It is rare for someone to get the chance to revitalize a company, partner with a great CEO and Board and live in the city you love. That was the opportunity I had when I joined Abt Associates in April of 2006.

Background
Abt Associates is a mission-driven, for-profit government contractor based in Cambridge, Massachusetts. It was founded in 1966 as the first company focused on research-based evaluation of the impact of US Government social programs.

By April of 2006 Abt had hit a wall. During its previous three years its annual growth had averaged 3% in a market growing at 12-15%, annual profitability was declining and turnover was increasing. Complicating matters was a Deferred Prosecution Agreement that was signed with the US Government in October of 2006 and Abt was at a crossroads.

Results
Six years later, Abt’s operating results looked dramatically different:
-Profitability had increased 371% from $3.1mm to $14.6mm
-Revenues had grown 151% from $187mm to $470mm
-Share price had risen 52% from 200 to 304
-Employee satisfaction positive ratings had improved from 50% to 80%
-Turnover had decreased from 17.5% to 8.5%

Let’s look at how this happened.

The Turnaround Process
We understood that re-inventing a 40-year old company would involve major changes. One of our most important challenges was convincing our employees that these changes - while painful – were truly in everyone’s best interests.

Our first step was to start with mission. Abt’s mission, which is to improve the quality of life and economic well-being of people worldwide, constitutes the “soul” of the company. From the beginning of the change process we made it clear to all of our employees that our commitment to mission was at the core of the changes we would be making.

We then took a hard look at our existing business portfolio and reached three conclusions regarding our strategy:

1. Over the years, Abt’s focus had changed. Beginning as a company solely focused on research, Abt’s service offerings had expanded to include technical assistance and consulting. The “a-ha” insight for us was that we had quietly morphed into a professional services company.

2. We had strayed from our core market of government contracting into areas where we were not as competitive. This insight led to the sale of two businesses and the acquisition of a third.

3. To stay competitive we needed to grow. To accomplish that we needed to make two critical changes to how we approached growth. The first was to target large government contracts instead of focusing on smaller niche projects. The second was to increase our emphasis on global programs, which also was where many of the largest government contracts were located.

Our next step was to take this new strategy and make the necessary structure, process and people changes so that all three were aligned with our strategy. Here is a summary of some the major changes that were implemented:

• Replaced a structure that had business development/sales and project management as separate functions with a general manager model. In the new structure one executive owned profit and loss from project identification through project closeout and was accountable for the results.

• Developed key processes including an annual strategic plan, project risk management, succession planning, and – in order to successfully complete the Deferred Prosecution Agreement – a comprehensive Ethics and Compliance program.

• Revamped the senior management team and hired 9 of its 14 members over the next five years to better align Abt’s capabilities with market demands. We also introduced a three-year executive bonus plan to help smooth out year-to-year company performance.

The results we achieved, as listed earlier in this article, were outstanding. An article of this length can’t do justice to all the factors and decisions that went into the Abt turnaround.  To me, the key to this and any successful change story is having committed leadership who objectively identify the necessary changes and have the courage to make them happen.

Lessons Learned
In looking back at the Abt story I am often asked what were the major lessons learned? There were many; here are what I think are the top three:

1. No sacred cows: When a company is in a crisis its leadership must be wiling to make a total re-examination of what is working and what isn’t. There cannot be any sacred cows or off-limits topics; everything must be open to discussion and changed if needed.

2. Involve staff in the change process: Many of the process changes that were implemented were the result of holding a series of employee “work-outs”. These meetings provided a number of benefits that included obtaining employee input on complex issues and providing transparency on how decisions were reached.

3. Hardheaded and softhearted: Change often means having to make difficult people decisions. We did our best to make these decisions objectively and pragmatically and then to implement them with maximum compassion and respect.

David Ferreira has held senior positions with GE, Beneficial and KPMG; founded Back Bay Consulting and most recently was CAO for Abt Associates. His primary focus has been helping companies grow and improve their performance through roles in Strategy, Structure, Process Improvement and Talent Assessment. He received a BS in Foreign Service from Georgetown University, a JD from New England School of Law, a Masters in EC Law from the University of Amsterdam and an MBA from the University of Michigan.

The primary reason a company fails when expanding internationally is the incompatibility of native and corporate cultures.  Some studies estimate that up to 75% of the failures were culturally related.  In my own experience, the more staff sent from the home office to the new country, the more likely the venture will fail. The two cultures, corporate and native,  are quite different and need to be considered separately.

Corporate is the way a company conducts its business, while native culture is the combination of beliefs and philosophies of the people in the company and the local people in general.  There are hundreds of great books on how to expand internationally that cover everything from travel to cost analysis and governmental rules and regulations.  There are law firms, CPA firms, and consultants who will happily assist in gathering information and conduct lots of research to prepare for this challenge.  Research is good and can create some nice binders for management to use. However, the majority of these do not address both cultural issues.  My advice would be to start with researching culture first.  This is not only to gain some understanding of the foreign practice, but more importantly, for your staff and executives to accept the foreign culture: an example being China and its famous dinner banquets.

A company asked me to review its senior executives and board of directors’ attitudes about going to China.  My report to the chairman was, “If the executives I interviewed are to manage this expansion into China, I would suggest either canceling this plan or changing the proposed managers.”

