Jose Ruiz

By Jose J. Ruiz

In 1996, Dr Elisabeth Marx conducted a study, analyzing the backgrounds of the CEOs of the FTSE 100 Companies. In 2007, Dr Marx also explored the CEO profiles of the Fortune 100 Index, allowing for the first time a transatlantic comparison of top business leaders. This study provides a compelling snapshot of the top CEO’s in Mexico and compares the results to those obtained by Dr Marx.

These Chief Executives populate the financial and social pages of newspapers and magazines in the country. They make decisions that routinely affect millions of people, influencing economic, social and environmental outcomes. So who are they today and who will they be tomorrow? What are their common characteristics and how are those characteristics changing?

As the country continues to change rapidly, what is already defining the new breed of CEO’s in Mexico?

Two numbers are presented for Mexico’s CEO’s in order to identify current trends. We show the totals and have also isolated the numbers for the newest CEO’s: A group of 47 with 5 years or less on the job.

Broad Market and Industry Trends

In the past few years we have seen dramatic market and economic driven changes in the strategic direction of many organizations. The great recession and the intense competition have forced many companies to focus on vertical industries in order increase their level of innovation as well as product and market expertise. This

has brought consolidation in many industries and a need toincrease global reach in order to achieve the volumes required to provide competitive prices. These changes have shifted the focus from regions to industries demanding executive talent with specific industry and product expertise that can perform across borders. There are already instances o foreign companies in the Expansion 500 that no longer have a country managing director and instead have leaders for specific business units reporting directly into regional or global heads.

Talent Trends

Let’s look at how these broad trends are reflected in the results of the study and how they translate into current and future talent and leadership requirements for executives in Mexico.

Global executives

The term globalization has been thrown around for decades but it has never applied as much as it has in recent years as organizations become more focused and specialized within a specific industry or product and reach beyond their traditional regions of business. Just looking at the numbers can be a bit misleading. One can assume that the increase in foreign nationals running the Expansion 100 companies is a sign of Mexican nationals losing control. However it is clear that the new breed of CEO’s and executives in Mexico are better prepared and better educated in a global environment than ever before. 54% of the newest CEOs have performed assignments outside of Mexico and 53% hold Master’s degrees from institutions outside of Mexico.

Executives who have been successful in international assignments have usually excelled in understanding the environment, leading visionary change, leading results and mastering complex business problems. Competencies that coupled with already acquired industry expertise translate into a small learning curve and quick results.

Senior executives are a more diverse group than ever before and the impact goes beyond the leadership teams. Middle managers and staff members are being exposed to global management techniques, metric driven environments and matrix organizations that are preparing them to be the next generation of leaders in or outside of Mexico.

Increased focus on key industry and market expertise

One of the most surprising trends is an increase of CEOs in Mexico that are being promoted from within the company with great importance given to company culture,  industry specific experience and the leadership skills that are acquired while working abroad. It is important to note that internal promotions don’t necessarily mean internal to Mexico or the region.

The study performed in 2007 by Dr Elisabeth Marx suggests that:

”… the FTSE 100 Companies in the UK and Fortune 100 Companies in the US take a very different approach to CEO selection. Whereas Fortune 100 Companies seem to value wisdom, develop better internal grooming and succession planning and have higher educated CEOs, FTSE 100 Companies put greater focus on international experience, welcome foreign talent and give ‘young guns’ a chance”

Our results suggest that the Expansion 100 companies share a bit of both with a high value on wisdom as evidenced by an average tenure higher than both the Fortune 100 and the FTSE 100 and strong internal grooming and succession planning that begins early and includes elite foreign education and opportunities to gain international experience.

The Expansion 100 companies have more Super CEOs (45 and younger) than both the Fortune 100 and the FTSE 100 put together but they have been well groomed and prepared for succession.

Elite education playing a big role

There is no denying that advanced degrees from foreign institutions play a big role in the development of the new breed of CEO’s. 60% of the newest CEOs hold Master’s degrees or PhDs from foreign universities. The surprising trend is the rise of the PhD educated CEO. All of the CEOs with a PhD are part of the newest CEOs group.

Women on the rise

Perhaps the common trait between the US, England and Mexico is the one that we can brag the least about. A very small number of Women occupy the top job.

