Using Executive Search Firms in Turnaround Situations

Businesses experiencing difficult times face the choice of whether to use an internal candidate or someone from outside the organization to affect a turnaround.   One approach that many organizations take is to rely on a star employee to lead the turnaround effort.  While this approach can yield significant benefits and is often looked upon as a good test of the employee’s skills, it also comes with its fair share of risks and drawbacks.

Pros of using star employees:

  1. They bring a wealth of experience and expertise.Star employees are often the best and brightest in their respective fields, with a proven track record of success. This means that they bring a wealth of experience and expertise to the table, which can be invaluable in a turnaround situation.According to a study by the Harvard Business Review, organizations that rely on internal hires for leadership positions tend to perform better than those that bring in external candidates. This is because internal hires are more familiar with the company’s culture, values, and operations, which allows them to hit the ground running and make an immediate impact.
  2. They inspire and motivate others.Star employees are often viewed as role models and inspirational figures within their organizations. Their success and achievements can inspire and motivate others to work harder and strive for excellence.As noted by Jim Collins in his book “Good to Great,” having a charismatic and inspiring leader is one of the key factors that separates great companies from mediocre ones. A star employee who can rally the troops and create a sense of urgency and purpose can be a powerful asset in a turnaround situation.

Cons of using star employees:

  1. They may not have the necessary leadership skills.While star employees may excel in their individual roles, they may not necessarily possess the leadership skills needed to guide a failing business unit to success. Leading a team or department requires a different set of skills than excelling in an individual role, and not all star employees may be equipped for this challenge.
  2. They may be resistant to change.Star employees who have been successful in their roles may be resistant to change, especially if they have a strong attachment to the way things have been done in the past. Coming from inside the organization, they may be part of what caused the problem in the first place or might not have the perspective to see what’s needed for success.  These can be a significant obstacles in a turnaround situation, where change is often necessary to achieve success.As noted by John Kotter in his book “Leading Change,” resistance to change is one of the primary reasons why many change initiatives fail. Overcoming this resistance requires strong leadership, effective communication, and a willingness to engage with employees at all levels.

Facing these conflicting issues, business can turn to executive search firms to help decide who is best suited to turnaround a business.

  1. Conducting a comprehensive search.When it comes to turnaround situations, executive search firms can help identify candidates who have a proven track record of success in similar situations.  In addition, they can proactively seek out individuals in their extensive network of contacts to identify potential candidates who may not be actively seeking new opportunities.
  2. Assessing candidates’ qualifications and fit.In addition to identifying potential candidates, executive search firms can also help assess their qualifications and fit for the role. This can include evaluating their experience, skills, leadership style, and cultural fit with the organization. This can be particularly important in a turnaround situation, where the candidate must have the right mix of skills and temperament to lead the organization through a period of change and uncertainty.
  3. Providing objective advice and guidance.An executive search firm can also provide objective advice and guidance throughout the hiring process. This can include helping the organization develop a clear job description and candidate profile, advising on compensation and benefits packages, and providing insights into market trends and best practices. They can also help manage the hiring process, from screening and interviewing candidates to negotiating and finalizing job offers.
  4. Ensuring confidentiality and discretion.In a turnaround situation, confidentiality and discretion are often critical. An executive search firm can ensure that the hiring process is conducted with the utmost confidentiality, protecting the organization’s reputation and minimizing the risk of leaks or rumors. This can be particularly important if the turnaround effort involves sensitive information or strategic decisions.Overall, an executive search firm can play a valuable role in helping an organization decide who to use to turnaround a business. By conducting a comprehensive search, assessing candidates’ qualifications and fit, providing objective advice and guidance, and ensuring confidentiality and discretion, they can help identify and recruit the best possible candidate for the role.

Article written by Carl Denny, CFR Global Executive Search USA
Photo source: Pexels

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