HR Challenges

Outbound HR via Headhunters suck

I get approached by headhunters a lot. Of course, I am not interested. I like my job, But still, if you are trying to improve your own HR strategy and you want to know what the top of the game does, you are trying to build a diobolic engagement strategy with them. But what I realized, they really really suck.

So what is the game. There is this big discussion and even a hype last year about whether inbound trumps outbound recruiting or vice versa. Yes, that’s kind of cool. Because since I am alive, I thought recruiting is inbound – without using that term. Companies build employer brands, they put out job ads and hopefully a billion of people apply, so they can apply hefty analytics and screening processes to select the best.

Revealing the broken headhunting process on C-Level

Boy, that is an idiotic process. When you look at the numbers, there are really really successful start-ups run by a maximum of 5 – 10 guys. And it is not guys (or gals), it is really top people. You also realize, that hiring is a key issue in start-ups. I mean, hiring and firing. It’s hard to hire the best and it’s hard to retain them. And because of that it is easier than it should be to retain less than the best. If you extrapolate that to a stage where a company has 100.000 employees, you get that it is impossible to get tier 1 talent at that scale. WHich is why corporates never outperform on a particular nieche opportunity. They just unlearned hiring top talent. But that is a different story.

I think it is absolutely clear that the corporate inbound strategy doesn’t work. But again, you can’t spend all your days as a founder oder executive team hunting top talent. So you are resorting to network referrals and yes headhunters.

But here is the catch. If you know the problem you have on the hiring side, and the problems organizations have, and everything else – or you think you know – you start engaging completely different with these headhunters.

You can even have a simple framework of questions and I think they are highly relevant. Let’s look at C-Level hiring at a start-up.

The questions are very clear:

  1. What is the complementary play – or where does leadership lag at the moment and how does this translate into performance of the company? Or: What is the gap? And what is the company actually in need of. And literally 0% of headhunters get this problem. It could as well be that the open position is inspired by “oh well, everything is good, but we might get a CMO.” for example. Terrible starting point for a high imact player to join and drive the company, if the company things it doesn’t need the position after all. And yes, headhunters don’t go for those that ask the right questions. They go for the ones that give the right answers. Or the least complicated ones. So that is a bad choice by design. If you hire on your own, you don’t build pipeline and easy candidates, you challenge the heck out of your potential prospects and hope they are 500% smarter and more driven in that area than you are. Because that is a real complementary and value-adding hire.
  2. The next step is to understand the governance structure. Is this lack understood on the board level and how high is the pressure. This translate into compensation, overall spending of talent acquisition and the profiles you attract. And more importantly, into the power the hire gets at least in his ressort / unit. It’s similar to a C-Level hire at a publicly traded company. Does the hiring have a clear and strong board mandate or doesn’t it. I mean it is clear that a top talent wouldn’t waste 3-10 years of its live in a pool of people with misaligned interests without a clear mandate to move ahead and wants to spend his time educating other C levels on the relevancy of action and the accuracy of ones decision making. It really helps to have a strong mandate from the top. It is far easier to get that and execute than relying on personal and cultural fit and hoping everything goes well. It is a simple risk-reward issue, the risk of not being able to add the value one brings to the table is then also lowering the reward that one would get given ones skill and the impact that would have on the company. Assuming one did sufficient diligence before and one knows one can add value.
  3. The next question I would always ask is: how strong is the team I will direct. It is a green field? Is the team Tier 2 or even lower? Do I have to constantly educate and train low performers and wish I could replace them? If that is the case, I would probably say “Sorry, but pass.” But this is tricky both for the headhunter as well as the executive hunting himself. Nobody wants to bash the team established. But in reality, if this is fishy, why would someone join a team of B players. Typically, A players want to execute on what they know and learn from other A players. They don’t want to spent time managing B players. ANd then again, if you attract someone without asking this question, he/she is either naive or not an A player. So, hard.
  4. Another question relates to the actual pecking order or chain of command in place. Kind of makes no sense if you are a harcore R&D person and you have to fight with sales or management consulting people. It’s clear they don’t get you. And if the historical forces at work created a particular pecking order, how will you change it below chairman level? That also limits impact. But honestly, who would reveal this structure as a headhunter? I think that is the actual job of an impartial / external C-Level recruiter jobbed with finding A players, but again, that’s typically not happening. So unless the chairman/CEO is really close with the board, and both agree that the headhuner mandate is to find a candidate if supported turns around the pecking order for the better of the company, the whole thing is a shit show.

