DHR/CT Partners Merger: Who cares?

Generally speaking, when owners of a business form a committee to consider their "strategic options," everyone needs to take cover or head for the exits because it's a clear sign no one knows what they're doing.

Except, of course, if you represent middle market firms active in executive search, or Search as the industry's long-time players like to refer to themselves. Recent news http://nypost.com/2015/02/23/embattled-ctpartners-faces-potential-takeover-by-rival/ that CT Partners has formed a committee of its own board members to consider options, including a hostile bid from DHR International, is the latest update in a saga that pits two small firms trying to compete against larger players. See an earlier posting here: http://povblogger.blogspot.com/2015/02/dhrs-hostile-bid-for-ct-partners-search.html.

To paraphrase one of Search's all-time seminal figures, deals are about personalities just as much (if not more so) than numbers. In CT Partners' case, the personality is CEO and primary owner Brian Sullivan who has been targeted in a sexual harassment case pitting female partners against what they're claiming is rogue behavior and unfair treatment in the workplace -- on Wall Street. Smart, blunt and controversial, Sullivan suffers no fools. DHR International's main personality is actually a Father/Son tag team: Father, or Chairman David and son, CEO Geoff Hoffmann. In previous cycles, Dad was spinning about how complementary the two firms would be in Europe and Chicago where combining the offices would save money. Really? So much so that industry reports now buy into the rationale. Dad even went as far to say to the NY Post that "the lawyers are negotiating non-disclosure agreements" referring to the potential deal.



Brian Sullivan

David Hoffmann

Even if this merger of so called equals were to take place, it doesn't add up to much other than vested interest. And clearly not enough to change the industry. A combined entity wouldn't even equal six months of revenues at Korn/Ferry International (NYSE: KFY), which is now the "industry leader" should that status still even matter. Long-time rumors about Korn Ferry combining with another large firm have remained just that largely because the economics and cultural issues that would arise from merging with another firm don't make sense. Plus the obvious: Going alone seems to be working just fine.

The only merger that would make any difference is if Heidrick & Struggles (NASDAQ: HSII) were to combine with privately held Spencer Stuart. Heidrick's year-over-year earnings, reported earlier this week, remained relatively flat while Spencer Stuart is firmly entrenched in the Fortune 100 CEO and executive suite, where Search has traditionally made its name. There are a few exceptions, but for the most part, lay of the land remains the same despite continued need for consolidation. Ironically, the industry that hyped the "War for Talent," now finds itself in one as veteran partners are staying put instead of taking the risk of losing brand name position established by their firms.

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Dupont: Quote of the year (even though it's early)

http://www.wsj.com/articles/stock-sales-by-dupont-ceo-raise-eyebrows-1423528311?mod=WSJ_hps_sections_management

Following is a quote from a governance expert commenting on recently disclosed stock sales by Dupont CEO Ellen Kullman, which coincided with activist Nelson Peltz's announcement that he and his firm, Trian, were seeking a split of Dupont's main businesses as well as additional board seats. The Dupont board rejected Peltz's board ideas earlier this week.

"It's either dumb luck or dumb bad luck, depending on how you look at it," said Frank Glassner, chief executive of Veritas Executive Compensation Consultants.

The stock sales, which were pre-arranged through a special program, happened last September and occurred nearly on the same day as the material news was reported, according to the Wall Street Journal. The company went to some lengths to say Kullman still owned more than her fair share of shares as if anyone in the general public understands ownership requirements for a CEO.

Here's what they do understand: When something looks bad, and it involves millions of dollars being rewarded to someone who is already making 400x the average employee, then perception is reality. And vice versa. Pay gaps and lack of #transparency# remain hot button issues. Put them together and you have a cauldron.

While the stock sales were not 'egregious' as another analyst put it, the fact that the transaction coincided so closely with material news obviously raised a few feathers.

Some loyal TGR readers will recall Kullman was responsible for the 2013 quote of the year: "We need certainty so we can plan." Looks like she finally earned some certainty. Read more here: http://povblogger.blogspot.com/2012/12/dupont-ceo-quote-of-year-2013.html.

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#Hash Tag -- you're it#

Note: Following was originally distributed as a client letter on February 6, 2015.

 

Dear Clients and Colleagues:

 

Did you know that more than half of the ads in the most watched, highest socially engaged Super Bowl earlier this week contained a hash tag? If you ask, “What’s a hash tag do?” then you’re behind the curve. If you don't care then you're somewhere in the safe middle. Good news is a potential antidote for media saturation follows should you choose to keep reading.

 

Social media is now a fully developed norm despite generational gaps that are closing pretty quickly. While some continue to compartmentalize lives on Facebook, a majority of business professionals have either used LinkedIn or have instructed someone else to improve their profile and add connections to get a better job. Twitter, a micro-blogging service, gets credit for inventing hash tags, which are generally tag lines set apart by hashes or number signs to describe something product-driven happening in real time. For an easy reference guide, turn on any network show in prime time and look down in the right hand corner of the screen for the tag otherwise known as Hash.

 

Here are three appropriately tagged issues that are going to define 2015 from (a leadership) POV:

 

#Transparency# is the most vexing issue facing leaders of major companies and institutions today. In another five years, whether information is conveyed freely, voluntarily and without hesitation will define brand reputations. Private is now public, and the reverse also is sometimes true. This issue can be complex, controversial and challenging to old legacy and new brands alike. Consider the NFL, Sony Corp. and Uber for recent examples. Transparency has a darker side, too, as evidenced by brutal tactics employed by terrorists.

 

#Authenticity# drives transparency. The opposite of authentic is phony. Space between these two points can create a challenging chasm at times, particularly when crises hit. To re-define an old saying -- you know leadership when you see it – authentic is self evident as long as you’re looking for the right cues. Great example: Chris Kyle played brilliantly by Bradley Cooper in "American Sniper."

