search-consult Issue 7

The International Executive Search Magazine

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The Chairman of The Directorship SearchGroup talks to search-consult

www.search-consult.com

Search Icon: Russell S. Reynolds JrThe Chairman of The Directorship SearchGroup talks to search-consult

Executive Search -The South AfricanMarket

Women in Search

Strategic Board Recruiting

Search Icon: Russell S. Reynolds JrExecutive Search -The South AfricanMarket

Women in Search

Strategic Board Recruiting

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.

In addition to the titles listed here, a numberof additional publications are available fromthe site.

Point your browser at:

www.search-consult.comand click onsearch-bookshop to browse!

The executive-search

2 search-consult Issue 7 2001

S E A R C H - N E W S

3Issue 7 2001 search-consult

search-consultMANAGING DIRECTORJason Starr

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EDITORIALBarbara Kwateng,

Pilar Gumucio

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© Copyright 2001 Dillistone Systems Ltd

September 11, 2001

Production schedules are such that thisissue of search-consult will land on desksseveral weeks after the events ofSeptember 11th.

Despite this, we would still like toexpress our sincere condolences to allthose affected by the tragedy. We feel thatit would be fitting to highlight the DisasterRelief Fund set up by the Association ofExecutive Search Consultants.

If you would like to make a contributionto this fund , cheques may be made out tothe AESC Disaster Relief Fund and sent tothe AESC at 500 Fifth Avenue, Suite 930,New York, NY 10110. Should you wish tomake contributions via money transfer orcredit card then send an e-mail to PeterFelix at [email protected] for furtherinformation.

In the next issue of search-consult, wewill be eager to illustrate any examples ofhow our industry is pledging support tothose affected by the disaster. Once again,our deepest sympathies for all thoseaffected.

The team at search-consult

A.N.S. INC. HAS BECOME THE FIRSTever human resources management firmin Asia to be ISO9001 accredited for itshuman resources management andhuman resources development services.

The Korean search market has been

expanding rapidly in the past 10 yearscurrently numbering over 100 firmsactively serving the needs of multinationalcorporations and domestic corporations.

A.N.S. Inc. was established back in 1996and started to evaluate their entire systemover a year ago. It is the first company inKorea to be accredited by theInternational Standardization. ISO9001 isthe international standard for qualitymanagement and quality assurance whichestablished by the technical committee(TC176) of the International Organizationfor Standardization.



KORN/FERRY INTERNATIONAL reported revenues of $114.4 million for thefirst quarter ending July 31, 2001, a 34.1percent decrease from revenues of $173.6million in the first quarter one year ago.The firm reported a loss of $1.25 pershare, compared to earnings of 26 centsper share for the same period one yearearlier. $49.4 million of the earningfigures include asset impairment andrestructuring charges. Operating lossesamounted to $52.4 million for the firstquarter, compared to an operating profit of$18.5 million for the first quarter of 2001.Korn/Ferry's executive search businessreported revenues of $99.2 million, a 34.7percent decrease from revenues of $151.9million for the same period a year ago.Revenues for executive search in NorthAmerica declined 45.3 percent to $52.5

million for the first quarter of fiscal year2002. Futurestep, the firm's middlemanagement recruitment branch, reportedrevenues of $14.3 million for the firstquarter of fiscal year 2002. This equalleda 33.6 percent decrease from $21.6 millionin revenues from the previous year. Thisquarter also saw a reduction in operatinglosses for the online venture of 53.8percent to $3.7 million, compared tooperating losses of $8.1 million for thesame period a year ago.

These figures accompany the news thatMichael D. Bekins, Chief Operating Officerplans to leave the company at the end ofOctober, after 20 years of service. Sincejoining the firm in 1980, Mr Bekins hasheld various senior management positionsin Korn/Ferry's network, most recently asPresident, Europe, having been Presidentof Asia/ Pacific.

Korn/Ferry - Profitsfall, C.O.O. departs

www.search-consult.com NEWS

Christian &Timbers openin Chicago

CHRISTIAN & TIMBERS HAS announced the opening of its Chicago, ILoffice as part of its strategy to expandoperations in the Midwest. Birgit (Bee)Westphal will lead the Chicago office asmanaging director.

Stephen Mader, President and C.O.O. ofChristian & Timbers, commented, "Chicagois the gateway city for our industrialpractice and is arguably the secondgreatest commercial and financial centerin the country. The city has a strong talentpool and market for executive search inaddition to its well-established venturecapital community".

Birgit Westphal first joined Christian &Timbers as a managing director in theToronto office in August 2000, having ranher own search firm in Germany and thenin Canada. Birgit Westphal will continue tolead the industrial practice. Christian &Timbers Chicago will focus on expandingthe firm's financial, life sciences, consumerand retail practices.

This move is coupled with the firm'smove into larger offices in London'sPicadilly. "At a time when manycompanies are downsizing, includingexecutive search firms, we feel privilegedto be expanding to a larger space toaccommodate the growth in our business"says managing director of Christian &Timbers' European operations, Brad Dewey.


Korean search firmreceives ISO9001accreditation


COMING UP IN THE NEXT ISSUE:

Exclusive Interview

Hob Brown Jr, CEO RussellReynolds Associates

Global Search

search-consult analyses theglobal reach of the major players

Executive Search in Spain &Portugal

Indepth coverage incorporatingthe results of an exclusive surveyby search-consult

The World Search GroupPartners’ meeting

An exclusive report fromCopenhagen



ARMSTRONG CRAVEN LAUNCHESfirst 24 hour executive research service.

Executive research and businessinformation firm, Armstrong Craven,announces today that it will offer clients a24 hour executive research service.Clients' demands for internationalexecutives has resulted in over eighty percent of Armstrong Craven's assignmentsinvolving searching Europe, the US andAsia Pacific for talent.

From their offices in Manchester,Northern England, researchers workthrough the time zones to identify andattract the talent across the world.Armstrong Craven's client list include

international blue chip companies, theinternational executive search businessesand professional advisors such as venturecapital firms. Employees from the threemain research practices - technology,healthcare and generalist will operateappropriate shift patterns specific to eachsearch assignment.

Kirsty Young, Armstrong Craven'sdirector of business development says;"Our clients demand candidates withglobal experience on their CVs so it is onlyright that we should offer them a trulyinternational service. We have workedthrough the night for our clients on anadhoc basis and today's announcementshows our formal commitment toresponding to our customers' needs."

Research firm launchesfirst 24 hour service

The IACPRrespond toterroristattacks



In response to the World Trade Centerdisaster, the International Association OfCorporate and Professional Recruitment(IACPR) will offer its resources to serve as aclearing house for any of the employees atthe Trade Center disaster who lose their jobsas a result, and for employers who haveavailable positions which might be suitablefor these individuals. Individuals and firmslooking to learn more may contact the IACPRon +1 312-630-9881 or [email protected].



To receive search-consult on a regular basis subscribe at www.search-consult.com

BOYDEN GLOBAL EXECUTIVE SEARCHheld its regional European meetingduring the third week of September, atwhich 81 of the firm's searchprofessionals and their partners werejoined by their counterparts from theUnited States, Chile, Japan and Australia.

At a recent regional European meetingin Rome, Boyden Global ExecutiveSearch's President, Christopher Clarke,unveiled statistics regarding the 18%increase in Boyden's global professionalstaff since January 1, 2001, which was"in marked contrast to the implosion bymajor competitors". This wasannounced to 81 search professionalsand their partners plus counterparts fromthe United States, Chile, Japan andAustralia. Also announced were theadditions of Boyden offices in the

following locations: Tokyo, Atlanta,Baltimore/Washington DC, Malaysia,Indonesia, Singapore, Copenhagen,Dusseldorf and City of London (FinancialServices). Mr Clarke also revealed thatan agreement has been made with amajor firm in South Africa, finer detailsare to be made public at a later date.

Attendees heard that Boyden has todate accomplished more than 450 keysearches for its top ten global accounts.Knut Revling (Boyden, Oslo) and TomFlannery (Boyden, Pittsburgh) presentedthe firm's new management assessmenttools to the audience. Boyden isanticipating a "turbo-charge" in this lineof business with Knut Revling as PracticeLeader. Practice groups will now belinked up internally across the world,told Bob Concannon (Boyden, SanFrancisco), Practice Leader for High-Tech.

East market for the first time. The General Manager of IRC Executive

Search is Mr. Ramzi Beidas. "We areprepared to assist client firms inlocating local and non-local executivetalent willing to be based in the MiddleEast. We are able to recruitprofessional talent, and we are alsoable to train them, if needed."

The opening of offices in Saudi Arabiafollows Cornerstone InternationalGroup's follows the signing of SeleCorp,S. C. as their official Member Firm inMexico City, Mexico. Founded in 1984,SeleCorp specializes in executive searchand selection services in Mexico,Canada, and the United States. TheMexican arm will be run by JulietaGomez Valasco.

Boyden RemainsConfident


New MiddleEasternoffice forCornerstone


CORNERSTONE INTERNATIONALGroup has unveiled the opening of anew office in Saudi Arabia. It isintended that IRC Retained Search,headquartered in Al Khobar, will assistCornerstone in international clientorganizations as well as local SaudiArabian organizations seeking executivetalent (Saudi and non-Saudi) for theirMiddle Eastern operations.

The company feels that "in light of thecurrent atmosphere in the Middle East,many companies may seriously considerestablishing and/or strengthening theirlocal capacity to operate from a"friendly" country such as Saudi Arabia.Products, supplies, and services will beneeded to support the current MiddleEast situation, and much of this supportmay entail private-sector organizationsoperating from a Middle East location".

According to Cornerstone's Chairman,William Guy, "IRC Retained Search wascarefully selected following a rigorousscreening process that entailed face-to-face interviews plus careful referencechecking of multiple client firms of IRC.We feel that Cornerstone now has ahigh-quality consulting representationin the Middle East."

In addition to retained executivesearch, IRC Retained Search alsoprovides other forms of HR consultingservices to client firms, for example,training and development HR consultingservices. The firm feels that suchtraining capability is also required byfirms that are entering the local Middle

THE AMROP HEVER GROUPhas announced that Gerard Nauwelaerts

will succeed Paul McMahon as ExecutiveDirector. Mr McMahon and MrNauwelaerts have been working togetherfor the last few months in the hope ofachieving a smooth handover. The AmropHever Group was formed following themerger of Amrop International and theHever Group.

