Analyzing Executive Search

In our experience at Dun & Bradstreet, rarely has either recruitment outsourcing or executive search been managed well for the long haul. I’m writing about this in more detail in the next (May) issue of the Journal of Corporate Recruiting Leadership.

For now, a brief overview.

We took a hard look at the way in which we sourced, evaluated, and recruited game-changing executive talent. We questioned which processes should stay firmly in our hands and which could scale cost-effectively through a 3rd party. Our Chairman, Steve Alesio, and our new CEO, Sara Mathew, were open to new ways of not only finding, but also evaluating executive talent. They were willing to admit that our track record with executive search firms was spotty, at best, and that a complete reengineering of the acquisition model for our most senior leaders was in order.

When you think about it, the business case for outsourcing to search firms was made 40 or more years ago with the inception of the executive search industry and has rarely been challenged since. Our premise challenged this decision and made a case for bringing key elements of the function back in-house, effectively giving us more control.

Search firms have lost their advantage, and their hands-off restrictions have only increased their limitations. This at a time when the real cost of using retained executive search is arguably 50% higher than we assume it to be, based on actual realization rates.

Once we took a hard look at our use of executive search firms, we began an in-depth analysis of our past searches that involved both a value chain analysis and an RFI process. This analysis concluded that our executive search value chain could be broken into three major categories we now refer to as the following:

  1. Takeoff — the process of defining our organizational needs and converting them into a search specification agreed upon by all our constituents
  2. Flight time — the process of sourcing, screening, evaluating and developing a candidate slate
  3. Landing — the final candidate selection, offer, and close

We then went back and studied our successful engagements with executive search, and found that our in-house team had basically led the “takeoff” and “landing” portions of the process. Based on these findings, we adopted a proprietary process for the takeoff and landing portions that allows us to effectively manage them without influence from the personal preferences of hiring leaders. We also made the decision to outsource the development of the candidate slate (or what we call flight time) that occurs in the middle of the process — leading to a higher realization rate of our searches and hires that prove to be more successful within our organization.

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By entering into regular discussions with our executives, we opened the door to a more in-depth exploration of the issues at hand and a fact-based evaluation of the current state of our talent base. We saw that our intrinsic value was in what we now termed as the “takeoff” and “landing” phases of acquisition. Subjective assessments were our norm and we often made decisions that lead to dismissal of someone today who might be deemed invaluable tomorrow; therefore, we started these high-level discussions with fact-based evaluations that looked at the risk inherent in each candidate. Our model enabled a transparent dialogue contemplating risk factors such as environment, proven past quantifiable results, as well as the unique personal motivators of each candidate’s performance needs and if the candidate(s) were “closable.” This early exploration established a practice that would trickle down throughout the organization and change the way we lined up to the business to acquire top talent.

We therefore implemented a proprietary methodology that operationalized a risk-assessment process already inherent in talent assessment, and began to teach our C-suite to move into a mode of “what do we need” versus “what do we want” — effectively managing what we call the “want/need gap.”

Again, more on this in the Journal, but basically what we found is that more proactive workforce planning on our part led to less reactive executive search engagements. Our “takeoffs” during executive search engagements now included fresh discussions about internal candidates, future operating scenarios and our strategic priorities prior to commencing the search. We got better at managing our internal dysfunction at the beginning of the search.

By working with our executive leadership and entering into a process by which we literally got inside the minds of our hiring leaders, we have gone beyond simply being talent experts. We are now organizational experts as well. We understand our strategic plan and we understand which individuals can carry out that plan with the greatest success; therefore, we know that we made the right decision bringing our executive search in house. We found that once the search was effectively calibrated up front, it no longer made sense to fully outsource the critical hiring of key talent. That only created another level of separation and the possibility of further disconnect. We effectively bridged the gap between the business and the talent strategy by focusing on the calibration and assessment piece versus the identification element. Not to mention, we saved millions in the process, since all along, we were paying for access to a database that we already had available for virtual pennies on the dollar.

Elaine Page, senior vice president of talent development and acquisition at Dun and Bradstreet, drives overall talent strategy on a global scale.

