Insight & Resources

Step One – Getting Beyond the Facade

LARGE FIRMS

Large firms often make impressive initial presentations by presenting slick brochures, upscale offices, well educated professionals and extensive client lists. However, the first contact is often with an Office Manager or Senior Partner and not with the people that will actually be doing the search: people who scan directories and files and other sources to get preliminary lists of candidates, others (often people in training) who make the initial telephone contact and do the preliminary screening of possible candidates and then the principal assigned to the search. It is extremely important to find out and to get to know the person who will actually be the contact and to have a strong voice in selecting that person.

REGIONAL or MID-SIZE FIRMS

Regional or mid-sized firms typically have a three tiered approach in which partners and senior consultants handle large clients; associates and people yet to have ownership or a partnership deal with medium-sized clients, and the trainees handle lower level searches and smaller clients. When these firms are busy they can get overloaded and may not provide timely or thorough service.

BOUTIQUE FIRMS

Small firms which rely on one to four key people are usually staffed with a couple of very experienced people and then others who have solid exposure and experience. Such firms usually have specialists who are industry specific and are well known within their specialty or generalists who can work on searches in a variety of industries and the recruiters provide very personalized hands-on service. But, if there are needs for many searches at once they may have trouble meeting the demand or may need to get other smaller firms involved and this can present administrative demands which are challenging for such firms.

Step Two – Learning the Firm’s Approach and Processes

Ask these key questions:

•Who will be meeting personally with the hiring manager and key executives at my company and who will be involved in the hiring process?

•Will a written and comprehensive summary of the position requirements be provided and by when? This document elaborates on the company, scope of the position, expectations, etc. and should always be pulled together by the search consultant who met with the hiring team from inside the company.

•Which companies are off-limits? These are companies that retained the firm in the past and have agreements in place that preclude or limit them from directly recruiting company employees. Typically, these agreements are in place for two years beyond the last retained search project with a company. With large global firms this could be half of the companies that you would like the search firm to penetrate.

•Who will actually conduct the research efforts on the targeted companies and individuals? Will this be done by administrative people or by the actual recruiter?

•Who will actually contact the candidates in the direct recruiting efforts? Will these be trainees in recruiting or experienced people in the firm or the actual senior recruiter managing the assignment?

•Who will conduct the interviews with the candidates? Will they have a good feel for the chemistry and fit issues which are the number one criteria to a successful hire?

•Who will handle the reference checks and will they know the vital questions to ask to ascertain candidate expertise and fit issues as well as future advancement potential?

Step Three – Evaluate the person actually doing the work

•What is this person’s background and how relevant is it to our needs?

•Do they show evidence of curiosity and interest in our company, our industry, our people and this assignment?

•Do they have the capacity to listen effectively, to learn our needs rather than simply trying to impress us with the attributes of their company?

•What is their actual track record? In what ways have their candidates performed well in meeting or exceeding the requirements of the jobs they have filled?

•How effectively does this person meet others and will they work effectively with our people? Will they be truly hands-on, involved and fit in?

•Will this person be able to do the work in terms of their know-how, schedule and resources?

•How effectively will they structure and schedule the work to be done? Will they provide us with clear benchmarks for progress and provide us constant feedback regarding their progress?

•Will they help us expand our knowledge, insights and perspective? What can we learn from them?

•Will we want them to be a part of our team and to come back repeatedly for additional work in the future?

•Are they professional? What ethical and professional standards do they adhere to? Are they experienced, well-trained and involved in professional networks and ongoing professional development? Can they keep confidences and do they respect the needs of their clients and candidates?

•Are they well-educated and experienced in business in general? Do they offer clear fee arrangements and professional accounting and billing standards? Will they treat our money and resources as carefully as we do?

Step Four – Ensuring that the Candidate makes a successful transition

After the slate of finalists is interviewed by the hiring team, the post interview feedback from both the company and the candidate is crucial. Keep in mind that the search consultant is retained and acting as the company’s agent and he/she should work diligently to address every issue uncovered through feedback.

To assure success, the search consultant should be intimately involved with the actual offer and package being extended to the successful candidate. Always be sure to get an acceptance letter in writing. Doing this promotes buy-in and conviction.

The search consultant needs to stay in touch with the successful candidate once or twice a week to make sure that the resignation from his employer is going smoothly and to keep the client in close touch with the candidate.