In Mexico only Nicole Reich (Scotiabank Inverlat), Carmina Abad (Metlife) and Grace D. Lieblein (General Motors) make the distinguished list in the Expansion 100 but Paula Santilli (PepsiCo Beverages) is not too far behind. Women are on the rise and while the numbers remain very low the trend is positive. All four were internally promoted and all four have extensive international experience with strong ties to Latin America.

Preparing for the future

The motivation behind the research presented in this article is part of our role as a leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment and development, talent retention management, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide.

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Por Jose J. Ruiz

Portafolio (Colombia)  Publicado el 16-03-10

Cuando se presentan situaciones de riesgo, surgen inquietudes tales como: ¿qué cualidades debe tener un líder a la hora de afrontar una eventualidad de este tipo? Muchos apuntan a decir que es importante tomar una actitud decisiva y de liderazgo, características que sin duda son mencionadas tradicionalmente como rasgos cruciales para ser un gran líder.

Lo mismo pasa con otras como la integridad, la inteligencia, seguridad en sí mismo y el ingenio para los negocios en general, enfocado a un sector específico, pero trasladando la pregunta a un entorno de carácter global, donde se enfrenta a mayores retos, a crisis más profundas.

Sin embargo, algunos directores generales de compañías afirman que existen otros rasgos de liderazgo que con frecuencia son pasados por alto, que capacitan a un líder para pasar la prueba del tiempo, combinados con el poder de toma de decisiones, resultan decisivos en momentos difíciles y prolongados. Un director ejecutivo ejemplar debe ser un alguien que demuestre claridad y sacrificio en vez codicia y pasividad.

La clave es la adaptabilidad, debido a que la gente que se percibe como líder se adapta a los requerimientos que demanda cada circunstancia, para permanecer como una influencia efectiva ante los equipos de trabajo que dirigen. Sería más fácil hablar de encontrar un líder que pueda demostrar empatía, claridad y sacrificio. Contrario a alguien ambicioso y reservado, el gran líder deberá ser capaz de actuar como un destello de valentía y optimismo para los demás cuando se sientan afectados por los efectos de una crisis.

Lo anterior no supone que los empleados se alejen de la verdad, lo que deben hacer es buscar honestidad y transparencia, que se establezca un canal de comunicación directo por parte de su líder en momentos de dificultades financieras y políticas, por lo que muchos concuerdan con que la empatía, la transparencia y otras características generan en los empleados un ambiente de comodidad y estabilidad, cualidades que desean ver siempre en los líderes de hoy.

No obstante, la responsabilidad de un líder va más allá de lo que la gente quiera ahora. Los líderes, deben asimismo soportar la carga de equilibrar las necesidades actuales contra las necesidades futuras, un acto de balance que requiere valor, especialmente en casos de crisis económica.

Finalmente, en momentos de situaciones de riesgo lo que se requiere es un líder con sutil combinación de características, ellos deben transmitir bienestar, estabilidad, demostrar empatía, ser optimistas, proceder con transparencia y sinceridad, todo esto al mismo tiempo que tomar decisiones complejas, emprender acciones agresivas y guiar con decisión a sus equipos. No es una labor fácil, pero hemos visto que grandes líderes lo han logrado una y otra vez con esfuerzo, han sabido sortear las dificultades que se presentan en tiempos de crisis.

“El valor del liderazgo radica en tomar decisiones que sean para beneficio de la organización por encima de uno mismo”, Kevin Kelly, director general de Heidrick & Struggles.

| Read article at portafolio.com.co

Heidrick & Struggles International, Inc., (Nasdaq:HSII) is the leadership advisory firm providing senior-level executive search and leadership consulting services, including succession planning, executive assessment and development, talent retention management, transition consulting for newly appointed executives, and M&A human capital integration consulting. For almost 60 years, we have focused on quality service and built strong leadership teams through our relationships with clients and individuals worldwide. Today, Heidrick & Struggles’ leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. For more information about Heidrick & Struggles, please visit www.heidrick.com

Leadership, Mexico Executive Search

For the first time in three year Bill Gates is not the richest man in the world. The top spot in Forbes list is occupied by Carlos Slim and not surprisingly the sentiment in Mexico is negative. People are mad. Why? What is wrong with us?

