 consultants asof March 31, 2001.

Revenue in North America was $66.8million, a decrease of 32 percent from $98.8million in the 2000 second quarter. Strengthin the Health Care practice group was offsetby declines in most of the other practices.

The operating margin declined to 10.6percent from 18.0 percent in the 2000second quarter, due in part to a decrease inrevenue coupled with increased fixed costs

related to a higher headcount forconsultants and their search teamscompared to the 2000 second quarter.

In Latin America, revenue was $3.5million, a decrease of 35 percent from $5.4million in the 2000 second quarter, as theregion felt the effects of a weakening U.S.economy. Excluding the impact of foreigncurrency translation into the U.S. dollar,revenue decreased 25 percent on a localcurrency basis from the comparable quarterin 2000. There was an operating loss of$378,000 in the 2001 second quarter,compared to operating income of $825,000in the Comparable quarter last year.

Revenue in Europe was $39.5 million, adecrease of 15 percent from $46.6 million inthe 2000 second quarter. Excluding theimpact of foreign currency translation intothe U.S. dollar, revenue decreased 9 percenton a local currency basis from thecomparable quarter in 2000. Gains posted bythe Professional Services practice groupwere offset by declines reported by most ofthe other practices. Lower revenuesignificantly affected the operating margin,which decreased to 3.3 percent from 10.2percent.

In Asia Pacific, revenue was $7.4 million, adecrease of 22 percent from $9.5 million inthe 2000 second quarter. Excluding theimpact of foreign currency translation intothe U.S. dollar, revenue decreased 13percent on a local currency basis from thecomparable quarter in 2000. The operatingmargin declined to 12.2 percent from 16.2percent.

LEADERSONLINE RESULTSRevenue for LeadersOnline was $5.8

million in the 2001 second quarter, adecrease of 4 percent from $6.1 million in the2000 second quarter. LeadersOnlinereported an operating loss of $135,000versus an operating loss of $4.3 million inthe 2000 second quarter.

"In July, revenue was slightly below Juneand there is little reason to believe thatAugust will be significant to the quarter. In

Europe, much business is placed on hold dueto structured vacations, and business activitytypically returns in late August andSeptember," said Pittard. "It's difficult todiscern any patterns from our revenue on aweek-to-week basis since some weeks arestrong while others are not. Therefore, weremain conservative in our outlook."

HEIDRICK & STRUGGLES International, Inc. has announced theacquisition of SHP Associates, a U.K.-basedsearch firm specializing in work at themiddle and senior management level.

"We intend to continue to make thenecessary investments to expand our

management search business foremerging leadership talent in Europe," saidPiers Marmion, "Our expansion plans -through organic growth as well asacquisitions of profitable businesses like SHPAssociates -- are an important step forwardin becoming even more competitive anddistinctive in this region. They provide anexcellent complement to our core executivesearch business, and allow us to get to knowtalent earlier in its career and support clientseffectively, with our guarantee of quality, atcritical levels where we have not operatedbefore."

James R. Quandt, President and ChiefExecutive Officer of LeadersOnlinecommented "I am impressed with thereputation and professionalism of thetalented individuals who will join ourHeidrick & Struggles team. Their skills in themedia-driven search business, coupled withour proven web-enhanced methodologies,greatly enhance the speed and scope ofcandidate acquisition services we deliver toour clients."

SHP Associates have 15 consultants and32 employees and achieved revenue lastyear of approximately US$7,000,000.

Exclusive Interview with Pat Pittard,Chairman of Heidrick & Struggles -See Page 13

German legalbattle develops -swings towardssearch

THE ONGOING BATTLE IN GERMANYabout the right for Search Firms to contactcandidates at work has seen anotherdevelopment - this time in favor of thesearch industry. At the end of July, a newruling was made on contacting candidateson their work telephone number (seesearch-consult issue 5). A high court inStuttgart ruled in favour of executive searchconsultant Michael Dobler who had beentaken to court by Bechtle AG, a Germansoftware house. This is the same firm whowas embroiled in a court battle by anothersearch firm in a case which ran from 1999until last year. On that occasion, Bechtle wassuccessful in obtaining a decision in theirfavour against the search firm calling itsemployees. In 1999, the high court inStuttgart ruled that "any attempt to sourcecandidates on their work telephone numberis inadmissible" (record number U 133/99).

In the past, the pattern has been thatcourts have made decisions on the basis ofprevious cases. In a therefore unusual step,the high court in Karlsruhe declared thatsourcing candidates from another companyis part of competition in a market economyand is therefore allowed. Dobler's behaviour,as an executive search consultant, wastherefore permissible. The judge ruled thatshort telephone calls to make initial contactscarcely interfere with work. The threat thatDobler would have to pay 500,000 DM (US$240,000) in fines or Bechtle's aim to begranted compensation disappeared.

This means that two high court decisionsare in direct conflict with one another. Ifeither party makes an appeal, then it will beup to the Bundesgerichtshof (Supreme Court)to settle the matter.

Related Story: The Top Search Firms inGermany - See Page 9

STORIES IN THE NEWS ANDbusiness press about Albert J Dunlap andhis incomplete resume have been called"a public relations disaster for theexecutive search industry"

Mr. Dunlap was chairman of Sunbeamcorp and was fired in 1998 amidallegations of fraud. Sunbeam hadretained Korn/Ferry to run the searchwhich brought Dunlap to the business andit is alleged that the World's largest searchfirm failed to notice that he had been firedtwice earlier in his career - by Max Phillipsand Son and by Nitec Paper Corp. AtNitec, Mr. Dunlap achieved spectaclar

profits - for which he received hugepayouts - only for auditors later toconclude that the profits were fictitious.Mr. Dunlap made no reference to workingat either firm, skipping from a role atSterling Pulp and Paper (ending in 1973)to American Can which he joined in 1977.

Korn/Ferry point out that Mr Dunlap wasrecruited to Sunbeam primarily on thebasis of his undisputed accomplishmentsat Scott Paper - a position for which hewas recruited into by Spencer Stuart.Spencer Stuart argue that whilst Mr.Dunlap did not reveal his time with thetwo firms to them, they had validated hisrecord over the a period of 20 years (up toand including his time at American Can).

Poor verificationtaints industry



Heidrick & Strugglesannounces Q2 figures


Cornerstonein Peru



C O R N E R S T O N EInternational Group have have namedBDO Consulting S.A.C. of Lima, Peru as itslatest member firm. BDO, with sevenlocal partners, offers both retainedsearch and generalist managementconsulting service.

Corrections:www.search-consult.com NEWS

IT HAS BEEN POINTED OUT TO US THATDaniel Carney of Boyden International wasnamed as David Carney in Issue 4. Weapologize for this mistake and are happy tocorrect it. Gremlins also attacked our articleon German Executive Search. The companyname of Bechtle was misspelled in the article.


T R A N S E A R C HInternational have opened an office inGreece - the firm's 4th new Europeanoffice this year.

The office is located in Athens and ismanaged by Spiros Kapnias and SpirosTrivolis. Spiros Trivolis has not only yearsof experience in Human Resources butalso in Management Consulting. SpirosKapnias boasts a background in theHuman Resources functions in variousIndustries such as Consumer and Retail aswell as Industry and Resources.

S E A R C H - P E O P L E


A.T. Kearney & Heidrick & Struggles namenew leaders - see News Pages

TRANSEARCH International haveannounced a series of new recruits to officesaround the World. Jörg Müller has joinedthe Stuttgart office. Mr Müller is the formerVice President Human ResourcesHirschmann Electronis GmbH,Neckartenzlingen and he joined with 10years experience in HR management,specialised in automotive supplier industriesand communication.Michel Groulus joins the firm's Brussels officeas a Partner. Mr. Groulus has 22 yearsexperience in various National andInternational Management positions. As anentrepreneurial Business Developer, heworked for Companies like HardwareProviders (Digital, Data Terminal Systems,Correlative Systems), Software Editors (AES,SAP), System Integrators (Corsys, Logica),Consulting Companies (DMR) and morerecently Start Ups into the e-Business (SapMarkets, Rightworks).In Sao Paulo, Grace Pedreira and NahidChicani have joined the company. Ms Graceis previously from A.T. Kearney where shewas Vice President in Executive Search.Grace is a generalist and has been inexecutive search for 9 years. Mr Chicani specialises in Consumer andRetail and held a Vice President position ata global consumer goods company for anumber of years. Mr Chicani has been activein Executive Search for 3 years.Finally, Stefan Michaelis joins the firm inFrankfurt. Mr Michaelis studied Economicsand Political Sciences at the University

Frankfurt. Prior to joining TRANSEARCH hewas the co-founder and co-owner,responsible for marketing & sales of acompany in the service industry. He also haslong-term experience in advertisedrecruitment.

Shelly Jones, Managing Director of theSeattle office of Korn/Ferry International isto head the firm's global aerospace practice.

Firth & Associates, the London member ofthe Cornerstone International Group, haveannounced the addition of Mr. Barry Laine totheir London-based professional team astheir IT Practice Leader. Mr. Laine hasworked in the Technology industry for morethan 30 years including experience in thefull arena of telecommunications and theinternet.

Norman Broadbent has hired Greg Patel asdirect of capital markets in the financialservices practice. Mr. Patel will takeresponsibility for developing the capitalmarkets team and is expected to hireadditional recruits in the near future. Mr.Patel joins the firm from Reech Capital.

Garner International has recruited HugoYadi and Bertrand de Muizon to jointly headup its new Banking practice.

