July 11, 2022 – It’s a well-understood trade-off in many areas of business: Do you want speed or quality? The traditional view is that you cannot have both. Of course, an entire generation of operations engineers and process analysts has built a science around optimizing business systems and processes for quality and speed. “The goal is to eliminate the trade-off and make business processes significantly more efficient,” said Bespoke Partners’ Eric Walczykowski and Megan Hay in a new report. “And now these optimization concepts can be applied toward human capital practices.”
In this study, Mr. Walczykowski, the firm’s president, and Ms. Hay, vice president, leadership advisory practice, discussed how Bespoke Partners’ proprietary FIT profile framework allows the recruiting of leaders to be accelerated while producing better results at the same time.
The Tradeoff in Executive Recruiting
The parallel to the quality-speed tradeoff in human capital matters is starkly evident in the area of executive recruiting, according to the Bespoke Partners report. Suppose you are searching for a leader to run a particular department in your company. If you want the best possible leader — say a seasoned pro from your industry with a track record in your company type and stage — then finding and recruiting that person can take hundreds of days.
“That search outcome will be of the highest quality,” said Mr. Walczykowski. “But the search is slow. How much more time will be needed to get the new leader up to speed? It’s easy to see that a year can pass before even the best leader starts executing most effectively in the new role. Alternatively, you may decide you need someone in the role quickly, even if they are not the dream candidate. So you choose to promote a junior person from within, or you recruit someone from outside the industry in a related sector.”
In this case the search outcome is not of the highest quality. “While these individuals themselves may be outstanding leaders, their fit for your role is not a precise match in all ways,” said Mr. Walczykowski. “But the search was concluded quickly, so the leader can start delivering value earlier. The new leader will have a lot to learn in the new, unfamiliar role or sector, which eats into that head start.”
Accelerated Search with Better Outcomes
It might seem counterintuitive that spending time on upfront analysis results in a faster search, according to Ms. Hay. “But in fact, it most definitely does,” she said. “It is exactly how the process analysis and improvement in business process optimization works. By understanding the desired outcomes and identifying impediments, business process analysts enable the process to accelerate without creating quality problems. We do the same thing. The FIT profile allows us to see what is needed in a new leader, how candidates compare to that target, and how candidates will ultimately mesh with the organization.”
“This allows us to very quickly surface the highest potential candidates,” Ms. Hay said. “We are able to filter out those that should not take up any of the recruiting effort because they are not a fit. That means the recruiting process becomes ultra-efficient, cutting out weeks that would have been spent engaging with candidates who are actually not a fit.
The proof of the FIT profile’s effectiveness is evident in the results. Our searches for senior leaders typically take half the time of the industry average.”
Ending Recruiting Trade-Offs
“At Bespoke Partners, we have cracked the code on how to make executive search both fast and high quality,” said Mr. Walczykowski.
“This is critical for our client base, which is exclusively private equity firms investing in software companies. Private equity firms often buy a new portfolio company knowing that they need to make major leadership changes, often including the CEO.”
“But there is a critical deadline involved,” he said. “The faster the company can start executing on growth plans, the more likely the investment thesis will be achieved. At the same time, these portfolio companies need to be led by the right leaders. With hundreds of millions or billions of dollars at stake, the private equity firm needs the best leaders possible to steer their new portfolio company. The cost of a mis-hire can be dire and can even derail the entire investment thesis. So a search that is fast but that also has high quality results is essential.”
The Science of Search
Business process quality, efficiency and optimization techniques emerged in the middle of the last century when business managers learned to apply data and scientific analysis to business processes, according to Ms. Hay. “Human capital management is going through this same revolution today,” she said. “We call our process search 2.0 and we describe it as the science of search. Just like with business process improvements, our approach uses data and scientific analysis to assess personalities and leadership styles and build a holistic picture of leadership in a company.”
“We can use it to identify gaps and then assess candidates to fill those gaps,” said Mr. Walczykowski. “We enable the entire executive recruiting effort to be tied to the value creation plans needed to achieve the investment thesis. Our search 2.0 process is highlighted by advanced scorecarding that enables consistent assessment and evaluation of candidates.”
The FIT Profile: Faster, Better Search Outcomes
The centerpiece of search 2.0 is the FIT profile. “This is a framework that allows us to analyze and understand the company and candidate so we can find and place the best leaders and do so quickly,” said Ms. Hay.
“We have developed the FIT Profile based on our experience with more than 650 executive searches for portfolio company leaders. In short, we know what makes an executive successful in a particular role and the FIT Profile framework enables you to analyze and measure those success factors in any specific instance.”
The FIT profile includes:
- Leadership Capacity Inventory: Using candidate assessment tools and advanced scorecarding, Bespoke develops a comprehensive assessment of a candidate’s leadership strengths and weaknesses, including in-depth backchannel reference checking.
- Organizational Strength Index: Bespoke uses data-based assessments to appraise the portfolio company and identify its strengths and gaps with respect to the growth plan. This produces a picture of a prospective candidate’s fit with the organization and the skills needed to fill gaps and execute on growth plans.
- Executive Leadership Team Analysis: This assessment evaluates the leadership team’s skills and gaps to determine a candidate’s ability to complement strengths and raise execution.
As soon as a private equity firm has closed on a new portfolio company, the pressure is on to get the right leadership in place to execute on the portfolio company growth plan as quickly as possible. But who are the “right” leaders? How do you assess the fit with the executive team? How do you prevent a bad hire? What do you do when multiple new leaders are needed? How do you do all this quickly to get value creation on track?
Join Bespoke Partners tomorrow for an interactive webinar supported by Hunt Scanlon Media. The session will focus on how new management science and behavioral analysis techniques are being harnessed to accelerate leadership transformation in portfolio companies. These methods provide unparalleled leadership insight and produce better placement outcomes while significantly shortening search times.
We will present an overview and case studies from Bespoke Partners’ FIT Profile process for executive search as illustrations.
Free registration … Click here to sign up!
Steve Maxwell is a senior vice president of portfolio human capital for Audax Private Equity, based in Boston. Prior to joining Audax in 2016, he worked in the executive search industry and was the talent partner at Kodiak Venture Partners. Prior to that, he was an operating executive at several technology companies.
Eric Walczykowski is president of Bespoke Partners and leads the firms’ commercial operations. As an experienced operator, investor, board member, and consultant, he brings a multidimensional perspective on building high impact executive teams that deliver superior results.
Megan Hay is VP of the leadership advisory practice at Bespoke. She is a talent management leader with 20-plus years of experience helping clients leverage their talent to achieve value creation. She helps organizations make better decisions through rigorous analysis of business needs and assessment of talent. Ms. Hay partners with her clients to create a deep understanding the skills and experiences leaders need to meet the investment thesis and provides coaching to help individuals and teams harness their potential.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media