So there are four questions that I bug headhunters with, and of course they all fail. Nobody tells you (1) the actual company gap, because that would increase your leverage in negotiating terms. Nobody tells you (2), because that would reveal too much information and headhunters aren’t hired by the board. Only works if the CEO is having a clear agenda and takes the risk or even has all other C levels on board. Which typically isn’t the case. (3) is an emotional topic. If everyone is an A player, they wouldn’t need to hire on top of the existing structure, but would promote on the lower level. I think it is a question of integrity and honesty to solve this information issue in a sensible and smart way. It’s one of the core jobs in hiring to tread lightly and expose the pain from the existing structure. But the discussion should allow to discuss strategy and game plan given the situation. Headhunters don’t walk that line. ANd finally, (4) is ultra political and sensitive. Of course, no head hunter can talk about it. But the question is – who are you talking to in the end. If the headhunter couldn’t answer 1 to 3, you won’t talk about this with anyone.

And down to the lower level

Now you can translate these questions also to lower levels.

  1. Instead of organizational gap, obviously you go to unit / function gaps and you try to understand how savy and smart the leaders above the position are, what their strategy and agenda is and if they really look for an A player to enrich the organization, or if they are clueless and want to fill a position coming from organizational planning. The strategy changes. IF they are very clueless, and you are decently good, and the overall opportunity and incentive scheme is okay, you might lie and hustle yourself into the position and have a laid back and easy life. You will see how political and assholy the culture is and how closely performance is monitored. Because you don’t want to be measured for performance if it relies on a failing process above you. If you are an A player, you wonder how open the higher layers are to your greatness and if you can turnaround both the lower and higher levels. And use that as a promotional or networking build strategy and you will reflect on the learnings you might get from the culture and complementary strengths of the people above you. But it”s a cut throat and rational decision process and it won’t make a retention case if the strategy doesn’t play out. So also undestanding personal bonds and power dynamics will be more important to an A player, but that will divert his competencyaway from his focus area. Bad.
  2. The mandate from the board issue boils down to the pecking order in the higher management level. If the top of the pyramid, let’s say the CEO, likes the CTO and CSO, but doesn’t care about marketing, why would an A player wnat to work under the politically failing CMO. Maybe he takes a shot if he thinks he can help the CMO regain position in the organization and make the functional line more important. That again requires a clear understanding of the actual gaps the company faces and the profile this company needs. In reality, understanding this is far beyond the understanding and intellectual capacity of the B or C player top management team. And again, why waste the time of ones life battling windwills – relateing to skill – vs battling veteran buddhas. But of course, that is all stuff that a medium company and normal headhunter can’t tell you anything about. Reason enough for an A player to pass.
  3. The lower you get, the less relevant the question of who you direct and the less likely the question “why do I have to retain A, B, C”. But the more important intra-functional, and cross-functional team set-up becomes. Is the organizational structure and the lines of direction enabling solid functioning of teams and cross-functional work? Or is the political landscape in the organization strong enough so you can build cross-functional high performance teams around the formal leadership structure? So your headhunter questions focuses on how teams work, how they organize cross-functional initiatives and how all that relates to how the businss objectives are met. And yes, no headhunter will answer this questions. And almost no tier B superviser will openly talk about this. So you won’t hire A calibre talent in this process either.
  4. And finally, the pecking order question, relates to how well-functioning the set-up in 3 actually is. It is similar to three, but it focuses more on how relationships, processes and overall culture define the workplace.

So what works best – outbound or inbound

I think the above process and considerations show why most head hunters only find mediocre talent. The only reason why you could attract A calibre talent is comparative advantage. If you are in the region where talent density is high and all competitors fail in the process as much, good enough might just win.

But facing the overall failing process and being sensible enough, the chances are getting higher again that you can reach these individuals using inbound / spray and pray channels.

But then again you are confronted with a lot of other problems. There is no AI or smart process that finds A talent. All there is streneous and data-driven processes that deselect a lot of low-profile talent, that likely misses a lot of A talent, too, because the A talent also might be bored to death by the installed processes. And the chances are getting even dimmeragain.

So I assume mixing inbound and outbound is the strategy to go. Using inbound to solve the information challenges that outbound obviously has, and using decently set-up outbound to solve the inbound data challange.

But yeah, still not 100% sure. All I know by now is: too many tier 5 headhunters out there. And HR is failing from both sides on the table. Sad.

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