November 17, 2023 – Senior leadership hires can make or break an organization. Various studies show that the failure rate of executives coming into new companies is 30 to 40 percent after 18 months. This makes the selection of the right executive search firm essential for organizations. Bigger is not always better when selecting an executive search firm and success is often much more about focusing on what you’re good at, according to Kelli Vukelic, CEO of N2Growth, a Philadelphia-based management consulting and executive search firm. Ms. Vokelic points to many times have she has heard a board chair say: “We’ve got one shot at this.”
“In a hiring market, like the one we’re currently experiencing, finding a true game-changing leader is extremely challenging,” she said. “Furthermore, making a hiring mistake is extremely costly in terms of both direct and indirect costs. So how do you find those top performers and disrupters that can take your organization to new heights? Internal recruiters do not have the tools or abilities to fill these critical leadership roles, their open requisition stack is too full, and all roles get equal attention, whereas the most critical ones need a dedicated team. Only a trusted, skilled expert can lead you to the right candidate. Once you recognize that an external search professional is needed, the decision for which one should be solved with a different calculus than in the past.”
“With demand for top executives outstripping supply, largely because of the Great Resignation, choosing the best search firm to partner with can have a critical impact on the future of your organization,” Ms. Vukelic said. “There are thousands of U.S. executive search firms who are looking to help place talent in organizations.” So how do you decide on which firm is the best fit? She says to ask these questions. Should you use a large firm whose name is familiar to you because of ads and billboards? Or should you partner with a more niche, local boutique? Or should you consider a new emerging category of super elite boutiques that give you the best of both worlds, international reach, and creative, disruptive thinking?
“I would caution that size is not always an indicator of success, and more importantly not a risk mitigator,” said Ms. Vukelic. “A small elite class of boutique search firms is achieving this, providing you all of the executive search solutions of larger firms, but with a more hands-on, better-resourced approach. There is no one-size-fits-all solution to placing C-suite candidates. One-size-fits-one and having worked at both ends of the spectrum, here are my points for your consideration.”
Plethora of Choices
There are countless options when it comes to executive search firms. On one end of the spectrum are the incredibly large firms, which come with big brand name recognition, high overhead, and revenues reaching into the billions annually, according to Ms. Vukelic. “Several of these publicly traded firms have good reputations, but they have historically catered to Fortune 500 companies,” she said. “If your organization is not a Fortune 500 company, your search can easily get lost in the shuffle or pushed down below the partner level, and placement costs can quickly exceed your price range with antiquated administrative fees that cover big overheads.”
Kelli Vukelic is CEO of N2Growth and is responsible for the firm’s global executive search and leadership advisory services. She is located in Vancouver, BC, Canada. Ms. Vukelic is an industry veteran, having spent her entire career in executive search. She brings over 20 years of experience to every team and client interaction—melding strategy with executive search, leadership development, and organizational psychology. Her areas of expertise include talent operations and strategy, and C-suite executive recruitment, mainly but not exclusively in technology organizations. Ms. Vukelic’s experience in these areas spans across geographies and organizations of varying sizes.
“On the other end of the spectrum, however, are boutique search firms,” Ms. Vukelic said. “You may be skeptical of these smaller enterprises, fearing that they lack the resources and experience to find the right executive for your organization. But these fears are often unfounded — in fact, boutique firms are often better resourced, making them a better fit for your search.”
When engaging with a boutique firm, you are more likely to deal directly with the person or team leading your project, according to Ms. Vukelic. “Typically, boutique firms create team structures to work on projects, and their top-to-bottom approach offers the client extraordinary attention to detail,” she says. “They can assess a client’s unique needs and then customize their approach accordingly. An agile process allows time for listening, connecting, coaching, and advising. This personalized approach allows boutique firms to place candidates who are technically, academically, and culturally additive to the organization. This sets both the client and candidate up for success on the first go-around, saving everyone involved valuable time, money, and energy.”
By working with a boutique search firm on your C-suite placements, it is highly likely that you will interface and deal directly with the senior leadership of the company, Ms. Vukelic explains. “Direct interaction with the leader of the firm builds trust, allows you to voice any questions or concerns you may have, and get a real-time answer from a key executive,” she says. “A boutique firm will invest in learning your culture and talent needs. The senior engagement leader that works with you from the onset of the search will lead the process, speaking to every prospective candidate on your behalf. In a noisy recruitment market, where candidates have the upper hand, who do you want to tell your story and be that extension of you in the marketplace?”
By contrast, Ms. Vukelic notes that when engaging with a large firm, you may only speak with a partner occasionally as they are likely busy chasing billings and not focused on your search day-today. “Larger firms often delegate key work to less tenured associates that you have never met and who have only second-hand knowledge of your organization and its needs,” she said. “They also have limited experience, meaning they bring a narrower perspective to the candidate process. These are the people telling your story in the marketplace. This can result in candidates whose resumes match your specification on paper but may not align with your goals or add anything new or different to your culture. Large firms are usually in a constant state of growth, which limits the attention they can pay to your search. A sizable client base may be great for them, but it might not be best for you.”
Greater Candidate Pool
Executive search firms have an ethical and contractual obligation not to recruit from clients, according to Ms. Vukelic. “Because large firms conduct business with so many organizations, they have significant hands-off limitations which limit their recruiting strategies,” she said. “Candidates that are active on a search within a firm are also off-limits for other searches. With large firms, this can equate to thousands of candidates who are unavailable to your search, severely limiting the talent pool.”
When meeting with a search firm, Ms. Vukelic says to ask what their completion rate is as you are likely to see that larger firms—which, by virtue of their size, can afford to leave a search unfilled— don’t have as strong a record of bringing candidates across the finish line as their boutique counterparts.
“The constraints on large executive search firms are real; they limit the firms’ ability to bring great candidates to you and contribute value to your organization,” Ms. Vukelic said. “When selecting a firm for your search, critically assess the quality of service you will receive, instead of simply picking the largest firm on the market that can rattle a long list of past clients, which are now likely off limits to you. A mentor to me and trusted advisor in our profession often reminds clients “bigger isn’t better; better is better.”
Generalist over Specialist
Any day and every day Ms. Vukelic would pick a generalist. She explains that specialists by function or industry, while very knowledgeable and subject matter experts, tend to be less creative about where to find disruptive talent.
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“Most search firms don’t know what clients want because they don’t know what questions to ask outside the stock list,” Ms. Vukelic said. “How often have you been tested with outside-in thinking or ‘bigger thinkers’ from adjacent and non-adjacent industries? The industry needs to move beyond the HR and talent acquisition world and that line of questioning to expand thinking and explore the art of what is possible. If you want to see the best leaders, look for leaders rather than a checklist of skills and experience. Many clients are seeking to challenge old norms with known networks and specialist search firm models are too narrow and candidate recommendations are to be expected and boring.”
How Small is Too Small?
Thankfully a strong benefit of the aftermath of the pandemic has been that clients don’t need to look for candidates that are only willing to relocate or are within an hour’s commute of company headquarters, according to Ms. Vukelic. “You do need a firm that can support across the Americas and has a global presence too,” she said. “The talent pool is both national and global and you want a firm that can mirror that. Also, you want a firm that can grow with you and serve you in markets globally.”
“Large search firms may seem appealing due to perceived brand value and organization size, but when it comes to the attributes that will serve you and your goals, get to know the new class of boutique firms as you may find that they provide a better option for your C-suite talent needs,” Ms. Vukelic said. “Big enough to have significant horsepower and global reach, but not so big that they lose that relational, bespoke approach that is just for you and your organization.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media