 

#Selflessness# is defined as being able to set aside self-interest long enough to listen to, help and serve the needs of others. Selfless leaders are in short supply and on limited display, which may be intentional. Truett Cathy, the late founder of Chick-fil-A, is difficult to beat for an example of great selfless leadership. Pope Francis is another selfless leader. There are no brand name examples in current domestic political circles -- or at least none that leap to mind. Serve or be served will define #selflessness#.

 

Look forward to hearing your views on these topics and more -- either on-line or off line. More on these tags in the previously mentioned social networks. No Instagram or YouTube yet so you're safe for now. Exhale,

 

JG

Jeremy C. Garlington
Point of View LLC
4060 Peachtree Rd./Suite D-#117
Atlanta, GA, 30319
Phone: 404-606-0637
Web site: www.pointofviewllc.com
TGR web log:  www.povblogger.blogspot.com 

DHR and CT Partners: Search Dwarfs in Alley Fight

When you're supposed to be the "highly esteemed, trusted advisor" to major companies and their boards, nothing is more unseemly than when bad hubris breaks out over your own business practices.

Unfortunately, this is the case with this week's reported hostile bid being made by DHR International to acquire CT Partners in a cash offer of $60 million, according to the New York Post's Kevin Dugan. See latest cycle here: http://nypost.com/2015/02/05/troubled-ctpartners-gets-takeover-bid-from-rival-recruiter/.

Neither Search firm is worth that much, nor do they even add up to a fraction of the top ranked firms, but that's beside the point. Hostile bids impact prices in ways that are completely irrational, which in this case, could also now describe the transaction's tone.

Deals are as much about ego and personality as numbers with the latest example raising the truth of that statement almost as quickly as a market index.

Consider this choice excerpt from the previously linked story: 'Obviously, we don't have a high opinion of Brian as an executive or as a person,' David Hoffmann, chairman of DHR, told the Post. 'Yeah, we think a big part of the problem is him.' 

(Side note: According to DHR's web site, Hoffmann's son, Geoff, the firm's CEO, appeared earlier today on CNBC and Bloomberg to discuss "hot jobs in the CEO suite." http://www.dhrinternational.com/about/news-media/what-are-hottest-jobs-c-suite-executives.)

Now, back to Dad for a minute. Why would anyone in a leadership capacity say something that personally disparaging in a public statement that risks legal suit? Especially when they're the ones who are trying to acquire the other firm? That's not leverage. Hostile or not, lawyers or no lawyers, this lack of decorum leaves a lot to be desired. Each side needs to work through the process professionally and with discretion. Set the personal aside even if the accusations may turn out to be true from your own point of view.

No matter what these players think is at stake, there's something larger here that needs to be observed. If you need help figuring out what that is, then chances are it's a good time to take a step back yourself. Transactions at all costs rarely add up to anything resembling long-term value.

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Say that again a different way

Note: This originally appeared as a client e-letter.

December 23, 2014

Dear Clients and Colleagues:

The subject line that you just read was a request made during a meeting in late November. It wasn't coincidence that the request came from one of my most admired figures. After putting the words to the test both through my own usage and discussion with others, here are some short burst takeaways that may be worth application in your world:

1.) First, note the language. This person didn't say, "Give me an example," or "Sorry, could you restate what you just said?" He said, "say that again -- a different way." The command was refreshing during a time of over-pleasing, equivocation and political correctness. It's almost as if we have forgotten how to speak to each other without watering down substance out of fear that someone may misinterpret what's being said. Or worse yet expose publicly. Perish the thought! Everything is public now in case you haven't noticed.

2.) When you read the statement, "say that again, a different way" aloud, does it convict you to respond differently without pausing? Of course not. It takes all of us a minute to collect our thoughts. During my experience with this command, no matter how a response was rephrased, it fell short in my mind and heart. What this rhetorical device does require is being able to think on your feet, which in this case, were literally dangling underneath the chair.

3.) Last point from a leadership point of view. Are you willing to answer the same question directly with conviction without equivocation? The easiest way to lose credibility is to repeat the same response when given this command so don't do that. Practice makes perfect here. No better time to try than during the holiday season, a natural time of reflection. Try it out on your children, or for those who would prefer a non-verbal response, your dog or family pet.

Thanks for your support this year, and to all those still reading and stirring, may you have a good night and great holiday season. Merry Christmas,

JG

Jeremy C. Garlington
Point of View LLC
4060 Peachtree Rd./Suite D-#117
Atlanta, GA, 30319
Phone: 404-606-0637
Web site: www.pointofviewllc.com
TGR web log:  www.povblogger.blogspot.com

Short Bursts (SBs) on Leadership

Note: The following content was originally distributed as an e-letter on October 1, 2015.


Dear Clients and Colleagues:

Welcome to a new e-letter format called Short Bursts (SBs.) These have been used in client-specific situations but now are evolving into wider use. Largely because the world seems to be increasing at such breakneck speed that very few are willing to take the time to go deeper. Or at least that's what it feels like these days.

A recent prospect, who by the way thankfully did not become a client, commented on a proposed 30-day service period: "30 days? That's hecka of a long time in business. Whole world could be different in 30 days." You are correct, Sir. But how you adapt and change based on what you think you need will not move that quickly, I assure you. Onto the bursts, rat-a-tat-tat:

As a business leader, are you striking the proper balance between off- and on-line engagement? Note the word 'discussion' was not inserted in place of engagement. For purposes of this letter, it will be assumed that you know when in-person conversation is essential. Hint: It's generally when the situation is sensitive and involves human dynamics, such as health, hiring/firing, performance issues and/or other hot emotional buttons. Remember the great ones always return calls, or in this day and age, emails. Differences are made one person at a time, not en masse.

Do you talk to others or at others? No one is immune to this question, including yours truly who struggles at times. Especially over the phone when there's only about 30 seconds to get your point across if you're lucky. The hyper-wired, attention deficit disorder, multi-tasking age aside, the only way to strike balance seems to be equipped to ask good questions. Then just shut up and listen, which is a little difficult for some. Someone asked me to "get a pen and paper" recently, and I almost fell out of my chair. Great reminders all around.

