Bringing Home the Heads
In the hunt for chiefs, sometimes the business is the best bait.
By Glen Helfand
Red Herring

 

Along with major, culture-shaping shifts in digital technology come equally notable changes in the way businesses operate – and in the way they’re staffed. In Silicon Valley, the ground zero of technology business, these changes have translated in a particularly complex job market.

It would be an overstatement to suggest that there’s a revolution of how companies are now filling key management positions, but there are notable shifts and trends in the field of executive recruitment in tech-based businesses. How companies find talent – and hold on to it – in an extremely competitive market creates some interesting dynamics for newly sprouted firms. Human resources departments are left filling lower-level positions, and chronic shortages of “A players” for key executive positions has turned the talent pool inside out. For the sake of expediency, some companies may hire unproved talent, while prime candidates are being wooed with astonishing compensation packages.

And size, it seems, doesn’t quite matter the way it used to. One trend noted by many in the business is the way startups, with the backing of large venture capital firms, are using such major recruitment firms such as Korn/Ferry Internationals and Heidrick & Struggles to secure CEOs who’ve had long careers in larger companies. “We’re one of the largest recruiters in the world, says Rick Devine, a partner in the Menlo Park office of Heidrick & Struggles. “We placed Ray Lane,” he says, referring to Oracle’s president and COO, “and more companies are saying they’re looking for a Ray Lane for their start up company. There’s definitely more activity on the small side.”

More and more VC firms are placing the top management teams of the modest new companies they fund. Jeff Drazan, a general partner at Sierra Ventures in Menlo Park, worked with Heidrick & Struggles because “they have access to talent that nobody else does, and the do it faster than anyone else can. That’s why they get a premium for their services, and it’s worth every penny.” Indeed, the pennies are considerable. High-end recruiters generally get 20 to 30 percent of the position’s first year salary.

For that kind of money, one would certainly hope to find a recruiter who understood the complexities of the business models being created in the high-tech world. Whether specializing in finding CEOs, CTOs, or CIOs, head-hunting firms now must be able to understand how such positions fit within larger business frameworks. Robin Reed, CEO of the San Francisco based executive recruitment firm the Reed Group and one of the more maverick voices in the field, notes the unique challenges inherent in an arena increasingly driven by electronic commerce. “The digital economy is something we all talk about, yet we haven’t established the criteria for executives to lead us in this emerging economy.”

“Most startups have limited resources and limited-time-to-market issues that have very high stakes,” Ms. Reed continues. “Everyone must wear 31 hats and focus passionately on the same goal. That’s not generally the focus of someone in a big company.”

People who move from a monolithic corporate structure to a startup position can experience culture shock,” Ms. Reed says. “They want to be in a small company, but when they get there they don’t have the toolbox to make an easy transition.”

More sought after are those who have been through the start up model in one successful company and then move to another with those lessons intact. Jacqueline Ross, a recently hired vice president of marketing at Marimba, the Mountain View-based e-business infrastructure developer, came to the position from Check Point Software Technologies, another successful startup that she helped steer through its first initial public stock offering and subsequent constant growth rate of 130 percent. After that experience, she was ready for new challenges. “The opportunity to come to a pre-IPO company was important to me,” she says. “It provides the chance to explore a number of new technologies and marketing strategies.”

STAR POWER
Candidates, like Ms. Ross, who can comfortably wear those 31 hats are very appealing to hiring companies—and recruiters. “I look for intellectually bandwidth, personal maturity, and the metabolism of an independent,” says Ms. Reed. “They must possess a searing intellect, and that is always apparent when you’re talking to people who you know are going to be very successful. They get it quickly. They think faster.”

According to her clients, Ms. Reed, as a recruiter, also scores points on this level. “Robin is truly unique,” says David Perry, president, cofounder, and CEO of the Palo Alto-based Chemdex Corporation, an electronic commerce resource for the life science research industry. “She has innate intelligence, drive and energy, but her true differentiating factor is the level of detail to which she understands Chemdex and our needs. She really cares about hiring someone who is not only a match in skill set but a cultural match as well.”

So how do recruiters find and identify sparkling individuals for their clients. It’s a truism in the recruitment business that the best candidates are currently employed and not looking for jobs. So the real recruitment work exists in the old-fashioned, low-teak realm of schmoozing, networking, and chatting with potential candidates over meals. And it works on both sides. “I strive to meet with executives, to get to the heart of what makes them tick,” says Kim Giannini of Giannini & Associates, a San Mateo-based firm that specializes in placing executive assistants for big VC companies. “My philosophy is, All carded on the table.”

“The very best tech recruiters are good salespeople,” says Sean Lally, San Francisco-based Cnet’s director of corporate recruiting and a ten-year veteran of a search firm. “You’re talking about a two-way intangible sale. I’ve got to sell an organization to a client, and vice versa. Usually in sales I’ve got to sell you on buying this car. I don’t have to call GM and convince them they should sell it to you.”