Category: Leadership & Management

The most common Board recruiting mistakes

by Marina Tarnopolskaya, Managing Partner, Kontakt InterSearch Russia

When Russian companies declare that they have a board of directors, it often turns out that it consists of the owner and hired top managers who have been working in the organization for a very long time. However, even the most excellent strategists are unlikely to bring something new to the business if they have been working with it for 15-20 years. The lack of independent directors on the board is the biggest mistake organizations make.

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Executive search is a challenging business in Turkey

Executive search firms face greater obstacles in Turkey than in other European countries. This is the assessment of Fatih Algan, Managing Partner at Ageo International, executive search firm and InterSearch member based in Istanbul. As a country struggling with economic crises and a high inflation rate, Turkey is not an easy place for high-quality and high-priced executive searches. Customers here still rely on traditional recruiting with a success fee model. Retainer models are not as established and there is often a lack of understanding on the customer side. In the executive search sector, on the other hand, about 75% of all contracts go to global players. Considering the hurdles yet to overcome in the Turkish executive search market, Algan particularly appreciates the international InterSearch network. “The numerous partner companies and strong position in the international market help us explain the quality of our services to clients.” The network also lends legitimacy over competing firms, he finds.

Clients still need to learn the difference between executive search and recruiting

One of the biggest challenges Algan faces in his work as an executive search consultant is the fact that executive search is not as established in Turkey as it is in other countries. “Clients often do not understand the difference between executive search and recruiting and tend to hire traditional recruiting firms when the search would actually be in the right hands with an executive search firm.” This often leads to disappointment when the recruiting firm cannot find quality candidates, he said. “Traditional recruiters often do not ask the right questions because they lack management and industry experience” Algan explains. They are often quite young and rarely have the necessary knowledge to fill middle management and “C-level” positions, he adds. Algan therefore sees it as a task for executive search firms in Turkey to educate their clients about the differences and make clear the benefits of working with experienced executive search consultants within a retainer fee model. “The client’s attitude of always choosing the cheapest solution needs to change” Algan adds.

Respect and age play a role

In addition to the classic qualifications that an executive search consultant should have anywhere in the world – business expertise, negotiation skills, communication skills – other factors also play a role in the Turkish market. “Age is very important in Turkish culture. Customers and candidates might not take a younger recruiter seriously,” Algan says. Experience and a certain gravitas are helpful in recruiting, he adds. “Otherwise, someone might not even agree to an interview in the first place” he explains.

Investing in a good executive search consultant will pay off in the long run

Algan cites the example of a longtime client who wanted to start a winery with an attached cheese dairy in addition to his supply company in the automotive industry. They hired Algan’s company to find a manager for the cheese dairy but withdrew the assignment after a newly hired HR manager wanted to take the search into his own hands. “Six months later, I was on the phone with this client again because the newly hired head of the cheese dairy had embezzled funds and caused over half a million Euros in damages to the company. In the end, I found a manager for him who is successful leading the company to this day” Algan recalls. Of course, this is a rather extreme example, but it clearly shows that investing in a good executive search consultant pays off in the long run.

Companies and executive search consultants need to be proactive in finding and retaining talent

Finding qualified candidates in Turkey is no more difficult than in other countries, Algan finds. With Istanbul as a business hub with a population of 15 million, he says the candidates are there, but it has become more difficult to convince them to switch. “Since the pandemic, very few want to leave their comfort zone. And if they do, they are asking for significantly higher salaries. Where a 15-20% raises used to be the norm when switching, 30% is now expected.” Algan explains that it is imperative for both executive search firms and their clients to be proactive in finding talent. As an executive search consultant, he says, one of the most important components of the services provided is finding and contacting the very candidates who are not even thinking about changing their jobs. “We need to show what sets us apart from traditional recruiting firms; what additional value we provide through our profound, in-depth assessment of candidates” Algan says.” On the corporate side, initiative must be taken before positions become vacant. “Through appropriate trainee programs and “talent pipelines”, our clients need to continuously procure new talent.” Even in times of increasing digitalization, when recruiting also makes use of tools and algorithms, Algan continues to see executive search as a “face-to-face” business: “After the pandemic, people will realize that purely digital recruiting is not sustainable.”