Do you know the difference between acting in public vs. being in private? Admittedly the lines are beginning to blur. It never ceases to amaze, however, at how so few aspiring leaders take the time to understand these dynamics. Start with the basics by offering a stranger a pleasant "hello," on the street. After staring into some jacked up eyes disguised in suits recently in New York and D.C., the world could use a little more publicly inclined leadership. Someone once said that what you do when no one is watching defines character. Times are a changin.' Someone is always watching.

Does the job define you or do you define the job? Age-old question. But it's not meant to be chicken and egg. Presidents going all the way back through Roosevelt have struggled with this question often at their peril. Latest example in the business ranks that no one seems too curious about yet: Who is the new Home Depot CEO (internal choice following long-time office holder, Frank Blake who leaves role Nov. 1st according to original cycle) and how does he plan on dealing with the company's recent record-breaking security breach? Nameless, faceless leadership usually translates into the job defining you, not the other way around. Tough to strike balance for sure; perhaps impossible the higher you go in the food chain.

If none of these bursts grab your attention, consider some vision stretching from the one and only Kermit the Frog who recently shared some great stuff with "CBS This Morning."

Kermit said if you're going to dream or have a dream don't forget to share it with others so they can help make it come true.

The last piece of wisdom was the best: Remember to spend some time in the big picture. Who knows? One day you might even be in one. Kermit should know, right?

Happy leading. Look forward to hearing feedback on how you are doing with your own set.

Best,

JG

Jeremy C. Garlington
Point of View LLC
4060 Peachtree Rd./Suite D-#117
Atlanta, GA, 30319
Phone: 404-606-0637
Web site: www.pointofviewllc.com
TGR web log: www.povblogger.blogspot.com

Three truths, one season

Note: Following is a client letter originally distributed via email on June 30th.

Dear Clients and Colleagues:

Monthly letters normally attempt to dive into a single issue arising out of chosen practice areas. This month's version is going to be a little more "surfacey" yet ripe with opportunities to travel deeper should you choose to do so on your own time. Of course you can opt out by deleting right now, which may be the whole magic of email.

First truth comes from a client presentation made last year at a business school. The general subject was competition, a red meat topic if there ever was one for aspiring MBAers. The quote can actually be attributed to former Ohio State football coach, Paul Brown, who later became the Cleveland Browns namesake:

"When you win, say little. When you lose, say less."

Talk about a truth that's gone straight out the door in our hyper-media, grace challenged world. This quote has been following yours truly around since February so consider it now fully shared. If you're not winning or losing then keep reading.

The second truth comes from a Lenten handbook date marked Wed., April 16th. It builds off a biblical passage, Hebrews 12:1-3. Rosabeth Moss Kanter once observed that "Change is hardest in the middle...Everything looks like a failure in the middle...Everyone loves inspiring beginnings and happy endings; it is just the middles that involve hard work." Thankless, mundane drudgery might be closer to the point. If you find yourself identifying with this stage then take comfort in the fact that it won't last forever. Something will move things out of the middle. That's not to say you will automatically move forward.

The last truth is a doozy -- you've been warned -- and probably could use better perspective than what this shortened format will allow. Check out now or forever be enlightened.

Following is a passage from the philosopher, Pascal, on human nature. The source of this leave behind can be traced directly to Ken Boa and his December 2013 letter. The passage has been highlighted since then and am sharing it now for the eminently qualified thinkers among you (hint: Not me.)

"Man is but a reed, the most feeble thing in nature; but he is a thinking reed. The entire universe need not arm itself to crush him. A vapor, a drop of water, suffices to kill him. But, if the universe were to crush him, man would still be more noble than that which killed him, because he knows that he dies and the advantage which the universe has over him; the universe knows nothing of this." ("Pensees," p. 347.)

Now you probably don't want to scare anyone around the campfire this summer with this last one. But the message is worth considering -- as are all three in your own leadership contexts.

Enjoy the Summer,

JG

Recruiting conferences: Where's the value?

From March Madness to April Fool's to Spring recruiting industry conferences. The new season has brought forth several forums -- all with different focuses and market segments. This post's goal is raise the value question, or more specifically: What value exists in conferences and how can that value be more readily transferred so others can gain better access? (Note: Two of the three bolded terms in the last sentence are leadership responsibilities.)

 

First, conferences remain proven direct marketing channels for product and service vendors to promote their offerings -- or "hawk their wares" to use an ancient phrase. Some turn out to be more valuable than others. For example, a young upstart all the way back in 2008 named LinkedIn dominated the landscape at what's now known as Recruiting Trends, a conference with roots tracing back 40 years to Kennedy Information. Linkedin originally established presence by sheer willpower and visibility. Banners were everywhere, kiosks were large and free logo t-shirts were abundant. After all that's what worked back before the economy fully collapsed.

Fast forward to today, the hyper-connected social media age when fewer spend the time or money to attend conferences for a host of reasons, including lack of perceived value. It's a different formula now, one that must combine the best of the off line world with effective digital engagement to sustain interest. Or as the head of a D.C.-based advocacy group says, "you better have something that no one can get elsewhere if you want to get people in the same room for two days." True that. Advantage goes back to the market leaders, such as LinkedIn, which now sponsors their own conferences that attract more than 3,000 attendees, according to a regular presenter. That's not bad for a group that used to beg people to join their network.

Dipping down to the individual or company attendee level, it's difficult to argue with the fact that conferences represent networking value. Access remains an issue, and it's not clear whether organizers are fully committed to connecting buyers and sellers vs. simply getting attendees to show up to confirm registeration. Presenters, such as long-time recruiter Lou Adler and Fortune Magazine's Geoff Colvin, enjoy an advantage via captive audiences despite the fact attention spans are split three different ways 'til Sunday.

