Geoff Champion likes to take a good, hard look into people's eyes when he's recruiting. "You can see who's alive and who's dead, and who's been dead five years," he says. As the head of executive search firm Korn/Ferry International's Global Advanced Technology Practice, Champion probably doesn't meet many of the five-year-dead among the job candidates. But there are some, and they have to be weeded out. Fast.
Speed is now one of the keys to successful business, Champion says. Many executive traits, such as ethics and leadership, have remained constant for a quarter of a century and more, and will probably never go out of style. Nevertheless, Champion believes that the key differentiator in recruitment today is that successful executives need to move quickly - largely because this is the age of the Internet.
This need for speed holds as true for the chief executive officer as it does for the chief information officer. It also applies across a broad slew of industry sectors that are hitching themselves to the Internet bandwagon. Executives need also to create work environments which can swiftly react to change, and to nurture their top talent by providing new challenges as motivation rather than simply offering a salary hike to buy loyalty.
Besides heading the Global Advanced Technology Group, Champion is the managing director of the firm's Boston and Silicon Valley offices. These two cities have for years been the twin Byzantiums of the technology world, hosting the headquarters of many of the world's leading computer companies. However, Champion now sees a world where every company is an advanced technology company to some degree - wherever it is based, whatever it does. "This affects all types of industry, if you believe that the Internet is pervasive, which it is," he notes. Consequently, all manner of industries are seeking executive talent which is conversant with the new technologies and the potential they deliver to business, and is able to move at a fair clip.
Besides serving the recruitment needs of what might be called the technology industry proper (telecommunications, systems, software and services), Champion is also finding IT-savvy executives for these other industries, and exploring how the new economy will ultimately reshape Korn/Ferry itself. "I'm the chair of our e-business initiative, set up in October of last year. This [initiative] is how we work with clients in the digital economy, both from the point of view of our methods and practice to support them in the course of their work, and the tools and techniques we need to build into our own company from workforce to systems to utilisation."
Champion has his work cut out. His team of international executive search professionals have also, given that the supply of talented executives willing to make a move is well shy of the levels of demand in most developed nations. And that demand is on the march.
In February Korn/Ferry (which is the world's largest executive search firm) released its International Executive Demand Index, which revealed that global executive demand rose 16 per cent during 1999. In the US the boom in technology was the main driver behind demand. For the first time technology companies, dotcoms and telecommunications companies were responsible for most executive demand, with other sectors paling by comparison.
The impact of this rising demand and the shortfall in supply was reported in an article published in a recent Australian Financial Review, which noted that, "Not so long ago it was the employer who chose the employee; now employees are choosing who they want to work for. Suddenly companies are having to sell the sizzle to candidates as well as consumers." For recruiters like Champion it means not only do they have to weed out the brain-dead candidates, but the brain-dead companies also, because top executives simply won't want to work for yesterday's employers.
As the AFR put it: "In an era when intellectual capital is mightier than either physical or financial capital, the employee is as powerful as the consumer was in the age of materialism." The same article quoted an Australian survey by Drake Executive, which found that about three-quarters of executives had difficulties dealing with high staff turnover. Not that this necessarily translated directly into a salary spiral when staff were eventually replaced. According to Drake's survey of 4500 executives in 1999, 44 per cent of staff had changed jobs to pursue new opportunities, yet only 1.1 per cent admitted it was to improve remuneration.
Clearly, attracting raw talent takes more than waving a fistful of dollars under an executive's nose. Champion is well aware of the need for incentives more alluring than mere money. He argues that if money were the only incentive there would not be as many salaried executives going off to found their own dotcom companies. It's the same reason why Microsoft still has so many millionaires on its payroll. He maintains they're not there for the money, they're there for the intellectual engagement.
Such is the scarcity of top recruits, Champion says, that companies are going to lengths previously unheard of in order to secure the "right" talent. "I'm doing a search now for a Nasdaq-listed $US200 million business, which is looking for a chief executive. [The company] has said that for the right person it is prepared to move the headquarters to Southern California, Silicon Valley or Boston." As yet, this remains an alien phenomenon in Australia, where executives almost inevitably relocate to the company's location rather than vice versa.
