The Morgan Samuels Perspective

It’s common advice that the key to nailing an interview for a job you want is preparation.  But what about an interview for a job you don’t necessarily want?

“Even if you’re not interested -- prepare,” says Bert Hensley, Morgan Samuels’ Chairman and CEO. After all, there may be
 an upcoming opening that is more appealing – either at this company or at another client company through the executive search firm.  “If you get good feedback from a client, then search firms will think of you again.  You have an audience beyond who’s in the room.”  

Executive search firms place candidates in two broad categories: active and passive.  Active candidates are actively seeking new employment, while passive candidates are generally happy in their current roles. 

“Passive candidates sometimes don’t prepare like they should.  There’s a perception among executives that they benefit from being coy or playing hard to get in the interview process,” Mr. Hensley says.  “In my experience, that’s not the case.”

 “Go in prepared, or you’re better off not doing it,” he advises. 

How to Prepare: 

• Know Your Numbers. Be able to quantify your own performance, but also understand the performance of the company.  If the company is public, read their annual reports online. 

• Know Their Story, and Yours. Be able to describe your career as a narrative and a journey.  How did you get where you are? What have you learned?  Also know the hiring company’s story.  Know its history and read through recent press releases to learn recent developments.  Research the professional background of the interviewer. 

• Know the Industry. Research what trends are impacting the company, both positively and negatively.

•  Ask Pointed Questions. Why is the position available?  What are their expectations?  What roadblocks would you face?  Are there opportunities for growth for someone in this position?  Both parties need to understand whether the placement is a good fit or it won’t last long, if you do decide you want it.

 Remember: interviewing for a job is always great practice, even if you’re not sure you’re interested in it. Look at it as an opportunity to shake the rust off your interviewing skills. That way, when you get to interview for your dream job, you’re ready to nail it.

Executive compensation has been a hot-button political issue since the 2008 economic collapse, the resulting bailouts, and following that, the Occupy Wall Street movement. You can find varied and conflicting viewpoints on income inequality and its impact on political and economic systems. But as a human capital consulting firm, the question for us is whether the methods for establishing CEO pay are effective for companies.

A new study from the University of Delaware's Weinberg Center for Corporate Governance offers some interesting insights and caused a bit of a stir. (It's been profiled in The New York Times, The Wall Street Journal and the Harvard Business Review.)

The authors argue that CEO compensation models are flawed. The basic system is that companies want to pay their chief executive above the average in their market -- both to draw the best talent in the market and to signal to their investors and competition that their talent is better than the rest. The effect is that the average compensation keeps increasing, faster than inflation, profits and worker's wages.

The supporters of ever-escalating pay argue that handsome compensation packages are necessary to keep CEOs from straying to greener pastures at other companies. But new research by a University of Delaware professor and student suggests fears of CEOs jumping ship are fiction.... [Researchers] compiled data on the CEOs of 1,500 companies over the last 30 years. What they found was surprising: Top executives almost never leave for other companies. Among the thousands of CEOs included in the study, only 27 left for another position, and most failed in their new positions.

You can read the whole study here.

There are some tidbits in there that we at Morgan Samuels have known for a while, both intuitively and from experience. You can't plug and play different executives and hope their profits come along with them to their new office. Fit and culture matter significantly. (It's something we place a big emphasis on with our executive search practice.) So why offer big compensation packages? This might seem obvious, but just because your competition shouldn't steal your rockstar executive doesn't mean they won't. You can't blame the executive for taking the better deal. And even if they aren't likely to leave, morale is important, even among high-powered executives. You don't just want your leadership in place, you want them happy.

But on the flip side, part of delivering maximum value to shareholders is ensuring they aren't overpaying for any commodity, and that includes human capital. So what's the solution?

Morgan Samuels is of the view that almost any problem can be eliminated or ameliorated with better information. Which is why one of the human capital consulting services we focus on is market intelligence. We like to know who in our target market is earning what compensation, how they're performing, who is happy in their jobs, and who is looking to move. Knowing all this gives our clients a leg up. It gets them closer to finding that perfect dollar amount where executives are excited to come to work and shareholders are happy with the balance sheet.

It’s called Big Data.  Every transaction, every contact with a customer, every employee interaction is a data point that gets recorded, analyzed and processed.  It’s going to be a boon to companies that can get a handle on how to use it.  You can read a lot about how it will change business here, here and here.  But you’ll notice that most people discuss Big Data as an outwardly focused phenomenon: How can it improve profits?

What you don’t see enough of, we think, is how it can improve hiring.  In other words: How can it improve the teams that drive those profits in the first place?

In the human capital business, that’s a thing we think about a lot.  In a recent write up about the movement they call “Talent Analytics,” Forbes explained its importance thusly:

There are around 160 million workers in the US alone, and most companys’ largest expense is payroll.  In fact in most businesses payroll is 40% or more of total revenue, meaning that total US payroll expense is many billions of dollars.  How well do organizations truly understand what drives performance among their workforce?  The answer: not really very well.

Simply put, companies know how to measure success.  That’s what the bottom line is for.  What they don’t know is why people are successful.