Most of this conclusion was based on how the executives expressed a negative opinion of the country, the people, and their capability.  In fact, it was indicated that all senior management would be from the US and that all control would remain in the US:  a plan sure to fail.  The end result was to delay expansion and to re-evaluate the management team.  My fee was a few thousand dollars, which probably saved the company a few million.

The most successful deployments have been accomplished by assembling a separate and specifically trained team to lead the process.  This may mean hiring outside executives with experience in this process or that are at least open to the many considerations that will be required.  Going global should not be approached like gambling, but rather a unique challenge that will require a new approach, lots of research, and the right advisers BEFORE entering into a venture.

One of my company service marks was “adapting technology to people”.  We strove to follow this motto, and some very successful products were the result of this approach. I would modify this motto to “adapting to their culture” when approaching a plan to expand globally.  In global expansion there are two cultural considerations: corporate and country/people.  These must be identified and understood separately.  Remember, you are not conquering, but establishing a relationship for success.

The first consideration when planning this expansion should be the Common Goal.

Getting from the beginning to the Common Goal is a multi-step process:  What is the Common Goal? Why do you need to go Global and why do they want a Global partner? Why this region?  In a recent review of a proposed venture into China, I asked the Chinese group what it felt was the goal. Technology transfer, international recognition, financing, and management training was their order of importance.  When the same question was put to the US executives, their responses were considerably different: understanding local politics, government regulations, customs, knowledge of local markets, financing options, and access to local markets.  The challenge is to satisfy both sides in the same venture or in a sense, agreeing on the common goal.  This generally means you adapting and accepting their corporate and native goals while getting them to accept your goals.

The main point of this article is to emphasize that culture differences are generally ignored or approached with a biased opinion. There are no single answers or shortcuts when planning a global expansion, regardless of the size of the company expanding. Global success is more dependent upon entrepreneurship ability than corporate hierarchy and existing management processes.  Keys to success include:

• Research, Research, Research
• Understanding the cultural differences
• Selecting the right management team
• Adapting to the cultural differences
• Defining the Common Goal
• Being Entrepreneurial

The rewards from a successful global expansion can be huge, but more companies have failed in this than succeeded. Understanding culture is the first step to understanding why.

Patrick Custer is the CEO of GoKnow Mobile Solutions and the Executive Director of the World Education Council. He has made over 100 trips to Asia, with focus on China. A graduate of Texas Tech and University of Texas at Dallas. Suggested reading “How to Win in China” by Stephen P. Turner.

A volcanic cloud descends on Europe, disrupting flight plans. A tsunami in Thailand ripples across the Pacific and affects port activity in California. Forest fires in Los Angeles close highways for days. Threats of a terrorist attack in Brussels halt all transportation.

These are typical scenarios for today’s logistics & transportation executives whose jobs have become as much about dealing with a crisis and understanding technology than simply about loading boxes on trucks and airplanes. It has always been about moving product from point A to point B. But in today’s market of international trade and the emergence of sophisticated technology, the job of senior-level executives has become extremely complex, requiring skills that 20 years ago could not have been anticipated.

As the methods and strategies behind logistics and transportation will change, so will the criteria for C-level executives. And, it will happen at a dizzying pace.

Today, logistics executives must deal with new challenges requiring minute-by-minute tracking in all parts of the world, developing cost efficiencies while guaranteeing timely delivery, and anticipating problems and having back-up plans. There is perhaps no other industry that illustrates the axiom – “time is money.”

Every product in our homes and offices got to your shelves as a result of efficient, safe, and rapid transport – some times in the same city while in other times from across the globe.

With the continuing increase of international trade, the faces of these executives have changed from a guy in a warehouse to someone in the board room with an understanding of robotics, inventory management, software/hardware, international customs, currency exchanges, border treaties, and security, to name a few.

The major logistics companies such as FedEx, DHL, and UPS, have helped bring the industry to higher standards. These executives must also be visionaries simply because this industry is changing rapidly and it’s clear that the transportation & logistics sector of today will be viewed as a dinosaur within a few short years.

Let’s first look at the local levels. For example, a local beer distributor is dealing with new systems that impact profits on many levels. These companies now have sophisticated warehouses featuring robotics, labeling machines, and high speed conveyor belts. Each morning, drivers are given computer-generated routes that get products to stores efficiently and save gas and wear and tear on the vehicles. These routes are updated regularly, re-routing trucks in the event of accidents or road construction.

On this relatively small level, the executive must be well-versed in management skills and must fully understand how these efficiencies can be implemented, resulting in more profitable operations.

But as the distances for delivery increase, so do the logistical and transportation processes. The following are some of the demands that C-level executives must be able to address:

1. Inter-modal transportation that could involve complex sequences involving trucks, ships, planes, and then trucks. There must be seamless transitions that enhance speed of delivery, while saving money
2. A knowledge of international currencies as well as border treaties, terrorist/piracy hot spots, taxes, regulatory laws, and government issues
3. Security since international shipping frequently involves product movement through dangerous areas. How can these areas be avoided? How can protection be secured for pilots, truck drivers, and crews?
4. Transportation management, another critical element of logistics and supply chain management. This is perhaps the largest single cost and impacts all supply chain activities
5. Negotiations with transporters in other countries and understanding pay scales and impressing upon them the importance of timely deliveries. An understanding of local cultures, religions, and work ethics also come into play when dealing with personnel throughout the world.

