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Friday, November 17, 2006

Finding the Right Fit for your company



Finding the Right Fit ( 20/20 hindsight)



The key to hiring the right executives may lie in hiring the right recruiter. That's not easy.
Brian Hecht knows the trials of an executive search. As CEO of Enews.com, a leading online vendor of magazine subscriptions, he took far more time than he should have in finding a new CFO. "I had been interviewing personally referred candidates for months and nobody was quite perfect for us," says Hecht. "At some point, we decided we needed a good CFO yesterday."
So the company called in executive search firm Redwood Partners. "We did not have a bake-off," he says, but rather looked for a firm that "looked like us" and understood the pressures of Internet time. "Waiting three to four months is simply unacceptable."
With the firm's help, Enews found and hired Phil Callaghan in just under six weeks. As CFO of Multex (MLTX) , Callaghan helped take the investment research and financial-services company public last year. Enews came up with a better candidate "than we ever imagined by using a good firm," he notes. "When it's a tough search, you want the professionals on your side."
Find Right Recruiter
Choosing the right professional is critical. The wrong recruiter can be a startup's nightmare. A bad fit could mean a search that languishes in the murk between the hiring company's expectations and the recruiter's responsiveness and connection to the market's best talent. Worse, the wrong recruiter could lead a company to make the wrong hire, creating a mess that sucks up time, effort and resources.
So how does a company find the right recruiter? Consider streaming-media company Electrifier's search for a chief executive. Current CEO and cofounder Mihail Lari conducted a thorough search of his own. "I've been in the technology business now for several years, and I've been following the most high-profile recruiters," says Lari, who plans to step down as chairman of his venture-funded company once the ongoing search for its next CEO – its first recruitment effort at the management-team level – is completed.
Lari also sought advice from people with firsthand experience: "We have several directors on our board who had done searches before, so we turned to our directors" to help select and engage the best search firms.
"The management team at Electrifier met with several people who are in the recruiting business," Lari says. The company eventually consulted with three firms that demonstrated solid leadership in placing executives at Internet companies and appeared ready to commit to Electrifier's search. Then Lari checked out one of the firms, Christian & Timbers, with a former client of the recruiter. He consulted his friend John Herr, senior VP of sales and marketing at Buy.com, which had engaged the search firm for its CEO slot. "I shot off an e-mail to John to see what [Buy.com's] experience was like and got very positive validation that [the firm] would do a solid job. We felt that we had found the right fit."
But how does that fit really feel? And what does it mean to the hiring company, and to its investors? Amy Bromberg, VP of human resources with Jupiter Online, says today's leading Internet companies are looking for lasting relationships with recruiters who can prove their strategic value and justify their high fees. "The best firms become an adviser to you on issues that go beyond making the hire," she adds.
The right headhunter will respect the client company's sense of urgency. Gone are the days when a recruiter could spend nine months searching for an executive job candidate, and one need look no further than the executive-search industry for proof. It is cashing in on company demand for executive talent, but it's also reinventing itself to meet the requirements of an increasingly wired world. "I think the significant difference today is the speed at which you want things done. When we've identified a need, it's immediate," says Thomas Pace, president and COO of the Internet Financial Network. "I think if they're good and effective at what they're doing, they're literally beginning to bring in people a week after you talked to them and [have] signed a deal to do it and to close the search inside of 60 days."
Furthermore, both the hiring company and its recruiter have to commit to keeping the search nimble. "There's just absolutely no time to waste in deciding whether you want this candidate or not," says David Lord, CEO of Executive Search Services, since it's likely the candidate, if he or she is destined for dot-com stardom, has already received other offers.
Dot-coms also need to decide whether a single recruitment provider can handle multiple search assignments across job functions, Pace says – in his case, from marketing to business development and editorial talent – without compromising quality on candidates. He also suggests that hiring companies attend industry-specific conferences and talk with others about search firms they've engaged and who they would recommend.
A recruiter, says Pace, will be more willing to channel the best candidates to a hiring firm if it has a vested interest, such as a fee agreement based in part, or totally, on equity – a potential pot of gold that has already started to line the pockets of many firms. "The idea of the search firm having or taking some of the compensation in equity gives it an incentive to deliver the best candidates and an ongoing interest in the welfare of the company. It's to its economic benefit to make the search work," says Pace.
Once one finds the right recruiter, however, there's another problem. "I think the challenge for a dot-com is not just finding a search consultant who can do the work but one that has the capacity," adds Executive Search Service's Lord. "There's so much work [for recruiters] in this sector right now. The best search consultants are helplessly busy."


WHY SEARCHES FAIL
The conventional wisdom in the recruitment industry pegs headhunters' "completion rate" at 75 percent. But what about the one in four searches that never end in delivering a top-flight candidate to the hiring company? It's just as likely that the hiring company pulled the plug on these "failed" searches as it is that the external recruiter waived the white flag. The hiring company may cite a new merger, acquisition or restructuring as reason for giving up on a search, or perhaps it simply changed its mind about creating or filling the position. It might also blame the recruiter for promising more than it could deliver or for presenting underqualified candidates who wouldn't fit into its corporate culture.
The recruiter might give up on a search because of a dearth of high-caliber candidates, because the hiring company has unrealistic expectations or because the company won't pay what it takes to find the best talent. A headhunter might also grow impatient if a client tries to change the job specifications halfway into the search, if the company is indecisive or if it insists on having too many honchos involved in the interviewing process.


Slainte


Gordon

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