I know the arguments. The way Telmex was acquired and the fact that it’s a virtual monopoly that has been benefited by the state could be valid. But consider this: Telmex had revenues of 9 billion while America Movil (Telcel) was at 26 billion and Telcel was a late comer in the mobile phone market in Mexico. Yes, Telmex propelled him. But Telmex is not what is keeping him at the top of the Forbes list.

There is great merit to what the guy has done and I’m not defending him. There is probably a valid argument for everyone to be questioned. Nobody’s road to the top of the list is clean. Bill Gates is certainly not exempt. The Walton’s have their share of controversy. Walmart is not considered an icon of social responsibility. Yet we all want to read about them and probe into the details of their business success. Slim? No. Corrupt capitalist pig?

Why the animosity? The anger?

There is a tale told in Mexico of an old man who was walking on the beach with two buckets, one open and the other covered. A young boy approached him as he was walking, looked at his wares and asked, “What’s in the bucket?” The man smiled and responded, “Crabs,” to which the boy said, “I can see that, but what’s in the bucket that’s covered?” The man smiled again and said, “I told you, crabs! Both buckets have live crabs!” The baffled boy wondered why one would be covered while the other one would be open if both carried live crabs, so he asked. The old man’s voice cracked as he let out a deep laugh and replied, “Boy, the crabs in the covered bucket are Japanese crabs. They start climbing on top of each other and help each other out of the bucket. The open bucket, on the other hand, has Mexican crabs. They don’t need the cover. Once one starts climbing trying to escape, the others just pull him back in.”

 I know it rubs some people the wrong way but we really don’t show otherwise.  Don’t kill the messenger.

 About Heidrick & Struggles International, Inc.

 The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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Executive recruiters can usher you into the corner office or leave you stranded after the fourth interview. Here’s what to expect.

by Joseph Daniel McCool

Executive recruiters—or headhunters as most businesspeople know them—are especially influential agents of executive mobility and management-career opportunity.

They are powerful ambassadors of hiring organizations’ brands and cultures, and their work lubricates the wheels of corporate growth, change management, and leadership like no other external business advisers. Their actions can shape corporate performance, because they hold the keys to most of the world’s highest-paying management jobs by virtue of controlling access to them.

Collectively, executive recruiters network their way to millions of experienced managers around the world each year to identify the most promising candidates. Their judgment determines who deserves to be introduced to client hiring organizations.

The truth is, whether you’re building a company or your own senior management career, you can’t get anywhere in business without the headhunters.

| Read full article at Businessweek.com

Jose Ruiz is Principal and Executive Search Consultant in Heidrick & Struggles. You can share your views of this article or aything related to the manufacturing, maquiladora operations or executive search at: jruiz@heidrick.com

About Heidrick & Struggles International, Inc.

The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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“You now have to decide what ‘image’ you want for your brand. Image means personality. Products, like people, have personalities, and they can make or break them in the market place.” – David Ogilvy

A lot has been said in the past few years about personal branding. A term introduced in the early 80´s by Al Ries and Jack Trout in their book: “Positioning: The Battle for your Mind”. In chapter 23 Ries and Trout point that you can benefit by using positioning strategy to advance your own career.  Key principle: “Don’t try to do everything yourself. Find a horse to ride”. And so the personal branding band wagon began to roll.

It’s a great concept and it’s a very valid concept: Build your career with focus. Define yourself. But somewhere along the way, as the bandwagon kept rolling, personal branding began to be defined as personal marketing and brand identity.  Somewhere along the way the focus was taken off building a career with focus and put on self promotion.

A great tool if you’ve planned your career, or even if you have hit a few bumps along the road but understand how you want to position yourself.

A very bad idea if you have not done the homework to define your personal offering. Social media has made this a very dangerous proposition for those with a bad or undefined ‘product’ and just following the trend of self promotion on Facebook, Twitter and LinkedIN.

Some of the personal branding efforts I’ve seen remind me of not following one of the best pieces of advice I’ve ever gotten in my career.  It came on my first sales call shadowing my boss.  Before stepping into a meeting he leaned over and told me “Just remember: It’s better to stay quiet and let them think that you are clueless, than opening your mouth and confirming it”. Not that I’ve always followed it. But I’m sure you get the point.

Your brand identity is about what you want to communicate about yourself. It’s tricky because the bulk of it is not explicit.