There’s no question that today’s executive is different from those of the past because of the premium placed on speed and safety of deliveries not only in local markets but across borders into other countries.

These efficiencies and systems translate into profits. Products are getting to the customer faster and prices can be managed better when processes result in lower transportation costs and fewer man hours.

As a result of these new demands, more pressure is being put on executives running these operations. And, this sophistication has also been responsible for the introduction of college majors which are preparing today’s students to be the logistics & transportation executives of the future. Taught by current executives, these classes have become quite complex.

For example, a syllabus for the Supply Chain Management major at Lehigh University clearly illustrates the complexities of this field:

• Provides solid exposure to supply management, logistics, business-to-business marketing and operations management topics.
• Develops cross-functional team skills by integrating Supply Chain Management students with engineering students in the Integrated Product Development (IPD) program.
• Emphasizes advanced cost analysis, negotiation, product development, and e-business.
• Integrates core business courses with supply chain major courses.
• Provides field study and experiential learning opportunities.

Logistics and transportation is a growing field, one that will not plateau. Companies are always seeking faster and better ways to get product to market and on consumers’ shelves or in their driveways. It is a sector that requires ingenuity for today and vision for the future.

Juan D. Morales is the Managing Director of the Miami office for Stanton Chase International. He is also the Regional Practice Leader for Logistics & Transportation for the Americas and a former executive with DHL Worldwide Express and United Parcel Service.

John Kenneth Galbraith, the famed 20th century economist, insisted that the distinguishing characteristic of the great leaders he had met was simply their ability to deal with the critical challenges of their time. In the opening days of the 21st century, interdependence and diversity loom as the distinctive challenges leaders, as well as most ordinary folks, must confront. We find ourselves in a world where vastly different groups live and work cheek by jowl, a world in which inclusion is critical and connection is inevitable. This new world calls for extremely different leadership.

While most people probably would agree about the omnipresence of interdependence and diversity, few recognize that they represent distinctly contradictory forces: Interdependence draws us toward collaboration and mutual interests, while diversity pushes us toward the expression of our uniqueness and the pursuit of independent goals. It takes a very special kind of leader to integrate these complex forces threatening to set us against one another, as we jostle to pursue our own interests.

I call these distinctive individuals “Connective Leaders,” and I have labeled this historical moment “the Connective Era,” a time in which everyone and everything are connected. Consider the World Wide Web, linking us to millions of people around the globe, the organizations in which they work, and the products they create and promote. Or think about the financial crisis in tiny, remote Greece, whose precarious situation threatens the American colossus. This tightly-coupled world calls for leaders who can see the overlap in the agendas of groups blinded by their considerable differences.

How are Connective Leaders Different?

Connective Leaders are genuinely different from leaders who led the world from which we are emerging, a world based on geopolitical alignments, hardened into lumbering, long-term coalitions, such as NATO and the Eastern Bloc. Connective Leaders build short-term coalitions to accomplish goals relevant to those parties and then move on to tackle other issues, demanding a different coalition, composed of other members, with different concerns.

Connective Leaders do not ask us to compromise with opponents, recognizing that compromise requires each party to give up some dearly held value. Rather than starting from a sense of loss, they base their integrative efforts on the “positive zones of agreement,” the overlapping strengths of each party. They realize that once a sense of trust and understanding is built, the remaining conflicts can be resolved more readily or more willingly left in that vague, but now far less “charged,” environment of “agreeing to disagree.”

Connective leaders draw their amazing strength and flexibility from an underlying repertoire of goal-oriented behaviors, called “Achieving Styles.” You might think of Achieving Styles as personal implementation strategies. They are simply that set of behaviors individuals have learned to use to achieve their goals through their own and other people’s action. Connective Leaders stay tuned to situational cues and select those Achieving Styles most appropriate for the task at hand.

The Achieving Styles come in “nine flavors” from 1) doing it on your own and measuring your success against your previous performance, to 2) competing to win, to 3) taking charge, to 4) using yourself as an “instrument” to attract and persuade other people to join you, to 5) networking, to 6) entrusting other talented people to take ownership of your goals and fulfill them, to 7) collaborating, to 8) contributing to another’s success, and, finally, to 9) taking pride in others’ success, as the roaring fans of the winning team routinely do. We call the degree to which individuals can readily call upon each of these styles their “Connective Leadership Profile.”

Connective leaders are exquisitely tuned to the demands of the situation. They draw on their own and others’ strengths, easily changing and modifying their strategies, much as a chameleon changes its colors to adapt effectively to its environment. Because their behavior may change from one situation to the next, Connective Leaders know they must demonstrate bedrock integrity, laced with ethical accountability. Then, as they match their behavior to the situational demands, – for example, collaborating in one moment, but moving on to take charge in the next – their followers will be able to handle those behavioral shifts. Their constituents can rely upon the demonstrated integrity and ethics of the Connective Leader.