Amrop HeverGroup names newExecutive Director


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


Spencer Stuart in South Africa have madea new appointment; Mpho Seboni hasjoined the Johannesburg office of SpencerStuart as a Director in August 2001. He hasoccupied a number of CEO and senior linemanager roles in South Africa, USA andBotswana companies in a variety of sectorsand was a management consultant withGemini Consulting, Johannesburg. Prior tojoining Spencer Stuart, Mr Mpho was theManaging Director of an investmentholding company. Mpho Seboni has livedin the UK, Canada, and South Africa andwas educated at McGill University (BA) andOxford University (M. Sc).

Hong Kong based executive searchconsultancy, Bennett Associates, hasannounced the appointment of two seniorconsultants in Hong Kong and Malaysia;Brian Lockyer and Foo Kok Yee. BryanLockyer has worked for Hong Kong'slargest IT&T recruitment agency and witha leading New Zealand's IT recruitmentfirm. Foo Kok Yee was an employee withCitibank over the last 25 years and wasmost recently directly involved in therecruitment of senior technologyspecialists for Citibank Malaysia.

Tom H. Rosenwald joins the New Yorkoffice of The Directorship Search Groupas a managing director and head of themarketing and consumer productspractice. Linda Ducruet joins the firm'sGreenwich, Connecticut office as aManaging Director and head of its wealthmanagement practice. Both werepreviously with Heidrick & Struggles.

Odgers Ray & Berndtson have awardedtheir annual prize for the Cranfield Schoolof Management to Kester Scrope as theMBA student most likely to succeed inmanagement. The £2,000 Odgers Ray &Berndtson Prize is presented to a full-timeMBA and was established in 1987 by IanOdgers, who took the Cranfield School ofManagement full-time MBA programme in 1966.

Boyden has appointed John Dembitz as itsDirector. Currently holding a number ofnon-executive directorships. Mr Dembitzjoins Boyden with responsibility for boardlevel appointments and for developing theprofessional services practice. He willwork alongside London Chief ExecutiveMike Curlewis in the strategicdevelopment of Boyden's UK/ Irish offices.John Dembitz was a former Partner atKorn/Ferry International and a seniorconsultant with McKinsey & Co. The firmhas also strengthened its German teamwith the voting of new partners. Asannounced in search-consult (issue 5),Ulrich Schuhmann, Thomas Breitzmannand Michael Kerber have newly beenelected as partners. They are now joinedby Dieter Albeck and Dr. Marlis Reck whichtakes the total count of partners at Boydenin Germany to 14.

Heritage Recruiting Group, Connecticut,has named Vincent P. Nolan as VicePresident. Mr. Nolan was previouslyexecutive director at Meriden Business &Learning Center. In his new position, Mr.Nolan will focus on new clientdevelopment and executive levelrecruiting in various industries for the firm.Simultaneously, the firm has formed arecruiting alliance with temporary staffingfirm McIntyre Associates and will nowoffer its existing clients executive searchoptions in focused practice areas whichinclude, accounting and finance, officeservice and information technology.

Chicago-based executive search firm CookAssociates has named Ken Norris,formerly with A.T. Kearney ExecutiveSearch, as Vice President in its technologypractice.

Battalia Winston International, NewYork, has appointed Dr. Gil Carrara as headof its healthcare practice specializing inpharmaceuticals, biotechnology, consumerhealthcare, managed care and health

information. Dr. Carrara comes fromNicholson International, where he wasmanaging director of the firm's healthcarepractice. Previously, Dr. Carrara served asa principal in Korn/Ferry International'sglobal healthcare practice.

Dick Beal has been named as ExecutiveVice President and Managing Director ofDHR International, Illinois. Beal comesfrom Korn/Ferry International, where heserved as Managing Director in the Austinoffice.

Korn/Ferry International have recruitedChris Matchan as a VP in the Londonoffice.

Bishop Partners has opened a new officelocated in Los Angeles and hired PeggyWinston as Vice Pesident to head theoperation. Ms. Winston joined the firmhaving recruited for Los Angeles-basedfirm Brad Marks International,entertainment industry search firm. Thefirm has also appointed Holly Haygood,formerly with Heidrick & StrugglesInternational, as Vice President in theNew York office.

Sheffield Howarth, the financial servicesrecruitment firm, has hired six staff inLondon, Paris and Frankfurt.

Geraldine Kaye, Chair of UK Firm GAAPShas been elected chair of the Associationof Search and Selection Consultants.

Korn/Ferry International has closed threeadditional offices in Emeryville, California,Dusseldorf, Germany, and Prague, CzechRepublic.

Joanna Clemens has joined The MilesPartnership from Norman Broadbent

Key moves in Executive Search this month

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

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


IconRussell S. Reynolds Jr

By Jason Starr, search-consult

There are not many retired searchexecutives who, upon returning tothe business, can generate

headlines in the Financial Times, Fortuneand The New York Times. One who can -and did - was Russell S. Reynolds, Jr -Founder of Russell Reynolds Associatesand now Chairman and CEO of TheDirectorship Search Group.

Now, in an exclusive interview withsearch-consult, Mr Reynolds talks abouthis career and how he sees the industrytoday.

Born and raised in Greenwich,Connecticut, Mr Reynolds was educated atYale and spent some time in the US AirForce as a First Lieutenant and aNavigator-Bombardier before entering thebusiness world with JP Morgan andCompany.

"I worked there for eight years and thattaught me a tremendous amount. Ilearned about business, made manycontacts and developed my businessphilosophy - to do first class business in afirst class way."

Mr Reynolds spent eight years with theBank before deciding to move on. As has

happened for many of the people leadingthe search industry today, his firstexposure to the sector was as a candidate.

"I was being introduced by search firmsto prospective employers, but I keptthinking about the fee they were going toearn if I was hired. I kept thinking aboutthe process that the consultant was goingthrough - how he wrote the letter, themechanism of presenting me and so on. Itfascinated me more than the positions Iwas being offered and after a few weeks I

realized that I was interested in the Searchbusiness. JP Morgan had offered me aposition in Personnel because theyconsidered me a 'people person' but Ididn't want to do it in a bank - I wanted tobe in the mainstream."

The status of the search industry at thetime was not too high - Mr Reynoldsrecalls that, when his father was told of hisplan, he had been less than impressed.

"He told me I must be out of my mindand that I was leaving the World's bestcompany. I told him it was a tremendousopportunity and went and did it anyway."

Mr Reynolds joined a small firm calledWilliam H. Clark Associates and felt athome in the search industry from day one.

"I was working with companies likeGeneral Foods, Morgan Stanley, AmericanExpress and Oppenheimer & Co. and Iloved it."

His aptitude for the business was clearfrom an early stage. Mr Reynolds recalls astory of a lunch that took place some sixweeks into his employment.

"My senior partner invited me to lunchat the New York Yacht Club with a client. Ifelt fairly insecure and was unsure as to

Russell S. Reynolds Jr



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The Directorship Search Group

why I was there until the partner told theclient 'Russ Reynolds here knows moreabout the search business than the rest ofus combined'. I felt great."

His abilities were also recognised at anearly stage by the industry as a whole. Hewas soon invited to sit on the steeringcommittee of the AESC with the likes ofGardner Heidrick, Ward Howell andSpencer Stuart "…despite being the juniorguy by quite a margin".

Mr Reynolds was with William Clark forthree years and built up his client portfolioto such an extent that he felt that he wasunable to support the necessary level ofservice alone.

He considered the best way to getaround this plateau was to hire anassistant - "…a bright young person tocarry my bags, leverage my time and helpme do the searches".

The role of bag carrier to Russ Reynolds- whilst perhaps not the most glamoroustitle in the industry - is one which hasstarted the career of a number of leadingsearch practitioners (see, for example,Steve Potter, CEO of TMP WorldwideExecutive Search, profiled in Issue 2 ofsearch-consult, and Halsey Minor, founderof CNET).

Back at the Clark firm, the request totake on such a person was refused on thebasis that if Mr Reynolds had an assistantall of the partners would also demand one.Instead, it was suggested, some of the lessbusy partners could assist Mr Reynolds.

"I pointed out that I was 33 and theywere in their fifties and would not wish totake orders from me."

Mr Reynolds admits to being "…a littlebit brash and a little bit audacious" and feltfrustrated with the limits imposed on himat William Clark. He recalls a conversationwith the Managing Partner where he toldhim "Frankly, Mr Clark, I wouldn't havehired some of these people. They arerejects from the business world and I don'tthink they are qualified to makejudgements about picking people formanagement."

It was this frustration that lead to MrReynolds' decision to found RussellReynolds Associates on October 2nd,1969.

"I was convinced I was going to besuccessful and failure never occurred tome. I'm a somewhat spiritual person and Ifelt I was being directed to do this and thatit would be good for my family, for me and,hopefully, for my clients."

Mr Reynolds invited an old friend, LeeGetz, to join him as a Partner and within acouple of months it became clear that thebusiness would be a success. Early clientsincluded Capital Research, General Foodsand JP Morgan. In the firm's first full yearit billed $550,000 and made a gross profitof $167,300.

"We were young, we were idealistic,reasonably well educated and optimistic.Business was great."

In year two the firm billed $980,000 and"…I was beginning to get bored. Iwondered what we should do as anencore and being completely non-analytical I put my finger up to see whichway the wind was blowing and it wasblowing towards London."

Therefore, in 1973, Mr Reynolds flew toLondon. He spoke to friends working forMcKinsey and Company and asked whothe good London recruiters were. One ofthe names to be mentioned was RoyBruce, then with Heidrick & Struggles.

"I called up Heidrick & Struggles andasked to speak with Mr Bruce. I was toldthat "…Mr Bruce is under the weathertoday…. You can reach him at home if youwant to call him." The helpful switchboardoperator provided the number.



Mr Reynolds called Mr Bruce, met himthe next day and, having hit it off, invitedhim to Greenwich to meet Lee Getz, HankHigdon and other associates. RussellReynolds now had a London office.

At about this time Korn/Ferryapproached Mr Reynolds. Lester Korn andDick Ferry offered Mr Reynolds a positionof Partner in New York, but Mr Reynoldsfelt that the objectives of Korn/Ferry didnot mesh with his own personal beliefs.

