By Patrick Gray, NorthWind Partners
Acquiring a new company is often a lengthy and highly detailed process for businesses looking to expand business, merge efforts and manage risk as they surge forward.
Most companies typically perform a massive amount of research, analysis and rigorous inquiry before deciding upon whether to acquire a new subsidiary. This process often spares no detail as it assesses revenue, earnings, transactions, projected future growth and corporate culture along with other crucial variables in a company.
For example, when companies are making an acquisition, they often use special criteria-specific score cards to better evaluate a firm’s suitability for purchase.
However, when it comes to human capital and decisions about which executive search firm to hire when searching for new senior leaders, firms often opt for a less rigorous process. As a result, certain key attributes can be missed or glossed over as a firm explores a range of potential candidates to be screened for new leadership positions.
In essence, companies would be well-served to apply the same rigorous effort to finding human capital that is often expended upon mergers and acquisitions.
Therefore, if we acknowledge that this approach to executive search could be critical to a company’s future success, there are a range of important areas of focus for search firms to emphasize.
A search firm will need to have cultivated expertise, familiarity and relationships in the particular sector or industry in which it is retained to operate. This expertise gives search firms the requisite ability to perform what’s called “back-channel” reference checks in order to thoroughly assess potential candidates. It can be important to learn about a candidate from people not listed as formal references, as they may provide needed insight into a candidate’s leadership style, manner, approach or philosophy.
An objective assessment tool can be a helpful way to analyze profiles and make final decisions on candidates…Some tools involve having candidates take the time to fill out detailed online questionnaires in order to better evaluate their strengths and experiences.
Furthermore, having well-established long-term relationships within the sector in which the search is being conducted can help search firm executives identify and, at times, convince potential candidates to consider positions they might not otherwise find interesting.
Another necessary element of properly conducting search evaluations is for a firm to really get to know their candidates well in order ascertain if a proposed move would make career sense for them when it comes to both professional and personal or family considerations. The idea, naturally, is to ensure the potential career move is one that has the possibility of being impactful, meaningful and successful for the long term.
Also, an objective assessment tool can be a helpful way to analyze profiles and make final decisions on candidates. For instance, firms which use organizational diagnostics are better suited to effectively assess the broad range of experiences, characteristics and variables needed in an ideal candidate. Some tools involve having candidates take the time to fill out detailed online questionnaires in order to better evaluate their strengths and experiences.
Multi-lens diagnostics such as a mechanism referred to as a “growth curve X-ray” allow search firms to explore key details of a candidate’s leadership style, past performance and reaction to changes within a business environment. The X-ray is designed to identify stages of organizational growth and proven success factors.
As part of a rigorous assessment process, search firms would also be well-served to understand a candidate’s motivations and inclination to collaborate as these attributes can be worthwhile indicators of potential future success. These factors can assists in determining whether a particular candidate is the right fit for an organization.
Other tools using metrics to better explore candidates include the potential use of a candidate score card in order to better determine exactly what experiences a candidate has relevant to the job description. If a firm is searching for a new Chief Financial Officer, for example, having experience with earnings announcements and SEC reporting could be key ingredients.
Finally, picking a search firm that can effectively learn and articulate your company’s vision serves as an important component in representing an organizations interests in the marketplace. The right search firm can effectively espouse a company vision to prospective candidates and tell a firm’s story the way they would like it told. This is often just as important as screening candidates as it can help attract the right person for your firm’s senior leadership role.
Ultimately, a senior leader’s performance in a given firm can have as much of an impact as acquiring a new company can on a firm’s profits and successful direction. As a result, it would seem essential that a search for human capital command the utmost care, consideration and studied effort as mergers and acquisitions require.