The kingmakers
When you`re on the lookout for CEO-level material, you can`t be too careful: up to 40 percent of newly appointed executives leave or fail within the first six to 18 months.“What is the risk of hiring the wrong CEO? It`s high,” says Bryan Hattingh of executive search firm Cycan. “That`s not necessarily because they can`t perform in the role but more often because their lifestyles, cultures and conflict-handling styles don`t fit,” he says. “Or because their positions don`t turn them on. If you can do a job with your eyes closed, you`re not going to be excited, energised and committed, which has huge repercussions for an organisation`s performance.”So Hattingh`s forte is to penetrate below the surface of those seemingly spectacular CVs and unearth the qualities he says make executives and their companies fly: passion, purpose and commitment. “Along with culture fit, a sense of excitement is the most important reason for hiring anybody and, more than anything else, that`s what I look for.”Like Hattingh, Allen Shardelow of Heidrick & Struggles seldom takes a CV at face value (which would be foolish considering that up to 50 percent of CVs contain at least one deliberate inaccuracy, from a date doctored here and there to blatant personal or career fibs). Under your skin“I look at the depth of people`s lives, rather than just what you`ve done in business,” says Shardelow. “I want to know about the soft issues: who you are, where you were born, where you grew up, what kind of memories you have of your childhood, whether you still have friendships with the people you grew up with...”This kind of background can be deeply significant, he says. “For instance, if you need to be in a relationship-type role, which most executives do, but you`re not good in relationships, I would be sceptical.”While executive searchers aim to get deep under your skin, there`s nothing crass or tactless about the way they do it. Rubbing shoulders with CEOs and chairmen of boards seeking top-level talent takes charm and finesse.Meeting the impeccably courteous but easygoing Shardelow, it comes as no surprise that he`s an ex-diplomat of 16 years, with postings in London and the United Nations in New York. Now a partner at Heidrick & Struggles, whose network covers 50 cities, his diplomatic background isn`t being wasted.Cycan`s Hattingh is more informal, what with an open-necked shirt and the earring in his left ear. Still, his credentials are blue-chip: he was the man who appointed the entire local staff of Microsoft when it first set up shop in South Africa 10 years ago. Now, with 14 000 leaders on his database and a footprint on every continent, his client base spans the IT, banking, insurance, pharmaceuticals and services sectors.Besides, the earring turns out to be much more than a fashion statement. It`s his wedding ring and he`s been wearing it for 28 years.Just as solid as his marital track record are the Rhodesian teak table and chairs in his interview room, aptly named the Wine Room. Filled with vintage wines, brandies and whiskeys, along with easy chairs, a porcelain tea set and hand-carved chess set, it`s the perfect setting to break the ice and put the most frazzled executive at ease.That, together with the ability to get him or her talking, is a hallmark of the blue-blooded executive searcher.Indeed, both Shardelow and Hattingh are big on getting people to open up. But both know that to do this you have to give something of yourself. “The more vulnerable you are, the more you get,” says Hattingh. Says Shardelow, “People are comfortable when you talk about things that are familiar.” Shortest guy on the teamShardelow may well start a conversation by telling you where he grew up – in Pretoria, near the Apies River – and that he did a BSc in zoology and botany at Wits University and that his first career choice was nature conservation. “I wanted to save the world and the whales and the lions and the ants. I wore a beard and had hair down to here,” he says, gesturing behind his immaculately navy-jacketed back.He may also tell you that he once played under-21 basketball for South Africa (“I was the shortest guy on the team”), that he joined Foreign Affairs after his stint in the army because he realised conservation wouldn`t pay the bills, and that he adores wine, Persian carpets and cooking. He`ll even say why he left diplomacy in 1996. “When I got back, I took a long, hard look at my prospects and realised I would have to mark time while the transformation took place.”Hattingh, whose company motto is “Inspiration @ work”, is just as frank about himself. Career details aside – he started out as a “propeller-head”, doing programming and then software and development support management – he obligingly spills the beans about his earring-wedding ring, along with his innermost fears, and how he`s conquered them.