Personal branding is about how everything you do: every job, every social and personal endeavor will define who you are and what you can offer in the next step of your career. You can’t go wrong if you focus on that.

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Loyalty is not what it used to be… and it shouldn’t be.

By Jose Ruiz
Translated from articule published in CNNExpansion.com on Dec. 6, 2009

A few weeks ago my grandfather, who was a top ranking executive in the banking industry back in the 80′s, asked me what I thought about the perceived lack of loyalty in today’s employees. He was surprised to see that now, the average time an employee spends working for a company is around 5 years. An uncle, an entrepreneur, quickly responded loaded with sarcasm: “And what do you think about the perceived lack of loyalty in companies? They think short term and fire people when they don’t need them anymore -this month.” Touche. Hey, in the end, it isn’t personal, it’s just business. It may sound cold and ruthless but it’s not. We just need to sit back and analyze some paradigms that have been redefined over the past decades.

To many, especially amid these hard economic times, loyalty has been discarded in the work place. But the truth is, loyalty has only evolved. I’m sure you will agree with me when I say it is crazy to assume that an organization can commit to an employee for life, just as crazy as an employee committing to an organization for life. It could happen under the right conditions, but one cannot assume or guarantee that it will. Things change and they change fast. Organizations and employees need to achieve independence. Now, this may evoke thoughts of selfishness, but it is quite the opposite. Business relationships exist for a mutual benefit. Employment is not an exception. Loyalty is assuming that the relationship can end. Loyalty is taking into consideration what may happen to the other party when it does and loyalty is taking action every step of the way to guarantee that neither party in the relationship becomes dependant. A dependant relationship in business is not a healthy relationship.

The current economic environment has exposed many of these unhealthy relationships. Let’s delve deeper into the concept of dependence using an example: Bill, an employee at ACME, Inc. is a close friend of his manager. He has helped him when unforeseen events have required him to do a little extra of everything. Bill is a go-to guy at ACME and has been rewarded over the years with generous pay increases. The economy has hit ACME hard and has forced the company to close down. Bill is out of work and now struggles to make ends meet. He was presumably loyal and did everything that was asked of him, including jumping from one position to another. Now Bill is in the open market. His post switching did not allow him to define his own niche or career within a discipline -he has no brand- his resume is a mess and his salary expectations are well above what the market will pay for his skill set. Bill was dependant on ACME and ACME never considered what would happen to Bill in an open job market. By not helping him define a career path, (both internally and externally) and overpaying him, Bill was put in a very bad situation. ACME made him dependant and Bill never realized that he was.

Now, let’s assume a scenario where an investor stepped in, ACME re-opened its doors and re-hired Bill. Bill knows that his life style depends on his current job with ACME. The relationship is at a high risk of turning toxic because Bill’s dependence would most likely have an impact on the decisions he makes at ACME. He knows he needs to protect his job. At best, he will make decisions with a higher degree of fear.

A healthy business relationship and true respect comes with the independence of both parties and the trust resulting from it.

 True loyalty in an employment relationship takes into consideration what will happen to the other party when the business relationship ends. A.J. Smith, General Manager for the San Diego Chargers preaches “We are all Chargers one season at a time, one game at a time”.

As an employee, one must consider all the possibilities, including that your job may end at any given moment. Are you ready for it? Do you know what your market value is? Do you know who may demand your services? Ask yourself these questions constantly. If you are taking on a new assignment, inquire how this will impact your personal brand and your resume. No matter what you do, or what your job may be, consider yourself a freelancer and your job as an assignment. Perform as if every assignment was an trial for the next. Above all, never forget that healthy relationships are based on mutual benefit. Push the other party’s benefit to the edge and you may break the relationship. If you guarantee your independence you will become a better employee. Guarantee the independence of those that work for you and you will have more loyal employees and a healthy relationship.

Be independent and be loyal. The new kind of loyal.

About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com 

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Scott Shane supports a startup visa program. But he urges fellow proponents to rethink the arguments they’re using to justify it

By Scott Shane – Businessweek.com

Myth: Immigrants need to be better entrepreneurs than native-born entrepreneurs to justify a startup visa program.