Ray & Berndtson have announced thearrival of Walter L. Ames as Partner in theHealthcare and Life Sciences Practice. MrAmes brings an executive searchbackground from Russell ReynoldsAssociates where he was a managing

director. He worked for several years in theirTokyo office before moving to Los Angeles in1999. Mr. Ames will work out of the LosAngeles office. The firm has also announcedthe promotion of Deborah Seltzer to Partner.Ms Seltzer also works in the Healthcare andLife Services Practice, and is based inAtlanta.

Ray & Berndtson announces the promotionof Michael Otte to principal in the Businessand Professional Services Practice in LosAngeles. Mr. Otte was formerly with Ray &Berndtson in Frankfurt, Germany.

Simon Stephens joins Odgers, Ray &Berndtson in Leeds. Mr. Stephens waspreviously with Michael Page.

Christian & Timbers have recruited ShaneBurgess as a vice president in the Londonoffice. Burgess works with global blue chipcompanies and early stage ventures and hasled and executed assignments across allfunctions within the information technology,telecommunications and new mediamarkets. Formerly at Korn/FerryInternational, Mr. Burgess was the youngestprincipal in the firm’s advanced technologypractice in Europe as well as the UKrepresentative for e-business within thetechnology group. His recent client work hasincluded building management teams andplacing executives at U.S. and Europeancompanies like marchFIRST, HyperionSolutions, Colt Telecom and GTSTelecommunications. Additionally, he hasworked with a number of prominentventure-backed companies at board level.

Key moves in Executive Search this month

Keep us up to date with any corporate announcements! Email [email protected]

Renoir Partners acquires CorpExec

6 search-consult June 2001

GENE SHEN HAS BEEN named as president of A.T.Kearney Executive Searcheffective immediately. Shen willreport to Dietmar Ostermann,chief executive officer of A.T.Kearney.

Shen previously was head ofthe A.T. Kearney ExecutiveSearch global financial servicesgroup in New York. He willcontinue in that role while alsoassuming global leadershipresponsibility for A.T. KearneyExecutive Search, one of theworld's largest retainedexecutive Search Firms. Shen

replaces Brian Harrison. "Gene has developed our

financial services practice into asignificant player in the globalsearch arena," Ostermann said."In his new role, he will drivefurther growth for the practiceand chart a new course for A.T.Kearney Executive Search as acollaborative partner with theglobal management consultingcapabilities of A.T. Kearney andthe implementationinfrastructure of EDS. This uniquecombination will provide aservice offering unequaled in theexecutive search marketplace."

Prior to joining A.T. Kearney,Shen was a co-founder and

managing partner for theWhitney Group, an executivesearch firm specializing in thefinancial sector, where heestablished the Tokyo office.Shen also served with Citicorpfor six years, directing globalrecruitment for investmentbanking and specializing inglobal finance from 1978 to1982. In addition to establishingexecutive search officesworldwide, he has worked onbehalf of global clients in Asia,Europe and the U.S.

"We will be globally- andindustry-focused with aparticular emphasis on financialservices and technology," Shen

said. "In addition, as part of ourglobal expansion, we will havethe unique ability to cross-fertilize talent betweenmanagement consulting andexecutive search."

Shen attended the CesareBarbieri Center for ItalianStudies in Rome and earned aB.A. in political science andmodern languages from TrinityCollege and a JD-MBA ininternational business andfinance from Harvard. Shen alsoholds the distinction of beingone of the youngest trustees ofPhillips Exeter Academy, aleading preparatory school inNew England.

A.T. Kearney Search names Gene Shen Presidentwww.search-consult.com NEWS


LONDON BASED SEARCHfirm Renoir Partners haveannounced the acquisition ofCorpExec - the search firmformally known as CorporateExecutive Search

Renoir Partners wasestablished in Spring 2001 byrecruitment industry veteransAndrew Goodman and BenAnderson with backing ofUS$2million equity investmentfrom individuals linked withleading venture capital firms,including Quester, Broadview,Amadeus and iGabriel. Thecompany has offices in Londonand San Francisco and hasalready gained a strongfoothold in the emerging andpre-IPO technology sectorswhere it works with leadingventure capital firms and

entrepreneurs to build seniormanagement teams on bothsides of the Atlantic.

CorpExec, formerly part ofpayment system specialistAuxinet plc, is a strong fit forRenoir Partners, offering bothstrategic opportunities andoperational synergies. Foundedover a decade ago, CorpExechas complementary expertisein the emerging technologyand e-commerce sectors. Inaddition it brings strongexperience in the corporatetechnology marketplace,endorsed by a blue-chip clientbase of software, services andt e l e c o m m u n i c a t i o n scompanies. The company'sentire team of highlyexperienced research anddelivery professionals havebeen integrated within RenoirPartners' UK operations. The

combined group boasts 25partners.

Said Ben Anderson, CEO ofRenoir Partners: "CorpExec hasa wealth of experience and anexcellent reputation fordelivering senior searchassignments to a diverse rangeof technology companiesacross Europe and Asia Pacific.This acquisition bolsters ourposition in the market andbroadens our geographicalreach."

Said Howard Bird, formerManaging Director of CorpExec:"This is a tremendousopportunity to be part ofprogressive business with aclear Strategy and strongfoundations to accelerategrowth and leadership in thetechnology industry. RenoirPartners and CorpExec sharethe same proposition to work in

long-term partnership withclients through the delivery ofstrategic human capitalsolutions."

Both Ben Anderson andAndrew Goodman are wellknown names in the UK searchindustry. Mr. Goodman founded Goodman Grahamwhich he sold to BNBResources in 1995, and wasChairman of TechpartnersInternational for an 18 monthperiod culminating in a sale toHarvey Nash plc in April 2000.Anderson's career includes asuccessful 10-year spell atrecruitment services groupRobert Walters where he ledcorporate development asExecutive Director, took thebusiness global and led thecompany through an IPO in1996.


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S E A R C H - M A R K E T


development in the ongoing legalwrangle over the practice of executiveSearch Firms contacting prospectivecandidates at work. A Stuttgart courtruled in favour of search consultantMichael Dobler - ruling that sourcingcandidates at work was allowed. OurNews pages carry the full story.

German Search industryworth US$1 Billion

By Barbara Kwateng in Frankfurt


For more information, visit:

Web: www.bdu.de

The German executive search andlection market grew in size by over20% last year. The Bundesverband

Deutscher Unternehmensberater (or BDU,the Association of German ManagementConsultants) announced that the sector'sturnover had jumped to 2.5 billion DM(US$ 1.12 billion) last year, an increase of0.49billion DM from 1999's figures. Thetop 25 firms accounted for 43% of themarket (see table). The average growthexperienced by German executive searchand selection consultants for the year2000 was 15.5%, lower than the averagegrowth in 1999 at 16.4%.

The BDU research also reveals a sharprise in the number of assignments carriedout in the year 2000. In total, 89,000searches were carried out in 2000,compared to 75,500 in 1999. This could bethe reason for the boom in the number ofconsultants. From 1999's figure of 6,350,there was a steep increase in the numberof consultants at German executiverecruitment firms in 2000 to 7,400. Thenumber of executive recruitment firms rosesteadily to approximately 2000companies. In 1999, this figure was 1950.

Dr. Joachim Staude, Vice President of theBDU remarks "The driving forces behindthe growth which we have witnessed inthe last few years include good economicdata, the boom on the stock market anddot.coms needing to fill manymanagement positions. To a degree, thehigh demand for talent could scarcely bemet".

Dr. Staude notes a slowdown "...in thegrowth figures for the first 6 months of2001. The current market situation means

that many companies are taking muchmore care before making any decisions onhiring. Some firms are even putting theirhiring strategies on hold". However hepredicts that "...bar any surprises, clientfirms are likely to give up their restraint inrecruiting".

This month has also seen a

Top 25 German Executive Recruitment firms by revenue (in millions):

Firm DM(Million)

US$(Million)

1 Kienbaum Executive Consultants GmbH 127,0 56.82 Heidrick & Struggles 11 3,5 50.743 Ray & Berndtson 87,0 38.94 TMP Worldwide Search 83,5 37.335 Baumann Unternehmensberatung AG 82,4 36.846 Korn/Ferry Hofmann Herbold International GmbH 80,0 35.777 Egon Zehnder International GmbH 72,5 32.418 Spencer Stuart & Associates GmbH 39,0 17.449 DELTA Management Consultants GmbH 38,0 16.9910 Steinbach & Partner GmbH: DM 34,9 15.611 Deininger Unternehmensberatung GmbH 32,6 14.5712 Russell Reynolds Associates, Inc. 30,4 13.5913 Mercuri Urval GmbH 28,0 12.5214 CIVITAS International Management Consultants GmbH 26,7 11.9415 Signium International - Ward Howell 26,0 11.6216 Pape Consulting Group 25,5 11.417 ifp Institut für Personal- und Unternehmensberatung 23,0 10.2818 a_priori international AG Corporate Consult 22,5 10.0619 Dr. Heimeier & Partner GmbH 20,0 8.9420 Boyden Global Executive Search 18,7 8.3621 TRANSEARCH Cetra Consulting GmbH 17,2 7.6922 H. Neumann International GmbH 16,6 7.4223 IIC Partners Executive Search Worldwide 11,9 5.3224 SCS Personalberatung GmbH 10,9 4.8725 Interselect GmbH Human Resources Consulting 10,0 4.47

(source: Data from Bundesverband Deutscher Unternehmensberater)

“In total 89,000 searcheswere carried out in 2000,compared to 75,500in 1999...”