The search person needs to make sure that more than one candidate is qualified for the position and stays involved in case the lead candidate chooses another offer from a different firm or decides not to make the change. Should you be unable to get the #1 candidate, for whatever reason, you want the #2 candidate excited and interested.

The Bottom Line

The actual search consultant is the most important component for a company to consider when picking a search firm and consultant to serve their needs. This relationship evolves and is incredibly important to success – assisting your company in putting a world class team together. We highly recommend that you do references with the managers and professionals who have used the search consultant under consideration. Success and effectiveness require that you select and evaluate your recruiter and firm as carefully as you do the people you want to join your company.

Dan Dieck, CEO
Dieck Executive Search
January 12, 2009
608-238-1000
www.DieckExecutiveSearch.com
Dan@DieckExecutiveSearch.com

Putting Together the Right Offer

Overview

When you are glancing through the business section and see that an individual who you think highly of has joined a startup or smaller company, do you ever just wonder why? Why leave a secure position with a major player in a specific market sector to join a company which has promise but lacks the resources of the bigger company?

Many have realized that this is an opportunity to play a pivotal role in a leadership capacity and to truly leave an imprint. Sure, the risk and reward components are present; but the bottom line is the internal drive the individual has to make a difference and the desire to be the architect of an organization.

Attracting World Class Talent

First and foremost, early stage companies need to understand that key executives aren’t interested in using their own financial resources for normal living expenses! The following example may clarify this point. John Jones is currently the CEO of a biotech company and was one of the two founders of the company that was started 12 years ago. His eyes light up when he tells you about how the organization was founded based on sound science. He is proud of the federal grants they attained and how they were able to get key members of the team on board. He does not gloss over the trials and tribulations they went through. After all, whatever doesn’t kill you makes you stronger.

John describes how the funding took hold – early angel investors, then going to venture capitalists when the timing was right. He describes how the company worked at positioning itself for purchase or maybe an IPO and the path to the initial stock offering. He is proud of where his organization is today – a biotech company with a market cap value of $450 Million dollars.

Today, John’s company is probably at the 3rd stage or early 4th stage of size and maturity. They have over 200 employees. Exciting, right? The problem is he finds the structure, the departments, the quarterly reports, and all of the other aspects of a large company don’t offer the same excitement as when the company was a smaller growth company.

As one of the two founders, he is financially set and has a comfortable life. John Jones finds himself the founder and CEO of a successful company and the key leader and visionary of the organization, yet you can sense that he’d be open to new opportunities. A Stage 1 or Stage 2 company with proven science or technology would be attractive enough to investigate from his perspective.

So, you have a potential candidate expressing some interest. It is important now to evaluate where he is at from a total compensation perspective.
•Base salary: $465,000
•Bonus up to 50% of salary based on clearly defined performance targets
•Executive vehicle program of $900 per month
•Health club membership at $400 per month
•6% match on 401K up to 15%
•Stock options tied to performance that could be 0 – 10,000 shares per year with 3 year vesting and a 10-year exercisable period

As one of the founders of your company, your background is in science or technology and you realize that you need a CEO to take your company forward. (This same situation could be for a COO, CMO, CTO, CSO, CFO, or a key VP). Can you attract this type of talent? You know this is exactly what you need at this stage of your company’s life. Is your exit strategy to sell your company or do an IPO? If it is, how can you attract a proven individual who has done this before?

It is human nature to reflect on your own position in the company: your base is less than half of what the potential candidate is earning; you have no car program, no health club, and haven’t even thought about a 401K; you participate in a group health plan through a national association you belong to. “Whoa,” you think, “this is never going to work!”

You not only need this type of talent, you have to have it and can attract it! If your vision is to be a company with a $250 Million market cap in 10 years or be sold for $250 Million, then bring on the individual who has done it already.

Here is where the risk/reward component comes in. What base salary will it take? Do you have to match the $465,000 base salary? No! No! No! Do you have to put a base salary target range in place? Yes, with flexibility. The base salary will need to be at a level where the new CEO will be able to meet all of his/her financial obligations. Here is where it can get tricky. The potential CEO wants you to provide every iota of information on the company from conception to where the company is at today. He or she will want to review all financial statements, tax returns and other private and privileged information. You may need to bare your company soul, but this needs to be mutual. Without this open disclosure, things will not move forward. If the potential CEO balks, run for the hills as it will never work. If the potential CEO states that he wants to be “kept whole”, it is the wrong person as she is more than likely with a Stage 3 or Stage 4 company and that financial equation will only work to go to a similar-sized or larger company.

