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Building a World-Class Research Organization for an Internal Search Firm

When companies look externally for executive management talent and other professionals, they generally rely on one of three recruiting channels according to the level and type of position in question:

* A retained search firm;
* A contingency search firm; or,
* An internal search firm.

Retained Search Firm
A company engages a retained search firm for help finding an “A” player within its market for a senior management position involving a six-figure salary. Executive search firms are the talent source of choice for many Fortune 500 organizations. The search firm’s job is to identify a list of “Top 10” candidates, which it qualifies and presents to the client for consideration. Executive search firms do not assist individuals in finding jobs, but rather partner with a client organization’s senior management to find the right person for a particular position. Search firms typically identify individuals from the client’s main competition and entice them to give consideration to a potentially better opportunity and role within the client company. As the term implies, a retained search firm works on a retained basis.

Contingency Search Firm
Contingency firms specialize in junior- to mid-level executives with salaries below $100,000. A contingency firm only earns its fee if the client hires a candidate presented by the recruiter. As a result, a contingency firm has a more transactional relationship with its clients than do retained search firms, which strive for a more consultative approach.

Internal Search Firm
Some large companies that recruit heavily throughout the year rely on an internal search firm to manage the majority of their recruiting requirements either alone or in conjunction with an external search firm.

The right talent is critical to the success of any organization, and internal search firms are no exception. Most successful internal search firms consist of a team of recruiters with prior experience in either retained or contingency search. But in the world of search, talent is only half the story. The ability to identify talent also requires resources – namely, a research organization.

Information Is Power: The Research Organization
Quality research is vital to any search organization. The research function provides search consultants with critical information such as:

* executive names generated from either:
o an internal database, or
o original research;
* company overviews;
* key executive profiles;
* target lists;
* company news;
* industry news.

This kind of information often makes or breaks a search consultant’s ability to quickly understand a company or industry trend and ultimately identify and present the right candidates.

In addition, the research organization is responsible for managing the search firm’s library, databases, and subscriptions, as well as its association memberships.

Building A Research Organization: The Nuts and Bolts
Successful research organizations within any type of search firm usually share four key characteristics: experience, resources, procedures, and culture.

* Experience – The head of the research organization must have deep experience in research, as well as a thorough understanding of executive search and the various roles within a search firm. He or she must also be able to mentor the other members within this functional role and provide insight into executive search firm practices and procedures.

Despite lack of prior experience, employees from other functional areas can find a career path within the research organization of an internal search firm. The research associate position is the entry-level role. Research associate candidates must be highly organized, disciplined, resourceful and diligent. They must also excel at multi-tasking in order to manage a heavy workload that usually involves commitments to multiple stakeholders.

* Resources – The resources within a research organization are a critical success factor for a researcher. They typically include:
Internal Database – The research organization needs to be able to query the internal database to provide consultants and team members with the valid names, titles, companies, phone numbers, addresses, etc. Where data is concerned, quality is far more important than quantity.

To help manage data recruiting software from organizations like Cluen, FileMaker, and Microsoft are available. During the due diligence process, it is important to make sure that the recruiting software can store and extract data in formats that will be useful to your organization. Software costs can vary substantially depending on the type of package and scope of implementation.

Data integrity is key! There is no foreseeable reason to keep millions of names within a database, if a majority of them are out-of-date. It is far more useful for a consultant to have twenty-five qualified names than a list of one hundred names taken directly from the internal database that includes seventy-five outdated records.

It is well worth the investment of time to set-up a database with care and maintain strict control over its contents. This type of discipline fosters the timely and error-free data queries that enable search consultants and other team members to be effective in their jobs. It also makes possible a much faster response time on research requests.

Periodicals – The periodicals library should include:
+ Magazines:
# Leading regional publications specific to the metropolis in which the organization resides (e.g.: San Francisco magazine, Chicago magazine, The New Yorker magazine);
# Industry or trade magazines are an important source of industry and sector information. For example, a collection of publications for the technology industry would include: Business 2.0, BusinessWeek, CIO, Fast Company, Forbes, Fortune, InfoWorld, Newsweek, Private Equity Week, Red Herring, VentureWire, and Wired.
+ Newspapers - Today most newspapers have an online presence providing access to content either free-of-charge or for a nominal fee (e.g., San Francisco Chronicle, San Jose Mercury News, Chicago Sun-Times, Chicago Tribune, New York Times, The Washington Post, The Washington Times, Wall Street Journal, Seattle Times, Los Angeles Times, Las Vegas Review-Journal).
+ Local business journals are an invaluable source of information on executives “on the move,” new hires, industry or sector information, knowledge of various departments within your firm, etc.