S E A R C H - P R O F I L E


A Human BusinessDale Winston of Battalia Winston talks to Jason Starr

Many consider Executive Searchto be an increasingly scientificprocess. Some firms are using

psychometric testing techniques; the useof technologies such as videoconferencing and the Internet iswidespread.

In the eyes of Dale Winston, the highprofile head of Battalia Winston, however,fundamental to a good executive search isthe skill of intuit.

"Executive Search requires certainfundamentals - technology, for example,and you need these to be competitive.Beyond this, however, to be good atsearch requires an intuitive ability. Aconsultant needs this to understand theclient's culture and what the successfactors will be. Every business hasdifferent needs and people who may bevery successful in one environment maynot be in another. Intuit is the skill ofknowing which people will fit in whichenvironments."

Some consultants believe thatpsychometric tests are the most accurateway of assessing cultural fit. Ms Winstondoes not accept this view.

"There are some profiles which are justnot accurate; the intuit is not alwaysaccurate either, but having a sense ofpeople is vital. I used to have a very dearclient who insisted on having everycandidate assessed. I used to predictwithin 5 points up or down the persons’IQ and I was always right. It was arunning joke."

An additional 'human skill' which shebelieves is fundamental to the success ofthe search is the art of working with theclient to agree a realistic specification.

"Another part of the art is trying to getthe client to really focus in on what theirneeds are and to define deliverables for

the candidate. Many clients come to anopening search meeting with a stack ofgeneric requirements which I describe as"Motherhood and Apple Pie". Our job -and this is part of the art - is to push thembeyond this generic specification.Sometimes this is collective and requires agroup facilitation process. What are thereal objectives for candidates?"

Ms. Winston believes that cultural fit iskey to the success of her business. Whenhiring for Battalia Winston, Ms Winstonand her partner, Terry Gallagher, claimthat they prefer people who will fit thefirm's own culture rather than those who,potentially, will bill more..

"There are many 'lone rangers' who arevery significant producers and who wehave had the opportunity of hiring in thepast. We feel that these people would becounter to our culture. We have someunique things about our culture. We arevery collaborative. We are team orientedin what is basically a business driven byindividual production. This comes downto who you hire. Some time ago acolleague of mine asked me 'How do youcompensate people to team?' I answered'You have got the tail wagging the dog.You have to hire people who already havethat mindset.'"

Despite the care with which BattaliaWinston aims to recruit, it has grown intoa top-twenty American search business,with six offices across the US and links tothe Accord group beyond outside theStates. Unlike a number of the larger USbusinesses, Battalia Winston has chosento focus purely on its core business ofSearch. Ms Winston draws an analogy tothe retail sector where she likens many ofthe larger firms to Bloomingdales. BattaliaWinston is more akin to a GAP or aLimited.

"We have a different model. The largefirms are department stores, whereas weare a specialist store for search services.Our average compensation is aroundUS$230,000 - US$240,000. We do notprovide internet based recruiting servicesand we do not offer managementappraisal services."

Ms Winston does not believe that theInternet is competitive at the level atwhich she recruits and believes that firmswho aim to develop a business around theweb are following a flawed Strategy atthis level.

"The internet is essentially anadvertising tool. I see the Internet asbeing a very powerful tool for mid-levelrecruitment and so it will have an impacton the contingent firms who work at theUS$70,000 - US$150,000 level. I see ourbusiness moving upward and away fromthat. At the risk of being controversial, Idon't believe that TMP will stay in thesearch business. I think that they believethat everything, cradle to grave, will go through the Internet. I don't believe that."



Web: www.battaliawinston.com

Dale Winston

&S E A R C H - C O M P A N Y


S E A R C H - C O M P A N Y


Layoffs, management restructuring and acquisitions

Three months in the life of

HeidrickStruggles

Heidrick & Struggles Internationalmade headlines in both theExecutive Search and the

mainstream business press in June withthe announcement of layoffs across thebusiness.

On June 20th, Heidrick & StrugglesInternational announced a 'realignment ofits workforce'. Some 13% of the workforce- around 300 people - left the firm, with65 search teams affected. In the days afterthe layoffs were announced, analysts atboth Goldman Sachs and Merrill Lynch cuttheir outlook for the Chicago-based firm.Meg Saegebarth of Goldman wrote ``Whilewe had hoped that some of HSII's costcutting moves last week would help offsetthe declining demand environment, wewere overly optimistic given how muchtheir business has deteriorated".

Less than a month after this the firmannounced the acquisition of mid tosenior level UK search firm SHPAssociates. Two weeks later, during theconference call announcing the secondquarter results, CFO Don Kilinskiacknowledged that more cut backs maybe required "… nothing is off thetable…we will have to revisit the issueover the next month or two if revenuecontinues on its current path."

Then, on August 9th, the firmannounced that Piers Marmion wouldreplace Patrick S. Pittard as ChiefExecutive Officer from October 1, 2001and that David Anderson would take onthe role of Chief Operating Officer. MrPittard would continue as Chairman ofthe Board.

In an article which features an exclusive

interview with Pat Pittard, search-consultlooks at the decisions made by the firm,and its likely future path.

The June 20 2001 announcementrevealed that around 300 people werebeing laid off by the firm. Layoffs coveredevery part of the business, with 2/3 of thepeople released based in North America,20% in Europe with the remainder beingin Latin America and Asia Pacific. 63were Consultants and virtually allpractice groups were affected. Thereduction will also enable the firm toconsolidate or close a number of offices -in total, the cut backs should save US$30-US$35 million annually.

Mr. Pittard accepts that reductions werethe results of decisions made in theprevious year. "The truth is that the year2000 was incredibly robust. Optimism

surrounded the "New Economy." Thisoptimism made us do things that inretrospect weren't the best decisions -aggressive staffing particularly.However, if we had not made the hires inlatter 2000 and the economy continuedto be robust through 2001, we wouldhave lost significant market share. It iseasy to be 'retrospectively brilliant,' but intoday's business climate, be decisive andthen adjust. We hired for a robusteconomy. That didn't happen - and now,we have to react to reality."

He acknowledges that the firm hadassumed that the growth rates of 2000would continue into 2001 and had hiredon that basis (the firm recruited 119Consultants - net - last year). He alsobelieves that last year's huge volume ofbusiness meant that the firm had not putenough effort into business development.

"We were so overwhelmed with workthat we didn't have time to give attentionto business development. We weretaking venture backed, early stage workthat seemed to easily find funding. Asthe funding dried up this year, many ofthese firms folded. Partners who servedthis market lost their business flow, andthey did not develop new relationships sothere was nothing in the pipeline."

"We found ourselves in a market thathad adjusted back to 1999 levels and yetwe had 2001 level staff. For the first twoquarters we worked very hard to see ifwe could make adjustments in ourexpense lines. If the downturn was shortlived, like the fourth quarter in 1998, wewould have been wise not to have gonethrough a headcount reduction.However, the severity of the situationbecame evident at the end of the secondquarter. As you book in the latter part ofQ2 you have visibility into Q3… Fromthis we could tell that the businessrecovery in the US was not going to besubstantial at least for search, in Q3. Wesimply had no choice but to reduce theworkforce."

Cut backs at the public firms have madethe headlines this year - both Korn/Ferryand TMP Worldwide have made similarannouncements - but Mr. Pittard does not

accept that the layoffs are connected tothe firm's public status.

"A slowing economy is not interested inyour capital model. All Search Firms,public and private, are going through thesame thing. We have had headcountreductions in the past, but as a privatecompany, it is not in the public 'glare.' Asa public company you must announcethese actions."

Mr. Pittard argues strongly that neitherlast year's growth or this year's cutbacksare anything other than a reflection ofmarket demand.

"Our analysts had much more modestgrowth predictions last year than weactually saw in the market. All ourpractices were being inundated by workat all levels, and particularly internetstart-ups. We have always enjoyed a

premier position in technology - and withearly stage companies. For a number ofreasons, we have always liked thisbusiness. We are an aggressive firm. It ishigher risk - no question about it. So itcame down to an issue of serving clients;they came to us for work and our Partnerscame to (the management) requestingcapacity. Basically, our staff increaseswere the result of business demand; wewould have had that demand whetherwe were public or private"

At Heidrick & Struggles' AnnualStockholders' Meeting earlier in June, Mr.

Pittard had revealed that the firmintended to use the slowdown "…toinvest in people, in technology, and inour future". This plan is unchanged, buthe is aware that acquiring firms such andrecruiting consultants soon afterannouncing layoffs may send a mixedsignal.

"It's hard on our people to haveweathered a reduction and said goodbyeto colleagues and later, the firmannounces an acquisition and a newcolleague shows up. The truth is that wemay need to send this mixed signal. Thecolleague who left may not have reacheda point of production whereas thecolleague that we bring in could be amature search consultant, and his/herlevel of production has stayed constanteven in a tough economy. This elevatesus all. The best search professionalsknow how to develop business even intough economies. Those who have notseen a recession do not have the sameexperience to rely on. Not only can hiringsenior staff bring us business, but theycan also be mentors to our nextgeneration of consultants. There isexceptional talent competing with us,and this is a good time to attract topperformers."

Evidence of this was provided in theAugust Conference call. Lynn McHughrevealed that 40% of the firms'consultants "...are still underwater - thatis, they are not producing enoughrevenue to earn their base salaries, andany minimum guarantees they mayhave".

Ms McHugh also revealed that many ofthe top consultants continue to performwell and are in line for bonuses, and Mr.Pittard is aware of the argument that thepublic structure of Heidrick & Strugglesmay make it harder to recruit and retaintop billers. The reasoning goes thatpublic firms have to divert a percentageof profits away from the earners and tothe shareholders. While he has heardthis argument, Mr. Pittard disputes thefact that his professionals earn less atH&S.

