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If I Only Had a Brain: The Failure of Traditional Retained Search Firms to Leverage Human Capital Intelligence (HCI)
By Krista Bradford, Founder & Principal,The Good Search
October 29,2007
If one theme emerged from Kennedy Information’s Executive Search Summit at the Princeton Club in New York City, it is this: while “change is changing” on the corporate side, increasing in “velocity, intensity, and complexity” according to Boyden Chairman Trina Gordon, retained search has steadfastly resisted change. Speaker and author of Deciding Who Leaves Joseph Daniel McCool pointed out that the 5 largest search firms by revenue 20 years ago are still the same. President of Executive Search Information Services David Lord shared that his clients often find the firms inflexible and relatively indistinguishable in their services, “The majority of the time I hear the same mumbo jumbo.” Author and Principal David Maister of Maister Associates posited that since search firms all do search pretty much the same way, the differences reside in each firm’s collective attitude.
Clearly, many these same experts believe retained search needs to change. Retained search fails to deliver the right candidate an estimated 40% of the time. In an era when there are Service Level Agreements that promise 99.9% uptime, 60% performance is stunning in its under-achievement. On the academic scale, 60% would warrant a “D”, teetering on the edge of “F”. No wonder, as David Lord indicated, more and more corporations are bringing search in-house”: they want to improve outcome as much as they want to reduce cost. Who can blame them?
Yet, there is a way to dramatically improve the search performance, while at the same time increase search transparency, accountability, and value. One must simply harness the power of Human Capital Intelligence (HCI) and, in so doing, shift the traditional emphasis in most retained search practices from sales to execution. Traditionally, retained search partners concentrate their bulk of their efforts on new business development – “on chasing searches” as Joe McCool aptly described it. Search partners often are recruited from the industries or functions they serve, and are expected to leverage those relationships to bring in business. They are paid more because they bring in the business. And that, my friends, is why so many searches fail. They’re not focusing on execution, the real heavy-lifting that’s often delegated to overworked, comparatively underpaid researchers and more junior people within the search organization. And as a result, execution suffers and searches fail at an alarming rate. Yes, there are outstanding partners and consultants at each of the major firms whom I greatly respect who have impressive track records. Through sheer force of will, they have succeeded where lesser recruiters have failed. They’re not the problem. The research is.
How do the major retained search firms approach research, according to information available on their own websites? At Korn/Ferry, they “identify and confirm target sources using a proprietary database and network of contacts” and “identify candidates, including internal ones as appropriate.” Heidrick & Struggles “identifies an initial slate of qualified candidates from among its network of executives.” Egon Zehnder consultants “identify candidates from three sources: their own professional networks and relationships, those of their worldwide colleagues, and from systematic research.” Spencer Stuart conducts “targeted research” into companies and sectors, leveraging their “proprietary database and personal contacts”. Nowhere is there mention of transforming the research into actionable intelligence, when one would have thought by now that would have been instituted as a best practice.
In this Age of Information, he who has the best information wins. And in the search business the best information is Human Capital Intelligence (HCI). Research is but one ingredient of HCI. Organizational charting and executive mapping is research. A list of target companies is research. Name generation (“name gen”) and candidate identification is research. Candidate development and even assessment is research. However, it takes expert analysis to transform myriad bits of data into actionable intelligence. HCI connects the dots, uncovers threats and opportunities, and ultimately finds the shortest path to the best candidate. How do you know whether your search firm is offering competitive intelligence?
- Does your search firm formulate an overarching search strategy based on real intelligence or is it merely tactical?
- Is the search strategy aligned with your company’s strategy?
- Does your search firm conduct an Internal Intelligence Review at the start of every engagement to leverage all the in-house knowledge you have scattered across his internal organization?
- Does your search firm conduct market intelligence to determine how competitive your opportunity is when compared to similar openings elsewhere? Do you even know how many other openings you’re competing with?
- Does your search firm give you the necessary documentation to make a business case for changes in compensation or scope to make your role more competitive? Does it do so at the start of every engagement or only when the search is in trouble?
- Does your search firm offer intelligence from the field, enabling the team to make incremental adjustments in search strategy and tactics throughout the search?
- Does your search firm use intelligence to identify previously untapped pools of talent?
- Does your search firm track news events to enable the team to respond instantly to threats and opportunities posed by those events?
- Does your search firm leverage sources of information that typically are not tapped by most search firms, providing you with a competitive advantage?
- Does your search firm document and report out all of the research conducted on your behalf, complete with expert analysis and recommendations for next steps?
- Does your search firm leverage the power of information to the same degree investment bankers and financial analysts do?
Clearly, we, at The Good Search, believe we’re onto something important. The futures of the companies we serve are far too important to be left to chance. But that appears to be what’s happening. Companies that put a search out to retained search firms have almost a one-in-two chance of failure. We believe that a sophomoric paint-by-the-numbers approach to research is largely to blame. Amateur research impairs a search firm’s vision and results in substandard search execution. The good news is that Human Capital Intelligence (HCI) offers a path to excellence as well as a competitive advantage. Once you’ve discovered the advantages offered from a more expert, strategic approach to research, and, in turn, to executive search, there simply is no going back. Retained search that fails to leverage intelligence is like searching with your eyes closed.
About the Author:
Krista Bradford serves as Founder and Principal of The Good Search, a retained search and Human Capital Intelligence firm based in Westport, CT in the Greater New York City Area. Ms. Bradford brings more than two decades of investigative and interviewing expertise to her innovative search practice. Before founding her firm in 1997, Ms. Bradford served as a three-time Emmy Award-winning investigative reporter and television journalist, having held positions with WNBC and WWOR in New York as well as with stations in Boston, Denver, Los Angeles, and St. Louis. Ms. Bradford spoken and written extensively about recruiting best practices and she is considered a leading expert in human capital intelligence.
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