The Benefit of Boutique Firms

IRC 2013IRC Annual Conference 2013 – San Francisco

Simply put, boutique firms offer a competitive advantage to their client companies.  Starting with the breadth of companies from which they can recruit from (based on conflict of interest issues at larger firms) and ending with not having to placate stock holders if they are a public company.  It is my belief that client companies want to make sure that their interests are paramount and not have to worry about search firms trying to serve their own shareholders’ needs to the detriment of the client

I’m delighted to join the Top Gun Ventures team,” said Brian Adamik. “What makes this opportunity most exciting is our ability to capitalize on the fact that the current executive search model is broken. Most of the large search firms today are faced with significant client “off-limits” issues, internal battles over account control, and an over-reliance on their databases of names that deliver the same candidates over and over again. Furthermore, given the number of searches that each consultant handles, large search firms today are simply not able to provide the level of client intimacy necessary to understand customer needs, nor the culture of the organizations they serve. The end result of this is that it takes far too long to fill the role and the placement is not always successful.”

“The Top Gun Ventures model is different,” said Adamik. “We conduct fewer searches at any specific time and we make it our business to understand our client, their culture, and the goals of the position we are recruiting for. We focus on conducting original research on every search we carry out which yields candidates who are top performing executives not actively looking for their next leadership position. Further, we have virtually no off-limits issues; our partners manage all aspects of the search including research, prospect calling, and candidate development; and our precision recruiting techniques allow us to attract the right executive the first time. In fact, we provide a 100% guarantee that our recruited candidate will achieve the strategic goals for which they were hired.”

The executive search industry can be divided into two camps.  On one extreme are a handful of mega-firms, some of them publicly-held, with big brand names and revenues in excess of $500M per year.  These large firms typically cater to Fortune 500 clientele. You may think it sounds prestigious to say “we’re using a big name firm”, but unless you’re a Fortune 500 company, your search can get very expensive, lost in the shuffle, and they will ultimately recruit from you after their hands-off time has expired.

On the other are a multitude of boutiques, most of which specialize by industry and/or function. We believe strongly that most client companies get better results by partnering with the right boutique.  Here’s why:

Is What You See, What You Get?

When you engage a boutique, you are dealing directly with the person who will work on your project.  In contrast, at big search firms, the search may be directed by a “Partner” but in fact a significant amount of the work is done by less tenured associates…people you have never met, and who have minimal knowledge of your company, your business challenges, and your goals. The results? Candidates who match the letter — not the spirit — of the job description; mis-hires who don’t fit your corporate culture; and poor performance down the road.

Access to More Candidates

Executive search firms have an ethical (and usually contractual) obligation not to recruit from clients.  Big search firms have significant off-limits constraints, which limits the pool of candidates while boutiques can access more candidates because they have fewer off-limits companies.   In addition, a little known fact is that candidates that are active on a search within a firm are also off-limits for any other search projects.  Large firms can have literally thousands of active candidates throughout the firm at any one time…all who are unavailable for your search!

Smaller Work Load

A typical search firm partner may conduct 15 to 20 assignments simultaneously, overwhelming their associates and research staff. They operate in a “book ‘em, bill ‘em & forget ‘em” environment. Unless your search is carrying the highest fees or is relatively easy to complete, it may be shunted to the bottom of the heap.  In contrast, boutiques typically work on fewer projects, devoting far more time and attention to each one.

Higher Completion Rates

Boutiques have higher completion rates than big firms.  Completion rates at big search firms are well-known to be in the 60% to 65% range.

In-Depth Knowledge of Your Company

Because boutiques have a business model that enables them to form a genuine partnership with you, they are usually better at selling your opportunity and assessing candidates. Combining its access to talent with its proven Performance Based Assessment SM methodology,

Exactly What is Their Process?

Many search firms operate on a “don’t ask, don’t tell” basis, convincing companies that the search process is mysterious and incomprehensible. The reality is, most big firm partners cannot explain their process, nor do they adhere to a proven methodology.

Big Fish…Small Pond

If your company plans to do more than ten searches a year, you may have enough leverage to get the attention you deserve from the big search firms.  But if your needs for search are more focused, you will get far more personalized and attentive service from a boutique.

In summary

Bigger is not better in executive search.  In fact, big search firms face significant obstacles to client service.  Large scale makes it easier for search firms to build their brands, but does not provide value to clients.

It’s important to remember that search firms are service providers. When evaluating vendors, look past the false allure of name brands and critically evaluate the quality of service you will receive. Determine the firm’s commitment to your company, assess its process yourself whether this search firm is passionate about serving your company’s needs and providing what you and your company want.

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