Reality: Recently several influential people advocated a program to grant visas to foreign-born entrepreneurs interested in starting high potential businesses in the U.S. Last week Paul Kedrosky of the Kauffman Foundation and Brad Feld of the Foundry Group wrote an opinion piece in The Wall Street Journal, and entrepreneur turned academic Vivek Wadhwa also wrote a Bloomberg BusinessWeek opinion column to support such a program…

| Read full article

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By Chris Kraul – LATimes.com
December 11, 2009

Led by resource-rich Brazil, the region is forecast to enjoy 4.1% growth next year, far outpacing the U.S.

Reporting from Bogota, Colombia – From appliance stores in Brazil to auto assembly lines in Mexico, signs are evident that Latin America has seen the worst of the global economic crisis and is poised for solid expansion.

The region is expected to post economic growth of 4.1% next year, according to a forecast released Thursday by the United Nations’ Economic Commission for Latin America and the Caribbean. That’s a stronger rebound than previously anticipated.

| Read full article

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Por Jose Ruiz (CNNExpansion.com)

Una relación de negocios sana y de respeto nace con independencia de las partes, afirma José Ruiz; el director de Heidrick & Struggles dice que el empleado debe pensar en su trabajo como un proyecto.

CIUDAD DE MÉXICO — La lealtad no es lo que era antes… ni tiene por que serlo.
Hace unas semanas, mi abuelo, quien fue un alto ejecutivo en el sector bancario en la década de 1980, me preguntó lo que pensaba sobre la falta de lealtad en los empleados de la actualidad.

Él estaba sorprendido de ver que, actualmente, el tiempo promedio que un empleado pasa laborando para una compañía es de alrededor de 5 años.

Ante esto, un tío empresario se apresuró a responder con sarcasmo: “¿Y qué opinas de la falta de lealtad que se percibe hoy en las compañías? Ellas piensan a corto plazo y despiden a la gente cuando ya no la necesita este mes.”

Touché. Hey, al final, no es nada personal, se trata sólo de negocios.

Podría sonar frío y cruel, pero no lo es. Sólo tenemos que pensar y analizar algunos paradigmas que se han redefinido durante las últimas décadas.

Para muchos, especialmente en medio de estos tiempos económicos difíciles, la lealtad es algo que se ha descartado en el trabajo, pero lo cierto es que la lealtad sólo ha evolucionado.

Estoy seguro de que concuerdan conmigo cuando digo que es ilógico asumir que una organización puede comprometerse con un empleado de por vida. Igual de ilógico que un empleado lo haga con la empresa.

Podría darse bajo las condiciones adecuadas, pero no se puede asumir o garantizar que sucederá. Las cosas cambian y lo hacen rápido. Las organizaciones y los empleados deben alcanzar su independencia. Ahora, esto podría evocar la idea de egoísmo, pero es todo lo contrario.

Las relaciones de negocios existen para un beneficio mutuo. El empleo no es la excepción.

La lealtad asume que la relación llega a un fin. Considera lo que podría pasarle a la otra parte cuando esto pasa y toma las medidas necesarias en cada etapa para garantizar que ninguna de las partes en la relación se vuelva dependiente.

Una relación de negocios dependiente no es sana. El entorno económico actual ha evidenciado muchos de estas relaciones poco saludables.

Profundicemos más en el concepto de dependencia usando un ejemplo: Bill, un empleado de ACME, Inc. es amigo cercano de su director. Lo ha ayudado cuando eventos imprevistos lo han requerido para hacer algo extra. Bill es un hombre con iniciativa en ACME y se le ha recompensado durante años con generosos aumentos de sueldo.

La economía ha golpeado fuerte a ACME y la ha obligado a cerrar. Bill está ahora desempleado y batallando para llegar a fin de mes. Él era aparentemente leal e hizo todo lo que se le pidió, incluyendo saltar de un puesto a otro. Ahora Bill está disponible en el mercado. Su cambio de cargos no le permitió definir su propia especialidad o nicho dentro de una disciplina -no tiene marca- su CV es un desorden y sus expectativas salariales están muy por encima de lo que el mercado pagaría por sus capacidades.

Bill se hizo dependiente de ACME y ésta nunca consideró lo que podría pasarle a Bill en un mercado laboral abierto. Al no ayudarle a definir un rumbo en su carrera, (tanto interna como externamente) y al pagarle de más, dejaron a Bill en una muy mala posición.