While selling and promoting at conferences are obvious value points, the other side of the equation, professional development, often gets shorter shrift. The reasons why are numerous. As an independent executive recruiter puts it, there's always been a "big difference between building the business vs. building the profession." Granted that's a little high and mighty, yet it's important distinction that few seem willing to balance anymore. Professional development as investment has fallen completely out of the picture. Some industry organizations with a bent toward the executive level have tried to address this issue, such as the Association of Executive Search Consultants (AESC) that recently held their annual conference in New York: https://members.aesc.org/eweb/DynamicPage.aspx?webcode=EventInfo&Reg_evt_key=b51ca1b3-b4ea-43d2-a322-02d0d6d57699&RegPath=EventRegFees. Another group with aspirations is a U.K.-based outfit called search-consult.com, which will hold their version in Miami next month: http://events.search-consult.com/agenda2.aspx?evt=51&past=not.

But that's only one slice of the recruiting market. The fact remains that very few top performers put any stock in attending venues that only speak to themselves. The need for clearer industry standards and certification continues to remain unmet. Until an organized, credible group impacts this missing dynamic, it's difficult to see the value equation changing. That's not to say it can't be done. After all it only took LinkedIn six years to become a conference market leader. The first group who can combine commercial interests with professional development that makes a difference may be onto the next big AND valuable thing.

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Disclosure: Based on previous participation, TGR was invited to attend "Recruiting Trends," which was held this week in Alexandria, Va.

Leadership as performance art

Note: This originally appeared as a client and colleague e-letter.

March 28, 2014


Dear Clients and Colleagues:

With new seasons come new inspirations. Or at least that's the hope. This year's winter weather has been enough to make anyone want to flip the switch on more daylight.

One of the joys of constantly searching for better narrative is when someone you've known for a long time brings a fresh unexpected perspective. This person recently sat down over coffee to extol the value of performance art as a differentiator in leadership. Performance art? Really? What do you mean?

Well, for starters, it's knowing when it's time to perform and knowing when it's time not to, which usually involves active listening. In this friend's words, "how to work the room" vs. when not to. This is fast becoming a dying art in leadership circles as more rise from financial ranks and other places that value tangible competency over the often intangible ability to connect to the occasion. We throw around the term, "authentic" so much now that's getting harder to discern who is and who isn't. Twitter doesn't seem to help with this endeavor. Capacity for performance art is having informed awareness both of who you are vs. who you are not and why you're present in a situation in the first place. It does not mean peforming only to gain an unseen advantage as some who think they should already be CEO often do.

The next step is understanding what the actual performance requires and being prepared for that moment enough to the point where balance is struck vs. going too far to the extreme of performance for performance sake. How many times have you sat through long winded speeches that try to find a point of view without ever doing so? Questions that make the points are always effective tools, but mastering that skill requires curiosity, another fading factor in the equation.

Back to my friend who has worked in several different Fortune 500 companies all with different sets of leadership. The leader who performed the best turned out to be the one who presented the strongest capacity for relationship, trust and access when it mattered the most (read this last part carefully, always being accessible isn't the same thing as access.) This CEO's story also was original without the need for fabrication and included being passed over for a major job prior to filling the role that would prove to be his crowning achievement. Granted it doesn't always work out that way, but this example provided pause.

Here is the inspiring part. My friend felt so strongly about the leader's influence that he wrote to him when his son graduated from high school, thanking his former boss for helping make it possible through jobs that compensated well enough to fund the kid's college education. In an age when it's easy to criticize and judge leaders, this story proved to be quite refreshing. There are countless others out there where individuals are making a big difference in the lives of those who work tirelessly for them. Gratitude is truly a two-way street even long after the transaction, which in this case, was a long-term job.

This is the lost story of leadership. Those leaders willing to make difference, be in relationship and fully invested in people will always rise to the occasion; the ones who don't won't because they can't get out of their own way. Or least that's my belief. Something tells me when that belief goes away yours truly will follow suit.

Happy Spring and thanks for reading. My perennial hope is that the messages contained here help make a difference with what you may be facing. All the best,

Jeremy C. Garlington
Point of View LLC
4060 Peachtree Rd./Suite D-#117
Atlanta, GA, 30319
Phone: 404-606-0637
Email: jeremy.garlington@hotmail.com
TGR web log: www.povblogger.blogspot.com

Five steps to look like a leader

Full disclosure: TGR has never, repeat never, addressed the subject of executive dress. Image is not a hot button -- at least not from the point of view of personal dress and hygiene. While our look can always be updated, we wear decent threads, nice dress shoes and always will remain clean cut until it's no longer in fashion to do so in executive leadership circles. That could be a good long while from now.

Having said all that, there does come a time when it's necessary to review proper guidelines. Especially now in the age of constantly changing dress codes, such as business casual, dressy casual, cocktail casual and simply, casual. It's not hard to envision when specific requests will be made to dress nicely, which means socks for men in dress shoes and no chewing gum in church.

Anyone still reading would be well suited (pun intended) to tune into the following webinar, which was originally hosted by SpeechWorks/Asher Communications in Atlanta. Fashionista Lori Wynne of Fashion with Flair gave a comprehensive outline of the five ingredients to looking like a leader. It's good stuff even for the sharpest dressed man who may need a reminder or two. See the following link for the hour-long webinar: http://www.youtube.com/watch?v=8Li8pjKsFnY&feature=youtu.be. When asked name someone with a great executive look, Wynne cited former presidential nominee, Mitt Romney, which explains this photo image lifted with credit from at least 500 on Google:



Photo courtesy of ginga.org

The most apt analogy in business circles when it comes to proper dress may be the old house sale image of a gutter hanging off the side of a house. That may not prevent an interested buyer from moving further into the process, but it sure does represent an eyesore that could prevent a successful negotiation. Same goes for not following proper dress or hygiene standards. Old school branding lessons aside, anything that doesn't seem right or sticks out based on the occasion probably isn't right. Adjust accordingly.