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11 Comments on “Analyzing Executive Search

  1. Great Post Elaine! You have stated very articulately what I practice and believe every day! It is why we have positioned our talents in that very niche of “Flight Time” (the process of sourcing, screening, evaluating and developing a candidate slate) Happy Hunting! Patti

  2. I read this with great interest. A single word popped into my head (displacing my other thought like a Windows Clipboard): Hubris.

    The goals seemed fair enough, but some of the premises stated and implied seem mighty unlikely.

    “Agreed upon by all our constituents” was one of them. I don’t think its possible to get three or more people to really agree on almost anything, and the more important the matter, the less likely true agreement will be found. Somebody is almost always lying or holding back when everyone agrees.

    “A mode of “what do we need” versus “what do we want” — effectively managing what we call the “want/need gap.”

    There are gaps- the gaps between today and tomorrow and the next day. Projecting the future is fine and dandy, but even the best futurists are way wrong most of the time. Discounting what people want v. what they ‘need’ implies that a) wants are always greater than needs, when that may not be the case at all and b) that wants are somehow less reflective of good future outcomes than ‘needs’ of the moment. I would say that history shows that wants are far more powerful than needs.

    “We understand our strategic plan and we understand which individuals can carry out that plan with the greatest success; therefore, we know that we made the right decision bringing our executive search in house.”

    This is the graf that screams hubris to me. What if the plan is whack ? How can you be sure you made the right decision before the financial and operational results are in for a reasonable executive tenure or two ? Maybe five to ten years? It’s not a winner just because you say it’s a winner.

    “since all along, we were paying for access to a database that we already had available for virtual pennies on the dollar”

    That’s another one that says blinded by the goal. What economic function is well rewarded year in and year out (like executive search) if there is no real value delivered? One thing our economy does very well is slam the door on models that don’t bring value. If its worked for 40 years, there may yet be something to it….

    Executive search is far from merely a database- it’s a discreet channel, a source of intel, a trusted political mediator, a source of persuasion and positioning, a source of objective input, free of overpowering internal agendas and influence.

    Sure there are great ways to bring search in house and cut down on third-party fees- organizations do it every single day- a good part of my own business is helping them to do just that.

    Yet there are also lots of bad ways to go about it, times and places where the third-party value is compelling, and the case described here seems awfully forced into a predetermined frame.

    I imagine the shock and pain felt at D&B over the last few years has been intense. The firm was at the center of the financial storm – its best judgments proven worthless and its imprimatur questioned as never before. I certainly hope the baby is not going out with the bathwater in an effort to separate the past from the future- the lesson to be learned is that anyone can be dead wrong (I enjoy finding that out many times a day…)

    Planning for the widest variety of possibilities is one way to survive and prosper- including maybe the notion that executive search may have its time and place…..if D&B decides to use third-party firms again in the next five years, somebody may have some explaining to do.

  3. As a grizzled old man still working in recruiting through my semi-retirement, I have to agree with much of what Elaine has pointed out.
    Our hands-off aspect might lessen the field. However, I love the ethics of that aspect.
    The internal recruiter certainly has the opportunity to get to know the hiring executives and the corporate atmosphere and to be able to “paint an effective picture” to prospective candidates.That is a distinct advantage.
    And having the access to the same databases as executive recruiters is another good point.
    I would like to point out some details that I feel might have been glossed over in “glorifying” this success.
    1. The recruiting department is only as good as the internal recruiters are. Do you have the best ever recuiters or were they executive recruiters that didn’t or couldn’t weather the storm?
    2.I use databases even though I resisted forever. I feel that recruiters who depend on databases are in for short career lives. A database is an excellent supplement. However, the credo of our profession since it’s inception (and I was almost around for that) is that we will recruit the best possible candidates for the positions and more than likely those people are not looking for a job change. Earlier in my career, we did a lot of newspaper advertising and so did our competitors. On Mondays and Tuesdays the phones rang off the hook at our offices and also at the competitors. And then it was a horse race to try to present the good candidates first. We learned quickly that this was not a good way to run a business. We all became specialists and experts in our fields and developed sources through the years that were invaluable in giving us “real” references before we ever spoke with a candidate.
    3. We are consultants and marketing/sales people. I feel that we need to tell the good and bad aspects of a company and position in order to do right by both the candidate and the client company. If your VP of sales is a tyrant, we might not call him a tyrant, but we will explain more than your internal recruiters will.
    4. It’s not good to laud a program before it has been wear-tested for a decent period of time. How many washings, dry cleanings, and storms have you put it through? And how does it hold up post-recession?
    5. I have absolutely nothing to gain from giving my opinion except to tell you that I have given it honestly just as I have always attempted to do.