Still, executive demand in this part of the world is no slouch, and a US recruitment peculiarity may yet prove a future yardstick for Australian businesses determined to hire the best talent. In Asia-Pacific, Korn/Ferry found executive demand peaked in the technology and telecommunications companies. That sector claimed a 21 per cent share of overall 1999 demand, up from 17 per cent in 1998. Executive demand in all Asia-Pacific companies was up by 24 per cent. However, this must be considered against a backdrop of the region's economic recovery from its 1990s slump"We are seeing two major trends in Asia-Pacific today: technology and change," says Steve Romaine, the firm's Asia-Pacific president. "Many companies and people in the region welcome new ideas and new technologies." This, he claims, explains the high executive demand. But in spite of this evidence of regional demand, Champion believes that the US still leads in the sizzle stakes. He claims this is largely because of the relatively deregulated financial sector, which encourages venture financiers investing in new economy startups.
He shies away from predicting this might prompt a brain-drain of talent to other economies. Nevertheless, he acknowledges the culture of creativity in the US, underpinned by a robust venture capital market, has given it a head start. He denies any suggestion, however, that the US has a monopoly on creativity, just that it has the momentum propelling that creativity.
"The momentum in the US is the financial markets. In 1998 there was $US14.6 billion of venture money ploughed into early stage companies. In 1999 there was $US35.6 billion of venture capital money into early stage companies," Romaine says. "In 1999 there were 4006 early-stage company financings. Now, if the average venture capitalist looks at 300 business plans before it invests in a single one, that means that there were 1.2 million business plans presented.
"Put it another way: one in every 230 Americans took a business plan to a venture capitalist last year."
It's a cute, but probably inaccurate statistic, as many business plans were most likely presented several times to a shoal of financiers before one took the bait, and some people would have dreamt up dozens of different business plans in a single year. The more telling statistic is in the 4006 startups which have emerged in the US in the last 12 months. Each of those is dragging in its wake a demand for raw talent. These new ventures also offer an intellectual excitement, which might be lacking in more traditional and established businesses.
Right and Ready
Champion can himself relate to that need for excitement. Born in Philadelphia and raised in Minneapolis, he went on to graduate from West Point, the US military academy. He flew helicopters over Korea, where "I got shot at; never hit". When he returned to civvy street, it was into the technology industry. But by 1980 he realised that the challenges he was facing in business had become day-to-day challenges and were not stretching him intellectually.
About to exit his then employer for pastures new, Champion was lured back with an overseas posting, a fresh challenge. He then spent from 1980 to 1997 outside the US. Now he's back in Boston, but is stimulated by the constant challenge of finding the right people for the right roles. Fast.
Korn/Ferry offers international search facilities. So does Champion believe the pace of development in the US, and those 4000 odd startups a year, is likely to trigger a brain-drain of Australia's best talents? Champion equivocates. "It depends. If this country deregulates like the US, then it will not prove a difficulty," he says.
At present, Champion believes that Australian financial sector regulation is holding back the development of an industry as vibrant as that in the US. "It is still too regulated. There is still too much old-boy network," he says. He does, however, shout down the suggestion that Australia may have missed the boat entirely. "Look at Singapore; that was supposed to deregulate telecommunications in 2002, but it was quicker to respond and moved in 2000," he says. "In 1998 there was $US200 million in early-stage companies. By 1999 that was $US500 million in early-stage companies."
Champion cites this as evidence of the "bandwidth" for growth still left in the IT&T industry. But he adds that "what is frightening is that 45 per cent of the $US500 million was US money, and 40 per cent was European. Only 15 per cent of the investment was Singaporean, and will remain in the country." According to Champion, for a robust and long-lived boom, the surge in industry development must be matched by a surge in local financial investment.
If Australia does deregulate, Champion considers the nation to have great recruitment allies in its geography, culture and climate, all of which are important lifestyle considerations for talented executives.