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First outsider, retiree and non-industry exec. to take reins at venerable search firm

For the first time in their 60-year history, Chicago-based Heidrick & Struggles has named both an industry and firm outsider to lead the newly re-branded leadership company.

Tracy Wolstencroft, a former Goldman Sachs executive who retired in 2010, replaces interim CEO Jory Marino who exits the position after replacing Kevin Kelly (2006-2013), one of the longest serving CEOs in Heidrick & Struggles' history. Kelly assumed the top leadership reins from former Chairman and CEO Tom Friel (2002-2006), who along with Chairman Emeritus Gerry Roche and several other long-time partners, helped elevate the firm to the highest levels of Fortune 100 executive search, leadership succession and board-level recruiting. Heidrick is perhaps best known for high-level CEO placement and recently served as firm of record on the Microsoft CEO search, which was officially completed this week with the naming of an internal candidate as only the third chief executive in the software maker's history.

The board-level decision to name an outsider signals a major -- some say way overdue -- change in leadership for one of the industry's largest search firms, which has seen revenues and market share drop as executive search has changed, moving away from a highly transactional business to a more consultative and advisory-based professional service. Heidrick's primary publicly held competitor, Korn Ferry, has solidified its standing as a fully integrated search and leadership consulting firm while privately held Spencer Stuart and Egon Zehnder have reinforced their respective niches domestically and in Europe where Zehnder reigns supreme.

Naming an outsider as CEO also seems to re-confirm earlier attempts by Heidrick to change its ownership structure. At least two attempts to return to private status have been attempted over the past five years, according to sources familiar with the situation. An earlier effort to merge Heidrick & Struggles and Korn Ferry International was shelved when it became clear that the two disparate cultures could not be effectively combined. During this same period an exodus of top talent began migrating from to Korn Ferry and has since reached a plateau as the flight to quality during the last recession peaks.

The key question now is the one that has remained at the forefront for years: Will Heidrick continue to operate as an independent, publicly held firm, or will it explore strategic options, such as selling to or merging with another entity? Hiring a senior CEO with major mergers and acquisitions experience would at least perceptually signal change will continue to be explored.

Since becoming a public company in 1999, Heidrick & Struggles has struggled to gain footing between what one of the firm's partners once called a "sophisticated start-up company" and privately held partnership. The original impetus to go public was led by former CEO Pat Pittard who served as worldwide CEO from 1996-2001 and later resigned from the firm following the 2000-2002 recession, which produced Heidrick's first ever round of firm-wide layoffs.

In a closely held business filled with ironies about their own hiring and succession practices, few partners currently hold significant equity in the firm other than former top executives, such as Kelly who vacated the CEO position with stock holdings valued at more than $1.5 million at the time of his departure. 

Where does Heidrick & Struggles go from here? Only time will tell. Executive search has always been highly cyclical, and the current environment is no different despite changing dynamics now driving the business. Where that cycle leads and how a venerable brand regains its footing will the subject of inquiry now that an inevitable succession move has been made. The "house that Roche built" will now have to be renovated in ways not previously undertaken or foreseen.

# # #

 

 

Microsoft CEO Search: Live blogging (facetious)

Following was overheard between Microsoft Chairman Bill Gates and retiring CEO Steve Ballmer in Redmond, Wash., earlier this week before Gates fired up The Founder's Jet for Davos and the World Economic Forum (WEF.)

Gates: So, Steve, how are we coming along with your replacement?

Ballmer: I don't know, man. We've got a lot of resumes here from the search firm but don't really have any standouts since Alan (Mulally) turned us down on CNBC. Board has been pretty mum.

Gates: Yeah, that kind of stinks. With all the money the company is making right now, we probably don't even need a CEO. (Note: Microsoft reported a 4Q 2013 profit of $3 billion earlier this week.)

Ballmer: Bill, it's not all about money. Strategy is critical to long-term performance of the company.

Gates: Easy for you to say. Didn't you come up with what we're doing now? Back in my day, that other guy with the Macintosh was hard to track. We just went with something simple like a computer for every desktop. Everything fell into place right after IBM turned us down.

Ballmer: Things are a lot more complex today. We are an extremely large matrixed organization. So many devices, so little time. That's why we have to move more in that market-driven direction after missing out on Search.

Gates: Good point. I love playing bridge with Warren on my Surface tablet. You think we can sell more of those?

Ballmer: Someday, maybe. For right now, let's keep updating Windows.

Gates: Sounds like a plan. So who is on top of the resume list, anyone more interesting and connected than me?

Microsoft currently does not have anyone technically filling the CEO position. It's been that way since last August when previous CEO, Steve Ballmer, announced his retirement. A firm re-branding as a leadership company with an interim CEO is currently assisting with the search.

See more here: http://povblogger.blogspot.com/2013/12/searching-constantly-searching.html.

 

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Great advice from new GM CEO

By now, unless you've been living under a rock in Nepal, you probably are aware that General Motors named a woman to be CEO late last year. Her name is Mary Barra and she's the first female executive to run a major car company. In an ABC News interview celebrating GM's double coup, winning top car and truck at this year's Detroit auto show, Barra conveyed the following piece of golden career advice to interviewer, Rebecca Jarvis: "I always approached each job like it was the one that I would do the rest of my life." Now, 30 years later, she holds the automaker's top job.

What a refreshing perspective. During a time when everyone is moving rapidly on to the next thing, or so they think, someone who has risen to the top offers up some timeless truth. Do the best job you can right now at this moment, stay focused (another theme emerging early in 2014) and quit worrying about the next job. The next opportunity will form one way or another.

