A Cook Associates Report
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"Now is the time for companies to increase due diligence. Extra care,and time,
should be taken to evaluate key areas of concern and ensure culture fit with the organization."
- Walter Rach, Managing Director, Cook Associates |
A study from The Corporate Leadership Council supports a relatively conservative number of three times an executive's salary. At the other end of the spectrum, in his book Topgrading: How Leading Companies Win by Hiring, Coaching and Keeping the Best People, Dr. Bradford Smart puts the cost at an imposing twenty-four times the executive's base salary.
According to Walter Rach, Managing Director with Cook Associates, hiring executives may feel additional pressure because, in uncertain times, making a "wrong hire" can be especially impactful on the organization.
" As a company navigates through this business environment, and identifies future talent for its organization, those responsible for making these decisions should consider a potential hire more carefully before they pull the trigger," he says. "The concern is that, if a new executive does not work out, it can damage a company that already may be vulnerableduring stressfulbusiness times."
Rach does recommend proceeding carefully and points out that many of the characteristics desired in a new
hire now are not necessarily different than those considered in times of prosperity but the scrutiny given those
characteristics should be intensified.
"Now is the time for companies to increase due diligence," he notes. "Extra care, and time, should be taken to evaluate key areas of concern and ensure culture fit with the organization."
The Watch List
Culture Fit
A true "team mentality" becomes especially critical during difficult times. Now, more than ever, hiring leaders need to examine how the new executive will interact and work together with the existing leadership team to accomplish company goals.
According to Zach Wochok, the CEO for PGP International, "Culture fit is still the top priority. With a top tier search firm you can feel comfortable that the screening process will result in the presentation of highly qualified candidates and a relatively good consideration of fitting the organization. However, the latter cannot be fully assessed until your own team has the opportunity to meet and evaluate the candidates."
Rach agrees. "Loyalty and teamwork are essential to success right now," he says. "Spend a little more time having the prospective new hire meet with other key management team members to determine compatibility. Some companies have found that group interviews suit this purpose well. Listen carefully to what the others
have to say and allow them to help you evaluate the fit."
Rach also recommends that hiring leaders ask the candidate for past examples of reaching out beyond their own functional area of expertise to understand and collaborate with other members of the executive team.
Big-Picture Thinking with a Bottom Line Approach
Now may not be the time for executives to focus solely on their area of specialty. Rach notes that in addition to having functional excellence, the new executive also needs to have the ability to understand the business as a whole and to comprehend how his/her decisions will impact the
overall growth and profitability of the organization. Hiring leaders should ask the candidate to provide examples of doing more with less andimproving the bottom line.
"Companies are looking at processes and profitability," he says. "How can we make what we're already doing better, more efficient, more productive? A new executive is expected to have ideas coming in the door about areas to examine, evaluate and improve."
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If you are the candidate...
From the Executive Search Professional: If you are looking for another career opportunity during these uncertain times, now is the time to prepare to highlight these desired skills for possible new employers.
Think back to a time when a company you were with was experiencing a challenging time. What lessons did you learn? What specific things did you do that helped contribute to the success of the organization? Showcasing experience from similarly tough times will make it clear you know how to stay focused and add value when a
company needs it the most.
Also ask yourself, what has made me a stronger overall business manager? What other skills, outside of my current functional roles and responsibilities, have I developed that may add value as the company moves forward?
From the CEO: Enter the market with your eyes wide open and a bit more caution. Dismiss the temptation to see the grass greener on the other side of the fence. This should always be the case, but in this economy, make certain that a potential employer is well positioned financially and is not in a position that might result in significant
turmoil in the near future (plant closings, reductions in force, reorganizations). This also requires greater vigilance and due diligence on the part of the candidate. These principles should always be followed but in an economic downturn they become even more important.
Focus, as always, on the positive aspects and contributions and be completely prepared through the vetting process to emphasize what you can do for the interviewing company. This should always be the case for every candidate, but it is absolutely essential for this particular type candidate. It is not so much of "what have I done to
now," but more of "here is how I can apply my experience and knowledge to help your company be successful/better/improved."
All of this having been said, when times are difficult some of the greatest opportunities present themselves to a candidate. The need for a turnaround, a jump start, flexibility, new thinking and high energy levels, plus a thoughtful but aggressive approach can be just what a lot of companies need at this time. For those candidates
possessing these characteristics and a taste of adventure, these just might be the best of times and times of great opportunities. |
Location
Relocating a candidate during times of uncertain real estate can add an additional component of risk for companies. "If a candidate has every intention of relocating to join a company, but simply cannot sell his/her home in a reasonable amount of time, he/she may be unable maintain two house payments and have to abandon the career opportunity altogether," Rach says.
He recommends improving relocation packages to insure that the new hire comes out "whole" with the move. If that isn't financially feasible, the company should consider more localized searches. He also notes that now may be the time for organizations to examine, and broaden, their flexibility on team members working off-site and
telecommuting.
Conclusion
As noted, neither Rach nor Wochok see these considerations for 2009 as anything new, just ones hiring leaders should consider more carefully.
Wochok notes, "I would say that we are moving forward more carefully in adding any new positions - but still holding firm in maintaining our current employee portfolio. Our hiring practices per se will not change, it's just that finding the right fit at a time like this means more involvement of key managers in the evaluation process,
particularly with senior level positions."
Rach adds, "Executives that companies hire now have the opportunity to make a significant positive impact on the organization long-term. Tough times can be the best breeding ground for innovation, efficiency and rapid improvements. By taking the time to examine the candidates a little more closely, companies can minimize its
own risk and reap the rewards for years to come."
About Cook Associates, Inc.
Cook Associates, Inc. is a retained executive search and buy-side M&A advisory services firm. Our core business is creating value where talent and opportunity connect, and we are uniquely positioned to help our clients capitalize on the brightest talent and best performing companies in the marketplace. Our client base ranges from
multinational corporations to early stage entrepreneurial companies, private equity and venture capital firms. For more information about Cook Associates, please visit: www.CookAssociates.com.
Walter Rach directs the Food & Beverage sector within the Executive Search division of Cook Associates, Inc. Since joining the firm in 1983, he has specialized in driving search strategy programs and complete search project management and execution for Food Processing clients. Walter has built a strong following in the Food Industry
and has successfully conducted search assignments for senior level executives for Fortune 500 companies as well as publicly and privately held firms of small to medium size.
As a Managing Director, Walter conducts executive search assignments at the CEO, COO and divisional President level, as well as functional heads of Sales, Marketing, Operations, Supply Chain, Finance, Technical Services and Human Resources for the all Food & Beverage industry segments.
A native of Chicago, he received his MBA from the University of Wisconsin - Madison and his BS, Business Administration from the University of Illinois - Champaign/Urbana.