Head hunting: lessons for executives

Wednesday, June 2nd, 2010 - Blog, Executive Recruitment, Headhunter

Head hunting: lessons for executives

Head hunting is a phrase originally applied to the process of finding and recruiting top talent and executives to fulfil a senior level position, most often in a publicly listed corporation. The fees of the head hunter are high – can be as much as the executive will be paid in the first year – and the risks are equally as high in a multi-billion pound global economy.

But, and here’s the question: is head hunting any different to recruiting any other type, skill or level of employee?

While the costs may be different, both in terms of what the head hunter earns and what happens to the company if the wrong employee is hired, then there are huge consequences. Personally I know from experience there are lessons to be learnt for all executive job seekers as to how head hunting is undertaken.

Yesterday, for those of interested in the process of recruitment, a new case study took an interesting step. Canadian Maya Greene is both the first non-Brit to take the position of CEO of the Post Office (the UK’s highest paid Civil Servant, on a basic salary of £500,000), and the first woman. She replaces Adam Crozier, who has headed over to ITV to join Archie Norman‘s team. I think there are lessons to be learnt for all of us in this two person shuffle.

Firstly, lets look at the core of the opportunity/problem, and what the brief to the head hunters would be in outline. The Royal Mail, founded in 1516, is the UK’s public postal delivery service, and the UK Governments largest point of contact with the (voting empowered) general public. Royal Mail delivered 84 million items every working day and had a network of 14,376 post offices with a revenue of £9.056 billion, and profits before tax were £312 million in 2006. Since that time, profits have dropped year on year – £233 million in 2006-7 falling to a £10 million trading deficit in 2007. In 2008, the BBC reported that Royal Mail’s trading position had worsened to an annual loss of £279 million/yr in financial 2007. For the financial year 2008-9 Royal Mail had an operating profit of £321m, with all four group businesses that employ 185,000 in total in a full year profit for the first time in two decades. But it faces new competition, through both users choosing to communicate through eMail over first class post, and new competitors attacking its corporate postal revenue stream for the delivery of items such as bills and catalogues.

So what type of CEO do you think the Royal Mail briefed a head hunter in 2003 to find? They would need to be used to dealing with big organisations, and those with close or immediate Government relationships and high-contact with the public. They would need to be experienced in large structural change, process reform and inevitably down sizing; which results in a need to be a great negotiator and fine HR person. They would need to be financially aware of the needs of large corporations, and the law behind it. Plus, with the job being so high profile, they need to be a great communicator.

• Lesson1 for the executive job seeker: read the job advert, and think about what is also implied within it and the culture of the company

So why did they choose 39 year old ex-Football Association Chief Executive Adam Crozier, with a background in public relations? I know in part, that the answer lies in the fact that top level jobs are solved not through one individual containing all the talents, but teams.

• Lesson2 for the job seeker: know your strengths and weaknesses, and what type of team will/could be around you to deliver the business brief?

The man who hired Crozier was the tough taking Alan Leighton, ex of Asda WalMart and one of the many former students to Archie Norman – more of him later. Leighton during his period at Asda revolutionised the retailers process and systems, which lead to a drastic growth in the company. It required experience of large companies and their finances – which he gained from Norman – and a knowledge of retailing, which he had from his period at Mars. As he knew the market and had the experience above him of company technicalities, his natural people orientated nature allowed him to win over and influence the staff by verbalising the long term vision: anyone ever heard of an industrial dispute at Asda?

So in choosing a new CEO for the Post Office, one of the items on the agenda was that the overall team lacked operational knowledge of the Postal Service. That suggests that they should have been looking inside first, but the need for revolution was so great that they decided to look outside.

• Lesson3 for the executive job seeker: if you are an internal candidate, some times your strengths are wholly perceived as weaknesses. Think: how would you look new?

I conclude the wining position for Crozier was his public relations background, something which the natural talent that is Leighton may have had forced on him by his shareholder, the UK Government. Leighton would have walked out if he felt imposed on, but as he had such skills was he also contemplating himself now in the Norman role of mentor? What ever, after his appointment, we soon saw media coverage of Crozier knee deep in post and dogs on delivery rounds, as he “learnt” the business from the ground up like Leighton had at Asda.