Putting Together the Right Offer

Putting together the right offer is more complicated than most founders ever think but surprisingly this process only requires only one key component – honest communication!

What are the key components to the right offer?

This may be less complicated than you think as there are just a few keys to the right offer:
•Base salary
•Bonus with clearly defined performance goals, objectives, timeline and measurement methodology
•Benefits (health, life, and disability insurance)
•Association memberships (Clearly defined criteria on what organizations the company feels the CEO needs to participate in)
•Allowable expenses – business travel (no Motel 6 or Red Roof Inn, but no Ritz Carlton or Four Seasons, either)
•Car allowance or mileage

(Now, the hook)

Working collaboratively, you inform the “new potential CEO” that together you will design the desired program on rewarding the executive management team going forward. (Remember he/she has been here before and knows what does and doesn’t work.) Bringing this individual on as the new CEO and a board member, how will he/she play the pivotal role going forward in laying out the executive compensation strategy? Only he/she can fully understands what drives the individual with the track record desired and what it will take to add these key executives to the team. It is the shared risk/reward component along with the empowerment and autonomy to do the job.

Now you know the key for attracting a CEO for your 1st or 2nd stage company. This similar methodology will work with any senior executive who will be a direct report to the CEO.

Again, key leadership individuals desire to be a part of a great team. They are incredibly bright people with a passion and zeal coupled with the energy, drive and commitment to succeed. Attracting this talent is paramount to any organization’s success.

Dan Dieck, CEO
Dieck Executive Search
February 20, 2009
608-238-1000
www.DieckExecutiveSearch.com
Dan@DieckExecutiveSearch.com

A young woman this past summer wore a swimsuit to the beach with the decorative legend, printed in various scripts, “It’s all about me.” One hopes she wore it with some degree of ironic sensibility – but maybe not. After all, this is the age of MySpace and YouTube – two self-focused Web sites extraordinarily popular among the young.

Born since 1980, the so-called Millennial generation (also referred to as Generation Y, Nexters and Echo Boomers) has just begun to join three earlier generations in the workplace –Generation X (ca. 1958-1980), Baby Boomers (ca. 1946-1958) and a few not-yet-retired Traditionalists (born before the end of World War
II).

Products of the Reagan era or later, they have little if any memory of the Soviet Union and the Cold War. For most or all of their lives, they have been “connected” by computer and wireless phone, have lived in an age of instant reality (with satellites providing real-time coverage of world events) and have been coddled by hovering “helicopter parents” anxious to provide them with every possible competitive edge in today’s flat world.

During their formative years, signs on their parents’ cars warned “Baby on Board,” while bumper stickers asked less considerate parents, “Have You Hugged Your Children Today?” Their moms and dads even went with them to college orientation week, helping them select the right courses and sometimes demanding to interview their teachers.

Wisconsin’s Beloit College for some years has published its famous “Mindset List”, which attempts to help its faculty understand the event horizons of incoming freshmen (i.e., what they have always known to be true). The entire list of 75 unique frames of reference can be found at www.beloit.edu/~pubaff/mindset/index.html.
Some examples:
• This year’s entering class grew up getting lost in “big boxes.”
• They have never heard anyone “ring it up” on a cash register or sound like a “broken record.”
• A coffee has always taken longer to make than a milkshake.
• “Google” has always been a verb.
• Disney theme parks have always been in Asia and Europe.

As the college observes, the list is neither critical of anyone nor all-inclusive. For example, there is likely to be a Beloit student who owns an “antique” typewriter or eight-track tape player. Equally true, not all Millennials are fortunate (or unfortunate) enough to have had helicopter parents always at their side – or money to spend on the latest iPod model and hottest Razr phone. And countries today that place PCs on every student’s desk are educating a far different generation from those in countries with few or no computers for their schools – creating a chasm known as the “Digital Divide.”

New challenges, opportunities
Integrating Millennials into the workplace provides managers with a fresh set of challenges, but also with an equally important set of opportunities. For example, having led highly scheduled and structured lives, Millennials may expect to be told not only what to do, but when to do it. On the other hand, having been taught inclusiveness from an early age, they are more tolerant of other races, nationalities and gender preferences than may be true of older workers. Similarly, having spent hours and hours alone in front of their computers and game machines, they are extraordinarily techno-savvy and are exceptional problem-solvers – but may have no clue as to how to work in teams or together as a department.

