As the leading independent CFO search consultant, I’m interviewed about my search process and approach to search by prospective clients many times a year. But frequently I’m not asked some of the questions that I know to be the most critical, based on my 20+ years of experience in the search field. Given the key role of the search consultant in the hiring process, and the importance of making the right management hire to the bottom line, you wouldn’t think this was the case. I chalk it up to the idea that most executives only engage search consultants for exceptional hires so they do not have a lot of experience in this area. So, as a public service to any company contemplating hiring a search firm to assist on ANY executive level assignment, here are some key questions to ask.
What is your percentage completion rate for searches you (not the firm) undertake?
The answer can be hard to verify, but it’s critical to understand the completion and stick rate of the search consultant you’re considering hiring. Publicly-available industry estimates indicate that only 70% of searches are completed. It would be outrageous to pay 100% of the fee to a certain search firm if there’s a 30% chance that you don’t get a great hire, right?!
Look for search consultants that are in the 90%+ range for completions. Our completion rate at Arnold Partners is 98%. The way to verify this is through the tone and sincerity of the consultant’s answer and by doing in-depth reference checks. The corollary to completion rate is stick rate: how do the placed candidates perform once in the seat, for how long, and how much value did they create? This can be verified by checking older references. I am FREQUENTLY asked how many searches I’ve done in the last six months. This is not nearly as important as: “Tell me about a placement you made two years ago, and what is happening with that placement?” Or “Tell me about a difficult search you completed, and what made it difficult?”
Who will be representing me and my company to the marketplace?
In most search firms, even boutique firms, the role of “sourcing candidates” is usually performed by the most junior people on staff. Partners, even in boutique firms, are incentivized by bringing new business into the firm. This means the person you meet when interviewing a prospective search firm is probably not the person that would represent you (initially) to potential candidates. The “sourcing” person may not really understand the nuances of you, your culture and/or the unique elements of the role. That situation is kind of like the game of telephone: you tell the partner/search consultant all the subtleties of your needs… they return to their office and have someone else write a specification… then yet another more junior associate reaches out to prospects. This is part of the reason for the 70% industry completion rate. In the case of Arnold Partners, while we use very sophisticated, data-driven research, ONLY Dave Arnold contacts prospects to ascertain interest and then qualifications — more on this in question 5.
Are you willing to “shoot for the moon” for me?
What I mean by this question is that every company has a level of executive they can realistically attract to their C-suite based on various factors unique to that company. Is your search consultant willing to push that threshold, to try to attract a pro-level player to a Triple-A club? There’s no harm in shopping at a level above your current team but this actually causes fear in most search consultants, because if the bar is set too high in terms of client expectations, the role may never be filled, and mutual frustration can result.
My approach is to shoot for the moon out of the gate, and have a realistic agreement with my client that if we don’t land that moon-shot after an agreed-to amount of time, we agree to re-aim our expectations. This can make for more work, but why try to land the executive you dream about?
What is the specific expertise of the search consultant handling my search?
There are two ways to go: the consultant is an expert in your industry, or they’re an expert in the function of the role to be hired. Obviously in my case, I’m a CFO expert and industry agnostic. Part of the reason for that is my belief that CFOs are industry agnostic because their skills and abilities cross over industry lines. That is not typically the case in other C-suite functions such as marketing or engineering. It’s OK to go one way or the other, but don’t hire a generalist. Your search consultant needs to answer to your liking to the question, “Tell me about your expertise in…”
What is the specific approach you will use to attract candidates to consider our opportunity?
It’s my opinion, based on many years of studying recruitment practices and training other recruiters, this is a good question because it will separate the wheat from the chaff. If the search consultant answers the question by saying they will sell your opportunity to candidates by telling them about you, and expounding on what a great opportunity it is, they have the cart before the horse. In my experience, a skillful search consultant will get the candidate to talk about themselves, their accomplishments, and aspirations BEFORE launching into a pitch for your company’s opportunity. Gaining this insight about the candidate is key to successful recruiting. By listening closely to the candidate’s words, a seasoned search consultant can determine whether it makes sense to go the next step. And if your search consultant regurgitates the spec as an opening salvo, take note, you may have the wrong search partner.
There are several other key considerations such as: current work load of the partner you’re considering hiring, fee structure, guarantee terms, conflicts of interest or “hands off” target companies, geographical reach, follow-up post placement, etc. But in my opinion, the five questions above will bring about the most important discovery, leading to the right partner for a successful search