Do we know why one sales person outperforms his peers?  Do we understand why certain leaders thrive and others flame out?  Can we accurately predict whether a candidate will really perform well in our organization?  The answer to most of these questions is no.  The vast majority of hiring, management, promotion, and rewards decisions are made on gut feel, personal experience, and corporate belief systems.

We all know that past performance is not a guarantee of future results.  But everyone wants to hire the guy with the past performance because he has demonstrated results.  Even if it works, the guy with the past performance is expensive.  No one likes expensive.  But we need results.  Round and round this loop we go.

How do we get off?  Talent Analytics.  The concept is familiar to anyone who follows baseball or saw the Brad Pitt film “Moneyball.”  (Baseball calls their analytics Sabermetrics.)  Much of the old, analog world hasn’t yet caught up to Big Data so there are huge market inefficiencies to exploit.

(The business world) operates under a belief system that employees with good grades who come from highly ranked colleges will make good performers.  So their recruitment, selection, and promotion process is based on these academic drivers.

Makes sense, right?  So they looked at the data.  You want to know three things they found did not matter when correlated with performance?

1. Where the candidate went to school
2. Their grades
3. The quality of their references.

You need to find the traits and process of successful people, and hire people who have those traits and processes.  If you focus solely on a candidate’s past results, you’re using too small a sample size that is too largely affected by chance.

Focus on process, process and process.  (Billy Bean of “Moneyball” fame had the simple but brilliant observation that batting average was a terrible stat because it was dependent on the luck of where the ball landed.  Why not get cheaper players who put the ball in play but had so far been unlucky or hadn’t gotten opportunity?  i.e. find the players who had the best batting process, but not results?  Voilà, competitive advantage.)

Here at Morgan Samuels, we love this kind of stuff.  As a Lean Six Sigma company, we’re big on fine-tuning our own process as we figure out what works for us.  But we’ve also found that we can make better executive placements across industries by matching skill sets, and sometimes ignoring the particulars of a candidate’s experience, as long as they have enough of it.  We can find a bigger slate of great candidates that way because no one else is doing it.

What can you accomplish by getting ahead of the data curve? Read this book: “Trading Bases.” It’s an out-of-the-box example of a former securities trader turned sports-bettor who used data-heavy analytics to turn $1 million into $1.41 million in one baseball season.  (He made only a 14 percent return the second year.)

How could he do that?  Simple.  He’s using Big Data, and the people he’s betting against are using their instincts.  Or as the trader, Joe Peta, put it:

Sabermetrics in baseball allows employers to pay for skill sets and not get confused by results.

When your competitors are stuck in the past, confused by attributes that don’t matter, that’s competitive advantage.

Kelly West, a Consultant in the Los Angeles office of Morgan Samuels, a leading human capital consulting and retained executive search firm, shares her views on the difference between leadership and management. Kelly joined Morgan Samuels in 2007, and has since successfully executed a number of retained search assignments across a wide variety of industries with a focus on healthcare, entertainment and new media, and information technology.

The differences between leadership and management has long been discussed – both in academic and casual settings. Yet, people continue to use the two terms as synonyms, and many individuals and corporations remain confused as to how to differentiate between the two concepts. Executive Consultants, like those at Morgan Samuels, must be familiar with the distinctions between these terms and be able to distinguish between them when speaking with executives. Here are a few key points to remember:

1. The Difference Between Leaders and Managers:  People use the terms leaders and managers to generally describe individuals who are responsible for directing others. Though the two terms seem similar on the surface, in reality they are quite different. Leaders share a dream and direction that other people want to share and follow. Managers, on the other hand, establish the infrastructure, processes and boundaries that allow the team to reach that vision.
   
   
   • Leaders: Leaders are focused on bringing about innovation and change for the company. Their primary role is to inspire people and to motivate employees. They are focused on change. They create a sense of vision, hope, and alignment among employees.
   • Managers: Managers supervise employees. They make plans, delegate responsibilities, and coordinate activities. Their goal is to create something that is definable and repeatable.
2. Distinguishing Between the Different Roles: Leaders ask what and why, while managers ask how and when.  A leader relies on trust, while a manager relies on control.  A manager is behind the scenes, while a leader’s role is front and center.  A manager handles the day-to-day tasks of the organization, while a leader’s role is more long-term and visionary.
3. Both Roles are Important: While a leader often receives more accolades than a manager, both roles are important and necessary for an organization to succeed.  An organization cannot thrive without a manager, and it cannot thrive without a leader.  Leadership and management must go hand in hand to be successful - both in corporate and casual settings.  They are linked, and complimentary to one another.
4. Executive Search Firms Help Companies Identify Which Profile Is Best Suited to Meet Their Business Objectives: Sometimes a company needs a brilliant leader.  Other times, a job is best suited for an incredible manager.  Occasionally, an executive needs to be skilled at both.  An executive search firm like Morgan Samuels can assist a company in identifying and selecting executives with the appropriate skill set - leadership or management - that will be most successful in realizing their specific business goals.