"Our philosophy has been for years to

Pat Pittard

By Jason Starr, search-consult



BoutiqueABrussels

Barbara Kwateng talks toGuy Stuckens and Alexander Paternotte

of Stuckens, Paternotte / Eurosearch

In the last few years, Belgium hasseen its fair share of mergers andacquisitions, including very public

ones such as the combination ofKorn/Ferry and Carre/Orban, a firm whichwas set up by two ex Egon Zehnderconsultants. This has led to, according toRobert Brodsky of the Belgian ExecutiveSearch Association (BEXSA), the largeinternational firms increasingly"dominating Belgian Executive Search".Smaller Belgian firms have also tried togrow in the pursuit of greater riches.

There are those, however, who wishand intend to remain small. Brussels-based Stuckens, Paternotte/ Eurosearch isone of these firms. First founded asDelville, Stuckens & Partner in 1976, thefirm became Stuckens, Paternotte/Eurosearch in 1997.

We talk to the two managing partners,Guy Stuckens and Alexander Paternottede la Vaillée, about Belgian executivesearch, their network and the challengeswhich they have faced. We also look atthe problems faced in finding candidates

amongst a population of only 10 millionand the differences between operating alarge global firm as opposed to a smallerBelgian firm.

The firm is part of the Eurosearchnetwork which is represented by 6members, down from its previous high of22. Much of the drop is down to thedeparture of the 10 Eastern Europeanmembers who decided to leave andpursue their own interests which theyfelt were not compatible with the rest ofthe group. These reasons include that theEastern European firms were attracting adifferent type of candidate, the highpotential middle manager in his late 20's,early 30's. The network, in its largerdays, was more formal, with a boardconsisting of representatives from US,Asia, UK, rest of Europe and Germany.Now its members include the Germanfirm Deininger with 25 consultants; in theItalian branch of Eurosearch, the twofounding partners still run the company.France has, however, restructured itselfand offers management audits alongside

executive search and Poland isEurosearch's central Europeanrepresentative. Five years ago, theysuddenly lost their British memberNorman Broadbent when "[the firm]imploded in 3 markets, the UK, the USand also in Asia." tells Guy Stuckens.Norman Broadbent was replaced a yearlater by Springman Tipper Campbell. Thedecision making body now consists of themajor partners or country managers whomeet twice a year to discuss commonplans for the next two quarters. The firmhas over 20 years with the network andAlexander Paternotte is very happy withthe relationship. "The best acid test forany networked search firm is how easilyassignments can be transferred. You'reput all your credibility into the hands ofyour partner. In the year 2000, wetransferred about 40 assignmentsbetween the network".

There is no global off-limits policy forthe network "In this respect, we're notthat integrated as yet" says Paternotte.The absence of a global off-limits firm is



pay our people at the top of the sector,and in dollars, not percentages. The wayto accomplish that is to work at the top.Senior-level engagements commandhigher fees. The partner can be paid aslightly smaller percentage but receivemore take-home pay. The averagecompensation of our consultants hasbeen better every year for the last fiveyears - including the two years that wehave been public (1999/2000). Inaddition, our people are building upequity. It is our intention with theHeidrick & Struggles brand, impact at thetop, our global reach, diversified practicestructure and compensation model,which rewards sharing - to accelerate ourPartners significantly past any other firm.Add to that equity in the firm - and youhave solid potential for long-term wealthcreation.

We often attract competitors to our firm.Our compensation model is notdramatically unlike theirs with theexception that we drive bigger numbersthrough the model and we can add equityto the mix. With the sector’s stock pricebeing down, equity is not playing a majorrole now - but it will."

"Our Partners do defer 10% to RSUs(stock) each year - but that amount isalmost equal to what they were paying tocapital as a private company partner.And the RSUs are liquid in three years.On the private model, we did not gainliquidity for our stock until retirement atvery little appreciation."

The firm also continues to invest intechnology. A search can take as long assix months to complete at the highestlevel and the firm is currently beta testingnew technologies which reduce thisperiod by a month. Mr. Pittard believesthat long-term investment in technologycan help reduce the cycle time ofassignments by 25%. He believes thatachieving this level will offer manybenefits.

"It's not just time - everything isimproved. You don't lose the candidate'sinterest, because you get to presentationfaster. Consultants are more committed tosearches that move along at a faster pace.

They can book more assignments, i.e.,greater capacity. Everything improves;speed, quality, compensation,everything."

Beyond the core executive searchbusiness, Heidrick & Struggles isfollowing what Mr. Pittard refers to as a'T' Strategy. This involves developingservices to provide managementrecruitment (the vertical axis of the T)whilst identifying complementaryservices such as executive compensationand retention along the horizontal axis.

"We have extraordinary access to andinfluence with CEOs. We intend toleverage those relationships intocomplementary businesses."

Vertically, LeadersOnline was designedas a web enhanced business to serve themanagement recruitment needs ofclients, typically operating at salary levelsof up to US$180,000 and with an averagefee of US$41,000 per placement. Whilemarketing expenses have been cut back

over the second quarter, the firm hasannounced a renegotiation of thestrategic alliance between the businessand Business Week magazine. As part ofthis, the Leader magazine, distributed viaBusiness Week, will be redesigned andthe print run increased to enableinsertion into the full production run ofthe magazine - this will raise the readeraudience from several hundred thousandto several million qualified individualsper issue.

The initial plan was to developLeadersOnline as an independent

business which would be taken public inits own right. The collapse of the capitalmarkets last year meant that these planswere discontinued, but Mr. Pittard isextremely bullish about the future ofLeadersOnline as an integrated tool.

"We now have critical mass forLeadersOnline in the US and parts ofEurope and it should break even in thethird quarter. LeadersOnline is going tobe a very big part of our business."

The search for the services that makeup the horizontal axis of the 'T' is the jobof Heidrick & Struggles Ventures. Thisdivision considers building, buying orentering into strategic alliances withother firms.

"It is very hard to build every newbusiness, brick by brick. WithLeadersOnline there was nothing toacquire - we had to build it - but withcompanies with an established clientbase, you are able to get a faster start. Ithink that you will see us do moreacquisitions and alliances than start-upsin the future."

As for the future, Mr Pittard welcomesthe appointment of Piers Marmion - "I amcertain Piers will be an outstanding CEO"and is not entirely disappointed to bemoving into a role which will enable himto spend more time on assignments.Speaking prior to the announcement ofthe management change, he revealed "Ihave maintained my client relationshipsbecause, ultimately, I want to go backinto Executive Search."

Piers Marmion now takes the reign of afirm which will have to operate in choppywaters for the foreseeable future. Thefirm continues to boast a brand namewhich is second to none and, as the SHPacquisition demonstrates, it continues toinvest for the long term. How he is ableto play his cards during the downturnwill go a long way towards answeringthe question of whether a search firmshould be public or private.

Lynn McHugh revealed that40% of the firms'consultants “...are stillunderwater - that is,they are notproducing enoughrevenue to earn theirbase salaries, andany minimumguarantees...”



Web: www.heidrick.com





vital for Search Firms in Belgium because"about 50% of our assignments are doneon an international level. There are thetraditionally international sectors such ashealthcare but in Belgium we often needto look for candidates outside of ourcountry. Recognising that Belgium is asmall country, our clients don't demand aBelgian candidate, we need to lookoutside. We call our partners, who help uscome up with candidates".

"People are harder to move now thanever. In international assignments wetalk to both the candidate and persuadethem about a position but we also talk tothe partner of the potential candidate.The unspoken contract has now beenbroken. It used to be that if you were aflexible employee working at IBM, theywould take care of you until retirement.Now the social safety net has beenremoved. People are much more carefulabout moving, something extra needs tobe on offer, experience offered in a newsector, more responsibility. We're findingthat financial rewards are proving lessattractive than ever" says Paternotte.

Stuckens, Paternotte/ Eurosearch arecommitted to retaining clients. Accordingto Guy Stuckens, their firm never workson a contingency basis "...repeat businessis our survival. The longest client hasbeen on our books for 25 years." This ishow such a small boutique consisting of 2consultants, 1 researcher and 1 secretarycan compete against the internationalfirms. Their clients know their history."Our clients also know that we will keepworking on an assignment until we havefound the right candidate. We don't havea big machine pressurizing us to completex amount of assignments to inflatequarter figures and buoy the share price".

Both Stuckens and Paternotteacknowledge the quality of theircompetitors. Alexander Paternotte spentmany years working the some of thebiggest names in search, first with EgonZehnder, then with Spencer Stuart. "Ijoined Egon Zehnder attracted by thepossibility of having a real stake in a firm.After 6 years at Egon Zehnder I became apartner but I still had little power because

of the share structure. After 9 years withEgon Zehnder, I decided to join SpencerStuart which was, at the time, a verysmall outfit in Belgium. The aim was tohelp direct and rebuild a reputable firm.There were just two of us back then.Within one and a half years, we acquiredthe Quadrus search firm and the companytripled in size. There were difficultieswhich has left Spencer Stuart in Belgiumtoday with 2 consultants".

Having spent time at both firms,Paternotte is perfectly placed to see thedifferences between the two firms inBelgium. "Egon Zehnder is verypersonality driven. It is an excellent firmand brilliant for esprit. In contrast,Spencer Stuart is much more structured.Processes are systemized, for exampleclosing and following up assignments.Visiting clients is never done alone,rather in pairs. New business is publishedon the firm's Intranet to sourceconsultant's knowledge on a global level.

They have an effective businessdevelopment and quality assurance".

