Perception v Reality - Why you should rethink your approach to hiring senior executives
Traditionally, executive search has always been about… well, searching for the right executive. But a recent survey conducted across 16 UK sectors by Practicus revealed that search firms rarely found and presented the person their client needed. In fact, only 27% of respondents agreed that their experience of using executive search firms to fill a position was a complete success, with 73% saying that the process was a partial or complete failure.
In most cases this was because the selected candidate simply hadn’t proved to be the right person to solve the business challenge they were hired for. In a third of those cases, engaging an executive search firm simply did not result in a hire at all.
Source: Survey commissioned by Practicus (December 2017) of executive search use across 16 sectors: housing, digital consumer services, advertising, airline, charity, banking, manufacturing, publishing, rail, social care, transport, travel, insurance, financial services, life sciences and retail.
It would be easy to chalk these findings up to a ‘competitive market’ and ‘scarcity of talent’ and many of the other time-honoured platitudes. But the reality is that we live in a world that is increasingly transparent, where access to the best talent has never been greater and professionals at all levels, not just executives, change roles quickly and frequently. Where does it all go wrong?
From the perspective of companies using executive search firms, 32% believed that the candidates they were presented with had not been properly qualified, 18% that the role has not been properly understood , 9% that there was deliberate pushing of the wrong candidates forward and 18% that the search firm did not prove to have the requisite domain and market knowledge. Harsh reading.
In fairness to executive search firms, the blame may not be solely at their door. When asked why no hire was made or the candidate proved to be the wrong one, the single biggest reason given by hiring companies was that the role had changed in its scope or was cancelled outright. The second biggest reason was cultural fit issues with the hired candidate and in only 8% of cases was failure attributed to none of the candidates meeting the client’s brief.
Source: Survey commissioned by Practicus (December 2017)
It would be easy to think that the change in scope or cancelling of so many roles was due to business conditions changing over the course of the search but it’s a theory that’s hard to marry with another stat, that only 5% of companies cited frustrations with the speed of the executive search process. Rather, the figures reveal a world where companies habitually begin hiring executives only to identify later that they needed to think deeper about who they are hiring and why.
A similar ‘take away’ on the executive search industry meanwhile is that in many cases, while it might not be the main cause of failure, it does not do enough to ensure the right business outcome. Based on this feedback, the industry is all too often guilty of taking client requirements at face value – of not qualifying roles properly and of lacking the requisite domain knowledge to interpret the brief effectively.
Too much haste, not enough speed
Could it be that that the essential problem is that both sides are guilty of too much haste, not enough speed? Can the executive search industry take bigger strides toward helping clients get the right business outcome? It seems the answer is yes and yes.
I like simple analogies and if I were to give one here, the executive search industry is a bit like a busy hardware shop, full of expensive tools and components. It has two long queues of customers. One queue stands with lists of items to buy and are dutifully sold what they ask for, mostly. The other queue is yesterday’s customers. They hold receipts and are returning items they didn’t get on with or simply weren’t what they actually needed. The problem is that on many days, this second queue is almost as long as the first.
At some point, you have to start asking customers deeper questions about what their intended purchases are for, work back the thinking and help them assess whether that is indeed what they need. A good hardware store does this – challenging you without patronising and then advising from a position of knowledge and experience.
Of course, no analogy works completely. Executive search firms still tend to get paid even if the executive they place is returned to the market without solving the problem. A new senior leader affects many stakeholders and a well-rounded view of what a business needs from that executive can rarely be ascertained from just one person. It’s important to point out that the collective view of several senior stakeholders in a briefing meeting is rarely as coherent and agreed upon as it might first appear. So… how do you do it?
Good search consultants can hold a mirror up to a client, help them rationalise their thinking and advise on the current executive market. Sometimes they can even explain how other clients have tackled a similar challenging role and why that did or did not work. However there are very few who can offer the same level of SME experience as those the clients they are supporting. So where does the value really lie?
In fact, the leading perceived benefits are now largely commoditised by the digital age and the rise of LinkedIn: Contact Network (“black book”) and, most disparagingly, taking away labour-intensive work.
Source: Same survey commissioned by Practicus (December 2017) of executive search use across 16 sectors.
In a world where companies are fighting tooth and nail to become more customer-centric, it is interesting to see here that the perceived benefits and the major frustrations of using search firms are starkly different. Whilst companies mostly value a firm’s contact network and their ability to take away labour-intensive work, they are mostly frustrated by lack of market knowledge and bad qualification of candidates and requirements.
This begs two questions:
1. Are the expectations of search firms skewed?
2. Are search firms really providing a service that is of maximum value to the client?
Time for a change
The findings of the survey were not a huge surprise. In fact, they were, if anything, slightly worse than we’d expected. Perhaps one solution is to shift the value toward an approach that puts advice, supported by a community of executives for further insight, at its heart.
Our view is that the days of ‘traditional search’ are numbered. It’s become a bloated and commoditised market which is no longer that clear for clients to navigate. Helping clients uncover their needs that is where real value is added and collaborating with them on how best to sell that opportunity to attract the right individual(s), with the right cultural fit. It’s early days, but the reaction to this approach has been strong. It bodes well for the future of the industry and, most importantly, the value clients seek from executive search.
If you have any questions regarding this article, please contact Practicus 01491 577122.