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The hiring organization's perspective.

This article is the second part in a two-part series on how to work with an executive search firm. The first article, which appeared in the September-October 1992 issue of Physician Executive, focused on executive search from the candidate's perspective. This article focuses on how organizations can work with an executive search firm to recruit and retain top management talent.

While some organizations choose to promote executives from within, or conduct do-it-yourself searches by tapping industry colleagues, others lack the time, inclination, or knowledge to seek out top health care management talent. If you decide to retain an executive search firm to conduct a search, what can you expect?

Organizational assessment

At the start of the search, the consultant meets with the client to discuss the assignment.

* What is the organization's mission, vision, and values?

* What is its current position in the marketplace?

* What are its key strengths, weaknesses, opportunities, and threats?

* What are the key features or tenets of its strategic plan?

* What kind of person will best fit the organization?

* Why is the organization looking to outside candidates to fill this position?

* What does the organization expect from the newly hired executive?

* What background, experience, and style is expected of the new executive?

* How will the new executive relate to individuals and groups internally and externally?

* What are the assets and liabilities of other members of the senior management team and of department managers?

In most cases, the search consultant will derive this information through face-to-face interviews with key players within the organization. In this way, the consultant can experience the organization firsthand and develop a realistic sense of its interpersonal climate. This information can then be shared with prospective candidates, who typically ask as many questions about corporate culture as they do about compensation and the duties of the position. By talking with key people, the search consultant also begins to understand the skills, style, and values needed in the newly hired executive.

Strategy development

Following these initial meetings, the search consultant meets with the client and shares the written candidate profile, a document that typically provides a profile of the prospective candidate and outlines the institution and its position in the marketplace, the organization's expectations of the candidate, and other issues related to conducting a successful search. In addition, the consultant discusses the unique challenges of the search. For example, does the organization require someone with CEO experience? With the client's input, the consultant develops a search strategy that includes targeting key organizations, sources, and prospective candidates.

Database review

Executive search firms often have resumes from thousands of qualified executives in manual files or in computerized databases. In most cases, the consultant will contact known executives and ask them to serve as sources of information or as potential candidates. Following an initial conversation, the consultant will forward a written position specification that outlines the position's responsibilities and qualifications.

Candidate contact and evaluation

After the consultant completes the process of sourcing and research, he or she begins to identify specific candidates to evaluate their capabilities, strengths, and backgrounds. If telephone communication indicates that there might be a match between client and candidate, the search consultant arranges for a face-to-face meeting. At this meeting, the consultant verifies the data on the candidate's resume, explores the candidate's background in depth, and determines the chemistry between client and candidate. In addition, the consultant makes a preliminary reference check.

Client presentation

After the consultant identifies several appropriate candidates, he or she presents them to the client for a "paper review." In this step, the consultant shares written documentation on each candidate, along with personal insights on how a candidate might fit within the organization. After this discussion, the client identifies a smaller number of candidates for face-to-face interviews. In this phase, the consultant works closely with the client to prepare necessary information and background, to conduct ongoing reference checks on candidates, and to facilitate first and second interviews and spouse visits, if appropriate.

Especially critical is the delicate process of reference checking. If a candidate's current employer learns that departure is imminent, he or she might be asked to resign. For this reason, the client organization sometimes extends a written offer to the candidate subject only to final verification of references. The candidate can either accept the arrangement or withdraw from consideration.

Negotiations

In many cases, the search consultant helps the client develop and negotiate a compensation package. Because a search firm works with numerous organizations and places executives in a variety of positions, it has an accurate sense of compensation, benefits, and perks within the industry. Typically, the client makes the final offer to the candidate, but in situations where the candidate has reservations or finds the final offer unacceptable, the consultant assumes the role of mediator and tries to negotiate differences. In this way, both parties can participate in discussions and overcome their differences without losing face and watching negotiations break down. Finally, the search consultant stays in touch with the client and the placed candidate for a period of at least one year to ensure that the management transition is comfortable and long-lasting.

How to Evaluate and Select a Search Firm

Although many reputable firms are members of the Association of Executive Search Consultants, the best way to evaluate a firm's ability to meet your organization's needs is to ask questions (see box on page 37).

Experience

One of the best ways to evaluate a search firm is to talk to executives who have used the firm in the past. In many cases, the search firm will be happy to provide you with references from specific types of organizations. You should feel comfortable about telephoning these references and asking probing questions, including how well the consultant executed the search and the organization's level of satisfaction with the placement. If the search consultant has completed multiple assignments for a single client, you can feel confident that the client is satisfied with the results.