“I used to be scared of heights, so I took up skydiving. I did scuba diving to overcome my fear of water and closed spaces. Giving blood was another,” he says with a shudder. “I was terrified the first time. Overcoming your fears is the secret of life. You`ve got to extend yourself, in work and life, by giving yourself sufficient stretch, challenge and unknown.”After this kind of openness, I defy you to keep your defences up. Rest assured, though, that Hattingh and Shardelow (also a scuba diver – yet another search common denominator?) will not divulge your secret hopes and ambitions to anyone else. “Working at this very high level, as a trusted outsider dealing with leadership issues, your integrity has to be beyond reproach,” says Shardelow.Nor, they claim, will they dangle glittering salary packages and promises of power before the eyes of a possible candidate. In fact, the first time you meet Hattingh, he probably won`t even mention that there might be a position available. Qualified but clueless“When I target people, I invite them to meet me,” says Hattingh. “You come along, and, guess what, I don`t talk to you about positions, money or companies. I talk to you about you, about what you really want from life.“I`ve learnt that almost nobody has been taught life planning and personal strategic thinking. We come through the education chain educated, intelligent, qualified and clueless. Only a few top executives I`ve ever met had really thought through where they were going. Talking in this way can crystallise a framework against which to assess your career opportunities and to discover potential you are not even aware of.”So Hattingh will talk about life with you, maybe drink a cup of tea or glass of wine with you, maybe play a game of chess with you. “At the back of my mind, I might have an opportunity to present but I will not create an artificial point of departure. If you do fit, and you indicate you are arriving at a departure point, I might arrange a meeting at which you can meet the client informally.”Shardelow`s approach is more direct. When he thinks he`s found a likely suspect, he`ll call the candidate and, without mentioning money or the client`s name, ask if the person might be interested. “Most of the people we approach aren`t looking but, nine times out of 10, they will agree to come to the first discussion. The skill is to get someone to lift up their head from what they`re doing and to consider alternatives, knowing that they might not get the job.”He doesn`t believe, though, in bulldozing or flattering anyone into making a career move. “When I make the initial call, the best answer to get is: ‘Funny you should call; my wife and I were just discussing that it was time to move on.` You`ve got to make sure this is the right time for a person to move. There may be a whole bunch of reasons why the timing is wrong and, in a way, the first discussion is like career counselling a person.” Finicky palatesOf course, there is more to executive search than intuition and heart-to-heart conversation. “We search by research,” says Shardelow, using the example of the master winemaker (executive searchers seem to have an affinity for the vine) wanted by one of South Africa`s top wineries, which was hoping to make a splash in the finicky American market.“The problem is that South African wines are not familiar to the palates of old-world consumers. To make our wines more accessible to them, you have to influence the style in which the wine is made,” says Shardelow. “So my client needed a winemaker with old-world and new-world experience. He or she also had to have experience of running a significant wine business, be able to influence other winemakers – which can be tough, because winemakers are like artists – and also be able to fit into the Stellenbosch culture, the heartland of Afrikanerdom.”It was a tricky one, much like being set the task of finding a coach for Bafana Bafana, the Proteas or the Springboks, although neither Shardelow nor Hattingh have actually been asked to try their hands at that.Within 24 hours of getting the brief, Heidrick & Struggles had activated its international network, zooming in on the world`s three winemaking hotspots in San Francisco, Melbourne and Paris. To cut a long story of an intensive search short, the right candidate was tracked down in Australia. With his wife, and incognito, he came out to Stellebosch for a “thorough recce” flying in on business-class tickets for two to three weeks. They liked what they saw but were concerned about the quality of medical care out here. Shardelow meticulously did his healthcare homework, an offer was made and accepted, and the couple relocated.