Lifestyle and challenge are two of the great motivators for top executives. "In the US it is a lot harder to get people to move. They don't need to move. People are accepting jobs in New York, but buy their homes in Florida," he says. Modern technologies are allowing this to happen, and companies desperate for executive skills are being far more flexible in their demands. In return they are finding their employees are more flexible in terms of their career progression. They no longer want to simply move up a company hierarchy, but across it, to where the next challenge is emerging. It is particularly the case with CIOs.
So what of the recent Forrester Research report which suggested that the CIO might be on the endangered species list, replaced by external consultants and savvy business managers? [See, "Is IT Dead", page 28.] According to that report, the devolution of many information processing activities out to the business will eventually mean that the IT department will disappear. The end users will conduct their own information processing, aided by external consultants who will sell and support an underpinning information system.
Champion states that "the notion that the CIO will go away is crap". But he is quick to acknowledge the changing nature of the role in Internet-enabled businesses. "The role will change dramatically. The CIO is more of a business person. "Will the CIO want to go on to be the CEO? Maybe, maybe not," he says.
Champion acknowledges that in the past career progression has meant that a CIO would need to rise higher up the business hierarchy, he believes that is no longer the case. "In the new world, provided the equity policy is motivational, you will see people spiral more, moving from intellectual challenge to intellectual challenge," he says. Again, however, this demands corporate structures and senior management accommodate this new career track. This leadership challenge holds as true for CIOs as for CEOs, as both will probably want to encourage in-company "spiralling" rather than watch top talent drain away to more flexible employers.
It demands a new style of management, Champion says, who characterises the successful players of the future as those able to conduct leadership at light speed. To achieve that, then, "you can't be a controlling manager, but a participative leader". It is a transition which he believes most companies will have to go through, simply because of the speed at which modern business moves. There simply is not time in this new economy, Champion says, for management to control and dictate from on high. Rather, it must react swiftly to information coming from trusted employees at the coalface, using that information to tweak strategy and direction.
With reference to Ed Gubman's tome on management, The Talent Solution (McGraw Hill), Champion says that the "upstream value for corporations is in people's minds. In my view, successful leaders know how to tap into this and unsuccessful managers don't. And that is the case whether you are a Telstra or a Champion.com."
He adds that the successful leaders will be those who "monitor and guide rather than decide. There just isn't enough time."
Desperately Seeking Someone
According to Geoff Champion, head of executive search firm Korn/Ferry International's Global Advanced Technology Practice, the following help recruiters weed out brain-dead applicants.
* The eyes have it. Champion says a look in a job candidate's eyes will tell a seasoned recruiter whether that individual is switched on or long dead.
* It's not what you say, it's the way you say it. How good are the candidate's communication skills, can he or she engage someone's interest or are they sending the interviewer to sleep?
* Only the enthusiastic and the motivated survive. Studied orations delivered without passion won't take a candidate past first base.
* Is there a cultural fit? In the Internet economy it will be obvious in minutes whether the new recruit speaks the same language as the organisation. When you're working at this speed you have to trust the people you are working with.
- B Head
Sex and the New Economy
In the new Internet-driven economy gender is one issue which is really opening up, according to Geoff Champion, head of executive search firm Korn/Ferry International's Global Advanced Technology Practice. But this is not a case of "one sex fits all", but of business appropriately deploying the different talents of men and women executives.
"Women are more objective about the way they look at business issues," Champion says. "There's still a lot of penis envy among men." But he cautions that "women can put a lot of emotion into their business decision, and that can be dangerous". Balancing one against the other, however, can be useful for new businesses.
- B Head
You're Never Too Old
Baby-boomers still rule
Is the new economy really the province of the pierced punks? At first glance, the young seem to hold all the aces in the new economy: weaned on high technology, comfortable with the speed of change, and unfettered by wardrobes plump with pinstripes. However, Geoff Champion, head of executive search firm Korn/Ferry International's Global Advanced Technology Practice, claims that when faced with two recruits who are equally matched "there is a lot to be gained with the older person, provided that there is a cultural match. Why? Because they've made more mistakes."
- B Head