Recruiting: Strategic Game Changer in 2010

How good is your recruitment process? Do you have one? Do you care? You should. It may be a recession out there but there is a lot of talent looking for the right place to call home as we close the first decade of this century and go into what will be the defining decade of the first hundred years of the 21^st century. Yet many companies, big and small, don’t follow a recruitment process that defines who they are and what they are looking for, nor does it leave candidates with a positive impression of their company. There are clearly exceptions in the market that value their recruitment activities and have invested appropriately in process, people and communication, but they are just that, exceptions. It is imperative for companies, big and especially small, to have a well-defined strategic recruitment process that is followed and respected culturally. Companies that fail to do so will be at a strategic disadvantage to those who do. And when it comes to recruiting talent, every company, industry and geography is your competitor in the decades ahead.

The first point to address is why most Executives and hiring managers reading the first paragraph of this blog think they already run a ‘strategic’ recruitment process that strictly follows both a set of HR rules and policies, and/or the guidance of an external recruitment firm. The problem is that while most companies do have a system for recruiting in place, its superficial and more about going through the motions than a culture of seeking talent. It is difficult to understand this unless you have been inside a company that has a strong employee-focused corporate culture. You can feel it when you are inside such a company. If you have been inside the walls of Apple, Google or Microsoft then you know what I’m talking about. The company I worked for back in the first half of this decade, FreeMarkets, also fell into this category. These companies have developed their own strategic recruitment process that is designed to do the following:

-   - Attract the best people in the market to your company

-   - Understand the talent available in the market for the open position(s) you are looking to fill

-   - Cultivate a culture of drive, success and competitiveness inside your company (only the best can work here because we are always attracting the best out there)

-   - Push the boundaries of your top performers by always adding more top notch talent to your work force and removing the bottom 10%

-   - Ensure your talent continues to be a strategic differentiator in your market

-   - Serve as the first point of PR for your company to the job market

I recently sat with a couple of friends who have interviewed for various jobs in the past 12 months, including myself. Talented people are no different than talented companies that put people at the top of their strategic reason for existing. We are always in the market talking to prospective companies that could lead to a better opportunity for both parties. I have never turned down a discussion with a headhunter or a recruiter who approaches me about an opportunity, no matter how happy I am in my current role. This doesn’t mean I’m not loyal, quite the contrary. My logic is simple, if my current opportunity is the right place for me to be, then there is no reason for me to leave. Any discussion with another prospective employer will re-enforce this, and gives me the benefit of learning something new. And I always follow the professional code of conduct when it comes to my employer, no matter what. My informal focus group supported this view, but it also highlighted the disparity that exists in the marketplace between companies who truly value talent and those who think they do.

My friends had some really interesting experiences to add to my own. One was that of a good friend in Europe (lets call him Pierre) who was approached by one of the premiere head hunting firms for a Managing Director of EMEA position for a US technology firm in its 10^th year of operations. The company is global with operations in North America, Asia and Europe, however Europe has lagged behind the other two regions due to three distinct reasons – 1) growth through acquisition of two smaller businesses spread across 5 European countries had left the European operations a patchwork of legacy cultures, technology and people; 2) the company had opted to manage the region from the US with one of the US executives pulling double duty and managing the region from their Atlanta headquarters; and 3) the company’s technology solution was not built for the unique challenges that exist in Europe, such as different languages, cultures and local regulations. The first step in solving its challenges is to hire a Managing Director who can tackle these challenges while developing an EMEA strategy that is in line with the company’s global strategy. A very important hire you would think.

Now Pierre is one of the best people in the market to tackle this business because of his experience as General Manager for a similar company that is in a connected industry, and where he achieved double-digit growth for 5 years earlier this decade. The headhunter was excited to have found Pierre and persuaded him to look at the role. He even did a great job selling the opportunity and all it had to offer from a career perspective, getting Pierre extremely interested. But as he went down the recruitment process, it became evident to Pierre that something was very wrong with the way this top three Executive recruitment firm was managing him. Appointments were rescheduled last minute and pushed out, calls and e-mails were not returned promptly, and before Pierre could meet with the client in person the process was closed and another individual was hired. The explanation was ‘you were late to the process and the client had gone down a path with another candidate’.

Now Pierre being the professional that he is researched what had happened and learnt that the individual who was hired was a former colleague of the recently hired COO of the company, and that the COO had worked over 10 years at a major technology firm where this new hire was coming from. Given this is a top talent recruitment firm; Pierre spoke to his contacts inside the company to find out what happened. The client had compromised the headhunter during the process, deciding to go down the full recruitment process with the sole candidate he had a relationship with. Any effort by the headhunter to prevent this was met with a stern reminder that the client was paying the fees and this is the way he wanted to go. Some of you may be thinking at this point that this is surely an exception, a rare blip in the system. You are wrong, this is what happens often because the client will always trump the headhunter or recruiting team if they believe they have their candidate. Pierre’s conclusion he shared with me was that he would not have wanted to work for a company that would run such an unfair process with no regard for the candidates under consideration. He is right to feel that way in my view. There is a lack of integrity that suggests deeper corporate culture issues; Pierre is better off staying where he is. For now.

I had a very similar experience a few months back where the recruiter from a different top Executive recruitment firm stopped returning my calls halfway through the process. When I bumped into him a few weeks later purely by chance, he bought me a cup of coffee to explain what had happened. The client had decided to hire an old colleague from his previous company, thus pulling the overall search with the firm and avoiding 85% of the fees. The recruiter was extremely disappointed in the client and proceeded to bash him for 10 minutes, not once mentioning his failure to return my calls or taking some responsibility for what was a sub-par process from my perspective. This guy is a Partner in one of the top three Executive Search firms, mind you.