Guy Stuckens adds that the advantageof being a large firm is that "...the nameopens doors. They have so manyconsultants that someone somewherewithin the company has done anassignment in a similar field. Theirpractice groups are all encompassing.However the greatest disadvantage forthem is off- limits. The situation becomeshorrendous". This is backed up byAlexander Paternotte "...within these bigfirms, you cannot talk to someone withouthaving the green light from the researchmanager in that country". This isobviously disastrous for large SearchFirms in Belgium if many of theircandidates come from outside thecountry. "In contrast, we have loweroverheads, are less constrained by off-

limits and can work freely on aninternational level. If you do a good job,you can be small and have your nameopen doors. Every completed assignmentbrings us a lot of satisfaction".

"We have done many challengingsearches" Paternotte continues. “I haveplaced a candidate, an excellent match ina very secret search and the client didn'teven interview a second person. Whilstsearching for a Head of Quality AssuranceEurope, I spoke to 235 candidates in anattempt to find the perfect candidate! Guyhas placed a whole management team fora Swedish/ Austrian paper mill companyin Southern Africa and, earlier this year,he placed a production director for a largefirm in the Congo. We never feel that wehave to stop a search because of pressureto do more and more searches to inflateour results figures".

Stuckens, Paternotte / Eurosearch areproud of their status. They are one ofBelgium's leading boutiques, a member ofthe Belgium Executive SearchAssociation, in which Guy Stuckens isheavily involved. Despite enjoying aboom last year, they were exposed to thedot.com bubble bursting. Stuckens "Itwas a very interesting year. However byApril/ May, many of our dot.com searcheswere looking wobbly," says Stuckens.The firm was doing 6 dot.com searchesfor one European holding company, withthe fee structure set so that research andsearch were paid in cash and the hiringfee made up of shares and capital. "Ourclient had seen the candidates and knewwho they found interesting but theirfunding ran out by June. It's part of thegame" tells Paternotte with no regrets."We can define searches as 'bottom line'or 'balance sheet'. Bottom line searchesrelate to a field in which we have alreadycompleted an assignment. We know whothe movers and shakers are in this areaand who would move to anothercompany provided that the price wasright. Bottom line searches have a quickcompletion time. The dot.comassignments which we completed werebalance sheet searches. We learntsomething new; it provided us with a

“...Whilst searching for aHead of Quality AssuaranceEurope, I spoke to 235candidates...”

knowledge asset. Our client wantedcandidates in their late 20's/ early 30'swith less experience but with an appetitefor risk. Therefore we cannot regret thatwe were part of this exciting time" hesays.

Like any search firm across the world,the economic situation is having an affecton business. Stuckens elaborates that"...business development is more difficultthis year. It is not just clients who arebeing more cautious; it's candidates aswell. Convincing a candidate to move intimes of economic uncertainty is noteasy".

In contrast, they describe setting up asearch business in Belgium as "...notdifficult. The start up costs are minimal,there is no entry barrier. The making of asuccessful search firm is much moredifficult" tells Stuckens. Most Belgiansspeak 3 languages, French, Flemish andEnglish. According to Robert Brodsky ofBEXSA, it is possible to do search inBelgium as an English speaker. "There

are a few successful search professionalsin Belgium who do not speak both of thecountries' official languages, for exampleAnders Borg of Hansar International(Penrhyn International)" he believes. “Itdoes add value to speak to the candidatein his or her own language during aninterview, discuss shortlists with clientsin the preferred language, but this is notessential, says Brodsky.

"To come straight from industry and setup your own executive search firm is thedifficulty here" Paternotte feels. "The firstyear might be easy as you have goodcontacts, in the second year, businessslows down as your contact list dries upand the third year is difficult because no-one knows you. I would advise learningyour trade in a large search firm and thensetting up your own practice".

And the future? "We want to attract afew professionals who are like- mindedand take a similar approach to search asours. At the same time, theseprofessionals should be sufficiently well-

known in the market to develop theirown client list, someone who has comefrom a large firm. Our ideal is to functionlike a law firm with an equal partnershipstructure, we're against inequality.However, we are never going to be 10person firm. In fact, we do not intend torise above 4 or 5 consultants. Experiencehas taught us that anything larger bringsproblems of office politics" tells AlexanderPaternotte.

Guy Stuckens also gives his vision forthe future. "Our aim is complete clientsatisfaction, hence our stress on size andthe amount of repeat business which wehave. People who were our candidates 10to 15 years ago are coming to us asclients, handing us assignments. Longmay this trend continue".



Web: http://www.stucpat.be/

By J. Antonio Purón of Egon Zehnder International, Mexico

S E A R C H - C O M M E N T



16 search-consult August 2001

Companies traditionallyconcentrated their efforts onobtaining robust legal, financial

and strategic consulting advice. Somehad the belief that, almost by sheer luck,the "people thing" would work itself out.That has all changed. At Egon ZehnderInternational, we believe that the abilityto make good "people" decisions istoday's most enduring source ofcompetitive advantage.

We are all probably familiar with thefamous words by Jack Welch: "If we don'tget the people thing right, we lose; it isthe most important thing in all ourbusinesses". In this new, borderlessworld, this so-called new economy, theyare true words of wisdom.

Now, more than ever, top managers atleading corporations are increasinglyappreciating the colossal value ofrecruiting and retaining a superior team.They are not only consistently turning tosearch consultants; they are also relyingon them as trusted advisors and partnersin their pursuit of victory in the war fortalent.

In light of this new mindset, I havebeen frequently asked what thesimilarities and differences are betweenmainstream or management consultancyand executive search. The answer is:they are remarkably similar. Take thecase of Egon Zehnder International andMcKinsey & Company, for example. Twoleading professional service firms thatoperate in seemingly unrelated fields, butthat, when compared side by side, theyare governed by practically the samevalues and operating principles; andpursue comparable goals.

McKinsey & Co. was founded by JamesO. McKinsey in 1926, around two mainideas: "To serve senior management onproblems important to them and theirenterprises" and "Professionalism:putting the interests of clients first andmaintaining the knowledge and skillsnecessary to serve these clients" .Seventy five years later, the firm'smission statement stays true to itsfounding principles: "To help our clientsmake distinctive, lasting and substantial

improvements in their performance andto build a great firm that is able to attract,develop, excite and retain exceptionalpeople" .

Through the evaluation and partnerelection process, along with an organicapproach towards growth, they havesought to remain a "one-firm", with aworldwide culture that shares the samevalues, mission, standards of clientservice and willingness to collaborate.McKinsey also lives by the principle ofremaining a private partnership.

McKinsey has an amazing list ofalumni, of which a distinguished memberis A. Daniel Meiland, who was electedCEO and Chairman of Egon ZehnderInternational in October, 2000.

Egon Zehnder International wasfounded in 1964 in Zurich, by Dr. EgonZehnder, who retired after 36 years ofenthusiastic and inspiring leadership,precisely in October, 2000. Dr. Zehnderinstilled in the firm a profound sense ofprofessionalism, guided by two basic

principles: to place our clients' interestsfirst and to lead our profession in creatingsustainable value for our clients throughthe assessment and recruitment of toplevel business leaders.

The number of consultants in the globalnetwork of this Swiss-based firm at theend of FY2000 was 292, of which 44 -that is, more than 1 in every 7 - areMcKinsey alumni, making Egon ZehnderInternational the number 1 ex-McKinseyemployer in the world. In fact, over 50%of the firm's consultants have formalmanagement consulting experience priorto their search careers. The rest arrive atthe firm with successful careers from anarray of industries or service orientedinstitutions.

The selection process at Egon Zehnder

International is perhaps the strictest inthe industry. Through more than 25interviews, performed by consultantsfrom 4 or 5 different offices, the firmensures that the potential candidatemeets three basic criteria. The first ispersonal integrity, along with a completefit with the firm's internal culture andvalues. The second is the candidate'spatent orientation to client service. Athird decisive factor is a keen businesssense, acquired through 10 to 15 years ofprevious relevant professionalexperience. Egon Zehnder Internationalselects and recruits only thoseconsultants who have proven to besuccessful after a number of years.

The firm operates out of 55 offices in 36countries. Every new consultant joiningthe firm has earned a postgraduatedegree, some have two or more; andmany have worked or studied in severalcountries. To complement this vastbusiness experience, Egon ZehnderInternational invests heavily in trainingand development - more than any otherfirm of its nature and size.

Our structure is perhaps the most solidfoundation of our vision. Our consultantsare organized around a single profit-center partnership. This is designed toeliminate competitive barriers betweenour offices, allowing the firm to operateseamlessly between countries andregions.

Mr. Rajat Gupta, CEO of McKinsey &Company, joined us at our FirmConference in Berlin last year as one ofthe keynote speakers. He talked aboutthe structures of professional consultingfirms, and expressed his downrightadmiration for the culture, values andoperating principles of Egon ZehnderInternational.

Our firm is privately owned, and it willstay that way. This is because we havechosen to operate independently of anyoutside interests and are motivated solelyby our passion for client service andresults. As Mr. Meiland points out, "whatbothers me most about the executivesearch industry is that it's become far toocommercialized. You cannot have it both

ofofconsulting”management“We are in the profession

“....Egon ZehnderInternational (is)... thenumber 1 ex-McKinsey employerin the World.”



Profile

J. A

nton

io P

urón

J. Antonio Purón is a principal in

the Mexico City office of the

executive search firm Egon

Zehnder International. Mr. Puron

focuses on general management,

marketing and business

development searches, primarily

in the fast moving consumer

goods, high technology and

telecommunications sectors.