Now, you might wonder, can we train ourselves to be Connective Leaders? Fortunately, the answer is a resounding, “YES!” Based on almost four decades of research at the Peter Drucker Graduate School of Management, the Stanford Graduate School of Business, and the Pasadena-based Connective Leadership Institute, www.connectiveleadership.com , we not only can measure and  train individuals to be Connective Leaders, we can do much more.

We can identify those organizational cultures that promote Connective Leadership and help those that don’t to create Connective Leadership Development Programs that will increase their chances of success in this interdependent and diverse world. Using this research, with an international database, and rigorous instrumentation, we can even identify the Connective Leadership Profile best suited for a particular role or project. Then, we can help match appropriate candidates to the jobs, teams, and innovative projects that will stoke the engines of success.
Interdependence and diversity are here to stay. In fact, they will only increase exponentially. Connective Leadership is the necessary pragmatic, but principled, paradigm we need to adopt to survive and thrive in the Connective Era.

Jean Lipman-Blumen, Ph.D., is the Thornton F. Bradshaw Professor of Public Policy & Organizational Behavior at the Peter F. Drucker/Masatoshi Ito Graduate School of Management at Claremont Graduate University.

In our last issue of “On Leadership,” we analyzed many of the divergent forces influencing the worldwide manufacturing sector and the significant impacts specifically that a progressive and sustainable manufacturing capability plays in the global economy. That article is still posted on this site.

The major conclusion we came to is that a healthy manufacturing sector is, quite possibly, the key ingredient for sustained growth on a local or regional basis whether it serves in the developing world to raise incomes and living standards or in the developed world to stimulate innovation, competitiveness and productivity growth. As we pass into the new year, it remains clear that the analysis of the impact of the manufacturing sector must be broad and deep as currently almost a full 20% of “service industry” jobs have their roots in manufacturing (R&D, customer service, finance, administrative, etc.).

Globally several factors are at work yielding increased manufacturing activity and growth requiring companies to make strategic decisions. In advanced economies, the recovery from the Great Recession has gotten traction accelerating hiring, specifically in engineering and general management roles. By 2025 a new global consuming class will have emerged and the majority of consumption will take place in developing economies creating a scenario for a more advanced approach to corporate manufacturing footprint decisions. And while 2025 is certainly not imminent given the global leadership talent shortage it is time for corporations worldwide to consider hiring top talent at the C-level so they can meet the demands of an improving and globally evolving manufacturing sector.

This is supported by a recent study released by The Institute of Supply Management which reports that its measurement index came in at 50.7 percent, moving it off a 2012 low of 49.5 in November. Any number above 50 indicates growth. The December figure marked only the third time the sector grew in the previous seven months of the year.

This index is based on numerous factors, including orders and employment. Factories have continued to hire despite the loss of 7,000 manufacturing jobs, mostly due to the closing of the Hostess plants.

Source: http://www.deloitte.com/

One recent report from T. Rowe Price, a global investment firm with over $500B in assets under management, indicates some very intriguing trends that could very well benefit specifically the United States manufacturing sector. As we know, for the past three decades the practice for American corporations has been to outsource manufacturing to countries where wages, insurance, real estate, and overall costs were significantly lower. But according to the author, Brian Berghuis, Manager for the T. Rowe Price Mid-Cap Growth Fund, this “cost-benefit” equation is gradually changing.

He cites rising wage pressures in Asia and risks (such as the tsunami/nuclear disaster in Japan) that are encouraging many firms to “in-source” factory production back to the U.S. Other factors contributing to this include:

1. Flexible labor markets with improved wage competitiveness
2. Lower energy costs, due to a revolution in new drilling technologies stimulating much higher projected natural gas drilling in the U.S. and Canada
3. Greater business predictability accompanied by more stable political and legal environments
4. Easier to manage and more reliable transportation and supply chain logistics
5.  US dollar depreciation (33% vs. Euro, 21% vs. Chinese yuan)

These and other factors have resulted in relocations of manufacturing capability from other developed nations, including Japan, Germany, and Canada. This same trend could continue or even escalate, according to Mr. Berghuis, if the ongoing labor talent shortage continues and labor costs in China continue to rise at the current 15-20 percent annual rate.

What is intriguing is that the renaissance of the U.S. manufacturing sector doesn’t just depend on labor costs. The United States’ sophisticated supply chain and logistics networks are also factored into the cost equation. In short, proximity to markets and customers result in significant savings. China has tried to lower wages by moving many plants further inland, but the “lower wage costs may be offset by higher shipping costs and longer delivery times,” according to Mr. Berghuis. Of specific note also is that manufacturing growth has a strong employment multiplier effect. Research by the Economic Policy Institute found that while industrial firms typically are the most obvious beneficiaries of a US manufacturing resurgence this also normally generates demand for utilities, energy producers and the heightened employment will often positively impact the consumer sector at a magnitude of 2.9 jobs created for every 1 job created in manufacturing.

The confidence of the global financial markets further evidences the criticality and priority of the manufacturing sector worldwide. From venture capital to private equity to strategics to IPOs manufacturing companies have been aggressively pursued as acquisition targets valued as high potential and attractive investment ROI. Interestingly, the “hot targets” have been diversified and range from mechanical valves, industrial components, medical devices, and pharmaceutical companies.