"I wanted to build the world's bestSearch firm, and not the world's biggest.It's a huge difference. I wanted to be theMcKinsey of the Search business."

After London, the next offices to openwere in Chicago and Houston and the restis history. By the time Mr Reynolds left thefirm it had achieved revenues of$96,000,000 and was a very close secondto Korn/Ferry in terms of size.

So what was behind the decision toleave the firm he founded?

"I was travelling incessantly and it wastiring. Also, the firm had grown to such anextent that it didn't need me any more.This became clear at an event I attendedthrough our Paris office. A French clientcame up to me and didn't know who Iwas. When I told him my name hecommented that he hadn't been awarethat there was a Mr Russell Reynolds. Irealised the company didn't need meanymore."

Mr Reynolds sold his share in the firmand limited his involvement to aconsultancy contract. To keep himselfbusy, Mr Reynolds invested in"Directorship" - a high quality monthlypublication and database dealing withcorporate governance.

"I had a little trouble understanding thatMr Brown (Hob Brown, Mr Reynolds'successor at Russell Reynolds) and hispartners really thought they could run thefirm very nicely without my presence.When this finally got through my thickskull, I realised that I was freer than I hadanticipated and so I took a few seats onboards and developed a corporategovernance consulting business atDirectorship."

In mid-1999, Mr Reynolds' non-compete

clause with Russell Reynolds was endedand he was ready to go back into theSearch business. He achieved this throughthe merger with Michael Kelly Associates -a boutique search firm based in New YorkCity.

"Mike is a terrific guy. He has everythingyou need to be a search consultant and heis very charismatic. He picked my brainfrom time to time about the developmentof his business and we became very goodfriends. At one point he suggested that Igo back into search. I thought this wascrazy - I'm a Neanderthal - but atDirectorship we have an advisory boardthat includes people like James Kinnear(former President and CEO, Texaco) andHarold Poling (Former Chairman and CEO,Ford Motor Company) and they agreed thatI should get back into the business."

Once again, Mr Reynolds set aboutbuilding an international Search business,but this time the first overseas office wasin Paris, soon to be followed by London.

Directorship recruited Jeffrey von derSchulenburg to run its London office. AGerman-American national, Mr von denSchulenburg was a Partner at Korn/Ferryin London and had previously been withRussell Reynolds Associates as a recruiterin the London office. This followed by ayear a tie up in Paris with Daniel Jouve -President of Jouve and Associates and aformer General Manager for RussellReynolds Associates in Paris.

If Directorship is similar to RussellReynolds Associates in terms of how it hasbeen received in the market and the rapidinternational build up that it has achieved,it does have a number of differences.

One of these is size. Russell ReynoldsAssociates has continued to grow and nowboasts 300 professionals working frommore than 30 offices. Mr Reynoldsbelieves that this scale of firm is notappropriate in the search business.

"I think that the optimum size for asearch firm is 100 people. You want abusiness where everyone knows everyoneelse and, at that size, you can still run thebusiness as a caring entity that putsrelationships ahead of money. I think wewill open maybe two or three more offices

over time - but not until the marketimproves."

The company also makes no claim tofocus exclusively on "A-level"assignments.

"There is no pride or arrogance here.We are not a firm that will say, 'We justwork at the top level'. We will dowhatever is important to the board and/orChief Executive Officer and if that meansthat we have to go out and recruit aHarvard Business School graduate thenthat is what we will do. We have doneseveral CEO assignments and a lot of workin private banking for people earningbetween $200,000 and $2,000,000, butmost of our work, however, is for NEDs at$50,000 - $100,000 per year."

One assignment that was particularlysuccessful was run on behalf of R.J.Reynolds Tobacco Holdings Inc., whichused Directorship to recruit 4 directorsafter it was spun off - a feat achieved in 60days.

On his return to the industry, MrReynolds was awarded the GardnerHeidrick award by the AESC. He remainsa man of strong opinions, and used hisacceptance speech to criticise a number oftrends in the industry - including publicownership, discounted search fees anddiversification. He does not believe thatsearch firms should grow throughacquisition and also feels that the Internethas only a limited role to play in therecruitment of senior people.

Even after 35 years in the business, RussReynolds demonstrates a tremendouspassion for Executive Search. His opinionsare expressed forcefully - but withhumour. Patently very intelligent, heregularly uses self-depreciation to take theedge off remarks which could, otherwise,be considered arrogant. His commitmentto training and the development of youngblood is beyond reproach and there is nodoubt that the search industry is better forhis return.


For more information, visit:

Web: www.directorship.com

S E A R C H - F E A T U R E


Womenin Search

By Barbara Kwateng, search-consult

Traditionally, female search professionalshave been found in support functions, insecretarial or research roles. Although inthe past decade the number of womenfound at top levels in search firms hasincreased, those making it to ChiefExecutive level in large global executivesearch firms is noticeably low. In thisarticle we look at why this is so, whetherit is indicative of a glass ceiling inexecutive search and how the balancecan be changed.

Agrowing number of female searchprofessionals in top positions arethose who own or co-own their

own firms. Janet Jones-Parker does justthat; co- owns the company Jones-Parker/Starr which recruits officemanaging partners, practice leaders andprincipals for executive recruitment firms.Having run the AESC, she is regarded bypeers as one of search's female pioneers.In 1973, together with her partner AnneHyde, she appeared on Americanprimetime television when Citibank hiredher co-owned company, ManagementWoman Inc., to find a female Vice-President. At that time it was quite radicalfor a woman to be contracted to find aprofessional salaried for $100,000(approximately $285,000 by today'sstandards) "Over the last three decadesthe landscape has totally changed" sheexplains.

"Back then there were really only a few

women doing research and, at HandyAssociates, a Harvard Business Schoolgraduate was the director of the researchdepartment." Also seen as a pioneer insearch is Millie McCoy of Gould, McCoy &Chaddick. She was one of these womenwho started out in research at HandyAssociates. "The search industry is moreopen to women, you are judged on yourperformance which is a major advantage".

The Association of Executive SearchConsultants (AESC) points to its femalemembership level resting at 28% of 3430consultants as symptomatic of thesechanging times. "Today, women are verysuccessful in every sector specializationand are doing extremely well in search. Iwould like to say that women are taking

over search but that is not true. They arejust being equally successful as men areand the doors are open" she continues.Janet Jones- Parker believes that "clientshave no problems talking to women".

Mary Pitsy of Boyden would go one stepfurther, "clients and candidates both liketalking to women. The ability toempathize is definitely called on whenclients need advice on how to dismisstheir Chief Financial Officer or how tochange their board with tenacity. Theexecutive search consultant is first andforemost a trusted adviser. Women aregood at fulfilling this objective." As aManaging Director of Boyden in Belgium,she feels that "when women are good,they are usually better". Perhaps this is

Mary Pitsy



less a case of prejudice within the ranksand more so "the challenge of fightingsociety's roles. You can be the best butthis is still a battle that every femaleprofessional needs to win in order to be atthe top".

A standard response to the fact thatthere is an imbalance between thenumbers of women and men at the top ofthe search would be the challenges ofsociety, i.e. having children. Superficially,it could be said that few females make itto CEO in large firms because they take acareer break at a critical point in theircareer, concentrating on other things.This break may be short or long yet theimpact it makes on career developmentmaybe lasting. According to Dale Winston,Chairwoman and CEO of Battalia Winstonin the US "consultants compensation andvalue is based on their production. Anextended leave of any sort will impact onproduction" and therefore chances ofadvancement. However, Ms. Winstonfeels that a search firm would be failing itsfemale search professionals if it were "notto accommodate the needs which societyplaces upon them".

Many search professionals point to theway in which the industry has developedas a reason for a low percentage of top-level female search professionals. Gould,McCoy & Chadick Managing Director,Millie McCoy, would say, "the leadershippositions, especially in the public firmsare largely composed of industryprofessionals, of general managers. Thefact is that there are not many womenwho come from that level back into theservice industries. It's an evolutionarything. Change will come about,essentially when industry's make- upchanges". Birgitta Neuhauser, ManagingDirector of the Swedish search firmNeuhauser & Falck says, "Approximately9/10 researchers are female. Perhaps thistypecasts women into a supporting role insearch; they're seen more as a researcherwhile their male counterparts are seen asconsultants. When it comes to hiring asenior consultant, most firms choosebetween finding a consultant fromanother search firm and training a leader

from industry. It's rare that a researcher ispromoted". Despite valuable knowledge ofthe market, few women are rising abovethe researcher level into the upperechelons of search. The Executive SearchRoundtable, presided over by Tory Clarkeof Whitehead Mann, has 349 members inthe United States. "Of these, 60% areinvolved in research. A massive 90% ofthis sector is made up of women".

It is argued that researchers andconsultants bring varying skills whichcompliment each other but differ heavilyfrom one another. This could be a reasonwhy the predominantly femaleresearchers do not make it to consultantlevel. However Tory Clarke believes thatthis should not always be the case.

"Central to the researcher's ability toadvance is the possession of the rightskills for their organization. Not everyresearcher is suitable for the role of aconsultant in the same way that not everyconsultant could do a researcher's job."Ms. Clarke continues by saying,"essentially, a researcher is responsiblefor undertaking a more tactical, reactive,process- driven task, ideally with well-defined parameters and a 'bumper- zone'between them and the client, in the formof consultant. The consultant is moreproactive, opportunistic and client- facing.Between these two roles lies a gray areain which both researchers andconsultants work. The skills sets requireddo overlap. There should be no reason fora researcher to believe that they cannotmake a successful consultant".

At least 4 of our interviewees followedthis exact route, researcher to consultant.Millie McCoy of Gould, McCoy & Chadickwas one of the very first to do so. "It tookyears to move from research into

consultant role. It was extremely difficult.I kept asking, eventually the founder ofmy first employer, Jack Handy (HandyAssociates), gave me a chance to do acourtesy interview. I held up well." Ms.McCoy's opportunity came when "we gotan upsurge in business. At the same time,a head of acquisitions for a Britishconglomerate came to Handy Associates'soffices. No- one had any time for him sothey asked me to work with him. Heneeded a white paper written on anindustry segment which he wasinterested in. I helped him write thepaper. He went out, acquired a companyand came back to me to do the search forthe President. My very first search was fora CEO. The firm had to let me continuedoing searches. My advice is to wait for anopportunity, then you seize it".

