Archives for December 2019

If you are in parts of the world where we are now sending out greetings and snowy holiday wishes, don’t forget your executive search consultant.  She, or he, is your new BFF.

Executive recruiting continues to grow in importance and value, according to the Association of Executive Search and Leadership Consultants (AESC), which now has 16,000+ professional members in 70 countries.  It continues to grow, and continues to evolve.

Finding and engaging the best in business leaders has become complicated and harder than ever.  Digital transformation, innovation, agility, cultural change and diversity are the leading issues influencing the process today. These issues are so important that they are driving a new relationship between the company and the recruiter.

The old model favored process — a firm offering the retained search model is better suited to executive search than a contingency search firm.  You can read about the difference here.

Today’s “best practice” goes one step further.  Forget the one-position-at-a-time phone call. You need your recruiter as a partner in delivering your business strategy year-round.

A capable retained search firm (such as, ahem, Cornerstone) will have a big percentage of its book with returning clients.  That’s because retained search requires the service provider to thoroughly understand not just the company’s immediate need but the culture and environment in which that need exists.

That is a lengthy and complex task during which a lot of trust is built up.  A successful outcome breeds a natural inclination to return the next time.

But the move to recruiting partnerships in 2020 is a big step further.  It has become attractive for these reasons for these reasons:

• Having, and keeping, the best leadership talent managing the business has emerged as the single most important element of business strategy
• Formalizing an expert relationship with shared goals removes an uncertainty from the team building. No time wasted how to get this done.
• The skills and knowledge of the search firm contribute value in new ways: consultation on the make-up of the team leadership; where are we going? How do we get there?
• Key issues such as diversity and generational culture become baked in to business strategy and automatically included.
• Knowledge of new industry sectors of interest becomes readily available and customizable as needed
• Together you can fine-tune the employer value proposition, seen by many as the greatest challenge in building top teams.

Just as new positions such as the CTO have become strategic essentials, so will the recruiting partnership become a must-have in developing the next generation of business leaders.

One of the challenges of AI in recruiting is the fundamental fact that there’s no-one to talk to. So far, that has been considered a plus: the rush to AI tends to assume that people just get in the way and take too long to do things.

But the further we go down this road, the more we find that, as always, assumptions are misleading and sometimes dangerous.

Lydia Goutas, partner at Cornerstone Vienna and Leader of our specialization team in Financial Services & Fintech got into this at the team meeting last week.

“We were discussing an interesting article from CNN Business and Adobe Analytics,” explains Goutas. “It states that 3,000 physical bank branches in the US have closed since 2010 in the face of digitalization and mobile banking.

“You would think this could be traced to new habits of young consumers, but guess what?  The consumer group that visits a physical branch most often is GenZ, the youngest.  Almost three quarters of GenZ consumers visit a physical branch at least monthly.”

GenZ are the youngest cohort, born between 1995 and 2015.

According to Goutas, the European banks most advanced in digitalization are finding the same trend. There are many uncertainties in this time of transition and it appears likely that the certainty of talking to another human is re-assuring – especially in a very personal area such as your finances.

The same seems to hold true in executive recruiting – another highly emotional area. At a moment of this importance in your life, do you really want to talk to a robot?

AI has made a huge impact at the lower levels of the search business, those of identification and triage, but at leadership levels, the candidate is as curious about the company as the company is about her.

Recent studies show high-performing candidates want more face-to-face contact and more interaction with their consultant in the recruiting field. It is a reminder, says Goutas, that there is a vast gray area which will not be covered in AI because the human element is vast and subjective.

It is also, if we go back to the banking experience, a lesson in the dangers of making behavioral assumptions on the basis of age. Despite being the most digitally savvy, the youngest consumers – GenZ and Millenials – are overwhelmingly those who say physical branches are an important part of the banking experience.

“If this comes as a surprise to you,” says Lydia Goutas, “it shows a lack of customer understanding.  Assumptions are always dangerous.”

Companies are throwing away money by not actively supporting and promoting women to their executive ranks and supervisory boards.

That’s a major finding of a new report on women in leadership just released by Cornerstone International Group. Expertly assembled by FTM-International, our member office in Berlin, “Women in Leadership” examines the sluggish gender parity drive and finds that the remedies are simple, manageable and overlooked

The report sets the stage in 2014 when a notable study in 91 countries first estimated that companies with 30% female management were 15% more profitable. Reviewing subsequent data, the Cornerstone report identifies flawed internal processes for not seeing more women in leadership and supervisory ranks.

“Women are disadvantaged in the workplace because of child-rearing and home building, among other things,” says Ronald May, CEO of Cornerstone Berlin. “But there are relatively simple process solutions which most companies are not seeing.”

According to the survey, the assumption that women leaders will at some point spend time away from work contributes to the “broken rung” in promotion processes – a flaw singled out here recently by writer Anne Glenn.  Although men and women begin the advancement process relatively even, the first step up the ladder overwhelmingly favours men over women by 100 to 72. Women never catch up.

The report follows this anomaly in specific industries and regions and appears to discount cultural and economic influence. Half of the 10 countries with the fewest women leaders are highly developed, such as Canada and Germany. Intra-regional variation is equally unpredictable —  China (13.5%) and Japan (2%).

In a section entitled Necessary Improvements, the report singles out gender-neutral parental leave and mentorship as addressable measures more likely to bring about change.  Mentorship is prized by the millennial generation, but only 60% of fast-tracked women benefit from it.

To read the full report prepared by Cornerstone Berlin, download a PDF copy “Women in Leadership” here.