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Explore the executive search and leadership consulting profession’s evolution and the shifting demands of clients
AESC President and CEO Karen Greenbaum heard a comment she’ll never forget. It came from an audience member during a panel discussion last year at the AESC Client Conference in Mumbai, India. “He raised his hand and said, ‘this business hasn’t changed in twenty years.’” The speaker said, “If I compared a proposal today with one that was written 20 years ago, they would be identical. This business hasn’t changed in any way, shape or form.” Greenbaum thought to herself, “that’s not true… is it?”
Greenbaum decided to explore the evolution of executive search, from its postwar beginnings to the present day. What she found is a vibrant, competitive, and deeply relevant profession not simply keeping pace with the global market for talent, but delivering sophisticated advisory work, elevating leadership worldwide.
Some History
Executive search has always been part of an advisory relationship, but when did the service evolve into a profession? In the mid-1940s, businesses in the US and Europe began to adapt to postwar prosperity. This led to the rise of competition for experienced executives, and a willingness to look for those leaders beyond the company walls and across international borders. That growing demand was the catalyst for the emerging executive search profession. Originally a function of management consulting, executive search became a thriving profession for consultants and a competitive advantage for clients. By the 1960s and 70s the need for experienced executives outpaced companies’ ability to fill those positions internally, and a more open market for talent expanded the demand for executive search. Today, executive search is a $12 billion industry.
In the last 20 years, global markets have undergone massive shifts, and what were emerging markets are now poised to exert a powerful influence on the world economy. How we communicate has amplified millions of voices, sparked social change, and connected continents. Technology continues to reinvent how people live, work and conduct business. Executive search has changed, too.
The Evolution of Search
In response to that speaker in Mumbai, Greenbaum suggests that the structure of a search may not have changed that much: take the assignment, determine the ideal candidate profile, conduct the search, complete the assessment and reference checking, negotiate to yes, and complete onboarding. She says, “If you’re just looking at that highest level, you might say nothing’s changed. But I think you have to go a level deeper.”
First, AESC research shows that client expectations have changed. The single most important criteria for selecting an executive search firm today is expertise across industry, function and market. Twenty years ago, one could have been a generalist. Greenbaum explains, “You would still come to the table with knowledge and experience, but what you were selling was your ability to do search.” Today, clients expect a “management consultant” who understands their industry and their function, and can bring that expertise to the table. Those who are generalists today bring that deep expertise, regardless of how they are organized.
Another change in client expectations is the demand for speed. AESC Members are seeing continuous and increased pressure to do everything faster. Greenbaum considers the reasons for the increased demand. “First, we are helping them fill their most important positions and they don’t want to wait six months to find the right CFO or CEO. The other reality is that technology has created an ability to move more quickly. The client has responded in kind and said, ‘I know you can go faster.’”
Another significant change in client expectations over the last 20 years is diversity. According to AESC research, the number one issue clients around the world identify is a lack of diversity among their leaders. Greenbaum says, “Diversity is certainly about gender, but it is also about race and ethnicity. And, it’s about diversity of skills, expertise and even age.” Creating a diverse team creates diversity of thought, which drives innovation and enhances a firm’s ability to connect with customers and employees.”
In addition to meeting new expectations, the profession has evolved in the scope of services as well as how those services are delivered.
The Assignment
A search assignment is no longer as simple as finding a person who has held a certain role in a certain industry for 20 years. Search has become a very complex service that requires a comprehensive understanding of the client, including the organization’s market and regulatory environment. The assignment also requires a deep dive into client culture, structure, and strategy, to ensure that the search results in a diverse slate of candidates with the highest potential to succeed.
The Search
Search itself is different, evolving from the old world rolodex to an entire suite of tools. Greenbaum explains, “Now, the search firm you hire has great networks and knowledge, but also proprietary databases. They conduct Boolean searches and x-ray searches, and they leverage social media. They look at industry news and thought leadership.” Search also requires leveraging tools and insights to fill high-demand roles that didn’t exist 20 years ago, and anticipate the skills necessary to fill roles that are likely to transform at an unprecedented pace. Greenbaum adds, “What hasn’t changed is the all-important human connection. That’s what makes this all work.”