Fatih Algan

Fatih Algan has been Managing Partner of Ageo International in Istanbul since 2018. Algan has 16 years of experience in marketing, finance, and HR in the Automotive and Durable Goods sectors. Prior to working in the executive search industry, he served as Commercial HR Director at a leading European manufacturer of household appliances. Algan is currently working on his PhD in Strategic Management.

 

 

 

 

Turkey in numbers:
GDP: 719.5 billion USD
Economic growth: 1.8% compared to previous year
Per capita annual income: 8,548 USD
Inflation rate: 12.3% compared to previous year
Unemployment rate: 13.2%
Employment rate: 43.4%
Service sector employees: 55.9%
Quelle: destatis/Statista 2020

How Do Companies Look For Top Managers?

Why are companies looking for replacements for their directors, what mistakes do they make when selecting leaders, and why, in some cases, is it better to trust an executive search agency?

An article from Elena Kolpakova, senior consultant at Kontakt InterSearch Russia.

Why is there a need in companies to select a top manager?

The most popular reasons for finding managers today are increasing the company’s profitability, the need to increase the efficiency of business processes, business automation and digitalization, as well as the development of new directions in accordance with the current market needs.

It’s no secret that the pandemic and the subsequent crisis helped to clearly understand what bottlenecks in the company are, and in order to improve them, you need to radically change processes.

Often, the current management cannot cope with the challenges it faces, because leaders were taken on completely different tasks. As a result, the business faces an acute problem of finding new top managers.

Other additional reasons include redefining teamwork, where old methods no longer work and new challenges require inspiring the team in a different way. Often, managers simply cannot cope with the workload, and this can lead to the fact that the team simply scatters. Here there is a need for a leader – a leader not only of changes, but also of a team leader, since she/he will be the agent of change in the company.

How is the process of finding and hiring managers usually organized?

The process of recruiting in-house managers and with the help of a third-party agency can be very different, since a partner who provides search services for top managers has much more resources for analysis, assessment, and prompt resolution of the issue. In general, the entire task of selecting managers can be divided into several blocks.

Preparation

At this stage, the customer (or a manager within the company) describes the task and transfers the necessary information to the agency (or a contractor within the company), which will take over the search function.

Market research

At this point, the formation of a search strategy takes place: an analysis of the market for potential candidates, interesting donor companies, methods for finding managers.

Search and motivation of candidates-leaders

Depending on the task and the level of the position, the agency, or the employer itself can use different options: in-depth research of the market of candidates-leaders, their own database, recommendations, social networks, communities, connect a network, etc. At this stage, the agency and the customer conduct interviews with candidates and determine finalists. Each candidate is assessed based on experience and personal competence. A separate issue is the correct motivation of managers to move to a new company: from income to freedom of action, team, scale of projects, promotion, and many other options. An experienced head-hunter can determine the right motivation.

Finalist selection

At this stage, recommendations are collected for key applicants not only from the boss, but also from colleagues and subordinates. In this case, it is also correct to conduct a professional assessment of the personal competencies of each finalist, for example, Hogan. If we are talking about cooperation with an agency, then consultants accompany the negotiations of the best candidates with the customer, advise him on the choice of an employee and the preparation of a job offer, accompany the candidate during dismissal from the previous job.

At this stage, the finalist often receives a counterfeit from the employer. The task of the project manager is to properly motivate the candidate and convey the risks that arise in this case. For example, it is highly likely that they will look for a replacement for him, because he announced his interest in changing jobs. In addition, according to world statistics, the probability of leaving the company within six months after the counter-offer is about 80%.

Completion of the project

In this case, an HR specialist or consultant monitors compliance with the timeline for the employee to move to a new job. If the company worked with an agency, then usually guarantees are prescribed between the parties in the event of the dismissal of the candidate-head.

What mistakes are made in the selection of leaders and how to avoid them?

Perhaps the most common mistake in the selection of managers is to look for the very “charisma” and fire in the eyes of the candidate: the candidate must show with all his looks that he is “ready for battle” and can move mountains in the company and will also be the leader of changes and teams. You cannot rely only on charisma in the selection of leaders – this will be a biased assessment.

