October 26, 2016 – It’s no secret that the past couple years have been tough for much of the energy industry. Crude oil’s rapid price decline was a body blow to the field, and hiring as a result went down. In the oil and gas sector, upstream businesses like exploration and extraction of gas suffered. Energy services and equipment companies also took a big hit.
But the midstream segment, trading and logistics of crude and gas, as well as the downstream section, refineries, held their own. That’s been a plus for Alder Koten, a Houston-based consulting and search firm, as it has navigated past the worst landmines and continues to see strong results.
“Our firm is fortunate enough to be diversified in a number of industries and regions, so this did help soften the blow to a large extent,” says Jose Ruiz, the firm’s CEO and managing partner. “Despite the downturn in oil and gas, we were fortunate to have experienced double-digit growth in our oil and gas practice during the last two years, which was aided in large part to our cross-border work.”
Busy South of the Border
Much of this, he says, has to do with what is going on in Mexico. “The country is in the middle of implementing an energy reform and that has kept us very busy south of the border. It has also had an impact in oil and gas, renewable energy, and power generation.”
In Mexico, top talent in the energy sector is scant. But circumstances in the world marketplace have enabled Alder Koten to recruit good prospects from outside the country. “Activity develops talent and there is a very big gap between the number of jobs available in the past, the jobs available now, and the jobs that will be available in the near future,” Jose told me when we spoke recently.
“In effect, there is no talent pipeline. A vast amount of talent in Mexico’s energy sector has been imported. It would have been impossible in many ways to fill many roles if we were not in a down cycle.”
Jose came to Alder Koten three years ago from Heidrick & Struggles, where he was a principal in its global industrial practice in Houston and Monterrey, Mexico. Among his responsibilities at Heidrick, he served as a member of the firm’s CEO, CIO, and supply chain and operations functional practices. Previously, he was managing partner for the QualiFind Group and vice president and general manager for Holley Performance Products.
For all the challenges America’s neighbor to the south poses for finding energy talent in-country, its automotive industry is a much different story, Jose says. That sector is showing the most growth in Mexico by far. “C-level talent is currently being imported into Mexico but it is being exported into the automotive sector,” Jose says.
Stress On a Talent Pipeline
As an example, he says, his firm is helping to place C-level talent — but that talent is going from Mexico to other regions, such as the U.S., Canada, and Europe. “The demand is putting stress on the home grown pipeline but it’s also generating tremendous opportunities for young multicultural management and executive talent,” he says.
Earlier this year, Alder Koten acquired OCE Consulting, a management consulting firm that focuses on culture shaping and change management. The deal reflects how Alder Koten and search firms in general have come to play a more influential role in their clients’ business beyond simply filling positions.
“We don’t see this as being an ‘ancillary business’ any longer and it’s also certainly not an attempt at diversification,” says Jose. “Organizations and their talent needs are complex and they get more complex with every day that passes. The key to success in recruiting is truly understanding the strategic, operational, and cultural challenges that our clients face.”
It takes time to fully grasp the intangible elements that drive an organization’s success, he says. “Consulting services and a consulting focus help us achieve a higher understanding of what our clients need and what works and what does not work for them. And it makes us more effective as search consultants. Once we are there, so to speak, it’s not about being a ‘one stop shop.’ It’s about a client telling us that they would not consider partnering with anybody else on a search because they know we ‘get them’ and they value what it takes to get to that point.”
An integral part of Alder Koten’s business is to recruit board members. But there is no single definition of an ideal board candidate, says Jose. Instead, it’s important to keep in mind the context and specific board for which one is one is recruiting. “Boards today have a lot to accomplish in a short period. The focus on their effectiveness is greater than ever before,” he says. That means everyone on a board must make a contribution and, what’s more, fit in well with the rest of the group.
“The effectiveness of a board is highly dependent on what each member can bring to the table in terms of knowledge and experience and how they collaborate with the rest of the directors and the executive team,” says Jose. “It can be very disruptive if a new director does not flow seamlessly into the dynamics of the board. The biggest shift is a stronger focus on director professionalism. It is no longer enough to have a stellar executive career.”
Despite spending five years at Heidrick & Struggles, Jose has no intentions of bringing Alder Koten into the fold of his former employer or any of the biggest firms for that matter. He’s full of praise for Heidrick and remains close with many of his former colleagues. But the business he runs today, he feels, would lose too much of what makes it successful should it ever join such a big entity.
“Our competitive edge over large firms is centered on the personal focus, flexibility, and agility that a smaller corporate footprint provides,” Jose says. “We’re not bogged down by overwhelming off-limits or regional restrictions. I’d never say never, but my feel is that our competitive edge would be lost merging into the large ecosystems of the top five firms.”
Contributed by Stephen Sawicki, Managing Editor and Scott A. Scanlon, Editor-in-Chief — Hunt Scanlon Media