Another woman who has madeprecisely this progression is ValerieBaxendale, a consultant at Boyden inBrussels. After 2 years working inresearch at Boyden in London, she rose toJunior Consultant and now Consultantlevel. Ms. Baxendale believes that thedistribution of female search professionalsis "not a clear cut gender issue. The toplevels of search are often comprised ofthose coming from outside of the industry.The more senior female executives in all

Tory Clarke

“....approximately 9 out of

10 researchers are female.

Perhaps thistypecasts women intoa supporting role..”



industries there are, the greater thenumber of high- ranking female searchprofessionals. It is as simple as that".Having started out as a Researcher atBoyden in London, she "made sure thateveryone in the firm understood that Iwas willing to do more. I was inspired by2/ 3 mentors who could see that I wantedto do more and pushed me in the rightdirection. I often went to client meetingson my own. Some of my colleagues at thattime wouldn't work with a newconsultant because that would involveworking on comparatively juniorassignments. The reality is that for ChiefExecutive level search, the step fromResearcher to Consultant is very large.Those doing lower level search may findthat they receive greater responsibilitysooner, making the transition toConsultant easier and a promotion thatmuch quicker."

Also inspired by a mentor was MaureenAlphonse- Charles, Senior Vice Presidentfor Management and Development at J.Robert Scott, a wholly owned subsidiaryof Fidelity Investments. After joiningPendleton James (now Whitehead MannPendleton James) in 1994 as an associate,Ms. Alphonse- Charles left the firm as aPartner earlier this year. ""I did haveindustry background, having worked forthe Swiss Bank Corporation, Putnam anda women's own investment firm. Yet Ireally felt that my career took off underthe mentorship of Andy Hunter, the CEO ofWhitehead Mann Pendleton James. ThereI moved from research into candidatedevelopment from where I startedgrooming business relationships. After apoint, I was bringing in my own searches.This then evolved into running my ownsegment within financial services. I wenton to join J. Robert Scott which offered theopportunity to grow professionally and

personally which should be a priority forany professional."

The scenario has somewhat changedsince as Dale Winston says, "when it wasan advantage to have an androgynousname like mine". Those search firms withwomen consultants "...were, in thisrespect, progressive for the times". TodayMs. Winston believes that "if there is aglass ceiling for female searchprofessionals, it is self-imposed". This is incontrast to Birgitta Neuhauser's belief that"glass ceilings do exist in search. It isdifficult for a female to get to the topexecutive recruitment positions. Whenyou get to a certain level, it does becomean issue that you just don't belong to theboy's club. But this is slowly changing asthe boards of directors are represented bya younger age group." Ms. Winstonbelieves that one of the reasons that thereare not a lot of women prominent insenior management roles is because"there are not a lot of females prepared tomake the sacrifices to reach thesepositions". Janet Jones- Parker echoesthis. "One might say that no major searchfirm is run by a woman but I believe thatthis is because women do not want tomanage and run. They like the businesswant the flexibility and control over theirlives but do not want to manage a firmand deal with what that means".However, Janet Jones- Parker, as arecruiter of recruiters, does not believethat this is gender specific. "Few menwant to run a firm either. It is difficult tofind a search consultant who is willing torun an office let alone a firm".

All of the mentioned women enjoysuccessful careers and at the same time,all have a family. "The central key is goodorganization. If you are well organized,good in your profession, then you willunequivocally receive merit. The morevalued you are, the steadier theadvancement. Not only is it important toknow when to delegate, it is alsoimportant to inspire your peers and tocreate an effect where your presence ispositive" believes Mary Pitsy. At Boyden inBelgium where she is Managing Director,the proportion of male to female

consultants lies at 50-50. For Sweden'sNeuhauser & Falck, this lies at 1 male and4 female consultants and at Jones-Parker/ Starr. Ms. Jones- Parker co-runs afirm with a 50- 50 split between maleand female consultants.

Neuhauser & Falck founder, BirgittaNeuhauser, advises young searchprofessionals to "first and foremost, makesure you have a good teacher". Shebelieves it goes without saying that ayoung search professional needs to "bevery careful in every step. Make sure youalways do your homework before going tosee a client. Equally important are youcandidates. Always give them feedback ina positive way. Make sure you leave themwith a good impression. You never knowwhen you may be facing a rejectedcandidate as a client". Ms. Neuhauserwould also state "you need to have a veryhigh level of integrity so that it can neverbe questioned. Be kind to your clients andcandidates alike without being toofamiliar. At Neuhauser & Falck, we neveruse first names with our clients orcandidates."

Millie McCoy would suggest, "in largersearch firms, you're going to have similarsorts of problems that you would beexposed to in a corporation. My advice isthat if you're having difficulty climbing thecorporate ladder in one of these largerfirms, get with a smaller one. A plus aboutthis profession is that you can be verysuccessful in a small search firm." JanetJones- Parker gives a similar line. "Learnall that you can in your current firm. Thenask for advancement to acquireknowledge and exposure for the nextlevel. If this is constantly denied, move onto another firm. Make sure that there areopportunities for advancement at yournew firm. Move on to move up."

Valerie Baxendale believes that theyoung search professional should "keep at

Janet Jones Parkers / Valerie Baxendale

“"...it is very important

that search reflectssociety's make up.”



it, be ambitious. Build up your credibilityby mastering other skills whether that bespecialist sector knowledge, languages orotherwise. In this way you raise yourprofile and make yourself interesting tothe powers that be. What is extremelyimportant is to bring in clients. If youcannot do this, you won't be takenseriously and will always remain in asupport role".

Dale Winston echoes this. "A consultantis evaluated on the level of production noton soft skills. You need to be producingbusiness and executing searchesconstantly. The key to success isdeveloping clients. If your clients valueyou then you will be at the top of yourprofession".

If a female search professional does feelthat there are barriers to her advancementon gender grounds, another avenue couldbe to join a female led firm. Ms. Winstonexplains that her "firm is gender neutral.Any consultant would be foolish to join uswith conflicting values".

Through this Battalia Winston regardsitself as "not having a glass ceiling by anystretch of the imagination". Boyden's MaryPitsy supports this "with a woman as aManaging Partner, it is easier to regulateequal opportunities throughout the firm".

Maureen Alphonse- Charles goes backto the theme of mentorship and visibilityas key to progressing within a firm. "It isjust as important to have a mentor withinsearch as one outside. The best way tofind mentors from outside is by joining anetwork or association of a sort. The oldboys' network is often blamed for keepingwomen out of the very top managementpositions. If we realize the strength of this,then we should understand the benefit ofany network. I myself am part of informalnetworks of women. There areorganizations which have search as partof the group like the Boston Club andWomen in Business. The Partnershipfocuses exclusively on providing mentorsand a network for people of color,especially those who are at executivelevels within their organizations".

But are such organizations such a goodidea? Amongst female search

professionals, it is often argued that youshould be a professional first andforemost, irrespective of gender. Yet Ms.Alphonse- Charles does not agree. "Ialways want to be known for the qualityof my work, more than anything else. I ama search professional and I am a womanof color. I can't disguise or separate thesefacts. It's almost part of the package. Iwould join organizations that empowerwomen. I am fully aware of the challengeswhich we face and that there is power innumbers". Over and above this, MaureenAlphonse- Charles sees huge importancein "helping others. By coming togetherand having discussions which are candid,we can pass the lessons which we havelearned to others. I know that I have gotwhere I am today by learning from others.It's important that I give others thischance too".

The associations point seems to be acrucial one. Belonging to an organizationof a sort provides the professional with asupport network, helps the professional tohelp others and raises visibility andprofile. Like Ms Alphonse-Charles, manyof the other women we spoke to aremembers of industry organizations. Forexample, Mary Pitsy is a member of theBelgian Executive Search Association(BEXSA) and coaches M.B.A. students atthe Solvay Business School and Birgitta

Maureen Alphonse



Web: www.search-consult.com

Neuhauser belongs to Executive SearchKonsulter (ESK or Swedish ExecutiveSearch Association).

The participants all believe that changeis continuing and that the search industrywill become much more diverse. All agreethat a woman in leadership positionsresonates throughout the firm and impactson the make- up of the search company. Itmay also be the landscape of otherindustries which determine how quicklythis change comes about. The trend seemsto be CEO's with management experiencewhich doesn't necessarily involve search.The more women who have topcredentials and come from outside theindustry into search, the quicker thedistribution will tilt in favor of a diversesearch workforce.

All our interviewees camerecommended for the important part theyplay in executive search. They were:● Valerie Baxendale: Boyden Global

Executive Search● Maureen Alphonse-Charles: J. Robert

Scott● Tory Clarke: Whitehead Mann-

Executive Search Round table● Mary Pitsy: Boyden Global Executive

Search● Janet Jones- Parker: Jones-Parker/Starr● Millie McCoy: Gould, McCoy & Chadick● Birgitta Neuhauser: Neuhauser & Falck● Dale Winston: Battalia Winston

In addition to our interviewees, somewomen in search who were labeled as"influential" include:● J. Veronica Biggins: Heidrick &

Struggles● Ulla Hilding: Éligo AB● Brigitte Lemercier: Russell Reynolds● Anna Mann: Whitehead Mann ● Marnie McBride: Spencer Stuart ● Jana Rich: Korn/Ferry International● Phillipa Rose: The Rose Partnership● Rae Sedel: Russell Reynolds● Judith von Seldeneck: Diversified

Search Companies



Increasing diversity in your business

Search firms with discrepancies in

their make- up should consult the

Coopers & Lybrand (now

PricewaterhouseCoopers) 1997

report entitled the 'Trendsetter

Barometer'. Having interviewed

CEO's of 427 of the fastest growing

product and service companies, it

found "The diversity issue has

briskly climbed the corporate

ladder of importance to become an

indicator of a firm's prosperity." It

found that "more than half of

America's fastest growing

companies cite diversity in their

management teams as a factor

important to their business

growth". James P. Haynes, then

partner and director of the firm's

diversity practice, believes that

"CEOs who acknowledge the

importance of women and

minorities on their management

teams appear to be leading the

more progressive and productive

growth firms".

With her experience of consulting

companies on diversity issues, J.