Those who have taught or hired Millennials praise them for their intellectual curiosity and genuine desire to make the world a better place. They have a strong work ethic and, if properly integrated into a workplace that may strike some of them as alien, can become important contributors to the enterprise’s success. However, in order to get them to achieve success you must provide additional training and work with them emotionally. By emotionally I mean give lavish praise for job well done.

Over the next 10 to 20 years, they may well steer the enterprise in new directions that generate fresh sources of profit while helping to preserve the earth’s dwindling resources. Also, early indications are that they may be somewhat less restless than their older cousins from Generation X, who until the last recession were changing jobs every three or four years in search of new challenges and fatter compensation packages.

However, thanks to the Information Age, Millennials are extremely well-connected (in the electronic meaning of the phrase) and know of dozens if not hundreds of other employers anxious to use their skills. The employer who fails to challenge the new employee and provide day-today mentoring and encouragement may find the Millennial among the dear departed. The Millennials are relatively quick to make decisions regarding their if they do not get the raise or recognition they feel is appropriate.

How to hire the new Millennial
Figuring out how to hire Millennials is going to be difficult. Hiring a freshly minted Millennial, who performs amazing digital feats on micro-equipment we barely recognize, isn’t going to be like hiring the money-hungry Generation X-er who fell for the Porsche in the parking lot every time.

Hiring managers are going to have to work very hard to convince Millennials that the organization will provide challenging assignments, surround them with fellow Millennials, offer helpful and constant feedback, treat them with the utmost respect, give them the flexibility to be with their families on important occasions and nurture them in an environment filled with increasingly diversified opportunities designed to help them succeed. This is no small task.

Most workplaces, quite frankly, are not designed to integrate the needs and preconceptions of successive generations of employees, each of which acts quite differently from its predecessors. The more wedded the workplace is to traditional organization models (with their rigid vertical hierarchies) and training programs (with their school solutions to every problem), the tougher the task will be.

We have seen that large hospital organizations have a better track record in giving the appropriate level of gratification and additional training because this is close to there traditional culture.  However the medical group practice organizations have not been as successful in making this transition.  This is because those types of organizations are flat from an organizational perspective and they are not terribly giving when it comes to additional training and education, which is why they experience a higher degree of turnover. 

Among the newest generation, superficial issues such as tattoos and overly suggestive attire are the most easily handled – provided some rationale is offered as to why some forms of dress may be inappropriate in the presence of customers or clients. The bigger challenge is how to harness the skills, energy, attitudes and enthusiasm of entry-level Millennials for the good of the organization as well as the world.

Unfortunately Millenials always want to start off as the President of the company and are not terribly patient when it comes to getting recognition. Further, they have no patience with fellow employees who in their mind are causing problems because of technology knowledge or are ignorant about new methods or ideas. 

With recent economic changes we have seen a stabilization of Millenials. However, once we recover from our current economic issues, I believe we will again see movement with these individuals.  One suggestion, offered by a number of training and development experts, is the use of “reverse mentoring” in which the young employees coach the old in the finer points of computer technology, viral marketing, cutting-edge design, eco-sensitivity and the like. That approach not only takes advantage of Millenials’ unique skills, but also helps them become a contributor from day one. Reverse mentoring, in fact, can help turn “you-nique” into unique.

The first quarter of the 21st century presents conflicting demographic trends in the United States and other developed nations. On the one hand, the ratio of those over 65 years old to those of working age continues to increase. On the other hand, the number of births continues to exceed the number of deaths. That, combined with increasing immigration, caused the U.S. population to exceed 300 million on October 17, 2006. By about 2025, those old enough to work may equal the number of available jobs. In the meantime, Millennials will be in the driver’s seat as they reach management age.

About the Author:
William Behrens is a partner in the healthcare services practice at Sanford Rose Associates in Mount Pleasant, SC. He may be reached at bbehrens@sanfordrose.com.

Contact information:
William Behrens
Partner, Sanford Rose Associates- Mount Pleasant
1150 Hungryneck Blvd, Suite C-373
Mount Pleasant, SC 29464
843-805-7017
bbehrens@sanfordrose.com