As an aside that buffers these comments, contrary to how it may seem, workers used to change jobs a lot more than they do today. According to a Bureau of Labor Statistics report reported by CBS Marketwatch, http://www.marketwatch.com/story/americans-less-likely-to-change-jobs-now-than-in-1980s-2014-01-10?link=MW_home_latest_news, workers are more loyal now than they were 10, 20, or even 30 years ago. Whether that's out of economic fear, genuine desire or combination of all the above remains an open-ended question.

Bottom line: Keep working hard, and when nothing else is working, try a different angle or tact.

Microsoft CEO Search: Score one for fleeting loyalties

http://blogs.wsj.com/digits/2014/01/09/why-alan-mulally-ended-his-flirtation-with-microsoft/

The Wall Street Journal is first again with what now seems like an obvious development in the Microsoft CEO saga: After one of the most public non-pursuit pursuits of a brand name executive job in recent history, Ford's Alan Mulally has "ended his flirtation" with the top job. According to the Journal, he evidently was disappointed with leaks emanating from the process -- as if Mulally was in control of the process from the beginning. The most disappointed party? That's easy. CNBC, the primary media feeder of speculation that became so pitched that Business Insider starting duping pix depicting the Ford executive in front of a Microsoft banner. See previous post for more: http://povblogger.blogspot.com/2013/12/searching-constantly-searching.html

This "startling" development has swung the balance of power back to Microsoft's board, which is a mixed bag to say the least. There's a major founder-in-chief fluttering in the shadows and an activist investor who appears ready to ride the trends in their special interest favor. Trying to do a discreet search now will be close to impossible. It didn't have to be this way but will be now.

 

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2014 Battle Royale: Specialists vs. Generalists

Editor's Note: This originally appeared as a client e-letter last month.

December 23, 2013

Dear Clients and Colleagues:

As the year winds down, here are a couple questions to consider for 2014: Are you a specialist or a generalist? Better yet, do you know when the difference matters?

Here is a personal anecdote to help set the table. A couple months ago, my 1999 Audi A4 developed a unique German engineering problem that involved having to take the dash apart to get to a heating coil system issue. Anyone that has ever owned a foreign born car knows that that type of repair ain't cheap. The certified mechanic who works on a lot of different cars completed the job but failed to re-connect the radio properly. So looking for a better fix, I called the specialist shop that's run by someone who looks like something straight out of ZZ Top. After explaining the issue, he asks, "so who worked on the car? It sounds to me like a wire wasn't re-connected properly." Really? You don't say. It's been great getting reacquainted with my CD collection.

As someone who has heavily specialized for the past 10+ years, my eyes and ears have become super sensitive to marketplace questions falling out of chosen branding specialty. Evidently the rest of the world is not. Specialists are everywhere, at every corner, in every industry. Few know how to converse in language outside of their own specialty. Worse yet far fewer even care while some claim so many industry specialties that they represent masters of none. Generalist CEOs are now being replaced with financial specialists, or highly trained CFOs who excel at finance but often can't speak or connect in every day language. Consulting firms that have specialized their way through the Great Recession now find themselves trying to grow beyond chosen niche, which often never leads anywhere other than back into the niche. A lot of old fashioned ink has been dropped on this subject this year. If you have pay wall access, see of this year's best summations by the Financial Times' Andrew Hill:  http://www.ft.com/intl/cms/s/0/3385b7da-423d-11e3-bb85-00144feabdc0.html#axzz2oJt26ys9. If you don't, try another related piece from Harvard Business Review  http://hbr.org/2013/10/consulting-on-the-cusp-of-disruption/

It's unclear who ultimately will win this post new normal battle. But here are a couple observations to help move a little closer. The first is the old stand by truth: Know where you are and with whom you are speaking. Chances are they don't really care about your niche specialty unless you're a heart surgeon or bankruptcy lawyer, which are two service providers you probably don't want to have to engage with anyway. Generalists also tend to come back into vogue during better economic times. In my view, specialists have to be even better generalists than the generalists themselves, especially in situations like the one outlined at the top. There's really no better time than when someone else besides yourself is in need. And that may be the whole point, which says end on a high note.

Merry Christmas and Happy New Year,

JG

Always searching

Loyal TGR readers will appreciate the irony of this post's headline on a couple different levels.

Level One:  The year's biggest brand name CEO search is based in Redmond, Wash., home of  software giant, Microsoft Corp. The position is currently open following the pre-announced retirement of current CEO Steve Ballmer who will reportedly remain in the position for 12 months or until the new CEO is named. When the decision was first announced in August, headlines carried the typical echo chamber fare. Holman Jenkins at the Wall Street Journal opined that only Bill Gates could save Microsoft: http://online.wsj.com/news/articles/SB10001424127887323906804579038852114518482

Steve Ballmer -- courtesy 9to5macfiles



Now four months later, hardly an eternity, the position remains unfilled despite frequent speculation on CNBC, "Business Insider" and other outlets that Ford CEO Alan Mulally or an internal candidate will become the next CEO of Microsoft. The company's long dormant stock value recently moved back past Apple on the S&P index, giving new meaning to the empty CEO reputation factor. Where Microsoft goes from here is anyone's guess; in the meantime, the company seems to be doing just fine despite having no leader and reportedly a divided board, according to the WSJ. Another major company mirroring similar situation is Wal-Mart, which quietly named a successor last week right before Turkey Day.

Alan Mulally -- courtesy BusinessInsider (duped pix)

Here's an initial takeaway for additional comments (please respond either directly or in the comments section below.) Maybe, just maybe, in large complex businesses, it doesn't matter who is CEO? Microsoft has businesses that are as large as some Fortune 500 companies. As long as the board does its job overseeing long-term direction and strategy, the CEO position isn't nearly as critical as advertised. That can always change. But for now the search seems like a real so what. The only path forward seems to be a return to the past, a rock star CEO who can sit above other lesser knowns. That list is hard to come by, and despite previous reports, really can't include Bill Gates with a straight face. Or can it?

