It’s a Talent Economy
Not long ago, I set up a meeting between a CEO with a big job to fill and a talented manager I had interviewed who seemed a perfect match. I made arrangements for the candidate to fly in for a meeting with the CEO at his office. Simple, right?
Not when the CEO refused to pay for a limo to transport him to the company’s offices. The candidate ended up taking a taxi—and getting lost. And as if that weren’t bad enough, when he finally arrived at the company’s offices, he had the pleasure of sitting and waiting, and waiting, in the reception area. A half hour past the appointed time, and with no sign of the CEO, the job candidate rose from his chair in disgust and walked out the door. And thus my client lost the one person available who was, in the opinion of his high-priced search professional, perfect for the job. Why did my client lose Mr. Right? Because like too many CEOs—and general managers of engineering, vice presidents of sales, directors of marketing, and managers of whatever with hiring responsibility—he had not committed his brain, his heart, and the future of his company to what I call the Talent Principle:
The company with the best people thrives.
What about the best product? What about marketing or sales? Strategic thinking? What about all those wizard business models coming out of the B-schools? They do not drive business. Talent does. In fact, there is no such thing as “sales” or “marketing” or even “product” without people. If, for example, you have a marketing problem in your company, then my advice would be to hire a more talented person to run the marketing department. The real art of building a successful company is to bring together so much talent that no one would want to work anyplace else, and that those who do will want to be part of your winning team. I would even go so far as to argue that you can build a major career in business simply by surrounding yourself with the best people you can find. Talent will draw more talent. It is the kind of virtuous circle you want in your career and your company at every level, from CEO right down the pyramid. If you are at the beginning of your career, attach yourself to the best people in your company; find mentors. If you’re already in a position of power, recruit the best people you can possibly find and keep them at your side. If you hire talented lieutenants, they’ll tell you what to do. All you have to do is listen. It’s that simple.
Finding all those talented people is a bit more difficult. So is interviewing for talent and persuading the best people that their future is with you. The most difficult challenge of all can be to keep the great talent you have from accepting another job offer. How do you get the best people and keep them? How do you create a career so that you will be identified as “talent”?
You have to learn to think like a headhunter.
That is the goal of this book. If I can help some of the most successful companies in the world find the smartest, most creative, and hardest-working talent available, then I think I can help you, too. In 1980, I founded Christian & Timbers, the first search firm specializing in information technology. Our work has affected thousands of companies, ranging from such Fortune 50 legends as IBM, Microsoft, and Apple Computer to such Internet and e-commerce pioneers as Lycos, Netscape, Cisco, Amazon, and Yahoo. When Hewlett-Packard’s chairman, president, and CEO, Lew Platt, decided in 1999 to replace himself, HP chose us to do the search. I brought them one of Lucent’s rising stars, Carly Fiorina, who as HP’s new president and CEO has injected new life into one of America’s great companies. Today, Christian & Timbers is one of the top ten search firms in the nation, with thirty partners and fourteen offices in the United States, Canada, and Europe. It has been a great ride, fueled partly, of course, by one of the most impressive economic booms in U.S. history. But my company—and my competitors in the executive search industry—have also benefited from what I believe is one of the most profound constants in the marketplace:
There is always a talent shortage.
At no time in history has this been truer than today, when every top company in the world finds itself competing for talent. Forget the hype about the “New Economy,” the “Internet Economy,” and the “New New Economy.” You cannot even be distracted by an economy in recession. We are operating in a Talent Economy, where only companies who hire the best people will thrive.
THE WORLD WAR FOR TALENT
In the 1960s only 9 percent of new chief executives came from outside the company; today upwards of 40 percent of new CEOs are recruited from elsewhere. Meanwhile, the pool of executives qualified for top management positions has actually been drying up. In 1999, Fortune reported that Silicon Valley “has been short of talent for a decade or more, but there’s evidence the problem is getting more desperate and far-reaching than ever.” The magazine pointed to five hundred vacant high-tech CEO positions in the Valley alone and cited a study that concluded that so many empty top jobs cost companies in the area upwards of $4 billion annually in lost opportunities and productivity. Even after the Internet bubble burst on Wall Street in April 2000 and the NASDAQ lost 65 percent of its value, the talent crunch persisted. High-flying companies had suddenly crashed to earth. Those that were still alive needed intensive care. But the kind of leader who can revive sick companies is rare in the best of times. Suddenly, “turnaround CEOs” were in high demand. Early-stage companies that had been looking for CEOs now wanted COOs with proven skills in running a business day-to-day whom they could groom for the CEO spot. Top companies surveyed the wreckage of the dot-coms and snapped up the best managers, many of whom found themselves hotly pursued by more traditional firms desperate for Internet expertise as well as what wisdom they might have picked up watching their start-ups or early-stage companies imploding. New companies reacquainting themselves with the old saying in business that “Nothing happens until something is sold” were searching for vice presidents of sales. Every company seemed eager to cut costs and wanted an experienced chief financial officer to do it. Particularly hot were CFOs with international experience. Technology is now a glo- bal business, and U.S. companies with the financial talent to manage money worldwide will have an edge on their competition. In interviews with one hundred senior managers of Fortune 500 and venture-backed companies about their future hiring needs, Christian & Timbers also found out that with Europeans discovering the joys of instant messaging and Americans trying to download the entire Internet into the palm of their hand, the need for management talent in the wireless space had not abated. Fiber optics companies still racing to create the perfect fiber optics switch were scouting for talented engineers—and would be for the next decade, the best guess for when the new networks would be in place. Software programmers are still in demand, and there remains a shortage of good computer engineers.
Nor has the talent crunch been limited only to technology. By mid-2000, the requests for top executives in the biotechnology sector were already up 300 percent over the previous year, according to search-industry surveys; analysts were predicting the biotech business to grow annually by 20 percent over the next decade. Healthcare is wide-open for talent. Hospitals report one of the highest rates of job growth in the nation. According to the Bureau of Labor Statistics, nurses, health technicians, and researchers are among the top five professions with the largest job growth and persistent need—right up there with the high demand for computer scientists. The aging of the Baby Boomers is likely to keep the employment opportunities in the healthcare and life sciences professions recession-proof. The number of law graduates has not budged in recent years, which has put smart, young lawyers at a premium. (Our hiring study in the first quarter of 2001 revealed a major shortage of bankruptcy attorneys—not surprising considering that the economy was on the verge of recession.) Financial services companies are also competing for young talent. Even major consulting companies such as McKinsey, Bain, and Booz-Allen, which used to have their pick of the best graduates of the best business schools, have had to sweeten compensation for young associates, as well as for partners who find themselves tempted to fill some of those CEO vacancies around the country.
Today’s top executives must be more qualified than ever before. Leaders in the biotech industry, for example, have traditionally had scientific backgrounds, M.D.s, and Ph.D.s. But to make it at the top of biotech in the future will require an understanding of the technology driving scientific development, along with regulatory policy, not to mention the ability to convince venture-capital firms and other investors that you have the skills to take a start-up or early-stage company to $500 million in a flash. Executives with all these skills are rare. Even the utility sector is scrambling for talent. Deprived of their captive markets by deregulation, utilities have been forced to consolidate and restructure. Suddenly, they have to become real businesses and compete for customers, which requires the kind of marketing talent that utility executives never needed. Sixty-five percent of recent hires came from outside the utilities industry—the same people every other industry in America is after.From the Hardcover edition.
Excerpted from The Headhunter's Edge by Jeffrey E. Christian. Copyright © 2002 by Jeffrey E. Christian. Excerpted by permission of Random House, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.