On the flip side, I did have three extremely positive experiences that demonstrate what a process with integrity can be. The first was with a technology company in Seattle. I was introduced to the CEO by one of my mentors, and after an hour call the CEO said he wanted me to speak to the headhunter they had hired so I could be included in the process. He introduced me to Jim Jonassen, CEO and founder of Jonassen & Associates in Los Angeles. Jim called me and we had a good first call where he went through the opportunity with me, as well as my resume. We scheduled another call so Jim could do a deep dive on my experience that was another hour. At the end of this call he said to me “I have to be honest with you, these guys are one of the hottest tech start-ups since Google, and they have a Venture-backed Board. They are looking for a well-known name from Silicon Valley to come on board and head global sales. Your resume is good, but you are up against some of the best talent in Silicon Valley. You bring unique qualities given your international background, but you are going to be a tough sell to this Board.”

Jim kept me in the process and after a couple of more rounds it became clear that I was not the right person for this position. The company hired a top name from Silicon Valley; it was all over the press. I wouldn’t have hired me either, but Jim did an outstanding job sticking to the process and ensuring I got a fair shot. He also did a great job advising his client who has had the same executive in place for almost two years. And Jim stuck to his word, he has contacted me for 3 different opportunities in the past two years, all of them more appropriate to my skill-set and background. Jim is an outstanding recruiter and he ensures his clients stick to a process of integrity that demonstrates their company values. It helps that Jim has founded several software companies himself in the past, recruiting quality talent and making a success of his business. If you don’t have the internal recruitment resources to help you find the best talent you would do well to hire Jim Jonassen.

Another top recruiter is Andrew Henry at JM & Company in Philadelphia. I have been through two executive search processes with Andrew and he and his organization are head and shoulders above any of the head hunting firms I have experienced in the past 10 years. JM & Company run a tight recruitment process that really includes the candidate in the process, as opposed to herding you like sheep. Those of you who have been through numerous recruitment processes will know what I mean. The two experiences I had with Andrew and his team was outstanding. The first was for the role of President for the Americas for a Swedish Medical Device company. I made it to the last round of the process and lost out to a seasoned veteran of that industry, a niche market. Throughout the process Andrew did two things that were unique in my view. The first was to inform me about every aspect of the challenge his client faced with their business in the US region. He gave me information that helped me understand what I could truly expect should I be hired. At every step of the process I had enough insight and understanding to decide if this was a wrong match for me (and vice versa). The second thing he did was to truly get to know me by listening, and by doing a thorough reference check on me. I provided him with 7 references and he spoke to 5 of them. There is nothing worse than a recruiter or hiring manager who asks for a reference and then doesn’t both to contact them. He contacted a CEO of a technology company, a Senior Director of a global software company, the COO of a UK Insurance company, and the then Undersecretary of Treasury of the United States on my behalf. I had to request these people make themselves available for me, so it was impressive for me that Andrew took the time to set up an appointment with each of these folks and get to know me. That was huge.

At the second to last stage of the process I met with the client’s CEO in New York. Andrew prepared me well for this encounter and I came away with an appreciation for the company, the CEO I had just met, and the process that Andrew ran. I had a major concern about what the client wanted and the challenge ahead of me. I expressed this to Andrew and he came back with a similar concern from the CEO who was worried the pace of things was too slow for my liking. It was becoming evident that this may not be a good match, and when Andrew gave me the news that they were going with the other candidate, I felt it was the right thing for all parties. Andrew made me feel valued and respected in the process and we agreed to stay in touch.

I was contacted by Andrew a few months later for another opportunity, this time in Washington DC for a British company looking for a Head of Sales for North America. He felt this was a much stronger match given my background and took me down the exact same process. By the time we got to the final round of hiring, I had a deep understanding of the client’s challenges and what the Board and the CEO in London expected of me should I be hired. This gave me the opportunity to express a myriad of concerns I had about what they were trying to do, and the process turned into an incredible exchange that both sides found valuable. I felt the role required a ‘General Manager’ as opposed to a head of sales, even though sales would be 95% of the focus. I met with the CEO several times and, through Andrew’s coaching and preparation, we had some open and frank conversations about how I felt I could tackle the challenge best versus how the CEO saw things unfolding. The process really allowed for this open dialogue, and while the opportunity didn’t work out for me, I came away with an extremely positive view of the company, the CEO, the key Board member I met with, and the process Andrew and his team ran. I also built a strong relationship with the CEO and we both feel we could work together in the future. I also believe Andrew Henry and the team at JM & Company are truly a rare outfit in the world of recruiters and headhunters, and I’m not alone in that view. JM & Company has helped many Private Equity and Venture Capital firms recruit top talent that has built companies over the past 30 years.

Many executives, entrepreneurs and companies under estimate the strategic importance of recruiting the best talent for their specific situation, market or size. It’s the difference between making a strategic hire versus just hiring bodies into open roles. My own experience speaks volumes to the importance of the hiring process and what it can do for you. It doesn’t matter how small or large your company is, or what kind of budgets you have, or even the geography you are in, if you run the right recruitment process you can hire talent and they will make a difference to your organization’s performance. A few years back I was faced with the dilemma of turning over an entire sales force in a $30m organization in a niche technology market. Compared to my experience working for a company ten times that size, I initially felt we were picking from the bottom of the barrel in market/region where talent was hard to find. But I put my faith in the recruitment process we had used to build FreeMarkets and within a few months I had hired a group of sales individuals that went on to outperform any group in that industry. The recruitment process, as well as the ensuing management of the team, had the strategic impact we were hoping for. The company doubled in size in less than 14 months.