  4. Elaine, I applaud your efforts! As someone who strongly believes that the retained search field has been fleecing their clients for years with exorbitant fees that have little basis in actual costs the firms incur – you are right to evaluate how the process is broken and to make it work better. We have spent significant time over the years assisting companies with decisions such as these. As a disclosure, until recently I have also owned a retained executive search firm for many years that competed directly against the companies your firm has probably retained.

    I would like to point out a few miscues that companies usually make in a transition to an in-house exec search function. If you are truly working on exec level projects, the biggest pratfall is in the attraction of potential candidates and the closing of them. Rarely will an in-house team have the ability to retain a staff that is capable of developing year’s long relationships with the very group of executives that you seek. It’s not practical, nor realistic. This part of the process is still something that a firm should consider outsourcing. To be in the mix at this level takes a ton of work and most executive talent will not want to develop that close of a relationship with one of their competitors…

    Following up on that point, the other miscue is thinking that you will be able to negotiate an offer package that consistently creates a “win-win” for company and candidate alike. It is pretty much impossible to make the case to the candidate that you are looking out for their best interest in making the offer when you represent the very company that is making the offer… This is the reason that entertainment, sports – and yes executives all retain agents to negotiate for them. A great “agent” gets the best deal for their client – but most importantly makes sure that the expectation levels of their client are managed effectively so that they feel that they did well. Working with the hiring company to ensure that they feel they got the best person for the role at the price that makes sense for them is the “agents/recruiters” job so there is that “win-win” feeling all around. It’s very hard to do this in-house…

    My suggestion to all looking to rethink executive recruitment (or any recruitment level), is to break out the parts of the process as Elaine has and to outsource the parts of the program that need to be handled externally. As pointed out there are still parts of the recruitment process that are hard to do in-house, but the days of handing off the entire search to one of the big boys should be coming to an end in the very near future..

  5. Good stuff – interesting read and especially on a polarized topic. The other comments are more articulate than me in my humble experience, but the key question I see unanswered: Let’s assume you have increased internal efficiencies and improved proactive workforce planning, buy-in from all stakeholders, etc. You’ve realized “X” amount of cost savings and have succeeded in delivering on your objective of saving D&B money by bringing exec hiring internal. But what happens when you haven’t found anyone to hire? Your executives are most likely very supportive but most probably because they expect this support investment to net them stronger hire results. Can the new efficiencies help D&B hire faster and with stronger quality candidates to chose from? Will your article in the May JCRL elaborate further on that question?

    Again, great article on an interesting topic.

  6. Nice article Elaine! Good to hear how Dun & Bradstreet’s executive search practice has evolved. I’ve done similar work for clients, consulting on ways to “save” on the use of outsourcing and outside search firms, as well as make more effective use of an ATS already in place and talent (resumes and competitive intel) scattered about teams. I’m always amazed at how much talent goes unnoticed in ATS’s, or how little strategy or automation is set-up to reach out to older candidates in the ATS. Part of this though is bad search functionality within certain ATS, but there are workaround solutions to that problem. There are so many avenues today to accomplish what you referred to as “flight time” including the use of social media, content sharing sites, communities, forums and mobile technologies in particular. Would be Interested to see what your company is doing to find, source and recruit your talent currently.

  7. Elaine, very interesting piece – I’m looking forward to seeing the print article as well 🙂

    As of late, I still work as an Exec Recruiter . . . however, I’ve taken a harder look at organizational performance from a Human-Network aware perspective.
    (Note: As a result, I launched OODAfive in mid-January with Dr. Karen Stephenson and Earl Mann. – OODAfive.com)

    I mention the “Human-Network Aware” perspective because until the last few years, companies and Execs were not able to consistently identify the informal networks that drive how work really gets done – when I say “how work really gets done”, I’m describing the informal networks that exist in the white-space of the OrgChart (as OrgCharts only describe ~40% of how work is done and value is created.)

