Heidrick Makes Outside Hire Its New CEO

May 13, 2015 – February 3, 2014 — Heidrick & Struggles International Inc. chose former Goldman Sachs Group Inc. partner Tracy R. Wolstencroft as its first outside chief executive, concluding an unusually long search by the big executive-search company.

Mr. Wolstencroft immediately vowed to keep talent from jumping ship at Heidrick, which has been beset by high turnover and sluggish growth. During the first nine months of 2013, the firm’s profit slipped 27% to $4.8 million from $6.6 million a year earlier, while net revenue rose 1.2% to $344 million.

In an interview Monday, Mr. Wolstencroft said he hopes to stem further defections by offering colleagues “a CEO and a game plan that they haven’t had for a while.” His plan will include expanding Heidrick’s leadership consulting services so the firm operates as “a real strategic adviser” for corporate clients’ CEOs, he said.

Mr. Wolstencroft, 55 years old, also wants recruiters in various practices to work together to expand in areas where the company doesn’t have a strong presence. The search-industry novice fills a vacancy created when his predecessor, L. Kevin Kelly, stepped down last July.

The board decided to replace Mr. Kelly after a string of disappointing results and a strategic review that failed to produce a possible buyer for the firm, a person familiar with the situation said at the time.

Mr. Wolstencroft said he doesn’t want to take Heidrick private. “I am here to grow a public company,” he said.

A Heidrick spokesman declined to comment Monday on Mr. Kelly’s departure. Mr. Kelly said he wished the firm the best, but declined to comment further.

Mr. Kelly, who had led Heidrick since 2006, was temporarily succeeded by Jory Marino, previously head of the company’s Americas business. Mr. Marino had sought the permanent post. He will take a different Heidrick leadership role that has yet to be determined, Mr. Wolstencroft said. Mr. Marino declined to comment Monday.

About 25 recruiters left Heidrick during the past year, and several were major billers, said Christopher Hunt, president of Hunt Scanlon Media, whose daily newswire and quarterly newsletter track the search industry.

Richard Beattie, Heidrick’s board chairman, confirmed Mr. Hunt’s estimate and said the company already has appointed successors for some departed staffers. The company conducted exit interviews to learn why many recruiters were leaving.

“The single most important reason was leadership—or lack of leadership,” Mr. Beattie said in an interview.

Mr. Wolstencroft’s 25-year-career at Goldman ended with his retirement in 2010. Heidrick’s board selected him because he has leadership skills and professional services experience, Mr. Beattie said.

Mr. Wolstencroft said Goldman taught him to become a CEO’s trusted adviser and work well with boards. His various senior management assignments there culminated with a stint as head of its environmental-markets group, a spokesman for Goldman said.

Heidrick’s CEO search took more than the usual three to six months partly because of failed talks with certain external contenders, according to a person familiar with the situation. Among them was Mark Foster, an independent Heidrick director and former top Accenture executive. He hoped to lead Heidrick from London, but fellow board members “thought it was important to have somebody here in the U.S.,” the person said.

Mr. Foster couldn’t be reached for comment Monday.

The Wall Street Journal, by Joann S. Lublin

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