Jeff Sanders -- Slammed!  Courtesy Fortune

Level Two: The firm who is helping Microsoft find a new CEO is Heidrick & Struggles, a 60-year-old player in executive search, which by most reasonable measures, represents an industry in flux. Heidrick reportedly is looking for their own CEO as well with internal vice chairs, Bonnie Gwin and Jeff Sanders leading the search, according to the fall issue of Executive Search Review. Sanders also is deeply involved in the Microsoft search, according to unnamed sources.  Official attempts to confirm this fact were not made for reasons not worth going into. Despite lackluster financial performance over the past few years and refusal to accept a new direction, which resulted in the previous CEO and other key players leaving, Heidrick and Struggles remains highly competitive. Some observers readily concede that despite attempts to kill the brand no one has been able to complete the act. The company is currently being directed by long-time insider, Jory Marino, who holds the interim CEO title and led efforts to ring the NASDAQ bell earlier this month, marking the firm's 60th birthday.

If Heidrick's intent is to return to private status, then the economics need be favorable to justify the move. Access to capital is more open on the public markets, and private equity no longer seems to be an option after a previously rumored takeover by the Blackstone Group either fell short or wasn't real. Several other attempts to return to private status have been unsuccessful over the past five years. These have been thwarted either because the financials were not favorable or the previous CEO held up the process -- depending on whom you choose to believe. 

At any level, as Thomas Wolfe once wrote, you can't go home again. Not doing something is doing something. It's time for both previously mentioned major company and search firm to turn their respective pages. The world right now could use a little change to believe in.

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From the Front Lines

1.) New rules of engagement are emerging but no one can fully define them. Much of the movement is being driven by the dizzying array of media used to screen and profile potential subjects of any kind. On-line has now replaced off line for impression gathering. To the degree that on-line profiles reveal something valuable then by all means respect the exercise. Just remember that truth isn't always about facts especially without proper context. Danger lurks when preconceived conclusions outweigh situation tested examples, which are harder to gleam without direct interaction. "Google me" used to elicit a few laughs; now it reveals fear on unimaginative faces.

2.) It is possible to dilute personal brands via social media despite how crazy that may sound. Board-level advisers are terrified of appearing accessible to everyone despite pressure to appear open and authentic. Mainly because perceived access out duels the need to be transparent. What does this mean in day-to-day terms? Be careful who you link with on LinkedIn. Not everyone is made the same way, according to this line of thinking.

3.) Dull organizational straits have replaced personal charisma and flair in the executive ranks. It's simply not cool anymore to have a larger than life CEO. That's too bad. Business is boring enough without more intention. Case in point: 10-15 years ago, business books, such as, "Straight from the Gut" and "Execution" represented one of the top selling categories. Now business book sales line the bird cage.

4.) Flight to quality in the consulting ranks continues at the higher end; major disruption looms but has its share of consultant speak. Thanks to a more astute friend, see the McKinsey POV here: http://hbr.org/2013/10/consulting-on-the-cusp-of-disruption/ar/pr. Key takeaway: Professional service firms of every order should be innovating their delivery models instead of doing the same old thing, which many continue to do.  Boutiques will always lack leverage and scale, which by the way, are two of the most over-used terms in the current lexicon of business.

5.) Industries under scrutiny continue to double down with the same leadership formula. Major banks, for example, have been notoriously doing the same thing since the 2008 market crash. According to a well placed source who works with bank boards, of the seven major banks who have hired new CEOs during the last five years, not one has come from outside the organization. So much for change we can believe in. Some other industries represent an exception but not many. Lack of injection from the outside continues to dominate the landscape, proving once again that the devil you know is better than the devil you don't know -- or so the saying goes.

6.) An entirely new "Retire Forward" class has emerged. They're in their late 50s, early 60s, and unlike their predecessors, detest the thought of traditional retirement. They have had successful careers or built great businesses yet want to exit gracefully to do something else with the remaining time. There's only one small problem: No one knows what to do with them! Not their former employers, friends, spouses, children, etc. No one. Except maybe for those curious and vested enough to help show the way through an ever widening hidden market.

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Is it a new season?

Note: Following first appeared as a client letter on August 29, 2013. True then — truer now?

August 29, 2013

Dear Clients and Colleagues:

Wedged in between historical events this week and the coming Labor Day holiday lies a question that's worth asking: Is it a new season? How do I (or would I) know?

The obvious answer is Yes, of course it's a new season. School is starting back, and football season will soon commence. Technically speaking, however, summer is summer for nearly another month. Humidity and fat mosquitoes confirm that fact.

So what exactly is the question asking? New seasons in our shared context generally mean something has changed either voluntarily or involuntarily and requires thoughtful action. Perhaps it's a new job, position or promotion. Or maybe it's the alternative: No job, retirement or reduced professional capacities. Going a little wider than self, new seasons also describe changing industries or market landscapes, which could describe everything these days. New rules of engagement are a common theme right now. Few know what these rules are, but everyone is willing to admit things have changed to the point where the old rules no longer apply.

If you think you're in a new season or approaching one, consider the following truths that may confirm what you're already experiencing:

1.) Something feels different. Uncomfortable even. The way you've been doing things no longer seems to generate the same response that it always has created. If you're smart, you'll stop for a minute, consult wise counsel and try to understand what's really going on. If you're smart but unwise, you'll continue to power through the existing construct, discarding what others who care might have to say. Perceptually speaking, the latter point seems to describe the current national political state and everything that is contained within.

2.) Others begin to notice the change or that you're either considering or moving in a different direction despite the fact that you have not shared what you're doing. Energy levels may be lower or moods might not be as positive. As basic as this may sound, generally speaking, the decision to move in new directions is generally made for us while the rest of our time is spent trying to make up lost ground. Those closest to us are more objective about these movements than we as our own masters could ever be. On the other extreme, beware of what Bruce Wilkinson calls "border bullies" in his timeless book titled, "Dream Giver." Border bullies stand at the front lines, preventing growth largely because they think they are going to lose you or something at the expense of what you're trying to change. Instead of picking them off one by one, learn and apply something from the feedback. Border bullies are not your enemies.

