They represent what many of us aspire to be, either collectively or individually, and are not entirely fair to the rest of us. There may be better investment banks, hedge funds or corporate finance boutiques out there, but then again there may not be. When something crucial needs to be done fast it is not the ideal time to take a flyer on an unknown quantity.
So it is in the world of headhunting. When the shareholder meeting is on Monday and there is a lot of explaining to do, the chairman doesn’t pick up the phone to call Directory Enquiries for the number for Acme Recruiting to go out and find a new chief executive officer. He probably doesn’t have to think that hard at all because there is
a finite number of headhunters capable of performing the task and the chances are that he knows several of them quite well.
He may have met Kenneth MacLennan from Korn Ferry fly fishing on the Blackwater in Sutherland, Russ Gerson from Baines Gwinner on the slopes at Snowbird or Matthew Wright from Russell Reynolds on the squash court at the RAC. The annoying thing about success, when you don’t have it, is that it breeds success. All of these people, and the firms they work for, are used to moving around in the upper stratosphere of search. It was literally in the upper stratosphere that Russ Gerson, the president of Baines Gwinner’s newly established office in New York, met one of his key clients, Richard Marin, the vice chairman of BT Alex. Brown.
‘I remember I was sitting in the first class section of a Delta flight back to New York from Salt Lake City when I first met Russ,’ Marin explains. ‘We are both avid skiers so when we started chatting it was about skiing, and then we realised that we had about fifty acquaintances in common. It became clear in a short while that his search business exposed him to people and places I knew. I asked him to do some work for us because we had ongoing needs, and was amazed to find that he was able to get the top six guys from our competitors all willing to talk to us and we literally had the pick of the litter. He has broken though the normal boundaries of where we would find our best people and, as a result, expanded our thinking and has thereby become a critical resource for us.’
Allen Wheat, chief executive officer of CSFB, agrees with Marin’s assessment of Gerson, describing him as ‘a real pro, fantastic and very successful for us’.
Gerson’s firm, Baines Gwinner, recently completed a senior level search for ING Barings in London, successfully placing UBS Alumni David Robbins as chief executive officer, and Malcolm Le May as global head of corporate banking. In New York, Gerson has recently completed searches for the head of a European investment bank, head of M&A and many other senior positions, typically at salary packages ranging from $750,000 to $5m, earning fees that are sometimes in excess of $1m.
Matthew Wright from Russell Reynolds also plays in the same league as Gerson, recently handling the search for the chief executive of a major investment bank.
‘Searches at that high a level are not that common, and getting less common as more and more banks merge. There are very few people in the candidate pool, and they are becoming markedly less accessible. The key is actually being able to pick up the phone and talk to the right individual, and there are very few individuals and firms that have the ability to do that,’ says Wright.
‘When you are a firm like Russell Reynolds and have been in the London market for 25 years, and have recruiters who have been around for 20 years and you have grown up with these senior people, that sort of access is straightforward – your phone call will be returned.’
Ken MacLennan of Korn Ferry handles very senior level positions on a regular basis, recently completing the search for a chief executive for a European stockbroker. He believes contacts at a senior level are all well and good, but without the back-up of knowledge, intelligence and business acumen it is all for nought. ‘Thank God the day of the gin-and-tonic recruiting is gone,’ states MacLennan. ‘Even at the very top it has to be underpinned by absolute professionalism. There is a fourth dimension to search and that is the chemistry or the ‘fit’.
At the top of the organisation you rarely find someone with a small personality, or who is an underachiever. The key is to match people who can work effectively together at the very top. By their very nature they have strong points of view, because once upon a time they had to get where they are and they didn’t get there by being wishy-washy.’
The search for the chief executive officer of a major company, or even a divisional or regional manager, can be more important to these headhunters than the actual fee generated. The knock-on effects are potentially tremendous, as the new executive will frequently completely revamp the department, subsequently recruiting a new range of middle management, generating fees for the headhunter that far exceed the initial fee. This is one significant reason why the major headhunting companies actively try to poach the top headhunters from their rivals. Much like the world of corporate finance, these are the rainmakers that can turn the balance sheet of an international recruitment company from red to black through one phone call. If they could only do the same for my credit card statement I’d be a happy woman.