What Everyone Gets Wrong About Executive Search

[00:00:00] The 10 Minute Talent Rant is live. I’m James Hornick joined by Jeff Smith and we are on the clock. The 10 Minute Talent Rant is our ongoing series where we breakdown things that are broken in the talent acquisition and hiring space. Maybe even pitch a solution or two. Before we dig in, all of our contact we found on talentinsights.hirewell.com.

[00:00:17] Getting deja vu? Executive search. I’m not feeling well.So, you know, back to kind of disheveled Jeff, but I promise, you know, that when we get into it, we can deliver on this sort of stuff in a buttoned up way. Yeah. Jeff is under the weather today, plus we had a major technical malfunction.

[00:00:37] So basically I already did this podcast once and it just didn’t work. Yeah. So getting deja vu. Anyways. Episode 109, what everyone gets wrong about executive search. Yes. All right, so, I’ll reuse my anecdote from earlier. Since we talked earlier this morning, have you watched Halt and Catch Fire yet?

[00:00:53] The old show? I have not. You have not. All right. [00:01:00] So I actually was working. Yeah. Halt and Catch, if you havent watched it, it was like the season one, it got criticized for being like a 1980s ripoff of Mad Men. But then I would say starting in season two on it’s one, a Top Pony show. It’s one of the best I’ve seen.

[00:01:14] It’s a great period piece about the early tech scene, kind of pre Silicon Valley, then eventually in the last season gets to Silicon Valley. But it really starts, season one, there kind of the counterculture pushback against IBM. Now, I think this is, it kind of perfectly encapsulated like the buying culture for IBM was just at that point in time,

[00:01:36] they were the biggest player in the space. They were the one everyone knew, they were the biggest name. And they also kind of sucked. They were not forward thinking at all, but everyone bought from them specifically because that’s who you just went with. And it also kind of perfectly encapsulates the analogy of what’s broken in the executive search world now.

[00:01:54] Yeah. I mean, that’s a good intro. We have some themes here, right? [00:02:00] And a lot of this will contribute to the issue. We’re going to kind of break it down to five different things, so I’ll jump right into it. The first thing is the prestige problem. And what we mean by that is what you just described, the IBM, you know, the safe choice logic.

[00:02:21] It is alive and well in the executive search space. The catchphrase used to be no one got fired for buying IBM. Now no one knows what that means because no one really, like, even like I would say millennials on down probably do know IBM is, but that was kind of the mindset. Continue. Sorry.

[00:02:37] It’s so true. Just like my Rolodex, you know, piece coming up here. Big firms sell based on reputation, not on performance. There’s just name cache there. I was driving down the street and saw a Jaguar the other day and I was like, man, remember when Jaguar was a thing? Like, yeah. It’s, you know, prestige matters.

[00:02:57] It holds on for a while. Yeah. And [00:03:00] just for context too, at Hirewell, our executive search clients, typically, I would say more than half, came to us after they either had a failed search they have currently, or their last search they had with one of the bigger firms was an absolute train wreck.

[00:03:14] Yeah. Which fine, I mean being second in line actually allows the customer to find out what they did wrong, and why the partnership wasn’t good. So it allows for the second search to work better, but we would like to be first in a lot of those cases. Yeah. The common patterns, the common things we see are like, they would typically get recycled the same candidates over and over again.

[00:03:33]  Minimal customization, meaning they, they would get people who came from bigger organizations that really weren’t relevant to them, who had these impressive MBAs. But just weren’t like an actual fit for what they looked for, but they were just supposed to be, oh, look how impressive they are. And they just didn’t really, it took them forever if they ever did actually zero in on like what that company, what our client like was actually looking for.

[00:03:54] And from a business context, and it’s just, prestige alone does not [00:04:00] deliver results as kind of the net net of it. Like you have to actually know what you’re doing and actually put the work in every time. Yep. Totally. Alright. Number two, the access myth. And when we say access, it’s simply access to candidate pools. Big firms,

[00:04:14] the big executive firms in this case, they search. They claim that they have exclusive access to these executive candidate pools who will only take their calls. Yeah. It’s unequivocally false. I don’t really know what else to say to that. The reality of the situation is executives and executive candidates are a hundred x easier to engage with than mid-level talent.

[00:04:41] Yeah, it’s crazy. It’s crazy. They receive far fewer inbound messages by design. There’s just less jobs and there’s less recruiters working on them. And every opportunity is generally speaking, high caliber and worth their time if only for networking. [00:05:00] Yeah. Even if it’s just to find out information, that information is valuable to that individual.

[00:05:06] So what we’re saying here is with the right pitch, response rates are 80, 90, like they’re infinitely higher than every other skillset that we work on. And there’s this Rolodex, you know, pitch that is all fear-based nonsense. And I just like IBM sorry if you know, you know, the young crowd doesn’t even know what a Rolodex is.

[00:05:29] Look it up. Competent firms can engage top talent that’s on the market now, yeah, versus this hypothetical, you know, database of people. Yeah. When someone reaches out to you and say, “Hey, I got a really high paying job” or “Get to run the company”, you’re going to respond. Right. It’s like, it’s just like come on.

[00:05:49] Yeah. Another thing, a third reason, like talking about the why executive hires fail and, I think it’s important to say. A lot of times they fail after the hire, [00:06:00] not during the recruitment process. Like it’s not always because you recruited the wrong person. Yes. Sometimes you recruited the right person,

[00:06:06] it just still didn’t work out. And kind of understand kind of why this happens. And this is really common in like mid-market organizations, which is a huge chunk of like the, of the executive hiring market. A lot of execs who come who were execs already, they were homegrown at organizations.