3.) Reactions to normal situations, or not so normal situations, tend to be at the extremes. Either dramatically positive or very negative. Moderation during moments of change is nearly impossible to achieve emotionally. Nor should it be in my view. Within reason, of course. A smarter, wiser friend once said that "tension sparks creativity." No truer words have been spoken in the context of change. Key is how to channel the tension and creativity into forward moving steps.

4.) No one else sees what you see. This speaks to both the power and danger of personal vision. Power lies in the passion with which you see what you see. Danger lurks when what you see may not be supported by fact, rationale or market value via specific reward. I personally think this is where the saying, "don't let facts get in the way of a good argument" found its business origins. Be careful with this one. Chances are if you can't transfer your vision effectively to enroll others then change efforts will fall short.

Embrace whatever season you may be in. If you're considering a new one, then drop a line or two. It's always informative to hear from the experiences of others. Happy Labor Day,

JG

Wisdom of Robert Ritchie

Editor's note: Following first appeared as a client e-letter on July 31, 2013.

Dear Clients and Colleagues:

Every now and then something will fall out of the sky and strike yours truly in the head. Some might call similar experiences A-Ha moments. What you're about to read is one of those moments.

For the esteemed business leadership lot, Robert Ritchie is an unknown name. He toils away in a different universe playing to crowds that maybe someone you know down the street or your children might recognize (hold that thought.) Ritchie's musical stage name is Kid Rock. 42 years old, he's a native of Detroit, Mich., home of Motown, Eminem and Bob Seegar whose song, "Like a Rock" remains the longest running corporate tome of all time. To say Kid Rock plays to the hard rocking party crowd might be an understatement. He's a well paid performer and accomplished artist much like a professional athlete or even that rare breed of over-performing CEO who deserves every penny of total compensation he or she receives.

Ritchie also is a shrewd businessman as evidenced by a recent deal signed with concert organizer and promoter, Live Nation. One of the more unique of its kind, the deal actually caps ticket prices in some venues at $20, which is literally free for a concert of any kind. In exchange for the cap, Ritchie receives a portion of the gate and concession receipts vs. the standard industry fee. Here's more from the original source:

http://online.wsj.com/article/SB10001424127887324063304578523523231085836.html

Why is this relevant to you as a business leader? The themes of change and transformation fill the lexicon every day yet few if any are willing to embrace creativity and risk taking required to make change. Conventional wisdom says there are too many threats to business right now to do anything differently or too far "outside the box." Phooey. Leadership's primary role is to help remove threats or obstacles to doing business. Kid Rock presents one of the the most compelling, and literally profane, examples of being willing to take risk to impact change. You might be hard pressed to name another when asked.

As for whether Kid Rock and his music are suitable for teenage children, I hear you, my friend. You don't have to approve the product. But don't miss the point out of your own prejudices. Sometimes performance art is simply that, art. It doesn't have to be widely accepted or processed through your own prism. Nor should it be judged for the sake of judgement. What it does have to do, however, is go farther so others can go far enough. This is one of those times, which is why the example has been chosen and now shared with a wider audience.

Good day,

JG

Jeremy C. Garlington
Point of View LLC
Five Concourse Pkwy./Suite 2850
Atlanta, GA, 30328
Phone: 404-606-0637
Email: jeremy.garlington@hotmail.com
Web log: "The Garlington Report (TGR)" www.povblogger.blogspot.com

Where have you gone, Bob Nardelli?

Recent headlines about increases in CEO pay and entrenched, never changing boards -- see http://online.wsj.com/article/SB10001424127887323664204578607924055967366.html?mod=WSJ_hppMIDDLENexttoWhatsNewsSecond raise an interesting question: Do things that happen on a large leadership scale, either bad or good, ever change anything? The obvious answer is yes. The larger answer is the more things change, the more things adapt in self interest -- at least when the topic is corporate leadership circles. Consider the following example.

Back in the model T days of CEO recruiting (2000), a fast growing Fortune 500 company searching for new leadership hired someone who had been passed over for another top job. Being passed over is normally not a good sign, but in that day and age, anything went. At the time the person was held up as an A-level performer who had helped make his employer, General Electric, and its former CEO, Jack Welch, famous in management circles. That CEO's name was Bob Nardelli. His counterpart who also was passed over to replace Welch later went on to become CEO of 3M and then Boeing where current CEO Jim McNerney still resides. After failed runs at Home Depot and Chrysler, Nardelli is the former poster child of CEO pay, which won't be repeated anytime soon. Or least not if more discerning boards have anything to do with it.

Fast forward 10-15 years. Is anything different about CEO pay or the boards that reward their pay? The biggest change may be better risk management of "bad optics" of situations such as what led to Nardelli becoming a maligned public figure. It's difficult to imagine a modern day board that would sign off on a pay package that rewarded hundreds of millions of dollars in severance pay. Especially to those who are under-performing or at the helm of under-performing companies when activist investors are breathing down their necks. Then again that group includes a lot of CEOs and companies over the last decade, including ironically, GE.

Despite periodic cycles, there's a fair amount of resignation on the pay issue and that favors those who don't want anything to change. Public outcries over say on pay and policy changes aside, not much is different now vs. then. Until a clearer mandate emerges, the issue will remain status quo -- with or without a new Nardelli lookalike. And that's too bad, considering how great that example was for aspiring leadership consultant brands. The change also won't be led among those on the inside, such as search firms which publish studies that simply confirm their own hypothesis. Effective brand building tools, yes. Truthful disclosure that amounts to change, no.

Note: Recent widely reported Equilar numbers citing a 16 percent increase in CEO pay in 2012 included a 200 percent gap between CEO pay and the salaries of the rank and file. If those numbers are accurate, anyone's guess at this point, then that represents a 200 percent decrease in the gap since 2004. Progress, anyone?

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