Executive Recruiter News, June 2001, p. 1, 4 - ©2001 by Kennedy Information LLC
Korn/Ferry Int'l taps Paul C. Reilly, 47, the chief executive of Big Five accounting firm KPMG International, as its own chairman and CEO in a bid to reverse layoffs, lift its sagging stock price adn set a new course for the world's largest retained executive recruiting firm.
But unlike rival Spencer Stuart, which elevated 46-year-old David S. Daniel form his previous role as managing director for the Americas to CEO just two weeks earlier, Korn/Ferry went outside its own ranks to find the talent to lead the firm into what remains, despite the continuing U.S. economic slowdown, a high-growth future for executive search firms.
The conclusion late last month of the five-month search to identify the successor to Windle B. Priem snuffed-out publicized reports that the firm might choose an inside candidate or another high-profile outside candidate such as George Shaheen, the former Andersen Consulting CEO whose storied management successes couldn't right webvan.com.
The search was conducted by Korn/Ferry senior search consultants, guided by a search committee of the Korn/Ferry board of directors.
Success profile
Reilly was named CEO of KPMG International in 1998. He joined KPMG in 1987 as the partner in charge of its Tampa Bay consulting practice. Over the next decade, he assumed a number of larger roles including national leadership of the financial services and real estate practices, chair of the international banking and finance consulting practices, and member of the firm's board of directors and management committee.
Prior to KPMG, he served as president of Southeast Capital Corporation, a real estate development company in St. Petersburg, Florida. Reilly holds a master's degree in business administration and a bachelor of science degree, both granted by the University of Notre Dame.
KPMG International has more than 100,000 employees in 156 countries and its member firms provide audit, tax, consulting and financial advisory services, generating annual revenues of more than $13 billion. Korn/Ferry's total fiscal year revenue was $653.8 million for the period ended April 30, 2001.
Says Priem: "He has a proven track record running the global operations of a world-class professional service firm and we are confident that he has the judgment and professional experience to lead Korn/Ferry through its next stage of growth."
Reilly says he was as impressed by the opportunity at Korn/Ferry as much as the bright future ahead of the executive recruiting industry.
"Korn/Ferry has the brand, client base, global reach and professional expertise to continue leading this growth industry going forward. There has never been a better time, nor has it ever been more important, to be in the business of enabling corporations around the world to assess, identify and recruit senior management talent," Reilly says
Firm Transition
With the arrival of Reilly, co-founder and long-time chairman of the firm, Richard Ferry, 63, assumes the position of founder chairman.
Priem, who has been with Korn/Ferry for 24 years and guided it through its initial public offering in February 1999, will continue his service as a director of the company and will remain active in the firm and with major clients identifying senior management talent.
Assessing the challenge
Former AESC president Janet Jones-Parker, now a principal with Jones-Parker/Starr in Chapel Hill, North Carolina, says Korn/Ferry's search committee must have wrestled with the old question of whether to elevate an insider or, in a show of support for its own business, look outside the firm.
"The old problem is, 'Do you take someone out of the search business?,' or do you look outside for someone out of consulting who understands managing a professional services firm," for a fresh perspective, Jones-Parker says.
"The risk for any firm hiring an outsider to manage an executive search firm is that the newcomer won't understand the nuances of the search process and the search business," she adds. "Most of the time, these people think they do understand it, but quite often they realize it's a more complex business than they imagined."
One of those complexities is balancing the generational interests of a firm's senior-most consultants and partners with the concerns and motivations of its youngest partners and consultants.
"The traditional 50-something who is doing search the way it has always been done, with great client relationships, can continue to operate that way until they retire," Jones-Parker says. But on the other hand, there are the "young, aggressive" members of the firm. "They grew up with technology. They have a heightened sense of urgency when it comes to doing search. They have a broader sense of the solutions they want to bring," she says.
When you bring someone in from the outside, sometimes they don't know what they don't know about the search business. These new CEOs, especially when they're brought in from outside the industry, need to figure out how to gain the credibility," with everyone from the firm's biggest billers and "executors" to its researchers and administrative staff, Jones-Parker says.
"My recommendation to these guys is to actually do a search. Sit with the researcher, with the person who is making phone calls, even if it's just for a day," Jones-Parker advises. "They've got to integrate themselves and speed the time [it takes] to understand the business. Go outside the apparent leadership and listen to the people who are outside the club of leadership because these people have some good perspective. Then, you understand the nuances and calibrate what you think you've learned about the search business."
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