[00:06:21] They were great. They are high skill individual contributors. They became high skill managers and they even became high skill executives. This is not an example of someone who got promoted over their skis. But what happens there is, they had many, many, many years in several positions to actually learn kind of how their organization worked,

[00:06:38] how to navigate it, what the culture was, how to build trust, and all those kinds of things. Yep. And people forget that once you get transferred to a new organization, if you’re not bringing your team with you, you’re starting from zero. And the expectations someone might be able to hit the ground running day one isn’t realistic.

[00:06:56] And it’s important because the other thing to mention too, and I think everyone [00:07:00] out there listening can agree with, there’s not enough leadership training in general. And that’s really kind of the crutch. And the thing that actually would fix a lot of these things is that you might have someone who’s excellent at the job, but if they never had leader, like.

[00:07:12] Being excellent at the job is one thing, but knowing how to navigate a brand new organization is completely different skill that they may have never done before. And things I’m talking about more specifically, like these common causes are like not having proper immersion, onboarding, getting that done quickly, not building trust fast enough with key stakeholders in the organization, not being able to grasp what the culture was or not being kind of introduced to the culture quickly enough.

[00:07:37] Not being able to navigate internal politics. And you might be listening saying, well, we don’t have internal politics. Yes, you do. Anytime you put three people in a room, there’s ultimately, there’s immediately a political dynamic that’s created. And it’s really, it’s really hard to figure out if somebody can integrate culturally or handle those politics without seeing it. Like it is the leap of faith stuff.

[00:07:57] Yeah. Then kind of lastly on top of [00:08:00] that is just like there’s, there might be people there who wanted that position, they didn’t get it. Yeah. And it’s like someone stepping into a minefield. And these are the key thing about, these are soft skills. These are not hard skills. These are not the things you made that hire for.

[00:08:13]  You made the hire to do that job. But these are additional things that people may or may not have been trained on or even had to do with kind of previously. I bring this up because

[00:08:21] search firms do not take this on as a responsibility, and it is something that Hirewell can do through some partners that actually focus and specialize this space to make sure, I mean, if you’re going to spend- you’re going to spend a bunch of money on executive hire no matter what. But

[00:08:35] not having a solution or not being able to account for what happens on the backend after that hire to make sure it act actually works out. One, is something that companies should be thinking about. But two, it’s something that recruiting firms should take a vested interest in actually doing, which we do.

[00:08:49] That way you’re not just lighting money on fire and hoping that things work out. Yeah. A miss on an executive search, where you go externally is, it is extremely expensive. Yeah. Which brings [00:09:00] us to number four, the fee model is broken. Executive search is expensive. Yeah. And often for no reason.

[00:09:06] It’s completely arbitrary. And it’s not just the high cost, it’s the variable cost that causes the buyer headaches. So there’s a ploy here. Salary creep in people who get submitted, or candidates that get submitted is a sneaky way of getting clients to pay more than they may have expected.

[00:09:28] So, for example, you get a $350,000 range from your customer, and you know, in the back of your head as a recruiter, you’re like, the market for this is 400/450, you agree to it. You send a couple of people that don’t fit and then all of a sudden we’re talking about a $400,000 search at 30%. That changes the equation.

[00:09:50] Yeah. Right?

[00:09:51] It incentivized firms to upsell higher paid candidates and it inflates the fee with absolutely no, [00:10:00] no additional effort or value. Yeah. We’ve got the solution- is simple flat fees. It’s easier for companies to budget for it. All you have to do is kind of create alignment kind of at the front of the search.

[00:10:12] You know, it’s not like you’re giving something away for free, but just agreeing to like whatever you end up buying like this is what the price is. It’s not that hard to do, and it just, it removes the variable component, which causes more headaches than just the price itself. You know, CFO’s going to love that just by having a common sense model.

[00:10:27] This is what I’m going to pay for this search. Yes. Done. Why is that so hard? I don’t know. It doesn’t make a lot of, hence why it’s number four on our list. Yeah. Number five, what executive search firms should look like. So here’s what you should be looking out for. Look for a strategic partnership.

[00:10:48] Duh, not transactional. If you hear anything that we just kind of described as like the big yellow flags, like just be warned. The firms that you select should, [00:11:00] you know, they should understand your business, your culture, your goals, and your stakeholders. And the way that they can demonstrate that is by simply asking and then listening to your answers.

[00:11:09] Yeah.It’s that simple. Like pick somebody that you feel has the expertise to absorb that information and then take it to the market. Being able to evaluate candidates for leadership style and that cultural, political savviness, not just credentials. I’m not saying. Don’t discount credentials. I’m saying they’re a package deal and both are equally important.

[00:11:34]  We should be helping clients mitigate that risk, like you said. So these things like internal resistance for maybe an internal employee who didn’t get the job or team conflicts, misalignment, not enough L&D, you have to think about that. And you have to pick a partner that’s going to help you navigate that.

[00:11:52] Yeah. And additionally, if they’re offering coaching, onboarding support, helping to build new executive trust, guidance in org [00:12:00] design, like that’s all cherry on top stuff that, you know, we are going to include. You know, and some of the big box stuff, places, unfortunately don’t. Yeah. Closing points.

[00:12:10] Just some thoughts. I mean, just don’t confuse brand with quality. It’s not the same thing. You’re not buying a name, you’re buying an outcome. And the goal isn’t just the hire. It’s making sure you have a successful hire long term that can make an impact and picking the right firm that’s vested in making sure that happens.

[00:12:27] Yep. Choose a firm that acts like they understand that. Yeah. It really is that simple. We are short on clock for the second time today. Thanks for tuning in the 10 Minute Talent Rant, part of the Talent Insights series, which is always available for replay on talentinsights.hirewell.com as well as YouTube, Apple Podcast, Google Podcast, Spotify and Amazon.

[00:12:47] Jeff, thanks again as always. Everyone out there, we will see you soon.