ceo viewpoint

8/14/2019 CEO Viewpoint

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CEO viewpointTime to make

up for lostground in talentby Kelly O Kay, Global Managing Partner of the Software Practice

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 buyers

market for talent, failed to attract or

retain genuinely top talent. Still otherscontinued 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 farseeingcompanies that continued to make

strategic hires will need to work to hold

the ground theyve gained in strategic

hiring and to advance as growth returns.


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Learning the lessons of theprevious downturn

The recent market downturn was steep, but its 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 ledcompanies 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 sectors 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 withthe right stuffAs companies adjust to economic uncertainty, they likely

need a set of skills that they didnt previously require or

have in-house. Hiring in these new skills is pivotal for theability 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.

Its 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 dont have

enough staff, the truth is more subtle: companies typically

dont 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, theyre more likely to need tightsegmentation and skill in packaging products to meet the

needs of specific communities. An executive whos 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

its the people who make it work.

The illusion of a buyersmarket for talentSome 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 buyers market may have made

them complacent about retaining the top talent they

already have. Theres a belief out in the market just as


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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 forefficient recruitingCompanies 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 companys 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 existenceof 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, theyre often venturing

into unfamiliar territory, where its 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 todays rapidly changing

environment theyve got to be successful quickly.

Minimizing the hiring riskCompanies 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

companys 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 didnt have

experience in evaluating candidates with those skill sets

and we couldnt 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 couldnt afford to have our executives spendingtime 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 cant afford hiring mistakes or slow

starts especially in a crucial rain-maker position. If youre

going to the board and asking for a strategic hire, youve

got to make your case strongly, and its your credibility

on the line, warns Tapling. Whoever you bring in wont

have time to learn on the job. Theyll have to perform asexpected, right out of the box. And youre going to be

accountable for their performance.

Overcomingorganizational freezeSavvy 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 theyre 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 theyre 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.


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Connecting leaders around the globe is what Heidrick

& Struggles does best. For over fifty years we have

been building deep relationships with the worlds

most talented individuals on behalf of the worlds most

successful companies. Through the strategic acquisition,

development and retention of talent we help our clients

from the most established market giants to the newest

market disruptors build winning leadership teams.

www.heidrick.com

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 beforethe recovery dramatically heats up the competition for

top talent.

Its not just who you knowThe A-players who could make all the difference to an

organizations success are usually still employed. Further,

economic uncertainty has made many people reluctant to

leave positions they regard as safe. But even if theyre not

employed, they typically have had the financial success

or foresight to allow themselves to be choosy about their

next position. Finding them isnt easy, and persuading

them to join a new company and stay for the long term is

even harder. Just knowing the people isnt 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. Were thoughtful, creative

and aggressive about targeting the right candidates, yet

nearly every situation is a competitive one. If nothingelse, were competing against a candidates 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 companys 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 needto adjust their recruiting strategy to the needs of the

individual being recruited, considering such factors as

money, security, and career potential.

Retention as recruitingPersuading 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 cant 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 havent

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.

Kelly O Kay, Global Managing Partner of the Software

Practice for Heidrick & Struggles, conducts searches on a

worldwide basis for a wide range of technology companies.

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