THE HEADHUNTING BUSINESS

THE HEADHUNTING BUSINESS

Also by Stephanie Iones BUSINESS DOCUMENTS: Their Origins, Sources and Uses in Historical Research (with lohn Armstrong) TRADE AND SHIPPING: Lord Inchcape, 1852-1932 *TWO CENTURIES OF OVERSEAS TRADING: The Origins and Growth of the Inchcape Group *Also published by Palgrave Macmillan

The Headhunting Business Stephanie Jones Foreword by Sir Peter Parker

Stephanie Jones 1989 Foreword Sir Peter Parker 1989 Softcover reprint ofthe hardcover 1st edition 1989 978-0-333-51941-7 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright Act 1956 (as amended), or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WCIE 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and dvil claims for damages. First published 1989 Published by THE MACMILLAN PRESS LID Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world Typeset by Footnote Graphics, Warminster, Wilts British Library Cataloguing in Publication Data Jones, Stephanie, 1957- The headhunting business. 1. Great Britain. Companies. Executives. Recruitment. Role of executive search firms I. Title 658.4'07111'0941 ISBN 978-1-349-11373-6 ISBN 978-1-349-11371-2 (ebook) DOI 10.1007/978-1-349-11371-2

To D.W., T.C.

Contents List 01 Plates Foreword by Sir Peter Parker Prelaee Aeknowledgements List 01 Companies Participating in Chapter 3 viii ix x xii xiii Introduction: The Economics of Search 1 1 The Emergence and Growth of the Headhunting Business 6 2 The Nature of Headhunting in Britain in the 1980s 50 3 Client and Candidate Experiences of Headhunting: A Survey 71 4 The Headhunting Process 96 5 Three Headhunting Case Studies 158 6 The Global Scene 172 7 Headhunting in the Future 187 Conclusion: The Headhunting Business 194 Se/eet Direetory: Leading Exeeutive Seareh Firms in Britain 197 Appendix: Hints on How to be Headhunted 249 Glossary 255 Bibliography 269 Index 275 vii

List of Plates 1a Gerry Roche, 'King of Manhattan Headhunters', now Chairman, Heidrick and Struggles. 1b Dr John Viney, Managing Partner of Heidrick and Struggles since 1985. 2 Nigel Dyckhoff (Zeft), Senior Director of Spencer Stuart worldwide; David KimbeU, Chairman of Spencer Stuart worldwide and UK Managing Director; and Kit Power, Chairman of Spencer Stuart in the UK. 3a John Grumbar, Managing Partner, Egon Zehnder, London. 3b Julia Budd, previously with Bain, who joined Egon Zehnder in 1987. 4 Stephen Rowlinson, London Managing Director of Korn/Ferry. 5 Roddy Gow, Managing Director of RusseU Reynolds in London. 6 Bert Young, Chairman of Alexander Hughes. 7 Hamish Kidd of Clive and Stokes (Zeft) with original founders Clive (centre) and Stokes. 8a Michael Silverman, who founded Merton Associates. 8b John Stork, who set up his own search firm in London. 9 Nigel Humphreys of Tyzack. 10 David Norman, who set up on his own in 1982 before founding Norman Broadbent in 1983. 11 Miles Broadbent, Chief Executive of Norman Broadbent. 12 Stephen Bampfylde (Zeft) and Anthony Saxton, founders of Saxton Bampfylde. 13 Mark Weedon of Heidrick and Struggles. 14 Ann Crichton, Nottinghamshire's Director of Economic Development with Paddy Tipping (bearded), the Chairman of the Economic Development Committee, and CUr, Stewart Pattinson, Opposition Spokesman for Economic Development. 15 J.P.P. (John) Smith of Succession Planning Associates. 16 Jonathon Baines of Baines Gwinner. viii

Foreword Headhunting is a serious, growth business wh ich - until now - has not had the serious study it deserves. The pace of the internationalisation of companies is quickening; takeovers and deals are the order of the day. The impact of the globalisation of markets means that managements are on the move, East and West. And in all the turbulence, the quality of managers is critical. The boom business of search involves at its best professional judgement based on skilled and thorough research. The prizes for the best placements may sometimes seem glittering and spectacular, but if the appointed person delivers the goods, the search company's human contribution to success and prosperity is decisive. The modern corporation knows the value of this expertise in seeking quality in the internationally competitive world. This is the first systematic and thorough exercise into executive search, from its origins in the USA to its wide-scale development all over the world. Not least, this book provides a directory of the major UK companies covering their history, size, turnover, style and specialisation. Dr Jones has the good sense to suggest how to choose and use search services. Management selection is a matter for the professionals: to go about it in any other way is as inadvisable as amateur bullfighting. That is why the headhunting business is growing, and that is why the industry and its standards need to be explicit and visible. SIR PETER PARKER ix