• Lesson4 for the executive job seeker: what training does you new employer see you doing to do the job? In part, this answers the question of how they see your strengths/weaknesses

Come forward seven years, and after a dip into loss for almost their entire period in charge, the Post Office makes a profit in the last nine months of the Leighton/Crozier management. The last two years have been rife with wild cat and voted industrial action, as the change was implemented over agreed. With Leighton working almost full time in Canada on the restructuring of Canadian retailer LobLaw, HM Government appoint 63 year old Scot Donald Brydon as his replacement.

• Lesson5 for the executive job seeker: a departure at one level often precludes an arrival at another, lower level

Brydon has an excellent City reputation in plc companies, and has a track record of CEO disposal if all things are not well in the business or on the stock market.

• Lesson6 for the executive job seeker: know when your time is up! Dispear before it, rather than afterwards

The inevitable was written large on the wall, so when Norman was made chairman of the distressed commercial broadcaster ITV, it can’t be too far from the truth that Leighton pushed Crozier’s CV under his mentors nose.

• Lesson7 for the executive job seeker: its not what you know, as much who you know. Find or develop an insider

As opposed to the negative media commentary on Crozier suitability to do the job in partnership with Norman, due to their lack of knowledge of television operations – they have a great team below them, including ex-BBC controller Peter Fincham – what Crozier does have is an excellent knowledge of the needs and a contact book full of advertisers from his earlier two positions. In the business of commercial television, you need a great product (Answer = Fincham), and a revenue stream to fund it (Answer = Crozier). What ITV needs is financial stability and a new business model (Answer = Norman). If you had to pick a team who could win the fight, then that’s not far off it I would say.

Mean while, back at Royal Mail, what are the problems? Oh, just dust off the list from 2003, and change the percentages of revenue disappearing to the competition. So what’s the brief to the head hunter for a new CEO from Donald Brydon? Again, dust off the brief you gave them in 2003. But this is where I conclude Brydon got canny for both the business and politically, knowing he had less time than Leighton to change the business. What he needs is insider knowledge with outsider perspective, and someone with a proven track record of implementing vast change in a public body. That suggests to me the head hunter who took the brief probably knew there were only about a dozen at maximum candidates: CEO’s of existing postal service providers, either still publicly owned or having undergone huge revolution. I therefore conclude it was at best a European brief, with an extended ex-British Empire brief: resulting in about a dozen possible candidates.

This is the main differences between recruitment and head hunting. In recruitment there could easily be over 1000 candidates, so drop-off rates of a third between each stage of the employment process still means you have more than enough suitably qualified candidates to fulfil the job. In head hunting, when there are only 12 people skilled enough to fulfil the job, and you know probably only a third of those would presently be willing to move, the core task becomes about marketing to result in as many of those possible job applicants actually applying.

• Lesson8 for the executive job seeker: personal brand is fine, but a unique skill set in a niche will ensure you a well paid career. So, develop one!

So, the head hunters are looking for a knowledgeable market insider who has delivered revolution in their postal service, ideally with minimal industrial dispute? Name me a competitive market in the postal market, with delivered change in the core business, and an executive who has been there for a while and might like a change of scenery? Step forward the well admired civil servant turned Canadian business woman Moya Greene, who in her five year tenure at Canada Post delivered a profit in every year, while facing a market that had collapsed by 5%. Could you ask for a better hire? I doubt it, and it seems that she both fitted the head hunter brief, and the Post Office fitted hers.

So, who has come out of this the better? I think Crozier is in a better job that is more suited to his talents than he ever was at Royal Mail, and will probably shine. I have placed a bet on him by buying ITV share. At Royal Mail I think the challenge was just too big, and the team with Leighton was inspired and undoubtedly delivered, but not to the level required on many levels. But Greene to me seems like a wise bet by Brydon: you do what you know, and I’ll know as chairman I’ve done my job. Brilliant choice, great management, and superb head hunting.

Good Luck!

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