Prior to joining Egon Zehnder

International, Mr. Purón was a

management consultant at Bain &

Co., based in Mexico City. In this

position, Mr. Purón worked on

several cases in the U.S., Mexico,

Central and South America. The

projects included market

introduction, business

diversification and organizational

re-design strategies, for clients in

the personal computer, financial

services, internet and retail

industries.

Previously, Mr. Purón spent

several years at Procter &

Gamble, where he held various

positions in the marketing area.

His latest role was marketing

manager for the health care

category. Based in Mexico City,

Mr. Purón participated in various

regional projects, in the U.S.,

Central and South America.

Mr. Purón received a Master's of

Business Administration from The

Kellogg School of Management,

Northwestern University and a

Bachelor of Science in Economics

from The Anahuac University in

Mexico City.

ways - you cannot play to be a businessat the same time as you want to be trulyprofessional. It just doesn't work. I thinkthe best structure for a professional firm isto be private, not publicly held… ifmoney is the overriding concern, thewrong choices are made".

At Egon Zehnder International, webecome partners with our clients. Overtwo thirds of our engagements come fromexisting clients, most of whom we haveserved over a long time. David H. Maister,one of Dr. Zehnder's favorite authors,writes: "If your clients aren't activelytelling their friends about you, maybeyour service isn't as great as you think".As management consultants, we have torapidly and thoroughly understand thenature and strategic challenges of our

clients, in order to help them solve theirtop management concerns. We do notdelegate. The consultants working on theengagement are those best prepared tohave the right ideas on how to solve achallenging executive search, a complexmanagerial appraisal, or a top levelcorporate governance issue.

Another crucial point of differentiationfor Egon Zehnder International is itscompensation structure. At mostmanagement consulting and executiveSearch Firms, professionals are paidaccording to the size of their billings.Consequently, firms invest considerabletime and resources to track these resultsaccurately. At our firm, rewards arestrongly tied to seniority. Consultants donot receive commissions or any

percentage-based compensation,encouraging teamwork and informationsharing across the firm.

We are confident that there will neverbe a substitute for high level, personaladvice, especially when it concernsleadership and human capital issues,which are crucial to the success of anybusiness. The use of new technologies,such as the internet, will serve as a toolto improve our productivity in terms ofresearch and knowledge management.

With our competency-based evaluationmodel, we not only select and attract toptalent, but we are also capable of helpingwith their retention and motivation. Oncea manager is hired by our client, we helpthem develop the individual; becausethroughout the process, we form a goodunderstanding of what the strengths andareas of opportunity are, so that the clientcan then provide specific guidance anddesign the compensation Strategyaccordingly.

Executive search is therefore naturallylinked with management consulting.There is a high correlation between theway each adds value. We both serve thesame purpose of helping our clients solvetheir most pressing managerial issuesand succeed. Clients benefit from sharingthe dedication and the wealth ofknowledge created by professionals.David H. Maister contributes with hisown definition of how to effectively"care" for clients: "Believe passionately inwhat you do, and never knowinglycompromise your standards and values.Act like a true professional, aiming fortrue excellence, and the money willfollow".

Egon Zehnder International andMcKinsey have both establishedthemselves as truly successfulprofessional firms and leaders at theirfield, mainly because their company'sorganization, structure, systems andstaffing are completely aligned with theirlong standing Strategy of focusing, firstand foremost, on serving their clients.

Source: "McKinsey and Company, inside and out" anintroduction to the firm, March 1999 ibid "TrueProfessionalism", by David H. Maister, The Free Press, 1997 ibid



assignment, it should explain why andthen refer you to another firm betterequipped to meet your needs.II. The executive search firm shall tellyou who will conduct the search.

In addition to the consultant whogenerates the business relationship,there may be a team of professionals whowill handle the search assignment.

It is certainly within your rights to askfor and to receive full and open disclosureregarding the consultants and theirability to successfully handle theassignment, as well as the resources thefirm has available to support theconsultant/team working on your project.III. The executive search firm shallprovide a high-level consultativerelationship.

"Retained executive search consulting"is defined as a specialized form ofmanagement consulting, conductedthrough an exclusive engagement and ona pre-determined retainer-fee basis. Itspurpose is to assist your organization indefining executive positions, identifyingwell-qualified and motivated candidates,and selecting those best suited throughcomprehensive, quality assured searchprocesses.

In addition to locating high qualitycandidates, your search firm should alsoprovide information and feedback thatnot only helps direct your search forexecutive talent but can also be used torun your business more effectively. Thisfeedback includes:● Knowledge of the industry in which the

search will be conducted, includingavailability of candidates, comparativeassessments of those candidates, andremuneration levels.

● General market research regardinghow your organization is perceived inthe market, what your competitors aredoing, and what kind of recruitingstrategies may or may not be workingat any given point in time.Do not expect a 50-page market

research report for your retainer fee. Butthe search firm should give you areasonable overview of market conditionsand the general perception of your

organization in the marketplace fortalent.IV. The executive search firm shall holdyour information in strict confidentiality.

By its very nature, an executive searchrequires you to divulge highly sensitiveinformation about your organization. Thesearch consultant must treat any and allinformation you give them with theutmost confidentiality.

At the same time, the consultant cannotconduct an effective search withoutmaking some information available topotential candidates. To protect yourinterests, however, the search consultantshould guarantee that he or she will:● Use confidential client information only

for the purposes of conducting theassignment.

● Disclose client information only toothers within the search firm (who maybe supporting the consultant on thisassignment) or potential candidates

who have a need to know theinformation.

● Never use confidential information forpersonal gain or provide thatinformation to third parties for theirpersonal gain.

V. The executive search firm shalldemonstrate a clear understanding of theposition, the company and the objectivesof the search.

In order to conduct a successful search,the consultant must have a crystal clearunderstanding of the position to be filled,the requirements of the job and yourcompany's culture. Accordingly, youshould insist on receiving a report thatdetails the consultant's understanding of:

● Your desired level and type ofexperience

● The background, education andtechnical skills needed to successfullyperform the position

● Responsibilities of the position● Any interpersonal skills needed

Good Search Firms will do more thanjust feed back the job description youpresent them. They will proactively helpyou develop, modify and refine your ownunderstanding of the position. To helpwith this critical step, give your searchconsultant access to all those whoparticipate in the selection process andencourage them to provide full disclosureregarding the position to be filled.

Because the job description representsthe bedrock of a successful search, youhave a reciprocal obligation to notify theconsultant any time circumstances (eitherinternal or external) require a change inthe position or the type of person you'relooking for. Be aware that a majorchange in search specifications mayrequire a change in fees. VI. The executive search firm shallprovide you with regular, detailed statusreports on the progress of the search.

Depending on the position to be filled,the availability of talent and a host ofother factors, a successful search can takeanywhere from a few weeks to severalmonths. To keep you up-to-date, thesearch firm should provide ongoingprogress reports that include:● The companies at which the consultant

has tried to target candidates● The market response to the search● Obstacles to identifying or attracting

candidates● Candidates currently being developed

The search firm should update youregularly, either by phone, fax, e-mail,written report or some combination of allfour. Let your consultant know yourpreferences.VII. The executive search firm shallpresent qualified candidates who fit theposition and the culture of yourorganization.

The consultant should present you witha range of qualified potential candidates,

“...your search firm shouldalso provide informationand feedback that not onlyhelps direct your search forexecutive talent...but canalso be used to runyour business moreeffectively.”



By Peter Felix, AESC

Executive Search FirmWhat to Expect from Your

The Client's Bill of Rights:

Despite its huge growth around theworld as a critical modern dayprofessional service, Executive

Search Consulting can still be confusingto client hiring organizations and thecandidates who are directly involved inthe process.

For this reason the Association ofExecutive Search Consultants (AESC) hasprepared a Bill of Rights for Clients andCandidates in the belief that educatedusers are more likely to be satisfied users.

An abridged version of the Client's Billof Rights follows. Full versions may bedownloaded from the AESC's web-siteswww.aesc.org or www.bluesteps.com.

An executive search involves a complexprocess that requires a substantialinvestment of your time and resources.When you hire a retained executivesearch firm, you're entitled to receive ahigh level of service. But what is thedifference between a professional,reliable service and a lower quality ofservice? What are your rights andobligations as a client? Above all, how doyou know when you have receivedexcellence in client service?

The more you know about the ins andouts of working with Search Firms, thebetter your chances of achieving asuccessful search and receiving full valuefor your investment. In the belief that

well-educated clients always lead tobetter client/consultant relationships, theAESC offers the following "Client's Bill ofRights."I. The executive search firm shall provideyou with an accurate and candidassessment of its capabilities to performyour search.

Not all Search Firms offer the sameservices, but they should all operate inline with the highest professionalstandards. In addition to the obviousdifferences in size and manpower, SearchFirms also vary in their areas of expertise,their knowledge of and contacts within

various industries, and the skills andexperience levels of their searchconsultants.

Before agreeing to undertake anysearch, the executive search consultingfirm should:● Verify that it has the resources, time,

knowledge and expertise to handleyour specific assignment.

● Disclose any and all information withregard to relationships orcircumstances that might create actualor potential conflicts of interest.Disclose limitations arising throughservice with other clients that mayaffect its ability to perform the searchassignment.

● Define with you which part of yourorganization is the "client" (i.e. whichsubsidiary, division, department, etc.)and agree upon the period, if any,during which the firm will not recruitfrom the defined client organization.