Preface The Headhunting Business concentrates mainly on the top end of the headhunting market; an analysis of the entire executive search - and selection - business, which now involves several hundred firms in Britain, would be unwieldy in length and inevitably inadequate and piecemeal in coverage. Here, we focus on the recruitment of executives and managers receiving salaries over f50,ooo per annum, generahy by search rather than processes of selection, advertising and outplacement. If we see the entire recruitment industry in Britain as a Christmas cake, then the headhunters we are discussing here are the icing. The cake itself, or the bulk of the business, comprises the permanent and temporary staff recruitment agencies, such as Alfred Marks, Reed Employment, BIue Arrow, Manpower, Brook Street and KeHy Girl, who have a large volume of business dealing in secretarial, technical and computing jobs. The marzipan layer between the icing and the cake - into which we occasionally dip here - includes PA and MSL and the search and selection businesses which have emerged from management consultancies, advertising agents and accountancy firms, where a mixture of advertising and search is used. Existing Iiterature on headhunting in Britain is confined principahy to three sourees. John Byrne's very detailed and readable account of the American search business, The Headhunters, includes seven pages describing the impact of the Big Bang on high-level recruitment in Britain. Robert McKinnon's book of the same name, about headhunters in Britain (also the work of a newspaper man), emanates almost entirely from the industry itself without detailed analysis; it ranges widely over ah aspects of recruitment and, written at the end of 1981, now seems dated. FinaHy, there is The Executive Grapevine, an annually updated directory of firms and consultants names, addresses and basic details. In contrast, The Headhunting Business seeks to provide an in-depth, critical and perceptive insight into the origins, progress and performance of the top-level search industry in Britain, based on research into the experiences of candidates and the users of search, as weh as the industry' s practitioners themselves. It systematically dissects exactly how headhunting works in practice, based on a range of case studies, practical fieldword and extensive interviewing. It considers the workings of the business internationahy, arguing that a search firm cannot offer a fuhy effective and comprehensive service without aglobai network. It attempts various projections of the directions in which executive search is likely to move in the future. This book also offers a x

Preface xi rough and ready Which? -type guide to the principal headhunting firrns, providing as much detail as private partnership firms are prepared to divulge, and incorporating a comparative appraisal of their ranking in the market, areas of specialism and style of approach. As such, this book has been written for all those coming into contact with search, both employer and employed; often they are one and the same, as a headhunted candidate may become in due course a headhunter's dient. More generally, it is aimed at the observer of the British business scene, who looks both backwards over the last generation and forwards into the future. STEPHANIE JONES

Acknowledgements I was first asked to write a book about headhunting in Britain back in December 1986, based on an article I had written for Management Accounting; at the time, this was the only article I had written on the subject and was, in fact, my first-ever foray into serious journalism. During 1987 and 1988, my researches and fieldwork into headhunting were often put on the back-burner whilst I finished another - completely different - book and taught modern economic his tory at the London School of Economics and the School of Oriental and African Studies. My interest in headhunting was sustained by the series of very impressive, charming, suave, witty, energetic, egotistical and even outrageous characters I met in the course of writing this book. There is certainly no such thing as a typical headhunter. This study would not have been possible without the interest, help and - in some cases - actual written contributions of, in particular, John Viney of Heidrick and Struggles; Miles Broadbent of Norman Broadbent; Mark Weedon, then of Egon Zehn der; David Kimbell and Nigel Dyckhoff of Spencer Stuart and Roddy Gow of Russell Reynolds. Thanks are also due to the many users of executive search within a variety of companies, who commented more or less freely about the service they had received. Two others helped enormously. Dominic Endicott, an ex-student of mine, now with the Boston Consulting Group, was a very imaginative, intelligent and enthusiastic research assistant. David M. Williams, friend and fellow economic historian, read and commented thoughtfully on the manuscript, as he has done for every literary effort I have produced over the last nine years. Both are now hoping to be headhunted! STEPHANIE JONES xii

List of Companies Participating in Chapter 3 3i BICC pie British Airways pie British & Commonwealth Holdings pie Cadbury Schweppes pie Grand Metropolitan pie Kingfisher pie (Woolworth Holdings) Midland Bank pie Midland Montagu (the international and investment banking arm of Midland Bank) Nomura International pie Phillips & Drew /UBS The Plessey Company pie Procter & Gamble Ltd J. Sainsbury pie SBCI Savory Milln Shell UK Ltd Standard Chartered Bank Tesco pie Unilever pie and eleven other companies which preferred to remain anonymous. xiü