Read an Excerpt
HEADS
Business Lessons from an Executive Search Pioneer
By RUSSELL S. REYNOLDS JR., CAROL E. CURTIS The McGraw-Hill Companies, Inc.
Copyright © 2012Russell S. Reynolds, Jr.
All rights reserved.
ISBN: 978-0-07-179500-5
Excerpt
CHAPTER 1
LIFE BEGINS AT 62
The 1989 annual report of Russell Reynolds Associates (RRA) featured a beautiful photograph of the famous ancient Greek sculpture Winged Victory of Samothrace on its cover. The picture, on the twentieth anniversary of the founding of my (now former) firm, was chosen because of its suggestion of victory, success, and confidence in the future. By that point, the firm had really arrived. With 21 offices worldwide and a staff numbering more than 500, we were enjoying the most productive years in our history.
Four years after that annual report was published, I retired from the firm with enthusiasm and confidence in the future. I had made up my mind two years earlier that I wanted to create a new life for myself. I felt that my persona, name, and actual being had been so engrained in my business that it was time for me to free myself up and reacquaint myself with my family and friends and other interests. Nevertheless, actually leaving the Park Avenue headquarters of a firm that bears my name—to which I had devoted virtually all my time and energy for more than two decades—was emotionally difficult and took some serious readjusting. Negotiating this transition was a lesson in embracing major change, with good advice from lots of well-meaning people, and using the change as a building block to the next stage of my career.
The 1980s had been highly productive years at RRA. We had grown at something like a compound rate of 23 percent a year for 20 years. Each year seemed to mark a new major milestone. In 1983, new assignments exceeded 1,000 annually for the first time. In 1984, we opened offices in Singapore and Sidney, followed by Frankfurt, Melbourne, and Tokyo in 1986. In 1987, the year we opened the Minneapolis-St. Paul office, I promoted Hobson Brown, Jr.—at the time, one of my closest business friends and a popular and productive executive in the firm—to the position of president and chief operating officer.
It all made for a pretty picture, but within six years, I would walk out the door of the firm I founded, unsure of my next step and still reeling from the rapid chain of events that had led to my departure. I wondered how long it would take for the door to close. Now it has.
RUMBLINGS AND INSURRECTION
Despite appearances, discontent had been brewing at RRA for some time. In fact, the history of executive search is filled with examples of creative destruction, with firms growing out of other firms as a result of key employee defections. Early headhunting operations, housed within management consulting firms like Booz Allen and accounting firms like Price Waterhouse, spawned early recruiters such as William Clark, which in turn led to RRA.
Still, I confess I was surprised that RRA was not immune from this trend, despite the fact that I had a reputation for hiring talented, well-educated employees with entrepreneurial ambitions—and outsized egos—of their own.
The first intimations of discontent came from David Norman, a highly impressive, dynamic, and successful recruiter based in London. By the 1980s, our London office (established in 1972) had built a reputation as the most consistently successful executive recruiting firm in the United Kingdom. That was due to hires who were both well educated and well connected. Norman, a graduate of Eton and Harvard Business School, took the firm in London to new heights in terms of brainpower, connections, and drive, and the office expanded commensurately. Revenues and profits were impressive.
By 1980, Norman was made managing director of the London office. That was the year we successfully recruited Ian MacGregor as the chairman of British Steel, marking the first time in the United Kingdom that a nationalized industry employed a headhunting firm to recruit its chief executive.
But Norman was restless, self-confident, and eager to run his own show. After prolonged conversations about the firm's culture, he left RRA in 1982 to form executive search firm Norman Resources Ltd. A year later, in what British writer Stephanie Jones described as a "mass defection," three other RRA London consultants, Norman Broadbent, Julian Sainty, and James Hervey-Bathurst, departed to join Norman. Taking along four additional RRA employees, they formed London-based executive search firm Norman Broadbent International.
RRA's London operation survived relatively intact, thanks in large part to our expertise in financial services, my own specialty and a lucrative niche for any executive recruiting firm in London. We kept chugging along. In fact, after a few short years, the London office's profits exceeded its revenue at the time of Norman's departure.
HIGDON AND JOYS
The next tremor was closer to home. It came from Henry Higdon and David Joys, key RRA employees who went off on their own and, in doing so, generated considerable worries.
Higdon joined RRA in May 1971, making an immediate impact at age 29. He established our Houston office, then moved to Los Angeles in 1980 to grow the West Coast operation. Shortly after, Higdon opened a San Francisco office and was soon wired into the key players in the business world up and down the California coast.
Higdon had been gone from headquarters for nearly a decade when we agreed he would return to New York, which he had been visiting intermittently for staff meetings. But Higdon by his own account was not altogether happy with what he saw. Joys had recently returned from running our highly successful London office and was also frustrated.
"Things had changed in the firm," Higdon says now, reflecting on why he became dissatisfied. "They'd go around the table at staff meetings and say what new business calls we've made. It wasn't focused as much on quality of searches, execution, getting the job done. And the worst thing I saw [was] that the associates, the younger people in the office, started reporting to office managers who were practice leaders as the firm grew, and developed these specialized practices. Instead of pleasing the clients, the associates started pleasing the bosses.... It was not as entrepreneurial."
NONCOMPETES
Another aspect of the firm that had changed since Higdon's departure for the West Coast was my decision to institute noncompete agreements. Associates were prohibited from doing business at another search firm with clients they had worked with at RRA. Higdon did not approve.
The year was 1986, and RRA was going strong, still gaining momentum every year and growing exponentially. Before coming back to New York, Higdon leveled with me, "Russ, we like LA, and if I started my own firm I could do it right here in LA. I'm current; I know the market; I know the clients; I know the people. If I come back, I want to know what your thinking is, and what my future at the firm is." Higdon also wanted his noncompete agreement to be waived.
Sensing storm clouds ahead, I invited Higdon out to my home on Clapboard Ridge Road in Greenwich for a meeting over dinner. We talked things over for six hours. Recalling the meeting today, Higdon says, "It was about what I thought about the firm; it was about me, about the future of the firm." In the end, "[Russ] agreed to waive the noncompete," says Higdon.
HIGDON, JOYS, AND MINGLE
But Higdon indicates that he was still not satisfied: "I was in charge in Houston, you know, and in charge in many ways on the West Coast and in Los Angeles. Then two other guys in the firm, David Joys and Larry Mingle, approached me, and the three of us talked." After determining that the West Coast arm of RRA had enough people to survive without th
(Continues...)
Excerpted from HEADS by RUSSELL S. REYNOLDS JR., CAROL E. CURTIS. Copyright © 2012 by Russell S. Reynolds, Jr.. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