● Define the scope and character of theservices to be provided and the feesand expenses to be charged for theservices rendered.This requires that you provide a full

and accurate description of yourorganization, its business needs andculture, the position to be filled, and yourcriteria for the ideal candidate. If thesearch firm cannot handle your

Peter Felix

S E A R C H - H E A D I N G




whom he or she has thoroughly assessedand interviewed. The consultant shouldbe able to discuss each candidate's:● Experience level and significant

achievements relative to the position tobe filled

● Education and background● Intellectual, interpersonal and

motivation competencies● Personal strengths and weaknesses

with respect to the position to be filled● Perceived cultural fit● Interest in the position● Remuneration and financial

expectationsIn presenting candidates, either

individually or in a "shortlist," you shouldexpect the consultant to discuss theinterviewing arrangements and otherissues that can affect the criticalinterviewing process. Immediately afteryou have interviewed candidates, yoursearch consultant should solicit yourcomments and feedback and help youconduct comparative candidateassessment and analysis. They shouldcomplete and transmit to you theverification of credentials and referencechecks.

If it becomes apparent that the searchwill take considerably longer thanexpected or that it may not yield anacceptable range of candidates, theconsultant should inform you as soon aspossible and discuss alternative coursesof action.VIII. The executive search firm shallhelp you negotiate with the finalcandidate, representing both parties withskill, integrity and a high degree ofprofessionalism.

Once you have selected a finalcandidate, the consultant's role changesfrom that of search agent to negotiatorand communicator. At this point, theconsultant's primary function is to helpyou bring the candidate on board in amanner that facilitates a long andsuccessful stay with your organization.This includes:● Acting as an intermediary between you

and the candidate regardingcompensation, benefits and other

conditions of employment● Feeding back to you any reservations or

concerns the candidate may haveabout accepting the position

● Helping the candidate to assess theopportunity

● Working with both sides to create a"win" for everyoneAlthough the consultant represents

your interests first and foremost, he orshe must also remain sensitive to theneeds and concerns of the candidate. Todo otherwise significantly reduces thechances of a successful hire. In addition,representing both parties with integrityand professionalism ensures twoimportant outcomes:● The candidate comes aboard feeling

that he or she has been treated fairly● The search enhances your company's

reputation in the marketplaceRemember that your candidates are

also very busy professionals who havesacrificed valuable time to talk with you.Furthermore, they did not solicit thisopportunity; it was presented to them.IX. The executive search firm shallprovide you with a clear understanding ofits replacement policy and other unusualsituations that may arise during and afterthe search.

The search firm cannot (and should notbe expected to) guarantee to fill yourposition. The consultant also cannotguarantee that, once placed, a new hirewill stay with your firm. With that inmind, the consultant should provide (inwriting) an explanation of the firm'spolicy regarding possible outcomes.These include:● The search firm's obligations and

responsibilities to you should a newlyrecruited professional leave yourcompany for any reason within anagreed period of time.

● Your obligations to the search firmshould you hire a candidate presentedduring the current engagement for aposition other than the assignedvacancy.

● The conditions under which the searchfirm can withdraw from yourassignment or consider it sufficiently

changed to start a new search.X. The executive search firm shallprovide you with a reasonable level offollow-through after you have hired thecandidate.

Seemingly successful placements cansometimes fall apart during the transitionperiod. As a result, the consultant'sresponsibility does not end when thecandidate accepts the offer. Instead, theconsultant should stay in contact with thenew hire as long as necessary to ensurea smooth transition and help them settleinto the new position. Above all, theconsultant should make sure that you arefully satisfied before considering thesearch a success and concluding theassignment.Stand up for Your Rights!

Given the importance to yourorganization of filling the position withthe highest quality candidate, you haveevery right to expect the highest level ofservice. Remember that by working witha retained executive search firm you haveentered into a consulting partnership.

Take a proactive approach to managingthe relationship. Do your homework andprovide full and accurate informationregarding the position and the idealcandidate. Set very clear expectations upfront in terms of how you and the searchconsultant will work together. Keep thelines of communication open at your end,and stay in regular contact with yourconsultant until the assignment has beencompleted to everyone's satisfaction.

If at any time during the search yourconsultant doesn't seem to understandthe nature of the assignment, fails toprovide ongoing feedback and progressreports, fails to present a range ofqualified candidates or doesn't representyour firm in the manner you wish,express your dissatisfaction immediately!Now that you know your rights, it's up toyou to hold your search firm to the highstandard of service that you expect.



Web: www.aesc.org

forGoing Global -

OptionsExpansion

By Barbara Kwateng, search-consult

Going 'international' is a naturalcourse of evolution for manyexecutive Search Firms. Motivated

by a desire to generate higher revenuesand improve client service many chooseto join a network, open a subsidiaryabroad or merge with a global whollyowned firm. But there is a breed ofinternational firm which is on theincrease, the one site firm serving aninternational clientele. They believe thatthe benefits of a single site outway thecosts. The success of this would dependon whether all the opportunities andmore which are available to multi-national firms could also be exploited bythese one-office search companies. We

look at the different types of internationalfirms and ask how a one-site firm cancapitalize using their models. In addition,we look at how a one-site firm can avoidthe difficulties which a multi- nationalfirm may face.

An example of a one-site firm isWakefield Talabisco. Based in New York,it has no overseas offices or affiliationsyet claims that it is able to conductinternational search as well as anymultinational.

"To avoid watering down companyculture, hands on bosses prefer to keepone office from where the business ismanaged", says Barbara Talabisco,founder of the firm.

Andrew Garner





Ms Talabisco identifies three basicreasons why a firm may need to operateoverseas - languages, time zones andcultural awareness. She believes thatshe has developed a model whichovercomes all three problems.

"We work 24 hours a day. At 5 p.m.New York time, we begin calling potentialcandidates in Australia, by 7p.m. we'recontacting talent in Asia. Our researchershave all spent time outside the USA.Therefore we respect the differencesbetween business practices in Taiwan asopposed to Korea. As far as a languagebarrier is concerned- there isn't one. Toptalent in Europe and increasingly acrossAsia are fully conversant in English".

Ms Talabisco believes that theeffectiveness of this Strategy is reflectedby the fact that her business currently has15 searches running across Asia. "This isa clear sign of a winning Strategy. It ismost definitely possible to run aninternational firm from one office."

Christian & Timbers would take asimilar line on language as a barrier butbelieve that the consultant needs to bebased reasonably close to the client.

This means that the firm's researchers,or knowledge workers as they aretermed, are asked to identify talent froma head office in Cleveland, Ohio, mid-west America. "Where research is done isirrelevant. The same research methodsare used to find candidates across theworld. For example, we recently did anassignment to find the Vice President ofHuman Resources at Ebay. Our line up ofcandidates represented a very mobilepool of talent from Belgium, Switzerland,Germany, the US and France. Localresearch just wouldn't have worked inthis case.", explains Geneva based BradDewey, Managing Director of EuropeanOperations.

Essentially, Christian & Timbersachieve this by splitting the traditionalresearch role in two. The knowledgeworkers - who have reading skills inforeign languages and a high degree ofsector specialization - identify candidatesbefore the local consultant makescontact.

But is this the best path? Researchdone from one office may only bring themost visible top candidates but can missout on vital local talent. These individualsmay not be as easy to find out, perhapsappearing occasionally in local press, forexample. To find out about the localcandidate, the researcher may need anear to the ground and this can mean alocal presence. Managing Director ofGarner International, Andrew Garnerbelieves that this is key and is strongly ofthe opinion that the ideal model sees "...aresearch project being done at local levelwhilst the consultant who took theassignment creates the shortlists, talks tothe candidates and deals with the

clients".This desire for local knowledge was

one of the motives behind Dutch firmFroom & Partner's decision to join LeadersTrust International. Founder, AlbertFroom, saw "the evolution of the Euromanager who, for example, works inBritain during the week and lives inSwitzerland at the weekend". Mr. Froomrecognized that his database is limited tocandidates based in the Netherlands andthat joining a network was an ideal wayto extend his reach.

"When we need someone who hascertain experience in certain countries,we can go to our members for help".

For a one-office firm determined not to

Going Global - The OptionsSingle Office Network of Affliates Integrated Subsidiary

Costs Start up costs are minimal – although Consultants should expect to build up Air Miles!

Costs maybe relatively low, but revenues must be shared

Highest cost

Local Knowledge Working from one office simplifies business and ensures that the firm need not consider international employment law, taxation etc.

Every firm looks after local issues.

The firm has to be aware of cultural, business and legal issues in all countries in which it operates.

Decision Making & Business Management

Simplest solution Can be problematic. Albert Froom – now with Leaders Trust - describes his experience at a previous network as being akin to the ‘United Nations’. Networks can also be insecure – look at the experiences of Ward Howell. Some firms – such as TRANSEARCH – have instituted share swaps to reduce this risk.

Integrated firms have the right to impose a policy and a set of standards – although management of an international business has its own problems

BrandManagement

Relatively simple, but brand awareness beyond the home country may be limited.

Different networks handle this in different ways. For example, all members of the Boyden International group must use the Boyden branding exclusively. Amrop/Hever allow a local brand to be used.

The opening of a subsidiary enables a firm to extend the brand without losing control.

Research The single office firm can have the hardest task in identifying local talent.The issue may be simplified through the use of external research firms.

A local presence may make research easier and – potentially – quicker, but can bring off limits issues.

A local presence may make research easier and – potentially – quicker, but can bring off limits issues.

ClientManagement and Business Development

Although some firms demonstrate it is possible, the none-local firm is at a distinct disadvantage.

Integrated firms argue that the networks are not as consistent in terms of standards, procedures and infrastructure and that this can have an impact on client service.

