A New Way to Build Great Management Teams

October 4, 2015 – It is a complex time to be in the talent management business, whether you’re serving the needs of clients as an executive recruiter or you’ve been charged with reclaiming the oversight of your company’s talent initiatives in-house. I see it as one of the most destabilizing periods in this field in generations. And whenever there is a paradigm shift in any industry, winners and losers emerge.

On the winning side right now are boutique search firms – and their growth in the last six or seven years has been nothing short of staggering. It is a transfer of power in a hugely important industry, and it is setting in motion a series of changes that I think are still not quite fully understood. In the next few years the upshot will be that every search firm, big or small, will succeed. But right now, it is the boutiques that have emerged.

Hunt Scanlon Media sat down this week with David Clapp, a managing partner for CarterBaldwin Executive Search, a boutique search firm based in Atlanta. Who better to ask about boutique search firms: David leads an active client portfolio that ranges from Fortune 100 global brands to high-growth PE backed companies. His clients are predominantly focused in the distribution, technology, consumer products and professional services sectors. He sees a range of dilemmas coming to the headhunting sector, including: the broad industry shift I mentioned above, the turn by larger firms to broadening their service deliverables, and the expanding trend by companies to use in-house recruiting teams to identify and recruit their next generation of talent.

As a generalist recruiting boutique, CarterBaldwin’s distinct practice areas have grown out of the firm’s partners individual backgrounds and experience. “We believe our size, resource model and partnering approach is what has fueled our growth,” David told us. “We are also ridiculously process-oriented which brings heightened predictability and visibility into our searches. I truly believe that too big and too small puts limitations on a search firm’s ability to deliver exceptional client outcomes.”

David said he is constantly hearing from clients that they are moving more and more of their work to ‘mid-market’ sized search firms. “For that reason,” he said, “we work hard as a partner team to manage our growth, and our team, so that we just get better and better vs. bigger and bigger.”

CarterBaldwin competes with its largest recruiting rivals all the time, but admittedly search boutiques in general are not getting the Fortune 500 CEO assignment calls. “Over time I think it’s likely that mid-sized search firms will become a more significant force in the F500 CEO search market as that segment continues to embrace the ‘boutique’ firm.”

Fundamentally, CarterBaldwin has always been building out core management teams for mid-market and F500 companies. The firm has also conducted a significant amount of mid-market CEO search work. “Frankly, I think these searches require more work than the big CEO projects because they are less ‘public’ and need more research, more hustle, and a more intensive vetting process.” Search firms, he said, often tout their CEO and board practices as the reason they’re special. “I think that’s great for them, but we’re very proud of our ability roll up our sleeves and build great management teams. We love this part of the market, and are very focused on having that continue to be our core.”

One thing CarterBaldwin does not do is cloud what they do best: “We are search and pure search only.” The firm’s clients span Fortune 50 global MNC’s, pre-revenue start-ups, universities and large non-profits. Its partners try to follow the market in determining strategy, but they don’t see the market or their client base wanting them to veer from their core deliverable: identifying management talent.

“We’ve had clients from time to time ask if we can help them with a special board assignment or some market data, and if we can help we do and consider these ‘value-adds’ to be part of serving clients. If finalist candidate assessments or industrial psychology interviews are helpful to a client then we will partner with them in getting that done, but only do so if it serves the greater goal of a well-completed search. As a partner team we’ve talked about adding adjacent services but we are all completely aligned that our investments will continue to go toward becoming better and better at our core business of executive search.”

David said that a number of clients have built in-house recruiting teams. “I definitely see the trend. I am not overly concerned about it though. My clients have been very clear with me that they will continue to need ‘go-to’ search partners to complement their in-house teams. To be sure, the searches we’ve been awarded by clients with expanded in-house teams are becoming more and more challenging. We will often get a search after the in-house group has made a few passes but was unsuccessful. We love those searches; they make us better and they cement us as the ‘go-to’ search partner for these clients.”

David said this trend has been somewhat offset by the broader inclination toward using medium sized boutiques that provide high partner involvement and significant research and recruiting support behind them. “I’m really thankful where we sit in the market and I’m gratified that CarterBaldwin has continued to grow at the same time client companies are building in-house teams.”

Having lived on the client side has given David a certain sensitivity to the business, economic and cultural performance that clients are after in every placement. “When I conduct a search,” he said, “I think I’m able to really relate to my client and to move pretty quickly to the harder questions around, ‘Can this person get done what my client needs them to? Do they fit? Will they move the team and the company forward?’ Certainly, my years in marketing for Coca-Cola and as a senior executive at Thomson Reuters were foundational for me.”

Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media

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