The executive search industry is still dominated by the 'big five'firms. There hasn't been a new firm to challenge them in 20 years. However, the marketplace is changing fast as clients demand increased transparency, accountability and results. Search firms need to realise that that the business they were in five, seven years ago is not the same business as they are in now.
What clients begrudge is if they pay a lot of money, and they don't get the best service. If the search is not handled properly, then they have a legitimate gripe. If the established firms don't improve their performance, they are in danger of losing market share.
Clients expect search to be more performance-driven than purely process-driven and the style of billing will reflect that. This is now normal around the globe. As search fees continue to escalate as compensation rises, clients expect that a portion of their fees will be performance based as opposed to strictly contractually based.
The days when the executive search industry enjoyed a certain mystique are over. Either the search company knows the available talent or they don't. Either they put the best talent on each and every search, or the client gets upset.
It is remarkable how many search firms tend to hold onto the old. But today it's a different business.
Take research. The research business has morphed. The client has shifted from the search firm and can simply hire external research firms directly. There is no need for the intermediary.
I want to be paid for the value I add, which is to access and influence tomorrow's leaders, not to do what the external research firms do. They have a different skill set. They are not looking for tomorrow's leaders.
Additionally, for large clients hiring at mid-level or even slightly over mid-level positions, there is a good argument for a couple of researchers in-house. With the internet and sophisticated technology, it is a real strategy for clients. Clients should be doing search in house. Any search firm that doesn't realise this is kidding themselves.
More often than not clients don't understand the search process. I think that a search process is no different from any other management consultancy project. It has to be done in conjunction with the client. You get a much better end result with the client being part of the process as opposed to being excluded from it. The deal is that both sides have to feel that they have a fair deal. And when you have that it works.
The way we work is that everything is transparent. Working in conjunction with the client ensures that we get the best ideas out on the table.
After 40 days, a partner, who is not involved in the search calls the client and asks how the search is going. This lets them know that the company cares. In around 10 per cent of the time maybe there is an issue. We promise to call them back in another 30 days. This ensures total transparency and puts the client at ease.
You have got to adapt to the times. Not re-inventing yourself you become outdated and stale. If you don't adapt you become an out-dated business model.