Associations – Recruiting associations or networks are invaluable resources for second opinions on vexing research questions or projects. Local, regional, national, as well as international groups include:
+ Bay Area Recruiters Association
+ Society for Human Resource Management
+ Society of Competitive Intelligence Professionals
+ The Executive Search Roundtable
+ The Association of Executive Search Consultants

Book of Lists – More than sixty lists of the top companies (by industry, private, public, not-for-profit, etc) within each major metropolis are available in online, hard copy or soft copy format. A research organization should have at a minimum copies of the lists for its state or region. These resources can be extremely helpful when building a target list of companies for an assignment within your organization.

The Internet – A research organization should make extensive use of the Internet part of its culture. Search engines to be included in the basic toolkit of staple Internet resources include: Google.com, Dogpile.com, SFGate.com, Yahoo.com (including Finance), CNN.com, MSNBC.com, CNBC.com, Refdesk.com, Switchboard.com, and Numberway.com.

Trade Newsletters – The two major analyst firms following the executive search industry publish newsletters: Executive Recruiter News (from Kennedy Information), Executive Search Review, Diversity Monitor, and Online Recruiting Strategist (published by Hunt-Scanlon). Trade newsletters provide useful perspectives on the industry, job outlooks, major announcements, etc. Both Hunt-Scanlon as well as Kennedy Information also send regular e-mail alerts to their distribution lists on news developments of interest to recruiters.

Online Business Information Services – There are a variety of online resources for useful business information, such as executive biographies, company overviews, financial data, addresses, telephone numbers, e-mail addresses, analyst reports, etc. Most are fee-based, but some offer a “free” portion within their website:
+ Hoover’s Online
+ OneSource
+ The Leadership Directories
+ TechNames
+ LexisNexis
+ PRNewswire
+ ZoomInfo
+ Morningstar.com
+ Factiva
+ Moody’s
+ EDGAR Online
+ Capital IP

* Procedures – While each search assignment is unique, a researcher should still follow certain basic procedures for each project:
o Understand the internal organization with the search need by studying the parent company; its competition; the relevant sector; the product line; location(s) of operations; top executives within organization; and the genesis of the position (replacement hire versus new position).
o Develop a list of target companies and industries, which may vary according to the organization’s requirements and specificity of the role.
Target lists more often than not include competitors.
o Query the internal database for preliminary candidates.
o Support the search consultant in sourcing professionals for appropriate referrals. In some cases, the researcher will also play a consultant-like role during the sourcing process.
o Identify internal and external prospective candidates based on the target list. Candidate identification is typically done by “smiling and dialing.” It is critical that candidate information such as name, title, company name and telephone number be inputted accurately into the internal database and that the researcher double-check his or her work.
o Assist the search consultant as needed in the candidate development process. Provide additional names if required.
o Support education verification and background checks.
o Support the reference checking process as required.

* Culture – Research is a demanding job. To be successful, members of the research team must have a passion for the function. The following qualities are essential:
o Attention to Detail – Entering data accurately saves on time spent correcting errors and ensures that search consultants are equipped with the right information.
o Dedication – Research is not a 9-to-5 job. Researchers must be prepared to do what it takes to field last-minute research requests.
o Time Management – Many research requests are more time-intensive than they appear. A researcher should have a clear enough understanding of time requirements to appropriately set consultant expectations.
o Persistence and Perseverance – To be successful, a researcher needs to have enough tenacity to use all available resources and sift through as much data as required to identify an individual or piece of information.
o The Ability to Multi-task – A researcher is expected to handle multiple projects and assignments.
o Organization Skills – To effectively manage multiple projects and masses of information, researchers must stay organized. A filing system to organize work, articles, and notes for each search consultant and their in-house clients is a must. Although the best files are always tailored to specific requirements, they commonly include a 3-ring binder with tabs for candidates, department information, target list, eliminated candidates, status reports, sources/calls to make, etc.
o Efficiency – Experience increases efficiency as a researcher learns which resources to use to find information in a quick and effective manner. Once again, filing systems can help manage information by sector, industry, company size, etc.
o Team Spirit – Researchers need to be prepared to assume consultant-level work, as well as assistant-level tasks as needed.

Dedication, time management, and attention-to-detail are mandatory. But the initial training a researcher receives is also critical. I was extremely fortunate to have been mentored by two individuals who are considered to be at the top of the research field in the nation. These co-workers shaped me into the researcher I have become – and the one who doesn’t stop until I complete the project at hand. To provide maximum value, a researcher must have a passion for excellence, the ability to stick to his or her guns, an instinct about what questions to ask, as well as honesty about the work provided to peers.

Karen E. Guiden is Research Director at Nosal Partners LLC.
Nosal Partners

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