Europe’s lagging economy represents another opportunity for the United States manufacturing sector and recently specifically automotive suppliers. Several German, Swiss and other automobile and industrial equipment manufacturers have plans to possibly relocate to North America as a way to stay competitive. This is something to watch in the coming months and years.

Mickey Matthews is the Managing Director of the Stanton Chase International Baltimore office and the Vice Chairman, Global Practice Groups. He is also the Global Practice Leader for the Industrial/Manufacturing disciplines.

The current state and future drivers of the global manufacturing sector are complex and difficult to assess because of the varying definitions of success in this critical economic time in our history. One observation is clear, however: Those countries which cultivate a progressive and sustainable manufacturing capability will thrive in the rapidly and ever-changing worldwide economy.

Regardless of the definition, and the difficulty in analyzing the metrics around the leading manufacturing countries, there is little doubt that this sector still drives the current and future global powers’ economies. For example, one way to assess manufacturing is how it relates to Gross Domestic Product (GDP). Using this as a benchmark, the United States, based on recent research, is one of the leaders with 12 percent of its GDP related to manufacturing for a total of $1.831 trillion, or roughly $12,206 for every person in the 150 million workforce.

But the United States’ output per capita is not the world’s greatest. That title goes to Japan but certainly will fall due to the recent tsunamis and subsequent nuclear disasters. The point is that gauging manufacturing is always a moving target, subject to, among other factors, natural disasters and political swings. As a result, governments and the private sector must continually analyze these and other forces, working proactively together, that can enhance their ability to produce goods for domestic and foreign consumption.

As search professionals in this important sector, we must continually be aware of countries which are losing manufacturing market share and those which are growing and emerging as “powers to be reckoned with”. We have seen the United States transition from a manufacturing giant to one focusing on a service economy. However, recently we have seen the United States migrate back to manufacturing as a way to improve a faltering economy.

We have seen this strategy result in countries such as China and India which have emerged as global leaders through their focus on the manufacturing sector. And, it’s clear that their growth isn’t just about the products they manufacture for other markets. It’s equally about producing for domestic consumption in addition to the positive benefits generating from the entire ecosystem supporting these manufacturing operations which include all of the service and local businesses and industries that further drive an economy.

Recent Manufacturing Trend in China

One interesting phenomena, and we’re seeing it in China, is that there is an increase in the manufactured products staying in that country for consumption. The reason is that China’s population continues to grow as does its industrialization. In other words, in the not-too-distant future the Chinese will be this country’s largest consumer of domestically manufactured products. Unlike other industrialized nations (United States, Japan, Germany), China has room to grow. The same could be said for India.

As this trend continues, there will be a growing need for talent, and the source doesn’t necessarily have to come from within these countries. The talent expertise required for innovation, such as highly skilled and technical workers, is likely to come from countries that have more experience in the global manufacturing sector, including the United States, Japan, and Germany, to name a few.

Companies must also assess the political stability of these countries and the prospects for long-term favorable climates for manufacturing. Will governments be overthrown? Will industry suddenly become nationalized? Does the country have a willing workforce? Given the trend towards increased mobility of talent, will foreigners with expertise be willing to relocate there?

In short, global manufacturers must weigh the opportunity vs. the potential for significant disruptions. Lower costs for production are no longer the only measurement for location evaluation. Companies must also assess governmental regulations that may enhance or hamper the possibilities for growth. When properly analyzed, governments must be regarded as collaborative partners in establishing or moving a manufacturing operation, whether it be across state lines or into other countries.

Geographic borders are truly becoming less of an issue based on the continuing evolution of the global economy and talent base. There is a 24/7 mentality allowing improved customer service. However, while some technology products can be delivered and serviced through the Internet, there is a growing need for fast, customized, and efficient fulfillment. This could result in manufacturers having a presence in multiple countries to meet both domestic and international demand.

All of these considerations obviously depend on the viability, sustainability, and ability to market the product. Is there a need for it and can it be delivered on a timely basis and serviced properly?

And, ultimately the final piece of the puzzle is talent and accompanying leadership. The leaders of the manufacturing sectors will be able to assess locations, product viability, availability of natural resources, logistics, ongoing development, and expansion. These individuals must understand and respect many cultures and have the ability to motivate a multi-national workforce that will likely come from many countries and backgrounds.

Manufacturing remains the critical ingredient for sustainable and growing economies worldwide. We are seeing industrialized countries making swift moves to enhance and rebuild this important sector. And, there is a growing trend toward emerging economies throughout Asia and Latin America taking bold steps to building this capability.

In the coming years, we will see a realignment of manufacturing leaders based on these trends. Some will be new to the sector, while former powers will resume their strength.

Mickey Matthews is the Managing Director of the Stanton Chase International Baltimore office and the Vice Chairman, Global Practice Groups. He is also the Global Practice Leader for the Industrial/Manufacturing disciplines.

