June 19, 2017 – With more than 400 consultants in 47 offices around the world, Russell Reynolds Associates works closely with public, private and non-profit organizations across all industries and regions. Constantine Alexandrakis, leads the firm’s U.S. business as well as the global leadership & succession practice. In the following interview, he discusses the current landscape of the executive search industry and how his firm is adapting to the change.
Constantine, give us your survey of the executive search and leadership assessment landscape. Where are we right now as an industry and where is Russell Reynolds Associates?
Our challenges are really on two fronts. One is more based on macroeconomic forces impacting our clients. The other is more specific to new capabilities our clients have access to. On the former, boards and executive teams are under more scrutiny than ever before – whether from shareholders (armed with new visibility into leadership decisions, some driven by new regulations), institutional investors (armed with greater detail on governance decisions via proxy scoring or direct engagement), or even employees (armed with ability to view and voice dissent via tools such as Glassdoor).
How’s this impact talent?
It significantly raises the stakes for the talent they seek and for meeting near-term performance expectations. The risk associated with executive selection and hiring has always been high. But, as executive roles have become more complex, the risk of making the wrong hiring decision has increased meaningfully. At the same time, the cost of executive failure has increased dramatically.
So access to information is likely a key to this, isn’t it?
Leaders now have access to far more information on their talent – through both improvements in human capital development as well as highly advanced third-party talent-related tools. This has the effect of blurring the lines between what companies can do on their own and where executive search firms can help – so we often compete as much against the status quo (or “do nothing”) as anything else.
Discuss how the recruiting industry is transitioning.
CEOs and boards are no longer content with Rolodex-based search strategies or vanilla search services – they are now more interested in services that span the full executive talent lifecycle. Clients expect their search partners to offer thoughtful, consultative guidance and deep insight – from defining a role, to selecting a successful candidate, to planning for succession, driving business transformation through talent, and rebalancing culture.
So we’re moving well beyond basic core search then.
In many ways, we are as much in the retention business today as we are the search business. Opportunity for us lies in helping to increase predictability, which in many ways really means ‘reducing risk.’ They look for us to bring specific advice and market insight – but they expect that insight to be supported by data and evidence. If you’re trying to compete on superior access to basic information, you’re going to lose every time. To win, you need to bring real insight to the table.
How does your firm look to respond?
It’s no longer good enough to trust your gut when making a hiring decision for a C-level role. The stakes are too high, and the risk of failure is too great. We believe that the rigor of executive selection, hiring, and development decisions should match the rigor applied to financial and operational decisions. This presents an opportunity for us but also a factor that influences the type of people we bring into our own business. We spend a lot of time and dedicate focus to making sure the consultants we bring into the business are of the right caliber to exceed client expectations and bring diverse experiences to allow for well-rounded advice in client settings.
So this must influence your offerings.
As you might expect, yes, it influences the types of services we aim to provide. One recent initiative you may have seen in the news is a partnership we entered into with Hogan, a true pioneer in the field of executive assessment. The first stage of our work with Hogan is sharply focused on the creation of an assessment approach that is purpose-built to predict success (both short- and long-term) in senior executive roles. Our clients are selecting talent in an environment with many uncertain and uncontrollable circumstances that leaders will need to contend with – so it’s really important to ensure the people you pick remain highly durable and actually thrive even in volatile settings. But that requires thinking forward into the challenges executives will face tomorrow, not just today, and helping to identify those best fit for leading the charge. We aim to provide market-leading insight to clients on this front.
What are your thoughts on data vis-à-vis the recruiting sector. Are you concerned the pendulum is swinging now too much in favor of relying too much on raw analytics?
The access we earn day in and day out provides a unique window into the talent challenges facing even the most progressive companies – and those experiences give our team the credibility to offer advice at critical junctures as organizations make very big, market-moving decisions. Trust is a word that is thrown around a lot – and, admittedly, it sounds buzz-wordy – but trust for us translates to very regular contact with very senior decision makers. And through those personal conversations – hundreds of them every day – we pick up on nuances that no data aggregation service could ever learn on its own. Real insight for us means, in large part, interpreting that nuance and turning it into informed, actionable advice clients can use every day.
Contributed by Scott A. Scanlon, Editor-in-Chief, Hunt Scanlon Media