Robert Scott's Maureen Alphonse-

Charles couldn't agree more "It is

always of highest importance to

make sure that top performers get

the job. However, I believe that it

benefits clients and us internally

when we have a more balanced

team. It brings a deeper level of

creativity to the firm and ultimately

enhances its performance. There is

a very fine line which you need to

walk; I'm not talking about focusing

on affirmative action. Rather

widening your lens and that of the

client".

Millie McCoy also firmly believes

that as a Managing Director and

co-founder, there is a

responsibility to ensure equality

within her firm. "We are very

diverse, not just on a gender basis

but also racially. We've always

been very proud of this. Within the

last decade, clients have developed

a greater awareness of the needing

to build diversity within their

executive ranks. This was not just a

result of governmental pressure but

also study statistics. Diversity

reflects society".

Ms. McCoy has seen the impact

that diversity makes on a client. A

few years ago, I put together a

pitch for a Chief Technical Officer

for a Fortune 500 company. They

requested our diversity statistics

which we then trawled through our

database to collect the data for this

potential client. In fact, we won the

search and as we weren't specialists

in CTO's, I was interested to know

what put us over the edge. What we

were told that is that we had the

best diversity statistics. We now

keep such statistics which has

taught us a lot about ourselves. It's

quite amazing; in the last 5 years,

43% of our searches have been

filled by a woman or minority. This

is clear evidence of the importance

of diversity to clients".

Janet Jones- Parker believes that

"search should only reflect the

talents, gifts and knowledge of

consultants who serve clients

successfully." Tory Clarke, however,

sees things differently. "In short, it

is very important that search

reflects society's make- up." Based

in America, Ms. Clarke sees that

"the US workforce is changing

rapidly and irrevocably. Companies

which do not reflect this will soon

be seen as old fashioned. Diversity

takes many forms, it may be

represented by color, and it could be

typified by gender. A more diverse

workforce offers widens the

company's views and reflects the

customer base. It will be the diverse

companies who will lead the way".

“....more than half of

America's fastest growing

companies cite diversityin their managementteams as a factorimportant to theirbusiness growth..”

“....In the last 5 years

43% of our searcheshave been filled bya woman orminority..”

“search should only

reflect the talents,gifts and knowledgeof consultants whoserve clientssuccessfully...”

FOSTERindependent executive search firms.Foster believed that this was necessaryas he felt that some of the overseas KPMGpractices were heavily 'advertisedselection' oriented and uncomfortablewith the direct recruitment approachpreferred by his business' clients.

"We realized that demanding globalclients wanted more than advertisedselection and cursory file searchapproaches to fill critical needs."

By the end of 1998, Foster Partners hadset up alliances with executive searchfirms in 38 countries. In 1999, however,the firm began to explore the option oftaking on partners under a different typeof relationship - the licence relationship.

Foster explains the difference betweenthe two types of partnership. "Firms inalliance relationships basically have aquid pro quo on business referrals.Licensees have an exclusivityarrangement to use our name andprocess, in return for a licensing feewhich is paid to us quarterly. Both thealliance and licensee relationships haveagreed to operate within the policy andpractice guidelines set out in the FosterPartners Practice Guide."



PARTNERS

Dwight Foster

From its roots in a public accountingfirm, Foster Partners has developed into asearch business with some ideas whichgo against the industry norm. DwightFoster talks to Jason Starr in an exclusiveinterview for search-consult.

Foster Partners is the successorpractice to KPMG US ExecutiveSearch. KPMG (then Peat Marwick

Mitchell & CO) had offered executivesearch services since 1962 but washampered in its growth by substantialclient blockage with the accounting firm'saudit client base and the independencerequirements of the Securities &Exchange Commission (the SEC). In 1978,all of the US public accounting firmsagreed to a voluntary proscription ofservices to their SEC registered clients.KPMG continued to provide servicesunder this limitation until 1990.

Dwight E. Foster, the National Partner-in Charge of the U.S. Executive Searchpractice took early retirement from KPMGand organized the buy-out of the searchbusiness. This took place in December1989. From this, Foster Partners LP wascreated and this firm began its operationson January 2, 1990. At the end of 1992Foster Partners converted from apartnership firm to a DelawareCorporation. The converted firm's legalname is D.E. Foster Partners but thebusiness is known in the market as FosterPartners.

An early objective of Foster Partnerswas to provide global coverage for multi-national clients. An initial step inachieving this was to organize in-boundand out-bound alliances with overseasKPMG offices. Over time theserelationships have been replaced withlinks to strong single discipline

The first firm to join the group under alicencee arrangement was Foster PartnersAsia which was created in the spring of1999 by Trevor McCormick, a KPMGveteran. FP Asia is headquartered inHong Kong and serves the managementrecruitment needs of multi-nationalclients in Beijing, Shanghai, Singapore,and Malaysia. "FP Asia's business mix haschanged dramatically.in its three yearhistory" said Foster. "At its inception inspring 1999 inception, FP Asia wasserving automotive, e-commerce,telecommunications, high technology,and OEM components sector. Thesesegments have little demand at this time.Today, FP Asia is prospering in theenergy, medical equipment, andinvestment banking sectors. At a timewhen the global demand for investmentbankers is weak, there is a heavydemand for US trained Chineseinvestment bankers to return to China."

In the UK, Foster Partners appointedCopley/Wall as their local alliancepartners on an exclusive basis.Discussions with a major pan-Europeanretained Search firm are ongoing.

Foster Partners has also entered intolicensing relationships in the US with CPJohnson & Associates in Minneapolis(Chris Johnson is a former KPMGexecutive search consultant), Reffett &Associates in Seattle, a well regardedspecialty retailing firm and, mostrecently, Daubenspeck & Associates - anIT specialist in Chicago. Reffett havesince expanded their operations and nowalso boast the Foster Partners license forCharlotte.

The group aims to develop synergiesvia bi-weekly telephone conferencebetween offices and through periodicnational meetings - the most recent of

he can rely on the KPMG associationalone.

"The KPMG relationship has to be lessformalized because of the independencescrutiny of the SEC. We are allies of andwe lease space from KPMG but, at theend of the day, Foster Partners isrequired to independently develop itsclientele. Other firms don't sell yourbusiness for you. We have to go out andwin business as if KPMG did not exist."

In summing up, Foster added, "FosterPartners started business with a highservices orientation, public accounting firmstandards of processes, documentation andprofessionalism. We are gathering like-minded boutique firms to join us in aglobal, "one firm" client services deliverymethodology. We ask ourselves the samequestion at the end of each week: How bigcan an executive search firm becomebefore it gets bad?"





Web: www.fosterpartners.com

which took place at the end of 2000 atthe Glen Cove Conference Centre in NewYork. This effort has paid off - forexample, consultants from Washington,Minneapolis, New York, and Seattle areworking closely on a national initiativefor the 'not for profit' and tradeassociation sectors and as a group havedeveloped an impressive client list.

This partnership is fairly typical of therelationships which have sprung upacross the group; For example, GailAmsterdam in the New York office, worksclosely with Bill Reffett of Seattle onretail assignments -- one of the firm'sstrengths.

In developing the group's culture,Foster has introduced some policies onbilling which go against the norm in theindustry. With the exception of the retailpractice, fee structures in the group tendto be based around fixed 'project fees'rather that a percentage of totalcompensation. He explains "…this goesback to our roots in public accountingand a desire to be objective. Where is ourobjectivity if we are advising the client topay more aggressively when it also

influences our fee?". The policy onequity payments is equally strident. Nofirm in the network will accept suchcompensation "We do not acceptpayment in equity or warrants. Webelieve that any firm that has pursuedthat practice will have some serious riskexposure in their balance sheets."

Foster Partners does not participate incontingent fee recruiting, however thebusiness does undertake a large amountof what Foster refers to as "Pipelinerecruiting". This is where the businessundertakes a retained assignment for aclient who requires a number of peoplein similar disciplines. "An example ofthis would be a retail client for whom werecruited a series of MerchandisingManagers over a period of three years. Italso happens a lot in investment banking- and when it does happen we will lookto negotiate an additional fee on thebasis of the increased value to theclient."

Foster believes that the focus ondeveloping his business through therecruitment of additional licencees andallies is vital - he does not believe that

EXECUTIVE SEARCH:The Brussels Debatesearch-consult, in association with Dillistone Systems, are proud to introduce the latest in our series of Executive Search

Debates. The Brussels event takes place at the Brussels Park Atrium, Rue des Colonies 11, Brussels, 1000 Belgium on

24 October 2001 from 9:00 a.m. Speakers include:

Robert Brodsky - Secretary General Belgium Executive Search Association Mary Pitsy oude Hendrikman - Managing Director Boyden Global Executive SearchAnders Borg - President Hansar InternationalEtienne Reeners - Managing Partner Hightech Partners ITPMarc Swaels - Managing Vice President, Management Assesment Practice Korn/Ferry International EuropeAlexandre Paternotte de la Vaillée - Managing Partner Stuckens, Paternotte Eurosearch

Attendence is free but by ticket only - to apply for a ticket, visit www.search-consult.com call the the Marketing Department on +44 20 7749 6100 e-mail [email protected] coverage of the event will be provided in the following issue of search-consult magazine.



inRay & Berndtsonthe Netherlands


The Dutch office of Ray & Berndston,is one of the leading search firmsby revenue and has plans to

consolidate its market share. Having beenan acquisition target for an internationalfirm as recently as last year, the companystill remains firmly a part of the Ray &Berndtson group. Talking to ManagingPartner Roger Bekius and Partner DaanSteenbergen, we find out about Ray &Berndtson's assignments referral process,employee-employer relations and look attheir predictions for search in theNetherlands.

Ray & Berndtson has 47 offices in 31countries with global revenues totalling$176 Million. Repeat business contributesto this figure (80-85% of clients comeback with more assignments) and 15% oftheir turnover is derived from referredassignments. Clearly, this is an importantpart of the firm's business. Whilst howfees are split for referred assignments is apart of company global policy, the client'swishes and the level of the search dictatehow the referred assignment itself will bedone, says Managing Partner RogerBekius. "The Dutch clients may approachus in the Netherlands, as their local Ray &Berndtson office, in order to find a newChief Financial Officer to be based in theUnited States. The normal procedure isthat the referring consultant, i.e. theDutch consultant, would play a minimal

part in the execution of the search. Inusual cases, the Dutch consultant wouldpass the assignment on to his/herAmerican colleagues". However"sometimes the client wants the referringconsultant to play a pivotal part in thesearch. Our partner firm, say in the US,may have a shortlist of 4 or 5 candidates,yet the client firm wants us here in theNetherlands to see these candidatesbefore they are presented to them. Theymay feel that we understand theircompany culture better. Our advice toclients is however that the partner firm isbest placed to lead and execute thesearch as they understand the localculture and can search better for theperfect candidate".

