Hands Across the Sea – The Challenge of Recruiting Top Management
In my experience of living and working in New York for 30 years as a British executive, I have often been struck by how cavalier decisions about strategy and management of overseas operations seem to have been. Not intentionally – just simply by not thinking things through and seeking advice from appropriate sources.
This is particularly true of British companies setting up operations in the US or acquiring US companies. The trite observation of “two nations divided by a common language” is a starting point in recognizing that things are not the same in the US as they are in the UK and I have often gone further by remarking that if Americans spoke a different language then the British would realize that they are in a foreign country, and that would change their attitudes and behaviour.
Of course, there are enormous links between the two countries – cultural, historical and economic. But that does not make the countries the same – far from it – and many companies think that because they have a well-known and successful brand name in the UK that, maybe with a degree of condescension and arrogance, they can simply set up in the US with the same degree of success.
This is not to say that all UK investments and operations in the US fail. But sadly the track record is far from stellar and, although things have improved, in the early days of the British invasion in the 80s many very costly mistakes were made. Grand Metropolitan acquiring Howard Johnson, Midland Bank acquiring Crocker Bank, Marks and Spencer acquiring King Supermarkets and Brooks Brothers. Unfortunately the list goes on and inevitably mistakes continue.
Is there a common thread to these mistaken investments? There are of course some. Paying too much, making assumptions about the size of the market which can be way off – the US is really a group of 7 separate regions, geographically, culturally and economically. What might work well in the North East may flop in the South West etc. It is aggressively competitive and not everyone plays by the same rules. The legal environment is very different to the UK – standards of commercial fair-play are different and litigation is part of the landscape.
Marketing is a different concept in the US and can often include aggressive, combative criticism of a competitor, the making of unjustified claims and egregious advertising. Packaging is all. Just watch American television to see whether that rings true.
Why is this so? In my view because the US is a multi-cultural and highly diverse environment without a common, easy to identify set of behavioural norms. Ask anyone who has done business in Louisiana as to whether it is different to Chicago. Ask anyone from Seattle whether they like doing business in New York. But these differences do not mean the environment is bad or need be adverse for foreign investors – just different and sometimes very different. Caveat Emptor (buyer beware) is a good rule. Seeking advice is another and finding the best people to represent you is a third and most important.
So where do you start? A lot of companies from overseas develop a US strategy on the back of a distributor arrangement, sometimes via an investment in an entity that already had US operations, and occasionally as a direct and deliberate strategy to open up a new market. Whichever it is it must inevitably involve management, and this is where the problems can really start.
“Harry, you like the States, why not go and open up our operations there”? “Jill, you seem to get on well with Americans”. “Bill, you need some overseas experience – go and be our man in New York”. I went through it myself when I first ran my search firm’s office in New York in the 80s.
OK, so you are now the Brit representing your organization in New York. How long is it, as you develop your local knowledge and begin to appreciate the dynamics of the market, that your former colleagues back home consider that you have gone native and can no longer be trusted to toe the party line? 3,000, or even 6,000 miles to the West Coast, and up to 8 time zones can quickly induce a feeling of separation and even alienation. When Midland acquired Crocker it dawned on top management in the UK that there would be no normal office hours common between the 2 operations. “Rather inconvenient that. Well I guess George will just have to get up rather early since I don’t intend staying late at the office and compromising my dinner party plans”! (See if that rings a bell with the management of US or European corporations working in China).
So, the touchy feely side of people management is going to be not just important but critical. Who is out there who could help? Accountants, lawyers, strategy consultants, psychologists? No doubt I am biased but to me the executive search consultant is a shoe-in as an adviser and helping hand.
Help me understand what kind of senior executive(s) I may need – should I develop an advisory board. How much should I pay them? Where will I find them?
Search consultants are essentially management consultants who focus specifically on issues of building a management team or recruiting best in class individuals for success against a defined strategic plan.
It is no use saying I need a CFO. The only sensible solution to that requirement is by conducting a thorough assessment of the goals, challenges, culture, personality and assets of the organization in question. Of course there are social media resources out there. You can start networking on LinkedIn and see what turns up from the millions of people now registered – you can select by category, industry and region and you will still be faced with a huge long list and be no closer to your goal because someone has got to contact apparently suitable candidates, make assessments and then bring them successfully into being considered as a viable option. You can place an ad in the newspaper if you can still find one that offers classifieds and you can ask a contingency recruiter to throw resumés at you until one sticks. But does this approach make sense?
Think about what time you have to do all this, to uncover candidates who might be interested if only they knew more, to organize the logistics, the assessments, the interviews etc, only to save some money? “Pennywise and pound foolish” springs to mind. How much more important could a decision be than the appointment of a senior executive? Especially in an international or cross-border situation.
In senior executive recruiting more is often less. It is not quantities of candidates that are needed but small numbers of the highest quality candidates from amongst whom a client may make an intelligent choice knowing that they are seeing among the best in the market. The United States has a huge inventory of talented and experienced people. But that can make identifying them and selecting them even more challenging.
Executive search work requires that a recruiter be of a calibre and experience that they can effectively make judgments quickly and go to the core of assessing whether a candidate is worthy of further consideration. It requires seniority, comparative experience and expertise in the field in question and the confidence to truly consult and advise the client as to nuances that can make all the difference in selection.
Such skills do not come lightly and are possessed by relatively few. An examination of the education and backgrounds of most executive search consultants will reveal a high degree of intellectual and career achievement. Extremely good communication and analytical skills are an essential part of a search consultant’s abilities as are a consulting manner and advisory capability that will engender respect and confidence on the part of the client.
Many clients recognize that an external consultant, especially one in whom they have built trust and confidence, can bring to their discussions objectivity, questioning and evaluative skills that are very difficult to acquire except outside an organization, rather than being part of it.
Many organizations have suffered from being too introvert, from not introducing challenging cultures and diversity, from not seeing the wood for the trees. A seasoned and experienced executive search consultant can question strategy and challenge assumptions because that is part of his or her role and raison d’être.
It is unlikely that such soft skills will ever be replaced by automation or by processing systems. Recruiting at senior executive level requires high touch service by the highest quality of individual. If you are investing in the United States dare I say that you will need all the help that you can get? Our association will be happy to help in guiding you towards executive search consultants in the United States who know their business and will quickly know yours! Click on www.executivesearchconnect.com to learn more.
American British Trade & Investment
This article was originally published in American British Trade & Investment 2012, the annual investment guidebook produced by BritishAmerican Business, the leading transatlantic organization dedicated to helping its member companies build their business on both sides of the Atlantic.