ACME lo hizo dependiente y Bill nunca se dio cuenta que lo era.

Ahora, pensemos en un escenario donde un inversionista aparece, ACME re-abre sus puertas y re-contrata a Bill. Bill sabe que su estilo de vida depende de su actual empleo con ACME.

La relación corre un alto riesgo de volverse tóxica debido a que la dependencia de Bill muy probablemente tenga un impacto en las decisiones que él tome en ACME. El sabe que necesita proteger su empleo. En el mejor de los casos, tomará decisiones con un mayor grado de temor.

Una relación de negocios sana y un respeto real proviene de la independencia de ambas partes y de la confianza que se deriva de esto.

La verdadera lealtad en una relación de trabajo toma en consideración lo que le pasará a la otra parte cuando la relación se termine.

A.J. Smith, Director General del equipo de los Cargadores de San Diego pregona: “Todos somos Cargadores una temporada a la vez”.

Como empleado, uno debe considerar todas las posibilidades, incluyendo que nuestro trabajo puede terminar en un momento dado. ¿Estamos listos para ello?, ¿sabemos cuál es nuestro valor en el mercado?, ¿quien puede necesitar de nuestros servicios? Haz estas preguntas constantemente.

Si estás empezando con un nuevo nombramiento, pregunta cómo esto podrá impactar tu marca personal y currículum. Sin importar qué hagas, o cuál sea tu trabajo, considérate un empleado freelance y a tu empleo como un proyecto.

Condúcete como si cada proyecto fuera una prueba para el siguiente. Sobre todo, nunca olvides que una relación sana se basa en un beneficio mutuo.

Nunca limites las opciones de alguien y ten cuidado con quienes no las tienen.

Si garantizas tu independencia, sin duda te convertirá en un mejor empleado. Garantiza la independencia de aquellos que trabajan para ti y tendrás empleados más leales.

Tienes que ser independiente y leal. Con una nueva clase de lealtad.

| Articulo en CNNExpansion.com

*El autor es Director de la oficina de Heidrick & Struggles en Monterrey, Nuevo León y es miembro de la práctica Industrial global.  Su experiencia profesional incluye más de 13 años en las áreas de ingeniería y administración de operaciones trabajando para organizaciones de manufactura en los Estados Unidos y México.

Es miembro de la Sociedad de Ingenieros Automotrices (SAE) y la Sociedad de Ingenieros de Manufactura (SME).

Es Ingeniero Mecánico Electricista egresado del Instituto Tecnológico y de Estudios Superiores de Monterrey.

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by Kelly O Kay, Global Managing Partner of the Software Practice at Heidrick & Struggles

During the worst of the recession, the approaches companies took to talent fell into three broad categories. Some simply froze hiring or made across-the-board cuts. Others, assuming a buyer’s market for talent, failed to attract or retain genuinely top talent. Still others continued to make strategic hires – no matter what it took and despite economic turbulence – putting themselves in the best position to ride out the rough waters and to meet the rising tide of recovery.

The first two groups of companies now need to make up lost ground. The good news is that there is still time. The bad news is that as the recovery gets under way, all three groups will be fiercely competing for the same limited pool of top talent – even those farseeing companies that continued to make strategic hires will need to work to hold the ground they’ve gained in strategic hiring and to advance as growth returns.

Learning the lessons of the previous downturn
The recent market downturn was steep, but it’s hardly the first of its kind. Just eight years ago, the U.S. economy experienced a sharp contraction, one that particularly affected the technology sector. The executives who led companies through that downturn learned the hard way how to refocus organizations on the fly and they applied those lessons to their recruitment activities during the more recent recession – lessons from which other companies could profit while the present window of opportunity remains open. “Unless an organization is going out of business, it should always be thinking about recruiting,” says Mark Tapling, now CEO of Language Weaver, who successfully steered a high-tech company through that sector’s 2001 free fall. “Many companies I know have had to hire in new talent to re-position themselves for success in this turbulent economy. And hiring the right people is never easy.”

The right staff with the right stuff
As companies adjust to economic uncertainty, they likely need a set of skills that they didn’t previously require or have in-house. Hiring in these new skills is pivotal for the ability to adapt to the changing economic conditions and seize new opportunities. Unfortunately, some companies, as a result of the uncertainty in the market and their own uncertain futures, have been reluctant to invest in recruiting the top-level talent they need in order to successfully reposition themselves. Typically, they have tried to delay hiring or make do with what they have, promoting someone internally into a stretch position or using their internal networks to try to locate the person they need.