Both the referring consultant and thelead consultant who actually completesthe search benefit from through thereferral fee scheme. This acts as anencouragement to share and pass on

work, when necessary. Fellow partnerDaan Steenbergen therefore believes that"a client's interests are always best atheart" as there are no arguments overwho is going to do the search. There aretwo policies for fee splitting as RogerBekius, Managing Partner explains. "If thesearch is inter-regional, e.g. from theUnited States to France, then the referralfee will be of 20% of the final fee. If thisreferral leads to other assignments, thenwe remain flexible. A sliding fee scale isnegotiated between those who areinvolved.". Therefore the referringconsultant will benefit if the client startsa lasting relationship with his/hercolleague in a different region.

The holding company also benefitsfrom this interactivity between regionaloffices. Executive Search International, or'ESI' as it is known receives 5% of thefinal fee. This goes towards consolidatingthe company's infrastructure. Bekiusinforms "This money contributes to thecosts involved in marketing activities,opening new offices and such like".

Inter-regional referring may be afeature of business yet it is probably lessso than passing on assignments within aregion, e.g. from European to Europeanoffice. To reflect this, the referral fee levelis somewhat different. "If we were topass an assignment to our Germancolleagues, for example, we would

“....Both the referring

consultant and the lead

consultant who actually

completes the search

benefit through thereferral fee scheme.”



receive one-off percentage of the fee.This would amount to 20% of the fee forthe first assignment which our Germanpartners complete for the client only,"says the Managing Partner.

Amongst the 175 searches that theDutch arm of Ray & Berndtson completesper year, there are those that call forwhat Bekius terms as "internationalteam-based outlook". There are occasionshowever when no fee is levied betweenoffices. This is when research resourcesare shared. The policy is quite exact;when another office requires researchtotaling less than 8 hours, this is free ofcharge. When this is exceeded, then a feeapplies. However, Bekius says that thereality of this is quite different. "Wenormally don't start billing our partnersfor research resources for less than 1-2days of time spent working on theirassignments". Steenbergen elaborates"when it becomes more serious, forexample when our research consultantsspend a week working on an assignmentfor our UK colleagues, then we startbilling at a negotiated level."

Just as maintaining good relationsbetween offices require diplomacy, sodoes the topic of employer-employeerelations. The research resources comeinto the equation of cross-borderassignments as well as the Dutch office'semployee retention and motivation

strategy. Surprisingly, however, as far asresearchers are concerned, Roger Bekiussays, "there are no promotions fromwithin. Research consultants remainresearch consultants. We are clear aboutthis from the outset. During the interviewstage, we make sure that our potentialresearchers are well aware of this".Therefore those ambitious researchers atRay & Berndtson in the Netherlands havelittle chance of ever making it toconsultant level. The company simplyprefers to recruit its consultants fromoutside. Some in the industry argueprogression from researcher to consultantis a good investment in continuity as wellas succession planning. On the otherhand, Bekius and Steenbergen believethat consultants are more effective whenthey come from outside the firm. DaanSteenbergen points to two types ofresearchers at Ray & Berndtson in theNetherlands. "There are those for whomresearching is a career. They are often intheir late '30's to mid- '40's. They do notwant commercial responsibility, rathertheir priorities include working in a goodteam in a pleasant cultural environment".

In addition to these career researchers,there are definitely those researchers,perhaps on the whole younger, who arehighly ambitious and for whomresearching is only the beginning of theircareer. Steenbergen believes that the firmhas a responsibility to these types ofresearchers. "We try to keep them happyfor 2 to 3 years. We have a very open setup here which may surprise some of ourcompetitors. When our ambitiousresearchers have grown out of their role,they come into our offices and say 'I'mconsidering leaving, what's the bestadvice you can offer me'. It doesn't havean impact on their bonuses or the waythey are treated. We want to coach them.Sometimes we introduce them to ourclient firms".

Does this not cause a conflict ofinterest? No, believes Steenbergen. "Wedon't make any placements there, no feesare levied. We may merely introduce aresearcher to a client. They have to dothe rest of the work". The researchers

may feel motivated to perform well notjust on the basis of internal benefits, e.g.promotion within the research ranks fromresearcher to senior researcher. They arealso encouraged by the fact that theirperformance plays a part in findinganother job through Ray & Berndtson.

It is a two way street: from search toindustry and, at the upper levels of Ray &Berndtson, from industry to search."Some of recent consultant hirings havecome from outside the industry. It takes6-9 months for them to become fullyoperational". Bekius dismisses thedisadvantages of high costs incurredwhilst waiting for these consultants toproduce revenue. Instead he sees thebenefit of "their seniority and skills whichcan be applied to search".

The industry to search route is thebackground of one of Ray & BerndtsonNetherlands newest partners, BertHondebrink. Previously, he was SeniorVice President for Ventures and E-business at i2 Technologies, following acareer at Phillips as worldwide SeniorVice President for global e-commercebusiness. Perhaps one of the reasons whyRoger Bekius is not worried about thestart-up costs involved in hiringconsultants without search experience isthat the firm believes that it is "notprimarily short-term sales driven".Although the firm has an idea of whatthey want to accomplish over the year,

Roger Bekius

Dan Steenbergen



their consultants "do not have fixed salestargets" explains Bekius. "We believe thisis a long-term business of relationshipbuilding, not a short-term, one-off salesbusiness. We consider it to be importantthat senior consultants have senior levelrelationships with prospective andexisting clients. I always say that I havesome clients that are not even aware thatthey are my clients yet!"

"We don't get nervous if our consultantshave a close relationship with a potentialclient for 2 years without ever havingwon an assignment with them. It's allabout building up trust. If you're active inthe market and continuously building uptrust, then this potential client will cometo you with their most discreet searchwhen the time is right. This may be in 6months, 1 year or 3 years," continuesBekius.

The firm has 11 consultants, of whom 4are partners, all building up trustedrelationships with existing clients. Ofthose 3 are part-time consultants, a partof the company's strategy. Partner, DaanSteenbergen, feels strongly that thesepart-time consultants "excel in theirprofession". He dismisses any claims thatthis is an enlightened approach. "Theyhappen to be all mothers who do a topjob and make an crucial contribution tothe organization. They co-ordinate thiswith other things they do".

There is a clear existence of globalpolicy at Ray & Berndtson when it comesto splitting fees of referred assignments.However does this global concept extendto company culture? This question iscentral to the company's philosophy. Lastyear, during an acquisition trial with aninternational competitor, Ray &Berndtson in the Netherlands completedan analysis on the existence of a globalcompany culture within the firm. "I spoketo partners who came to Ray & Berndtsonfrom other leading firms. These includedpartners coming from across the worldwho had left international competitors tojoin us. The survey included in depthtelephone interviews about why theseprofessionals joined our group. Iquestioned what their ideas on culture

were, comparing and contrasting themwith their previous employers".

"My findings were very interesting andprovided an insightful angle on how ourcompany culture works. Among theresults, we found that Ray & Berndtsondoes have a clear global culture. Ourfundamentals are based onprofessionalism and friendship. Theideals we hold mirrored those held bypartners around the world within thefirm," tells Roger Bekius.

A global strategy for Ray & Berndtsonhas evidently been to widen the scope ofservices offered. The immediate future,believe these two partners, is a littleuncertain at present. The effects of thisperiod will mean a reform in search firms."The quality and client focus will besharpened somewhat dramatically. In thenext 5 years, there are going to be a lot ofchanges. Those who survive this re-organization will produce a broad rangeof services to their clients" believes DaanSteenbergen. He feels that this will be amatter for every search economy,

especially in the Netherlands."We believe that pre-search and post-

search services will become as importantas the assignment itself," continuesSteenbergen. "Retention is going tobecome an ever more important issue".Ray & Berndtson in the Netherlands isgearing up to meet this aim. "We areabout to launch a new business rangeoffering management audits and teamcoaching. Our consultant Majorie Soetershas just completed a postgraduatediploma in management coaching. Shewill be part of the coaching divisionwhich will be handling assignments atindividual and team levels," Bekius adds.

This development, they believe is

crucial because "organizations arechanging faster than ever before, movingfrom one type of core business toanother". The trigger has undoubtedlybeen e-business and the way it hasrevolutionized the way people work. Inhis capacity as partner leadingassignments in consumer goods and forservice companies, Steenbergen haswitnessed the impact of e-business ontraditional business cultures. "Our plan isto help companies and talent to workwhose culture is unfamiliar. We wantthese 'culturally unfamiliar' people toassimilate into the company well. Thisbenefits candidates and clients alike."

As well as concentrating on emergingservices, the firm is also aligning itselfalong the Netherlands' growingindustries says Ray & Berndtson partnerDaan Steenbergen. "Professionalservices, biotech and the leisure industryare going through a mini-boom atpresent. Increases in search for theleisure industry are largely attributable tothe fact that the average working weekcompromises of 38 hours in theNetherlands. Dutch people simply havemore time on their hands which ispushing up growth rates in leisure. Theyneed good senior management to makethis work ".

Managing Partner Bekius expectsthings to pick up in other areas of searchtoo. "We expect to see the return of thetechnology sector in the first quarter of2002. As well as in the new economyindustries, we predict a boom in searchfor privatized industries, for exampleenergy and utilities. Traditional publicsectors like healthcare, government andeducation need another style ofgovernance to ensure that they are morecustomer-oriented. This is wheredemand for search will come in. Theyrequire the benefit of our privateknowledge to improve publicinstitutions".



Web: www.rayberndtson.com

“....We don't normally start

billing our partners for

research resources forless than 1-2 days oftime spent..”

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


inThe Role of

Search FirmsStrategic Board Recruiting

By Susan F. Shultz

Adapted exclusively for search-consultfrom "The Board Book" (Amacom -www.ssaexec.com)

I t is ironic that the one group, theboard of directors, with the mostpower to influence the company, is

the one group often randomly selected,rarely evaluated and almost never heldaccountable. As we search consultantsknow, if you get the people right, goodgovernance will follow. A board's power isa function of its directors and how theyare chosen. You can have any kind ofprocess, intent and leadership, butwithout the right people, it doesn't matter.

