Grace Dunbar had some serious decisions to make. As General Manager of Superior Packaging, she had P&L responsibility for a $40 million operation which was facing a number of challenges. Superior was a privately held company owned by four founding shareholders who were not active in the business. She had joined the company three months earlier and was selected on the strength of her eight years’ experience as VP Sales with a competing organization. She knew the field well, the customers, the pricing parameters, and the manufacturing requirements.
Being a General Manager is Another Story…..
But now she was responsible for a number of new areas with which she had relatively little experience. Running a sales organization was her area of expertise, so she could hold her own here without question. Manufacturing was somewhat familiar because, in order to quote on packaging projects, she had to know what was and wasn’t practical and what would enable her organization to earn the required margins. Finance and accounting was not her strong suit; however, she did have a basic grounding in university-level accounting. Human resources was an area that she had had little involvement with up to now; however, with the ever-expanding legal and regulatory issues facing businesses in this area, she knew that it would be one that could not be ignored. Customer service was another area that Grace had had a lot of interaction through her sales roles in the past; however, it was different now that she needed to ensure that the company’s interests were considered and she couldn’t always be solely a champion for the customer at all costs. Finally, procurement and logistics was a black hole to her. Occasionally, delivery issues had been a frustration for her when, as a VP of Sales, she had been required to resolve problems on behalf of her customers, but she had never needed to dig deeply into the source of problems or their long-term resolution. Her interest then had been strictly focused on fixing the issue at hand. Now she had it all and there was more than one wheel on this bus that was beginning to wobble.
Without the Numbers – Where Are We?
Most seriously, monthly financial statements were not being generated on a timely basis. Their availability was erratic and never before the 10th workday of the month. By that time, the next month was half over and any action taken based on the information available could not have an impact until the month following, at best. She didn’t have confidence in her Accounting Department or its leader, Controller Jeff Gordon, who had been with Superior for three years. Cash from operations had declined for two months in a row, even in the face of rising sales. Trying to identify the source of the problem was a frustrating experience, due in part to the delayed statements and the apparently faulty way in which costs were collected and flowed through the statements. Grace decided that she couldn’t continue much longer with Jeff running the Accounting Department and that she would have to make a change.
Alternative Approaches for Moving Forward
She looked at her options and summed them up as follows:
- Recruit on a confidential basis? (An approach that comes with its own problems and risk) (Read More: What’s That You Say?)
- Make a clean break with Jeff and limp along with her existing three-person accounting group for a while?
- Bring in a contract Controller for a couple of months until a full-time replacement can be hired?
After some consideration, she decided on the second of these alternatives and set about finding the Controller that would fit all of her needs.
Alternative Approaches to Recruiting
Again, there were choices.
1. DIY (Do It Yourself) – Grace was an eight-year veteran of the packaging industry and she knew a lot of people. Two members of her ownership group were also packaging warriors but their contacts were a little dated. She had a small HR team that could place an online ad and do the screening of potential candidates. That, together with her contacts, could generate some leads for a replacement Controller who had the requisite experience and cultural fit.
The advantage of this approach was one of cost saving, in that there would be no recruiting cost. The downside of this strategy was that her time to focus on generating candidates was extremely limited, especially now that she was working with a leaderless accounting department and the ownership group was becoming increasingly agitated with the declining profitability. Since the cause couldn’t be explained, corrective action couldn’t be taken. Another downside was that with her limited resources, she would really only be searching a small segment of potential candidates. She would be fishing from a pond and not the ocean.
It has been estimated that up to 80% of employed people are in the “passive” job market. These people are not actively searching for a new job or looking at online ads, because they already have a job, they are reasonably happy and they have busy lives. However, if a recruiter approached them and presented them with an attractive opportunity which might involve an interesting challenge, a potential increase in compensation or an attractive location, they might very well consider it.
2. Engage a Recruiter – A second choice was to engage an outside recruiter (head hunter) to focus on this issue and bring forward a select group of candidates who could be interviewed. Even with this option, she faced choices – she could hire a contingency recruiter (or several) in which the recruiting fee would be paid 100% on the successful hiring of the chosen candidate, or she could engage a retained recruiting organization which would approach this process as a consulting project, with fees paid in instalments (usually a third at the start, a third in 30 days and a third upon the successful candidate accepting the offer).
a) Contingency Recruiting Option – Considering these alternatives, the main advantage of the contingency option was that no fee would be paid until a successful hire was made. The downside of this was that the risk to the recruiter is such that contingency recruiters tend to work on a lot of projects at once and hope for a quick success from an existing inventory of candidates or by depending on online ads. This prevents them from really digging deep into the “passive market” mentioned earlier. An even worse situation can result from engaging more than one contingency recruiter for the same project. This “non-exclusive” arrangement guarantees that no recruiter is seriously committed to solving the problem beyond a cursory effort to present a few candidates out of their inventory in hopes of quick success. There is also the real possibility that more than one recruiter will forward the same candidate for consideration. The contingency approach is similar to the DIY in that it is a limited approach, akin to fishing from a pond.
b) Retained Recruiting Option – With the retained recruiting approach, the relationship is always an exclusive one and because of the professional “consulting” arrangement, the recruiter is incented to penetrate the passive candidate market deeply to find the best possible candidates that are available. It truly is like fishing from the ocean.
Grace didn’t have a lot of time. She had to ensure that a process was in place to generate excellent Controller candidates within a few weeks. She had a business to run that required her full-time attention. She knew that the successful candidate would not only have to be a technically qualified accountant (with cost accounting and manufacturing experience), but also would have to have the right “soft” skills to be a “fit” with her organization.
She needed to start to build her dream team. Would she be best served by sourcing candidates from a pond or from the ocean?
As an executive recruiting firm based in Toronto, Kathbern Management helps companies find the executives and senior managers who not only have the experience and credentials to fulfill their responsibilities but also have the emotional and “fit” requirements that will enable them to be successful in a particular environment. We simplify the process and, through our deep research, are able to bring more and better candidates forward than would ever be possible through a do-it-yourself passive advertising campaign.
Contact us today for a free consultation about your key person search.