It’s certainly understandable that companies have taken that cautious approach. During the initial trauma of the downturn, boards and stakeholders were demanding swift, decisive action. In the face of frozen credit markets and plummeting stock prices, most organizations had to put aside grand strategic plans and focus on immediate operating plans. But they should have also started seriously evaluating their future staffing needs.

Though the emotional and logistical turmoil of downsizing leaves most organizations feeling like they don’t have enough staff, the truth is more subtle: companies typically don’t have the right staff to achieve their objectives. For example, in a growing market, companies typically focus resources on branding, voice, and demand generation. But in a shrinking market, they’re more likely to need tight segmentation and skill in packaging products to meet the needs of specific communities. An executive who’s strong in demand generation may not have the segmentation skills to double down on segments where the business has been successful to drive maximum profitability.

“All change is disruptive,” says Dave Habiger, CEO of Sonic Solutions. “But ultimately, it can either advance your business or undermine it. Any winning strategy is partly a talent strategy. You can have the perfect business plan, but it’s the people who make it work.”

The illusion of a buyer’s market for talent
Some companies recognized early on the need for new skills called for by the uncertain economy. However, some of them also bought into a widely held – and largely unexamined – belief about the effect of the recession on the talent pool. “People think that even the very best people, the ‘A-players,’ are a dime a dozen,” says Tapling. “That belief is dangerous.”

While there are certainly more people out of work, it is usually the best people that smart companies do their utmost to retain. So, while the talent pool was larger in absolute numbers, top talent remained in relatively short supply. As Mark Tapling suggests, the notion of a talent market that overwhelmingly favors buyers is an illusion. Companies that have been laboring under that illusion have typically made two mistakes.

First, they have underestimated the difficulty of finding the talent with the demanding mix of skills needed to see the company through the recession and prepare it for recovery. As a result, they have failed to fully understand how difficult it is to get top external talent – believing that they could get “A” players at “B” prices and with a “B” recruiting effort.
Second, the notion of a buyer’s market may have made them complacent about retaining the top talent they already have. “There’s a belief out in the market – just as there was in the previous downturn – that absolutely nobody is hiring,” says Tapling. That has also proved to be a dangerous belief for those companies that have seen some of their top talent seek greater appreciation elsewhere.

The drive for efficient recruiting
Companies that do understand the real dynamics of the talent market have not only been hiring strategically but have also been doing it in a systematic way, with a full commitment of resources and an understanding of what it takes to define, find, and attract top talent.
SumTotal Systems took that approach. “First, we fleshed out our new strategy and operating plan, including reductions,” says Arun Chandra, the company’s CEO. “Next, we defined the roles and skills that we required to succeed in this new environment. Then we started discussing execution: what skills we would need to achieve our new goals, and what skills we already had in-house. From there, we moved on to discussing specific positions that we would need to create and recruit for.”

Once companies have developed their plans to create new roles, they face the biggest hurdle: the difficulty of finding top talent. Not only is the idea that there are great people just waiting for a call a myth but also the existence of many more candidates, most of whom are unsuitable, makes the market noisy and complicates the process of finding candidates who really fit.

Even more challenging is the fact that when organizations try to bring in new skill sets, they’re often venturing into unfamiliar territory, where it’s all too easy to make mistakes. Hiring new talent also carries other risks, especially when new hires are high-priced corporate change-makers. Such executives are expensive and inherently disruptive, and in today’s rapidly changing environment they’ve got to be successful quickly.

Minimizing the hiring risk
Companies can meet the challenges of strategic hiring and minimize the risks by working closely with an experienced executive recruiter. The recruiter can help the company thoroughly explore corporate strategy and requirements, conduct a systematic search to identify the best candidates, implement a skillful recruitment and integration process – and make all the difference in the company’s ability to compete successfully for talent that will only get harder to find.

“Some of the roles I had defined in the plan were not just new to me, but also new to the culture of the company,” says Christopher Franey, President of Kensington, a wholly owned subsidiary of ACCO Brands. “We didn’t have experience in evaluating candidates with those skill sets – and we couldn’t afford to learn through trial and error.”