There are definite advantages to working with a firm that understands your organization's problems, personalities, traditions, and business opportunities. For example, if a search consultant has placed a chief executive officer or hospital administrator with an organization, he or she can provide subsequent candidates with a more complete profile of the senior executive's management style. Moreover, the consultant who conducts the second, third, or fourth search with an organization is usually better equipped to evaluate the elusive variable of chemistry or organizational fit. Even in situations where the consultant may not have worked with an organization for three to five years, he or she can usually build on previous knowledge and develop a quicker and more refined analysis of the organization's needs.

Management

Many executives are surprised to discover that the senior consultant who made an initial presentation to their organization and "pitched" the business isn't the person assigned to conduct the search. For this reason, you should ask if the dynamic and articulate individual who presents the firm's credentials will have a role in the search, and to what extent that person will share search responsibilities with more junior staff members.

Keep in mind that search consultants represent your organization's interests. They need to participate in initial assessments and in all meetings with candidates and sources. If they work on a piecemeal basis or receive their marching orders second hand from a senior consultant, the overall quality of the search may suffer.

When you retain a search firm, you have a right to know who will execute the search. If two consultants are involved, you should feel confident that both parties can adequately represent your organization's interests. If a junior staff member or trainee is assigned to the search, you should know that limitations have been placed on that individual's contacts with sources and candidates.

Process

As a client, you should have a good sense of how the consultant will execute the search process.

* How will the consultant advise you of progress in the search process? Will written reports be made biweekly or monthly? Will communication be by telephone or face-to-face?

* Given the position's specifications, how long will this search take? What are the best- and worst-case scenarios?

* Where and how will you need to be involved in the search process? How much time should you be prepared to commit?

In general, you should clarify your expectations and ask the consultant how he or she plans to meet those expectations.

Workload

To determine if the consultant has adequate time to conduct the search, you need to know the consultant's work load. Many consultants are so overburdened that they have a tough time accepting telephone calls. On the other hand, few searches require the full-time commitment of a search consultant. Be wary of search consultants who claim they will devote 100 percent of their time to conducting your search.

How to Work with a Search Consultant

Working with a search consultant demands ongoing feedback and sharing of information. If you hold back information, refuse to answer difficult questions, or ignore the consultant's advice, the search may become burdensome, time-consuming, and even more costly than you had anticipated.

Share information

Be prepared to confide in the search consultant and relay the organization's previous search problems or obstacles. If you fail to confide completely in the consultant or provide only partial information, the consultant will be unable to provide an accurate picture of the opportunity to sources and candidates. Candidates may discover the truth in the final stages of the negotiation process and begin to question the credibility and ethics of the consultant and the hiring executive. If not, an executives accepts the new position and relocates only to discover hundreds of skeletons rattling in the organization's closet.

Be realistic and reasonable in setting candidate expectations

One of the most important roles of a search consultant is to advise clients if their expectations are reasonable and attainable, given current market conditions.

* Education. Does the executive need a PhD or MBA, or could the position be filled by someone with an MHA or MPH? In at least some cases, it may be more important to look at what the candidate has accomplished at positions held within the past 10 years rather than what was achieved in two years of graduate school.

* Experience. To what extent are you willing to look at a different set of credentials? Some organizations have had success hiring senior officers in human resources, marketing, information systems, and finance from related service industries, such as banking or hospitality, or from consumer products companies.

* Personality. To what extent are you bent on hiring an executive who reflects your own image and style? The reality is that many people who differ from you in personality, family background, birthplace, and style are eminently qualified to solve your business problems. On the other hand, it's critical to develop a fit between the candidate and the organization's corporate culture and style.

Understand the payment process

Before you retain a search firm, you should have a clear understanding of how you will be billed for services. For example, will you be billed 30 to 35 percent of the first year's compensation plus out-of pocket expenses, as is the case with many search firms? Other search firms charge a fixed percentage of the first year's compensation plus an hourly fee, while still others quote a fixed dollar amount in the form of a per diem or hourly. You'll also want to determine what expenses you, as a client, will be billed, including the search consultant's air travel, hotel and meals, long-distance phone calls, and printing costs. Some firms require that you pay a retainer before they commence work, while others complete some preliminary assessments before sending the first invoice. Some firms also provide discounts for conducting multiple assignments with a single client.

The most effective searches are those where the client and search consultant have developed high levels of trust and confidence. The more you and the search consultant can function as partners and equal members of the search team, the more satisfied you'll be with the outcome of the search.
COPYRIGHT 1992 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Career Management; includes related article on selecting a search firm; Working with an Executive Search Firm, part 2
Author:Doody, Michael
Publication:Physician Executive
Date:Nov 1, 1992
Words:2018
Previous Article:An insider's view of the Canadian system.
Next Article:Solving physician-hospital administration conflicts: a physician strategy for the 90s.
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