Several years ago, I made a presentation to a Dallas Rotary Club on the subject of “To Serve or Not to Serve on the Board of Directors” as the president of the club had initially contacted me indicating he was interested in getting on a public or private Board. The individual was a president of the international business of a Fortune 500 company, and felt that in his final career move serving on a Board was what he wanted to do, as he was soon to be stepping down from his current role. He asked if I could help him getting on such a Board and as we talked and he learned more about the process a search professional goes through when retained to do a Board search, he felt I would make a good speaker to his Rotary Club as many of the members were senior executives of corporations. The subject chosen was intentional as many people I have talked with over the years underestimate the time commitment and responsibility, as well as potential liability they may incur, if they accept such a role. Over the past several years, the enormity of serving on a Board has continued to increase, yet it also can be a very intellectually challenging and rewarding role, if the person fully understands what will be expected of her ( I shall discuss the diversity angle later in this article) or him.

As search professionals, we are often contacted by people interested in serving as a member on a Board of Directors, and in most instances they have done little or no research on what is expected of a board member or how best to prepare and make themselves a potentially strong candidate for serious consideration. I would also add there are times we are contacted by someone who already serves on a Board and wants to be considered for additional board opportunities. When that occurs, one of my first questions is why and the second is on how many Boards they may currently be serving. One such person with whom I recently asked the question indicated he was on four boards, two publicly-held and two private companies, and I simply indicated I thought that was probably all he should consider, as he would most likely have scheduling issues if he were to serve on an additional Board, as well as not being able to prepare in advance for fully performing his duties in the manner expected.

As I am always looking for potential Board members who I believe could be good potential candidates on future Board search assignments, one way in which I surface such candidates is asking senior level candidates I am in contact with for president, CEO, COO, CFO and general counsel assignments, who on their boards do they consider the best board members. As I also do a great deal of diversity recruiting at the senior executive and board level, I ask the candidates, if I know their board does have one or more diversity candidates, how they consider them in fully performing their responsibilities. One of the reasons I do this, is that I have learned some diversity candidates serve on multiple Boards and in many instances, the response I get back regarding their performance is something like, “she/he is one of our worst Board members because, she/he is the least well prepared based on the number of boards on which they currently serve.”  Thus, I am always trying to identify outstanding senior level diversity candidates who may not currently serve on a for-profit board of directors.  At the same time, I suggest to them ways in which they may raise their level of recognition with current Board members who could be able to recommend them as potential candidates for Board positions they know are currently open. I also recommend to diversity candidates who want to serve on Boards a good way to get known is to seek out a high profile not-for-profit Board, as most NFP’s want to have senior executives of for-profit companies and strong diversity representation on their boards. Thus, when they serve on such a Board, it is quite possible they will serve with senior executives of other companies, and will be able to let it be known they would be very interested in being recommended for a public or private for-profit board.

Diversity Increase Collective Intelligence

Regarding the additional importance of diversity representation on a board, the Harvard Business Review recently published an article:  “Defend Your Research: What Makes a Team Smarter? More Women.”

The finding of the authors was: There’s little correlation between a group’s collective intelligence and the IQs of its individual members. But if a group includes more women, its collective intelligence rises.

I would predict the same result, if the research done had evaluated ‘all white male boards’ vs. boards that are diverse due to minority representation being on the board. Additionally, we all know people are reaching higher level positions sooner in their careers than has been the case in the past. Therefore, it will also be the responsibility of search professionals to look for and identify younger potential Board members who will be able to provide Boards on which they are asked to serve, the importance of social media and technology necessary to keep a company current in its advertising and communications with current and potential customers, as well as investors.

Some search professionals may take the easy route in doing Board search assignments for their clients and only try to identify and surface individuals who already serve on a Board.  (I would profess getting to speak with a potential Board candidate is often times easier than trying to surface a senior level executive, because when one makes contact with the individual’s assistant, one does not have to be vague in the reason for the call.) Therefore, getting through to the intended individual, one can state the reason for the call is for a board position and the assistant will be much more inclined to convey the message and the prospective candidate/executive will agree to a conversation.

Thus, I strongly believe that due to the increased responsibility and time commitment being made of Board members today, it will be a necessity that a search professional spend time in surfacing perhaps untested, but outstanding individuals, including diversity candidates to serve on Boards of the future. And, at Stanton Chase International, we strongly accept this challenge and responsibility.  

David M. Love II is the Global Practice Leader for Consumer Products & Services and Director in the Atlanta office with Stanton Chase International.

For many senior leaders “The War for Talent” is about pitting consulting company against consulting company in the vicious run-off to get the best, most creative and accomplished individuals possible, train, retain and keep them happy and productive …. and far away from the competition.

However, a recent study by AMCF shows that although “The War for Talent” is still being waged between consulting companies, the real battle is between the consulting industry and other industries such as finance (esp. private equity), technology companies and other more “entrepreneurial” options.  Gen X, Y, Z are just not as into consulting as we’d like them to be.

Many of the under-30 generation’s complaints are well-known – too much travel, too much work and unclear career paths without an acceptable ROI over the long-term. “Why hit the road four or five days a week and deal with antagonistic clients when you can start a family, keep your travel manageable and make $1 million within the first few years as a PE banker, tech wizard or founder of that great new start-up?” the high-potential recruits say.