Sonic Solutions’ Dave Habiger had a similar experience. “We needed help in identifying who the key candidates would be, and how to qualify them through interviews and reference checks,” he says. “Finding and recruiting the best and brightest is a time-consuming process that requires precise expertise not typically found in-house. Plus, we couldn’t afford to have our executives spending time and energy on dozens of interviews. Now more than ever, we need them to be focused on operations.”
Efficiently choosing the right person is especially important because, with the pressures on businesses today, companies can’t afford hiring mistakes or slow starts – especially in a crucial rain-maker position. “If you’re going to the board and asking for a strategic hire, you’ve got to make your case strongly, and it’s your credibility on the line,” warns Tapling. “Whoever you bring in won’t have time to learn on the job. They’ll have to perform as expected, right out of the box. And you’re going to be accountable for their performance.”

Overcoming ‘organizational freeze’
Savvy companies are also looking for ways to reduce or eliminate “organizational freeze,” the operational paralysis that tends to occur between identifying a critical new position and filling that role. One such solution is “talent mapping.” At Heidrick & Struggles, we find companies coming to us and saying that although they’re not ready to launch a full search, they want to get started so they can move quickly once they get the authorization they need. We draw up a profile of what they’re looking for and identify specific individuals who fit that profile. When they get sign-off to hire for a position they can move swiftly to interviews and offers, often saving a month or two in the process.”

Some of the best-run companies have also been looking past the most pressing needs on their talent maps and asking recruitment firms to introduce top talent on an ongoing basis. With a full commitment of resources and an understanding of the real dynamics of the current talent market, they are taking advantage of the opportunities created by market uncertainty to secure A-players before the recovery dramatically heats up the competition for top talent.

It’s not just who you know
The A-players who could make all the difference to an organization’s success are usually still employed. Further, economic uncertainty has made many people reluctant to leave positions they regard as safe. But even if they’re not employed, they typically have had the financial success or foresight to allow themselves to be choosy about their next position. Finding them isn’t easy, and persuading them to join a new company and stay for the long term is even harder. Just knowing the people isn’t enough. You also have to know how to pry them out of their current positions or lure them out of wait-and-see hiatuses in employment.

“Top talent always has options,” says Lori Goler, Head of Human Relations at Facebook. “We’re thoughtful, creative and aggressive about targeting the right candidates, yet nearly every situation is a competitive one. If nothing else, we’re competing against a candidate’s incumbent company, which can represent a comfort zone. And, good companies are doubling down on their best talent, which makes them even harder to lure away. In these cases, knowing your company’s value proposition and being able to convey it compellingly is the key to success in getting top talent to make a move.”

A company that is aiming high must position the role as exciting and the company as superior to other companies, with far more upside potential. Organizations often need to adjust their recruiting strategy to the needs of the individual being recruited, considering such factors as money, security, and career potential.

Retention as recruiting
Persuading a desirable candidate to say yes is just the beginning. Before the new executive begins work, a comprehensive onboarding process should be firmly in place. The onboarding process should set expectations with the new hire and current employees in order to smooth the path and address any of the cultural differences or anxieties that people may have about the new star on the horizon. Organizations can’t afford to create the kind of disruption that might make the new hire less effective or lead other talented staff to consider other offers.

Organizations also cannot afford to neglect retention of these A-players, especially as recovery approaches. These talented executives will have far more opportunities, both as a result of economic expansion generally and as companies that have been sitting things out or haven’t fully understood the recent talent market commit to making up lost ground.

Talented staff must be carefully nurtured and managed, with ongoing development, training, and professional opportunities that keep them fully engaged and committed to the future and the success of the company. Think of it as a kind of ongoing recruiting that can pre-empt the need for at least some actual recruiting – with its uncertainty and time lag – when the recovery takes off. Companies that do not do a good job of retention are likely to find themselves with a talent gap at precisely the time of greatest opportunity.

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About Heidrick & Struggles International, Inc.
The world’s premier provider of senior-level executive search and leadership consulting services. The firm’s executive recruiters and leadership experts operate from principal business centers in North America, Latin America, Europe and Asia Pacific. In Mexico, Heidrick & Struggles operates offices in Mexico City and Monterrey. For more information about Heidrick & Struggles please visit www.heidrick.com

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