Some clients have shown a preference for integrated businesses when selecting preferred provider lists. However, many of these lists are overruled at a local level anyway

expand abroad, the solution may be tocontact a local research firm (see search-consult, issue 2 for further information onexecutive research). Armstrong Craven,based in Manchester, England, workswith over 200 executive Search Firms

"Search Firms see the advantage inusing us when they need to completeEuropean assignments. For example,some of our clients are Americancompanies whose employees do notpossess the linguistic skills which wehave here" explains Victoria Gartside,Head of the Executive Research Practice.

Ms Gartside reveals that the firm oftencarries out work on behalf of clientsbased outside the United Kingdom.Search Firms see the ability to outsourceresearch as beneficial for a number ofreasons - it can reduced fixed costs, helpwith periods when demand is particularlyhigh and also provide a degree ofindustry specialization with the clientmay not have. Ms Gartside also sees avery significant benefit in terms of offlimits. Armstrong Craven does not adoptthe off limits policies of its clients

(Armstrong Craven's off limits list largelyconsists of Recruitment Consultancies).Although the client’s off limits are strictlyadhered to during the course of theassignments the firm undertakes on itsbehalf, Armstrong Craven does not adoptthose off limits when working for otherclients. If the overseas search firmworked through a UK affiliate, it wouldhave to work within both its own and theaffiliates off limit issues.

The key reason for having localrepresentation, however, is for businessdevelopment. Without a local marketpresence, it can be much more difficult toexport a search brand abroad. What couldmake a firm in Hong Kong choose aEuropean search firm to find them a newCEO? Logically, the local search firm witha reputation on the local scene wouldbegin the sales process with a hugeadvantage

Albert Froom concurs that internationalpresence is vital for winning businessfrom international clients.

"Although many of our clients arebased in the Netherlands, they may have

offices abroad. Therefore marketpresence is essential to our winning anassignment," he explains. "Our clients areinvolved in a globalization process, wefeel we should be too. We also benefit byknowing what search trends aredeveloping in other regions, for examplein the United States. This impacts theway we do business."

By not having local representation, thefirm may be sending a damagingmessage - that a firm is not well enoughacquainted with the indigenous market.Andrew Garner argues the case forhaving nodal offices which cover ageographical area, rather than presencein every country.

"Reputation is all important," heexplains. "The essential factor indeveloping a successful firm is criticalmass and this is not a numericalphenomenon. It is more about developinga reputation which is easily recognizedand well respected". In GarnerInternational's case, this involves officesin Indonesia, Malaysia and Singaporeserving Southeast Asia.

As the war for talent continues toincrease - and demographics show that itwill - the tendency for Search Firms towork beyond their borders will increase.Every model carries with it strengths andweakness, and the market demonstratesthat there is no single solution whichguarantees success.


For a database of global firms, visit:

Web: www.search-consult.comBarbara Talabisco

“...Search Firms see theadvantage in using us whenthey need to...some ofour clients areAmerican companieswhose employees donot possess thelinguistic skills whichwe have here.”

TheS E A R C H - H E A D I N G




Executive Search -

Nordiccountries

The Nordic region of Europe - Sweden,Finland, Denmark and Norway - isincreasingly seen as a single market forexecutive Search Firms. Michael Berglundof Michael Berglund Chefsrekryteringtalks to Barbara Kwateng about why thisis and how his firm - part of the IICPartners network - operates in thisenvironment.

M ichael BerglundChefsrekrytering operates in aSwedish market which is

defined by both national and regionalcharacteristics. Sweden itself has a

population of only around 10,000,000 butdemand for search is increased by thehigher than average number of corporateheadquarters - Volvo, Ericsson and H&Mare all based in Stockholm - and the closelinks with other Nordic countries. Theselinks reflect both client demand - thereare many Nordic wide companies with theairline SAS being an example of this. Inaddition to this, whilst the countries havedistinct languages, they are tightlyentwined - there are so many similaritiesbetween the different languages thatcitizens of each country can interact aswould people speaking different dialects

of the same language. There also tends tobe an overlap between ownership oflanguages; Swedish is the mother-tonguefor 5% of the Finish population - a relicfrom the previous century.

Michael Berglund Chefsrekrytering ispart of the IIC partnership, but it enjoys anespecially close relationship with theNordic members.

"We work very closely with ourpartners in the Nordic region" states MrBerglund. "When we start a pan- Nordicassignment, we draw up a brief togetherand then start researching separately.Local research is important; for example,

only a Swedish researcher would knowwhat it means if someone has gone tocertain Swedish universities, e.g. UppsalaMedical School as opposed to KarolinskaMedical School. We understand thedifference between Swedish regionalaccents and what this suggests about acandidate. It would be difficult for us tocompare candidates who have studied attwo top Norwegian business schools, forexample Bergen against NHH. Ourcolleagues in Norway understand thesefine cultural differences within theircountry better than we can". AlthoughNorway is not a member of the EuropeanUnion, it has EES status which means thatits population can travel freely and arewithout work restrictions within Europe,making it possible for the NorwegianSearch Firms to share candidates withtheir Swedish counterparts. Norway isone of the 15 countries participating inSchengen Accord of 1985, from whichsome European countries such as GreatBritain have opted out of.

In Copenhagen and Helsinki, the IICpartners are known as J. Friisberg. Untilfairly recently, J. Friisberg was a networkin its own right, but its members decidedthat it was “...too small to developinternationally”. When the partners of theFriisberg network joined IIC, its membersdecided to keep the Friisberg name but inall other ways have been subsumed intoIIC Partners.

Currently around 10% of revenues forMichael Berglund Chefsrekrytering relatesto cross border work, and Mr Berglundexpects that with will increase rapidly. Inpreparation, the Nordic Members of IIC arealready co-operating on projects such as"The Nordic Search Academy". This isdesigned to provide training for newpartners, consultants and researchers andto create a forum for discussion and closeintegration amongst employees. Thefirms also "...develop methodologiestogether and strengthen the resources ofwhat would be very small markets".

Mr Berglund, a former Doctor ofPsychiatry, believes that the evertightening links between Search Firms inthe region is in the interest of all

concerned. "We need this to be able to continue to

work at the very top level of executivesearch. Developing a specialist, Swedenonly, business would not be sensible.Ours is such a small country that thesearch firm would either run into off-limitsproblems or end up working at the lowerend of search. It is much more logical tohave a general search firm with specialistconsultants working within it, for examplein finance, government, consumer goodsor pharmaceuticals".

Despite the slowdown in certain partsof the World, demand for search in theNordic region remains strong. Particulargrowth has been seen in the amount of

search work being undertaken for thepublic sector.

"We expect this to be a worldwidetrend. Governments are increasinglyusing executive Search Firms as theyrealise the importance of human capital.In our market, it was not legal to performsearches for the government even 10years ago. Things have now changed.Public institutions are seeing that they arenot as popular as they once were inattracting human capital".



Web: www.mberglund.se

Background

Like many Search Firms, Michael

Berglund Chefsrekrytering has

developed a package of services

beyond the core Executive Search

business. Senior level recruitment

amounts for the largest slice of

the business, but over recent years

the firm has launched 'People in

Project' and 'The Recruitment

Academy.

'People in Project' provides senior

management on an interim basis -

a service offered by many Search

Firms. The Recruitment Academy

is a more unusual service,

designed to educate the client in

better recruitment.

One objective of the Academy is to

ensure that clients are fully aware

of the different services offered by

the contingency agency,

advertising and direct search.

"Many companies still do not know

what exactly differentiates us as a

search company from, say an

employment agency. Many firms

believe that a big database with

many executives implies a strong

executive search firm but we

would say otherwise. We would

define that as a high level

employment agency. For us,

search means seeking and

identifying who is the best person

for the job with and without a

database. On average we contact

100 people for each search"

explains Berglund.

"We then teach their recruitment

managers the essentials of

interviewing which are important

after we have completed research

and search. We improve our

clients' skills on how to draw up

profiles for ideal clients. You can

be an extremely good executive

but if you don't know how to sell

your company, you will simply not

know how to win the war for

talent. The client needs more than

the perfect search consultant. We

can sell the position to a candidate

but the client needs to do their

part too". By Barbara Kwateng, search-consult

Executive Search -

Nordiccountries

Subscriptionsand back issues!“Our readers include

executive search

professionals from firms

in 18 countries.”

£100 / $160 / €160is the cost for 10 copies perannum, delivered anywherein the World.

Subscribe online at:www.search-consult.comor contact:Carol Crawford([email protected])to discuss discounts formultiple copies.

Enjoying this issue?Want to make sure you receive the next one? The ONLY way to receive the next copy is to subscribe!

Recent and upcoming interviews include:• Hobson Brown Jr. - President and CEO, Russell Reynolds Associates• Russell S Reynolds Jr - Chairman - The Directorship Search Group• Regional Focus reports looking at Australia, Spain, Portugal and France

Back IssuesCopies of back issues of search-consult are available for £15 per issue.Contact [email protected] for further information

ISSUE 1● Dr Jürgen Mülder -

Heidrick & Struggles● Executive Search and

Management Appraisal

ISSUE 2● Steve Potter -

TMP Executive Search● Executive Research -

The Outsource Option

ISSUE 3● Jeff Christian -

Christian and Timbers● Focus on the

Whitehead Mann Group

ISSUE 4● Windle Priem -

Korn/Ferry International● Chris Clarke -

Boyden Global Executive Search

ISSUE 5● Paul Ray Jr -

Ray & Berndtson● Search in Germany -

The Law

ISSUE 6● Pat Pittard -

Heidrick & Struggles● Germany's top 25 Search Firms

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search-consult issue 6

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