Recruiting Trend: Diversity the Nature of Work

The fact is we have been working on these issues both on an individual firm level and as an industry for decades. Collectively we have made a huge commitment to diversity in the workplace, not only along gender, ethnic, political, cultural, religious and sexual-orientation lines, but also in the nature of the work and thinking we do. Many companies have also developed regional models to service clients closer to home that dramatically lessen the need to travel. Firms increasingly give consultants exposure to non-profit and private equity work as part of their development and, in some cases, even provide assistance and capital for consultants to start their own ventures.

But let’s not forget the nature of consulting projects themselves. While hard work is still the name of the game – and why shouldn’t it be? – the variety of client exposure and learning in our industry is unparalleled.  The chance to make positive change and improve our clients’ businesses, organizations and ultimately their lives is for many a great reward. And, let’s face it, the money is not bad at all. Consultants are some of the best paid professionals in the world.

As the trade association and voice for the industry, AMCF is committed to supporting all efforts to improve the attractiveness of the industry and, more importantly, highlight the benefits of a career in consulting. The association will be rolling out programs in the Fall to address these issues both within the consulting profession and with the institutions of higher learning that feed our industry with the lifeblood of our business – talented, committed young people.

John Furth is President and CEO of the Association of Management Consulting Firms
(www.amcf.org). AMCF is the premier international association of firms engaged in the practice of consulting to management. Founded in 1929 as AMCE (Association of Management Consulting Engineers), AMCF today remains in the forefront of promoting excellence and integrity in the profession.

By Ward Garven

How can you help us place multiple key executive positions scattered around the world?  This is exactly the question executive search firms are increasingly facing as major industrial and manufacturing firms expand into international markets.

“Our international cross-border client assignments are increasing from 15 to 20 per cent annually”, says George Cross, Chairman of Stanton Chase International. “We are reporting fast-growing client demand for this advanced level of service.”

Executive search firms must make sure they are ready for this challenge. These types of assignments put pressure on search firms to deliver quality service evenly across multiple markets. They also test the understanding and relationship between the search firm and the client.

Implications for executive search firms are significant. Search firms need to really know who their clients are, and understand their needs. Firms also need practices and resources in place so they are able to respond effectively.

Cross-Border Global Recruitment Clients

Though clients request cross-border searches from a range of industries and circumstances, some patterns are emerging from our clients’ activities, explains Cross.

The demand for cross-border search seems to be greatest with clients in the industrial and consumer goods sectors – anything from the automotive, capital equipment, chemical and electrical equipment industries, to luxury goods, food, beverages, restaurants, hotels and retail. These firms may already be established multinationals, or they could be strong mid-sized local firms expanding into international markets.

Directionality of the assignment varies. “This activity is not just with North American and European firms,” says Cross. “Firms from Asia and South America are just as active.”

Some clients have extensive requirements. One significant Stanton Chase client is a manufacturer/distributor headquartered in the United States. This client needed searches in 16 countries in Asia, Latin America, North America, Europe and the Middle East. This work has involved 17 Stanton Chase international offices over the past seven years.

Another Stanton Chase client required more than 120 searches over the past seven years in 14 countries. Headquartered in Europe, last year this pharmaceutical industry leader required searches for business units in the USA, UK, Switzerland, Austria, Mexico, Poland, Romania and India.

Searches can be local, regional or global in scope, depending on the position. Clients are searching for the best leadership regardless of country of origin. VP level opportunities, for example, can require search in multiple countries and regions around the world.

Leadership Development Strategies Vary

The most common search is within the target local talent pool, but there are other approaches.  Some firms want to transplant a home market executive into the target market, and then build a strong local team around that leader.  Others are interested in an executive from the local market but locating him in the firm’s home office to run the regional market expansion from there.  There is also an approach in which foreign executives from the target market are recruited for home market leadership positions.

Clients have tended to fill executive roles on an ‘as needed basis,’ taking the opportunity to fill vacancies as they arise. But some clients are now adopting a more strategic approach and investing in search as part of broader succession and expansion plans. This requires the search firm to take on an enhanced consulting role which looks at the client’s current leadership resources, analyses potential gaps emerging from expansion plans or market trends, and recommends long-term leadership strategies, areas not normally addressed in standard search assignments.

Clients Want Seamless Cross-Border Service

Whatever the nature of the client and the search, executive recruiters must know exactly what their clients are looking for, Cross explains: “Our cross-border clients want seamless, personal, consistent service linked with authentic local coverage and knowledge.”

“Coordinating multiple cross-border searches demands a lot from a firm,” says Cross. “The good consultant understands and anticipates these expectations.”

Stanton Chase has surveyed its clients – both single-market and cross-border – about what they expect from their executive search partner. We base our approach on what clients have said they desire, which is:

• A true partner who understands the business, the position, and the culture of the client’s organization
• A high level of communication resulting in transparency of process
• Strong market knowledge leading to candidates with the right “fit”
• Professionalism that builds credibility
• Quick, on-time results
• Flexibility in pricing and services
• Care for the candidate – before, during and after

When it comes to cross-border searches, these expectations are even greater. Cross-border search clients want:

• The same high level of service from all the consultants in all the markets of the search
• The ability to coordinate multiple, linked global searches
• Seamless interaction and transparent two-way sharing of information between all the search firm offices working with the client
• The ability to understand not only the client’s home market and office culture, but also the cultural context of the new market office and community.
• Detailed local market knowledge that includes the local labour market trends and conditions, applicable local legislation and regulations, and all needed organizational and technical information
• Access to local talent pools and networks including candidates in the margins of the search zone
• Clarity and transparency about costs and billing arrangements

The stability and longevity of the search firm are also important. With the volume of searches needed over extended periods of time, cross-border clients are seeking long-term relationships with stable search partners.