    Today, there is technology that can identify a series of networks (to include the key players as well as what flows between them), and this is relevant for the following reason —

    When evaluating Executive level talent (that is mobilizing internally), we all too often focus on the Human-Capital element of the candidate (i.e. what’s ‘within’ them, or their individual ‘talent’) instead of the Social-Capital element of the candidate (i.e. what’s ‘between’ them, or their ability to lead and mobilize their Human Networks around them to get things done and move the needle forward.)

    By identifying each Exec candidate’s *position within a series of informal networks* that under-ride how work really gets done (i.e. the Work-Information flow network, Social Network (the real one, not the fake ‘online’ one), Innovation Network, Expert-Knowledge Network, Strategic Network, Learning Network, Decision-making Network, etc.), we are able to move beyond selection techniques largely driven by assessment testing, prior manager recommendations, 2-dimensional performance mgmt data, interviewer bias, etc.

    Dr. Karen Stephenson wrote a super article about this type of succession planning work for one of the largest Telecom firms in the world at: http://bit.ly/aM1YZ5

    Dr. Stephenson is also a keynote (“Lead with Trust, Follow with Technology”) at the HRPS planning conference coming up later this month, so if you are in the San Diego area, I’d highly recommend checking her out: http://bit.ly/9ghWvk

    And for a shameless plug (of course!), you can find more about our OODAfive solution in regard to Succession Planning at: http://oodafive.com/solutions/ooda5-succession/

  8. Wow! Thank you to everyone for the overwelmingly positive response to this article. I appreciate all the comments, questions and inquisitiveness this article has generated. My email has quite literally “lit up”. Seems like this topic has really struck a cord! The full article sheds further light on our transformational journey on the “how” we have made an impact on the bottom-line of the business with our strategy and execution plan. I’ll personally respond to those who have specific questions. I am grateful for ERE allowing me the “floor” to share my point of view and learnings. Best wishes.

  9. Great post. You touched a cord Elaine because few windows into this C-suite recruiting ‘silo’ are visible in public forums. Your comments about the convergence of acquisition and succession planning are also ‘new’ for many firms (Cappelli pointed out how historically we were much better at integrating succession 30 years ago and then lost it in the 80s and 90s.)

    And as Martin implied without saying- even less is discussed within most firms beyond “need to know” so even the senior staffing leaders and the those ‘very best recruiters’ are often clueless about the few top search efforts that are going on.

    The limitations of the traditional C-level searches done by the traditional firms and ‘connected’ boutiques are increasingly coming under fire- especially when the subsequent performance of the C-level (buy) hires remains open to question (versus build).

    It is a great conversation to examine the alignment of internal versus external exec search for a business and I hope in the Journal you’ll also address how far the transparency of those top level internal discussions [of your proprietary model] are driven down…so that recruiters inside Dow with aspirations to participate and develop can see what is going on. Josh’s point around assessment methodology that considers the C-Level candidate’s ‘networks’ is also a potential area of discussion.

    I would be interested in your take on the qualities (knowledge, skills and experience an internal exec recruiter MUST have to succeed ( also inferred by Martin versus someone who knows the number of the nearest search consultant)and how you manage the relationships with the remaining search agencies done externally (for example do they review with you their discussion with every person in the pool they considered – or just the finalists?) Is there still a level where Talent Development/Acquisition would not be brought in to help manage a search regardless of whether it was going to be performed internally or outsourced?

    I would also be interested in your addressing the #s and roles of the internal folks and sources of hire for internal exec recruiters. Most [all] staffing leaders I know would never move a recruiter into an exec position, no matter how good they were, elsewhere until they had worked externally in a high ‘brand’ search firm.

    There is a certain irony there don’t you think?

    Ok, so maybe you should tell Todd that in addition to the Journal, there is a good opportunity here to have a lively discussion at the Fall Expo.

    Thanks again.

  10. It will be interesting to see how Ms. Page’s strategy plays out in a normal to hot hiring environment. When senior talent is hard to recruit I wonder how a structure like she described at D&B will hold up? Time will tell.

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