“They`ve been here two years and he`s done a wonderful job,” says Shardelow. “He`s got South African wines into markets they`ve never been in before, the company is delighted, he`s built relationships with everybody, including the guy who washes the hoses in the winery, and his wife has learnt to speak Afrikaans.” No bums on seatsEvidently, executive search is far removed from recruitment and advertised selection. Search companies don`t skim thousands of CVs and they don`t place advertisements hoping that the right person will simply come to them. “Talented people don`t normally respond to ads,” says Kuseni Dlamini, a top mining industry executive who has been on both ends of the executive search chain, as an appointee and a client who has worked through Hattingh. “They need to be approached in a special and unique way.”Says Hattingh, “This business is not transaction-driven or commodity based; the aim isn`t to get bums on seats through quick appointments. Recruitment is not what we do. This business is about having an impact on business`s bottom line. It`s about strategic leadership and cultural issues. An energised and purposeful leadership is your greatest competitive advantage and if you have the right leadership, the whole organisation will be sparked. And the risk of hiring moves to zero – leaders with energy and passion stay the distance.”In 16 years of executive search, Hattingh says, he has not had an appointment fail. "However, we do provide quite lengthy guarantees, the minimum period of which would be three months up to a maximum of 12 months, depending on the nature of the appointment. These normally have some conditions to them but in short, if the appointment did not work, we would redo the assignment."Other differences, says Shardelow, are that executive search companies use dedicated researchers and build long-term relationships with their clients and the people they appoint long after the ink has dried on the employment contract.And, of course, their fees are different.“We are more like trusted advisors to the CE and chairman, and a client has to be very serious about using search,” he says. “Unlike a recruitment agency, where the client only pays when an appointment goes through, we work on a retainer basis, not on commission. The client pays upfront.” Heidrick & Struggles` fees amount to one third of the annual salary package of the position being filled, payable in three instalments over three months. The cost-value equationSo yes, an executive search will cost you, and many may wonder whether the services are worth the prices charged.“It comes back to that wonderful word that catches everything – value,” says Ken McArthur, MD of market research company ACNielsen, which has used Shardelow`s services twice in the past year.“I`ve got a company to run and I don`t necessarily have the connections at all the levels I`d like,” he says. “Search companies have those contacts, but one of the biggest benefits is that they do an enormous amount of screening for you. They know who is going to fit and who is not, and they don`t waste your or the applicant`s time. Of course it depends on the level of management. For junior management positions it`s probably too expensive, but at higher levels it`s absolutely essential.”McArthur, incidentally, isn`t just a client, but was also appointed to his current position through Shardelow. “Allen called me two years ago while I was on holiday in Germany to establish if it was a time I wanted to move,” says McArthur, who was then CEO of Gold Circle, the Durban-based horse racing and gambling business. “I was actually considering coming back to Johannesburg, which was where my wife and family were. It`s worked out very well.”Claudia Koch, head of Ethos Private Equity`s Technology Fund, says there are three reasons why she uses executive searchers to make strategic appointments: "In the instances where we have used Cycan, Hattingh`s understanding of technology and the venture capital business, his vast network of contacts and, above all, his ability to judge an individual from a qualitative, soft-issues perspective, were the key reasons for our engagement. When things go wrong in business, it`s typically the soft issues that trip companies up,” says Koch. The price of failureOperating in the private equity space, Ethos`s Technology Fund specialises in acquiring young technology companies, growing them and ultimately selling them on the international market. “This environment is fast-paced, very pressured and highly complex,” says Koch. “The price of making one mistake during the investment process can be quite great. We look after an enormous amount of money but have quite a small team, which relies on team collaboration, stability and harmony. Bringing in a person with the wrong attitude or a culture that doesn`t align with Ethos would definitely put the business at risk.”She adds, “It is very easy to be seduced by a wonderful CV but you have to put those things aside and look at how the person interacts as a human being. They might be excellent on the hard skills but will they align with our culture? Are they going to be sensitive to the very complex dynamic of our business or are they going to come in and ruffle feathers, frustrate and irritate? I cannot emphasise enough how important the soft factors are.”
04 May 2003
When you`re on the lookout for CEO-level material, you can`t be too careful: up to 40 percent of newly appointed executives leave or fail within the first six to 18 months.
So Hattingh`s forte is to penetrate below the surface of those seemingly spectacular CVs and unearth the qualities he says make executives and their companies fly: passion, purpose and commitment. “Along with culture fit, a sense of excitement is the most important reason for hiring anybody and, more than anything else, that`s what I look for.”
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