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:
- Takeoff — the process of defining our organizational needs and converting them into a search specification agreed upon by all our constituents
- Flight time — the process of sourcing, screening, evaluating and developing a candidate slate
- 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.