Dillistone Systems
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Differentiation, not Revolution:
Four years ago, as the Internet hype was at its peak, many commentators felt that the Search industry, like the rest of the recruitment sector, would be devastated by the Internet. One speaker at a meeting of the Association of Executive Search Consultants claimed, “The technology-intensive version of doing Search is going to conquer the World”.
Some of the industry majors—Korn/Ferry and Heidrick & Struggles to name just two—have some sympathy for this viewpoint and made Internet plays which, they felt, would allow them to be at the forefront of this new world order.
Today, of course, we know that, while lower-level recruitment has certainly been hit by the likes of Monster.Com, most senior executive positions are filled in much the same way that they always have been. The revolution never happened.
In mid-2003, Dillistone Systems (the supplier of software to the international Executive Search industry and publishers of search-consult magazine) undertook a major survey to find out exactly how technology was being used within the industry. Responses from across the world revealed that, while the revolution never took place, search firms are increasingly using technology as a way of generating a competitive advantage in what remains a tough workplace.
Defining the Stakeholders
Technology can provide a competitive advantage if it can change the way in which the firm meets the needs of its stakeholders. Search has four groups of stakeholders—the Client, the Candidate, the Employee and the Shareholder. Of course, these groups are not mutually exclusive—in Search, today’s candidate is tomorrow’s client. For many firms, the employees are the shareholders. In some cases, for example with firms that took stock in clients, the relationship can be even more complicated. For the purposes of this analysis, however, the four groups may be considered separately—and this article will concentrate on the Client.
What a Client Wants
Typically, clients are looking for the best possible candidates in the shortest possible time and for the minimum possible cost. They want the candidate to be successful immediately and to remain with the firm for the long haul. Ideally, they want all of this yesterday (but they will settle for tomorrow).
While few would suggest that technology is the major reason why one search firm will be selected over another, when two firms of similar standing and similar experience come face-to-face in a shoot-out, technology can be a differentiating factor.
Primus Associates is a Texas-based Search firm which carries out retained search for the IT industry. As part of his quest to serve his clients better, President Sam Gassett—previously Head of Global HR at Dell—began experimenting with a “Cultural Analysis” tool that had previously only been used in the mergers and acquisitions industry. This product—Teamfit—enabled Sam’s team to evaluate the culture at the client company scientifically and then to compare short-listed candidates against that culture. This enabled the search firm to both identify potential problems and to advise on candidate induction. Furthermore, it led to Sam’s firm increasingly becoming involved in Management Appraisal and Organizational consulting.
Essentially, Primus Associates used technology to differentiate itself by saying to the client—‘Not only will you be buying the benefit of my experience and judgment, but you will also receive the benefit of specific, detailed and scientifically validated advice about how to ensure that your chosen candidate is as successful as possible, as quickly as possible’. It was a strategy that worked.
One area, which has been in the news over the last year, has been the quality of reference checking undertaken by search firms. search-consult has carried a number of stories about firms that have faced both bad publicity and—in some cases—legal problems, having introduced candidates on the basis of inaccurate information.
When a candidate provides a referee, it is a fairly safe bet that he or she will be confident of a positive reference. It is, therefore, important that independent references are found. Modern Executive Search database systems can track relationships between people. Perhaps the most advanced piece of ‘new’ functionality in FILEFINDER (launched in the summer of 2003 by Dillistone Systems) is a facility, which will automatically track back through a candidate’s entire employment history, identifying people who worked alongside the candidate throughout his or her career. This dramatically increases the ability of the consultant to validate the candidate’s claim that he or she was responsible for the turnaround of XYZ Corp.
The examples mentioned above depict of products that can help a search firm offer the client a better result. The next group of examples is of technologies that help the client make the hire more quickly.
Several technologies have been used to speed up the search process. Korn/Ferry, for example, was one of the first firms to use portable video conferencing units to allow a candidate to be interviewed at anytime and anywhere. Heidrick & Struggles launched an Extranet facility that was designed to speed up interaction between the candidate, the client and the search firm. This is what former CEO, Pat Pittard, told search-consult at the time of its launch.
“It’s not just time—everything is improved. You don’t lose the candidate’s interest, because you have got to the presentation faster. Consultants are more committed to searches that move along at a faster pace. They can book more assignments without reaching capacity. Everything improves: speed, quality, everything.”
The idea behind this type of Extranet was simple. Essentially, it would allow a client to visit the search firm’s website, enter a username and password and then review the type of information traditionally provided on paper—the ‘Assignment Report’. In addition, however, the client could provide feedback and guidance—which was particularly beneficial for searches with multiple decision makers in multiple time zones.
The major drawback from the search consultant’s perspective was one of control—while most consultants would argue that they have an open and transparent relationship with the client, this transparency rarely stretched as far as allowing the client to delve around in the search firm database! Therefore, most early Extranet facilities were—essentially—made up of information that had been re-keyed from the main search firm database. So much for technology improving efficiency and speed!
Today, however, the process is substantially simplified. Search firms in the US, Europe, Russia and even China are now providing this type of functionality to clients using technology such as the FILEFINDER bolt-on, FF Client Interactive Module. FFCIM allows search firms to ‘publish’ interactive assignment information on a secure website with just a few clicks. Furthermore, search firms have complete control over the information published—options include providing assignment documentation (terms and conditions, candidate profiles, position specifications and so on), target companies (or a subset), candidates (or a subset) or candidate documentation (such as the shortlist report).
Client reaction to this type of offering varies. Some, of course, are not interested. Some find the facility to be tremendously useful. The point made by a number of search practitioners offering this type of service, however, is the value of the tool as a tangible differentiator. A search firm offering a client extranet facility is able to position itself as a firm that operates transparently; one that has confidence in its information; one that has invested in technology to improve the client experience. This may not be valuable in winning business as would be a ‘big firm brand’ but, in a shoot-out scenario, when a client is selecting from 2 or 3 equally competent consultants from equally established firms, the consultant who is able to openly sit with the prospective client, view and interact with a website covering potential targets, industry news and blockages, and who can explain to the client how he or she will be able use the site on an ongoing basis is certainly in a position to differentiate on something other than price.
While search firms—particularly in the US—are increasingly adopting this type of technology, our research demonstrated that, currently, the vast number of firms consider that the only role that technology plays in winning is sending the occasional mailing item. One of our survey questions asked search professionals how technology helped in this area. Table 1 demonstrates that less than 10% of respondents have any type of technological support.
Table 1
In the next issue of search-consult, we will look at how technology is being used by firms to generate an advantage in terms of the candidate relationship, allow staff to work from beyond the confines of the office, to operate better internationally and to cut administrative costs.
Jason Starr is President of Dillistone Systems / search-consult and may be contacted at +1 201 795 1202 or via email to jason@dillistone.com. If you would like to learn more about the technologies discussed in this article, email sales@dillistone.com.
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