As understanding of the importance ofboards escalates, the process by whichdirectors are selected becomes critical. InThe Board Book (AMACOM), the "failure torecruit strategically" is the first and mostcritical of the most common 10impediments to strategic boards. Analystsknow this and pay a premium of 20% forgood governance. ¾ of Institutional

investors worldwide rank governance ona par with the numbers when evaluatingcompanies.

Boards used to be largely gentlemen'sclubs assembled to reward largeshareholders and loyal friends andmanagers. Still today, Boards often arelittle more than cheering sections whofavor whatever management wants to do.The overwhelming majority of directorsare networked onto a board, usually bythe CEO, too often as an afterthought.

As good governance gains favor, theprocess is moving to strategic recruiting.Board membership is no longer just areward for `making it' 74 percent of U.S.companies have nominating committeesmade up of independent directors whoguide, if not lead, the process.

This includes determining what theneeds are, overseeing the process andextending the offer to serve. Increasingly,boards are engaging search firms tovalidate the process and proactivelyaccess the best.

As search firms, we are positioned toadd extraordinary value. Here are thesteps for strategic recruiting.1. Create a board charter.2.Create a needs matrix.3.Develop a measurable profile for each

director slot.4.Recruit proactively to each profile.5. Interview and reference potential

directors in the context of your board.6.Provide comprehensive orientation.7. Recruit in a continuum.

1. Create a board charter. (Corporategovernance guidelines). Define what theboard wants to accomplish and how itwill be measured. Will the board offeroccasional advice to generally maintainthe status quo or will it be independent,engaged, and a real contributor to thesuccess and strategy of the company?

Outline the structure. For example, howoften will the board meet? Who will selectthe directors? What will the size be? Willdirectors contribute beyond the meetings?

Is there a term of office? What's thecompensation? Will there be equity?What committees will there be? Willthere be a strategic planning retreat eachyear?

Will it be a statutory or advisory board?In other words, will the directors hire andfire the CEO or will the CEO hire and firethe directors? How will the success of thedirectors be measured? Perhaps, aninternational advisory board is theassignment with a broader mission.

2. Create a needs matrix. Once the charter is clarified, the next

step is to prioritize the strategic issues, thecritical needs going forward. What arethe key business metrics, for instance,technology, building alliances,international expansion, merchandising,government access, e commerce, humancapital, diversity, distribution, exitstrategies. Evaluate the strategic plan andwhat the company will look like in thefuture. What expertise, what attributesand access will move the company to thatfuture?

Critical needs might include: ● Merger and acquisition experience with

a strong financial background. ● Technology vision to help see what

technology can do for the company● Strategic planning. ● A proven marketing leader with

contacts to accelerate alliances. ● Operations experience to guide the

company's growth.● Diversity to reflect and respond to the

constituencies of the future.● Expertise in human relations - to help



recruit board members, implementevaluation, and guide successionplanning.Remember, this is an extraordinary

opportunity to gain valuable expertise nototherwise available - or affordable

Once the needs matrix is detailed, thenext important step is to Define thecurrent board members in the context ofthe needs matrix. What is the company'sbench strength? And, where are theneeds going forward that are notaddressed by the current directors?

3. Develop a measurable profile foreach director slot once a charter and needmatrix are defined. Specify expectations ofeach board member. In other words, givethe same attention to recruiting a boardmember as to recruiting the mostimportant manager, the chief executiveofficer, the marketing director, or the chieftechnology officer. How will the directorsbe measured? What will constitutesuccess? What specifically will they bringto the table?

4. Recruit proactively to each profile.Throw a very broad net. .Access thewidest possible candidate base andvalidate the board to prospectivecandidates. Just as in a more traditionalassignment, identify the three keyelements of the board opportunity thatwill attract them. Why specifically willthe prospective director want to serve? Inour experience, the pivotal generalconsiderations are liability, the board'sindependence and validity, themanagement, the business model, andthe other directors.

● We find that chairmen and CEOsrepeatedly are astounded at the level ofindividual willing to serve if approachedin the right way.

5. Interview potential directors incontext of the board. What strengths willthey bring? How will they contribute?Pose experiential questions in the contextof the critical issues, so you can learn.How will they add value? To whichcommittees would they make the bestcontribution? Audit, governance, strategicplanning?. Will they represent all theothers who are not at the table? For

instance, ask what strategic initiativeswould they suggest? How did theyparticipate on other boards? What is theirview of marketing options? What do theythink about the business model? How dothey evaluate the management? Whatrole do they feel is appropriate for adirector?

Yes, look at expertise, access,experience, and relevancy. But alsoconsider scope, culture, and the softqualities. These are the intangibles thatmake the board and the company the bestit can be - and that buffer the companyfrom self dealings

A few other points:● Every director votes on every issue.

They fail their fiduciary duty if theyfollow the lead of the "expert. If theaudit committee report is on the table,even if another director is a CPA whoheads the audit committee, eachdirector must do more than follow thatdirector's lead. Her vote carries equalweight and she is equally responsible -and liable.

● Consider time availability. The averagedirector devotes 12 to 20 days per boardper year. Consider carefully the valueand trade offs of over boarded,"marquis" directors. Think 2 to 3outside directorships for employeddirectors and 5 to 6 for full timedirectors.

● Vint Cerf, WorldCom inventor of theinternet, sits on 15 boards. VernonJordan, Lazard Freres, sits on 8 Fortune500s.

● Remember that every person you recruitis a reason for others to stay or stayaway.

● The only person who won't serve is theone you don't ask.

● Look for people who will elevate thecaliber of the board 6. Reference in the context of the

board. Consider balance and culture.Pose scenarios. A powerful, decisive CEOwill not necessarily be a good team playeron a board, listening and brainstorming.What is he like on other boards? Does hemonopolize the dialogue? Is he preparedwith thoughtful questions for discussion?

Susan F. Shultz



Or does he sit there quietly, never sayinganything. Several CEOs have describedsuch directors with outstandingcredentials whose total contribution issilence. What is the attendance record ofthe prospect?

7. Comprehensive orientation. Asdirector responsibilities escalates,expecially in the area of audit andgovernance practices, a comprehensive,candid orientation is increasingly vital. Inaddition to learning the numbers and thebusiness model, there are a number ofways to engage directors in corporatebusiness. Pepsi sends its board membersout for a day. Home Depot expects itsdirectors to visit and assess 20 storeseach year.

8. Finally, recruit in a continuum. Keepthe matrix in mind and maintain a list ofprospects tied to the company's future.

Bethlehem Steel is an example of acompany that relies on a director matrixand maintains a confidential prospect listthat it continually refines.

The most difficult thing to do around theentire governance issue is to "fire" adirector. Why not invest in the process

instead of a failure? Great boards reflectgreat companies, and search firms can

play a pivotal role in driving the trend togood governance.

Profile

Susan F. Shultz is a recognized

governance expert, speaking and

writing on the competitive

advantages of strategic boards and

leading the governance practice of

SSA Executive Search.

Recent engagements include

Management Action Program's

CEO Forum, Dallas; The

Management Association,

Milwaukee; the American

Management Association Executive

Forum, Chicago; The American

Society of Corporate Secretaries,

Phoenix and The Royal College,

London (March 2001).

Ms. Shultz established SSA

Executive Search International,

Ltd., in 1981. SSA conducts

searches locally, nationally and

internationally, and has affiliates

throughout the world.

Ms Shultz may be contacted via

email at [email protected].

Her book, "The Board Book" is

available from the search-consult

bookshop (www.search-

consult.com) or from the SSA

Executive Search website

(www.ssaexec.com).Susa

n F.

Shu

ltz

ADVERTISING INsearch-consultFrom November, search-consult will be

circulated to buyers of executive recruitment

services in the US, UK and continental Europe.

Advertising opportunities are available -

contact Jason Starr or Carol Crawford on +44 20 7749 6102 or e-mail

[email protected] discuss your needs further.

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


South AfricaSouth Africa is often regarded as the

only search economy on the Africancontinent. From Johannesburg,

international companies conclude searchassignments placing candidates as far asthe Middle East. In 1994, the six leadingfirms by revenue together collected $7.1million in total revenues (source EconomistIntelligence Unit). Search firms in SouthAfrica have changed since 1994, not leastbecause this was the year of the firstdemocratic elections. In a recent article inSouth Africa's 'Financial Mail', it wasquoted that one out of ten executivepositions in South Africa is unfilled"because a suitably skilled andexperienced candidate could not be found".We look at why this is the case, what themain search issues are in South Africa andwhich African economies could burgeon anew search market.

There are 3 different types of searchfirms in South Africa and can be classifiedas first, second and third generation. Thefirst-generation search consultancies "relyalmost entirely on their contacts in themarket or the traditional 'old boy' network"says Dr. Trevor Woodburn of WoodburnMann. "The second-generation searchconsultancies are those who rely oncomputerised databases. These are mainlyas boutiques or functional specialistcompanies." The third generation searchconsultancies use of a combination of theirnetworks and databases. Extensive use ismade of research methodologies to identify the candidates regionally,

nationally or internationally.These third generation search

consultancies are largely made up by majormultinational firms present in South Africa.They include Whitehead Mann Group Plc(Woodburn Mann), Heidrick & Struggles,Spencer Stuart, TASA Worldwide andTRANSEARCH. Heidrick & Struggles SouthAfrican operation was borne out of anacquisition of Johan Redlinghuys & Partner,a firm founded in 1970 that was previouslypart of the Amrop network. Most of thesearch firms are made up of approximately4 consultants with a support network ofresearchers. Due to the market size, manyof these are generalists, however firms likeTRANSEARCH under Ian Blackie have builtup specialist areas of search, i.e. miningand resources.

Despite going back 31 years, SouthAfrican search is still not seen by all as anestablished industry. According to Brian

Hosking, South African Managing Directorof TRANSEARCH United Kingdom "in anyone month, in South Africa, 5 newrecruitment firms start up. At the currentmoment, there are probably 8 of themgoing out of business every month". Dr.Trevor Woodburn, Managing Director ofWoodburn Mann (part of the WhiteheadMann Group) explains. "The market couldstill be described as immature as there isno clear differentiation or understandingbetween retained executive search,contingent executive search or generalrecruitment. The only exception would bethe major multinational clients whooperate in South Africa and have anappreciation of retained executive search".