Another common misconception is a “narrow view” of the candidate: in this case, the top manager is assessed only for the tasks that he did. And if there were no others in the experience, it means that he will not cope.

It is also important to note the high expectations from the candidate (the search for a certain “Phoenix bird”), who will build everything in the shortest possible time, “digitalize”, and inspire the team. At the same time, the company may not realize that it itself must correspond to the level of such a candidate: it needs a clear strategy, specific tasks, decent financial conditions, the presence of an understandable transparent, long-term motivation system, etc.

How to avoid mistakes when hiring managers? To attract a strong top manager to your company, you need to prepare comprehensively, because for the candidate it is very important how the company positions itself in the market. Another point is how ready the top management is for an open dialogue: this requires a strategy formulation, an understandable, clear story about the current situation in the company, a willingness to answer questions and not hide from the candidate.

Recruiting leaders is not easy. When compiling a position profile, systematic, teamwork of HR and the hiring manager is required to get a clear portrait of a candidate without overestimated expectations. In addition, at a meeting with a potential manager, it is important not to conduct a dialogue-conversation, but to build your interview on a professional approach, with an assessment of competencies, involving, if necessary, an HR-manager as a business partner or an executive search agency.

Types of leaders

Which leaders should you look out for first and which directors are the future?

Experts call different classifications, one of the most popular is Daniel Goleman’s system. According to him, six types of managers can be distinguished.

  • Prepare people for future challenges: “Try this”
  • Set high standards of performance: “Do as I do”
  • Seek agreement based on collective participation in problem solving: “What is your opinion?”
  • They create harmony, make emotional contacts: “People first”
  • Mobilize people around their vision of the future: “Follow me”
  • Require direct submission: “Do what I tell you”

What is the most efficient and optimal management style? There is no consensus, since much depends on the tasks and level of business development, however, most employers believe that the coronavirus crisis and the transition of many employees to “remote work” have changed the requirements for managers. According to a Kontakt InterSearch Russia survey, 40% of companies have chosen an inspiring style as the most important for a manager today. About a third of employers noted an urging style, 12% – democratic, the same number – supportive. The minimum number of answers was collected for the options “consulting” and “directive” (4% each).

These data are confirmed by the leaders themselves. In a Kontakt InterSearch Russia poll conducted in March 2021, most directors-respondents confirmed that they most often use an inspiring and democratic style in their work. However, pure types are rare, and many successful managers change their approach depending on the tasks and people in charge.

Leadership type Answers from women, top management Answers from men, top management
Consulting 14% 15%
Urging 8% 10%
Democratic 24% 20%
Supportive 20% 15%
Inspiring 28% 29%
Directive 0% 0%
Depending on the situation 6% 10%

Pros of finding executives through an agency

To ensure the most accurate and quick search for a candidate and to avoid mistakes in hiring managers, you can use the services of an executive search agency. Consultants of such companies, like no one else, have an up-to-date picture of the market. They will help you understand what kind of employee the company needs, how it can be attracted and retained. An executive search agency in this case is like a business partner: involving business and HR in the process, consultants build the most systematic and understandable work. They rely on a deep knowledge of the candidate market and its trends, and therefore are more likely to help find “the very candidate” that the company needs.

As an example: in my practice there was a project for the selection of a commercial director for a large international logistics company. The search was long, difficult, the market was revised, but we never found a candidate. We really wanted to help the customer in closing the position, so communication was initiated from our side: we organized a call with the customer, talked about the current search situation and the difficulties of selection, after which we offered the option of considering candidates from large international companies in related industries. We came to this option during the discussion. Having understood more deeply the customer’s request, we, being market experts, were able to offer him an alternative option. As a result, we have successfully promoted the candidate to the position. In this case, our goal is to give a broader picture of the market, to identify and communicate the risks.

Kontakt InterSearch Russia is an exclusive representative of the InterSearch Worldwide in Russia. The company implements projects in the area of management consulting, search and selection of top managers for managing positions and boards of directors. The alliance with the international network allows our consultants to communicate with candidates from all over the world and to quickly close difficult international vacancies.

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