Market Coverage and Industry Knowledge are the Foundations

The first requirement for a search firm is global market coverage. Whether that is through international offices or affiliates, the search firm needs a grounded and authentic understanding of the markets they are searching within.

“Market coverage is something that cannot be simulated, it must be real,” says Cross. “At Stanton Chase, we need to be confident when we talk to clients about the extent and depth of our coverage.” Clients know when market coverage is not authentic and substantive, and this can affect the relationship.

The quality of the market coverage is also very important, in two ways.  First, the local market knowledge must be complete and based on local business connections and insight. Second, the quality of the consulting service provided by the local office and partner must be on a par with those of the referring office.

“When we grow new partners and offices, we do it with cross-border work in mind,” says Cross. “Because of this, we are able to refer client assignments between offices confident that our clients’ interests will be served professionally, with extremely high quality and reliability.”

Differences between markets can be crucial. For example, one Stanton Chase assignment in Asia was superficially the same as an assignment in Germany, yet due to the development of the German market, the level of executive sought for Germany needed to be higher than for Asia; same job, but quite different position descriptions.

Another Stanton Chase client in the energy industry needed business development executives in different markets. The North American position required someone with traditional competencies in product development and corporate processes.  The same position assigned to emerging markets in the Middle East and South America needed different strengths in technical innovation and building relationships.

The next thing search firms need is deep knowledge of the client’s industry. The search firm needs to know what is happening in the client’s industry around the world, including demand for executive positions, the depth of the international talent pool, patterns of compensation and tenure, and whether executive skills are transferable from other industries.
International practice groups are one way of ensuring a high level of industry knowledge. For example, Stanton Chase has nine of these.  Each group is headed by a Global Practice Leader who works with regional practice leaders, and practice specialists in many partner offices. Each group participates in regularly scheduled conference calls which discuss specific client searches and industry trends.

Another useful practice is to involve clients in internal service discussions. At Stanton Chase, clients are included in our November and April international partner meetings. Up to 100 clients attend and participate, and between eight to ten clients are asked to make presentations to the partners about their needs, issues and trends. “We learn a great deal from our clients at these meetings,” explains Cross.

These meetings can be extremely beneficial to the success of the cross-border search service. “They develop more than just long-term inter-office relationships, friendships and trust; these meetings focus extensively on cross-border work,” says Cross.  “Approximately 40 per cent of our November meeting time, and 80 per cent of our April meeting was dedicated to discussing our clients’ cross-border search issues.” This benefits clients because it provides our consultants with a better understanding of client needs, which is shared by all our international offices, producing high-quality results regardless of the office where the search is carried out.”

Strong Global Infrastructure

Clients expect the search firm to have buttoned-down inter-office processes and protocols.  “For us, this is about coordinated, client-centered service and interaction,” says Cross.  “At Stanton Chase, these needs are met though standardized inter-office referral practices, including a referral fee structure and an intranet-based, knowledge-management system where all offices share search status and network information.”

Communication and teamwork are also critical. “Communications between offices on cross-border searches are intense and effective,” says Cross.  “At Stanton Chase, the referring consultant fully briefs the referral consultant, after which they work closely together to complete the search.  The referral consultant shares client insights with the lead consultant and any other consultants running searches for that client. Global conference calls are a frequent norm connecting all the offices working on a client’s various cross-border searches.”

Managing Diversity – The Final Ingredient

Cross-border searches have a diversity element by definition, and the ability to effectively manage the diversity issues within the search is a vital capability firms need to have.  “We are not shy about asking the diversity question,” says Cross. “What are our client’s diversity expectations?”

Search consultants must come to the client already knowing the local cultural and legislative diversity context. That way the consultant can focus on the client’s unique expectations and preferences related to the culture they are trying to build or reinforce within their company.

The firm then needs to have the internal resources to address these diversity needs. For example, when searching for female executives, it is helpful to have female consultants involved in supporting and managing that search. “It is the actual diversity within our international partner offices that give clients and candidates confidence that Stanton Chase can understand and meet their diversity needs,” explains Cross.

As a leading executive search firm, Stanton Chase works to be ready for cross-border searches, explains Cross. “They are an important and growing part of our business. So we must be prepared to partner with our clients and effectively manage this complex, yet very dynamic, service.” The key factors that make cross border searches succeed at Stanton Chase are the strong group ethic and relationships that exist between our partner offices around the world, and their commitment to working together effectively with the client’s needs front and centre.”

Ward Garven is the Vice Chairman Business Excellence and Managing Director in the Calgary office with Stanton Chase International.  Garven is responsible for service standards and quality, global marketing and corporate communications.  The Calgary office serves domestic and international clients in energy and natural resources, industrial, financial services and technology.