This seems to be a crucial reason whythe search market in South Africa hasremained static. There has been an"explosion in the numbers of personnelagencies and recruitment shops" over thelast few years, explains Neil McCafferty ofMcCafferty Consulting; a search firm whichmakes specialist placements withinfinancial services. "Generally South Africanline managers favour the shotgun approachof multiple agencies to the precision of asingle search professional". McCaffertycontinues by highlighting that "search andrecruitment are often seen as one in thesame. This results in the generalmisconception is that both subscribe tosimilar ethical guidelines".

One answer to this problem could be theadoption of AESC covenants on clients andcandidate's bill of rights. Recruitment


search in

Brian Hosking



agencies are less eager to take the AESCrules on board and this is what divides thecontingency recruiters from retainedexecutive search. Managing Director, IanBlackie, believes "that it does markourselves from the contingency recruiters.It is a good tool to describe who we are.Alongside to using these covenants, weexplain to clients the risk they are taking inusing personnel agencies to find seniormanagement staff. We will find the bestperson available whether they are lookingfor a new position or not. The personnelagency will find a different sort ofcandidate".

However, things could get tougher forSouth African search in the next few yearsif firms do no begin to appreciate thebenefits of search. Brian Hosking ofTRANSEARCH explains, "in the last 2 yearsthe market has shrunk. Amongst firms inindustry, those who could move theirassets outside of South Africa have done so,listing elsewhere. The South Africaneconomy has become less formal andsearch does not work at its best in aninformal setting".

A new avenue for business could beadvising on retention. The main reasonbehind this is migration. Marco Boni,Managing Director of Spencer Stuart inSouth Africa tells "this is having an impacton the entire country. The fact that highlyskilled labour has emigrated has createdan imbalance". Trevor Woodburn ofWoodburn Mann supports this. "The pool oftalent in South Africa has certainly beendiminished by the emigration of individualsover the past two decades. The mostnotable absence of skills is in the 30 to 40-age range with a particular shortage in IT,Chartered Accountants and individualswith global business and marketingexperience. There are still very goodcandidates available but the talent pool tosearch in is smaller".

A quickly developing side effect isinflation in salaries. This is predominantlyfor two reasons. Firstly, the remainingcandidates are finding that not only theirskills but more so the years of experienceare increasingly in demand. Ian Blackie,Managing Director of TRANSEARCH South

Africa, has witnessed candidates who havebeen recruited into several positions withina short space of time. "The effect on theprofessional is immense. If you imaginethat 200 of 15,000 accountants in SouthAfrica are black. They are hot property.We've heard stories of candidates beingrecruited from a Chartered Accountant to aFinancial Director within 3 years. Withinthat timeframe, they may have movedseveral times. At some point, they find thatthey may not be able to cope with so muchresponsibility acquired over such a shortspace of time". As a knock- on effect of thisfeverish recruitment activity, companiesare desperate to retain their staff andthereby employees can demand a veryattractive salary. Dr. Woodburn says, "Ittends to be a sellers market where goodcandidates are able to dictate their termsrather than the companies dictating theterms for hiring and remuneration."

The second reason for increasing salarylevels is that migration. "The government istrying to reverse the migration and attractSouth Africans back. As a searchconsultant, you are well aware that there isa double squeeze on client companies. Toattract these expatriates back, the salaryneeds to be commensurate with what theywould receive in the U.K., Australia or NewZealand. Add that to the fact that thecurrency has depreciated, then you canunderstand the challenges which theseclient companies face," explains SpencerStuart's Marco Boni. "When we do highlevel searches for important positions, wealso tap into our international network tosee if we can tempt successful SouthAfricans abroad back and into thesepositions. It's not necessarily an easy thingto do".

Neil McCafferty's sees that "there are alsoa sizeable number of expatriates returningto this country. It's not entirely a one-waystreet." These expatriates are not only theminority white South Africans but alsoblack South African leaders who were inexile during the apartheid regime. "Theseexiled South Africans are returning havingbeen educated abroad will often havemanagerial experience which is second tonone," explains Marco Boni.

Apartheid in South Africa is the mainreason why search consultants cannotwidely capitalise on a population of 43million people. The South African economygrew rapidly in the 1950's and 1960's,explains Brian Hosking. "However it wasonly accessible to whites. In order to satisfythe demands for a growing economy, thegovernment encouraged immigration fromWestern Europe. This came to an end in the1970's yet in this decade many skilledEastern Europeans came over to SouthAfrica to fill the skill shortage." By the early1980's, realising that demand for talent stillexceeded supply, there were the first realattempts to equip the black South Africanpopulation with the necessary skills forsuccess. "In the '90's, process of developingblack potential had firmly taken route. The1994 democratic elections gave thisprocess further impetus".

However, search consultants are facing amore difficult task in trying to find suitablecandidates for positions. If we couple theimplications of migration with the fact that"at any one stage over the last 30 to 40years, there has been a 10- 15% shortagein senior managerial skills in South Africa"as Brian Hosking puts it, we witness anincreasingly challenging position whichthe search industry finds itself in. Hoskingdoesn't believe that "new blackprofessionals are not going to fill this short-fall in the short- term. In Europe, youwouldn't accept a candidate for a top-levelposition with less than 10/ 15 years ofsenior management experience. What weare seeing are attempts to do put peopleinto positions with less than the mandatoryrequired experience".

Dr. Woodburn echoes this observation."The biggest shortage of skills is amongstpreviously disadvantaged black SouthAfricans, created by the limitationsimposed by apartheid during the previousfour to five decades. These individualswere not fortunate enough to receive thenecessary education in the sciences andmathematics as well as appropriatebusiness experience."

To rectify this imbalance, affirmativeaction has been encouraged. TheAffirmative Action and Employment Equity



legislation "potentially impinges on thebasis of operation" of search firms,according to Trevor Woodburn.TRANSEARCH's Ian Blackie explains theoften-misunderstood intention behindaffirmative action. "It is more a positivediscriminatory issue. Most people see it asa plan that all companies should have acertain amount of previous disadvantagedindividuals at certain levels within a giventime. This is not a strictly correct meaning.What affirmative action says is that acompany should start to reflect thedemographics of the nation".

However Dr. Woodburn believes that thislegislation "forces organisations that dealwith government or para- statal businessesto conduct a significant portion of theirbusiness with organisations that areowned and operated by previouslydisadvantaged individuals". How far doesthis affirmative action go? Marco Boniexplains his experiences. "In some cases,clients make it clear that their preferencewould be for a black person in a particularjob. We would do everything possible to tryand fulfil that requirement. But according tolaw, it is not possible to stipulate 'black' or'white' but the reality is somethingdifferent. We have to be very flexible inthese issues and conscious of what the lawsays." At the same time, Boni sees the needto "redress a situation which has beenskewed for so many years. This isn't just ona racial basis but on a gender basis too.There are accelerated programmes ofpromoting women in existence."

But if such programmes exist, how can asearch consultant be sure that they areputting the best person into a position,regardless of political or social pressure?The widening skills shortage does make acase for greater flexibility in placements.Spencer Stuart's Boni sees the solution in"identifying talent with generic skills whohave excellent communication, solideducation and experience albeit perhaps inan unrelated field. The candidates need tobe able to make a leap into another field."He does not believe that this is somethingwhich is simply South African. "It happensin other parts of the world too, sometimeson different levels".

The South African market is, accordingto Brian Hosking of TRANSEARCH, worth"a lot less than £10 million". There may bescope for expansion to other parts ofAfrica. An indication of this may beMcCafferty Consulting's identification oftalent "in Zimbabwe, we have identifiedtalented, quality people from Botswana,Ghana, and Kenya." Spencer Stuartbelieves that the Johannesburg provides"the perfect springboard for the whole ofAfrica and the Middle East." Perhaps it isthose mature economies in Africa whichwould offer the perfect environment forsearch. However Marco Boni believes that"it doesn't necessarily follow that wewould get work from mature economies.We get a lot of work to be done indeveloping economies where they requireskills to drive privatisation or help launcha new company. Business comes fromregions like Nigeria, Kenya and Uganda,for example".

In addition to searches which are donein these regions, candidates for SouthAfrican searches come from Uganda,Ghana, Nigeria, Zimbabwe to name but afew. However is the call for businessenough to sustain a search firm in anotherSouth African country? Brian Hosking doesnot believe that this is the case. "Searchescompleted in the Ivory Coast are usuallydone from France. Houston controls a largepart of the search market in Nigeria. Thereis not a large enough market in otherAfrican countries to warrant further officeopening. Plus technology helps us connect

to all corners of the continent."Dr. Woodburn is in agreement. It would

not necessarily be viable to open an officein another region of Africa. "No particularmarket outside of South Africa isdominant. The reality is that most of thesearch opportunities are opportunistic anddepending on the level of economicactivity and development in the particularregion".

The future for South African search willinvolve offering retention strategies toclients. There will also be a requirement towork on a very international basis,attracting the emigrated talent pool back toSouth Africa. The changes that South Africais experiencing mean that empowerment(black owned businesses) will become justas much an issue as affirmative action."There is a need to reflect thedemographics of society," believes MarcoBoni of Spencer Stuart. Search firms areattempting to reinvent themselves arounddevelopments. In order to meet this end,Woodburn Mann is adopting a newapproach. Dr. Woodburn explains."Woodburn Mann are in the process ofidentifying an appropriate individual orgroup of individuals. Once they have beenidentified, the firm will form an executivesearch associate owned in the majority bypreviously disadvantaged individuals. Thisbusiness would then target thoseorganisations demanding diversity in itsownership and structure. Woodburn Mannwould provide the infrastructure support aswell as transfer of skills to previouslydisadvantaged people recruited into thebusiness". Through its "empowermentexecutive search business", WoodburnMann believes that it will be able to "betterserve the needs of employment equity andachieve representation of thedemographics of the country". In order to capitalise on changing circumstances,this could be a trend followed by many ofthe international search firms in South Africa.



Web: www.search-consult.com

Trevor Woodburn

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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 -

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Korn/Ferry International● Chris Clarke -

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The Law

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Heidrick & Struggles● Germany's top 25 Search Firms

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search-consult Issue 7

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