Kevin Kelly isn’t a know-it-all. It would be easy to assume that Kelly, CEO for senior-level executive search and leadership consulting services firm Heidrick & Struggles International Inc., could tell you some intricate strategy about running just about any business. After all, he spent a good portion of his career as a senior executive overseas, he wrote a book on being a CEO, and he makes a living talking with some of the world’s most important people about who they should hire.
Despite all that, Kelly likes to keep things pretty simple. He does-n’t want to hit you too hard with numbers or strategy. Instead, he often shares stories about some of the gaps in hiring, retaining and growing senior talent that people just don’t think about. He has one story about the importance of knowing what your senior employees want.
“I was working in recruiting in investment banking,” Kelly says, “and there was a head of a hedge fund business who resigned, and when he resigned, his managing director said, ‘Why are you resigning?’ He said, ‘I wanted to be head of the desk, and I’m nominally head of the desk, but I’m not the real head of the desk,’ and the manager said, ‘Well, we can make you the real head of the desk,’ but it was too late. This other firm had already offered this other position, and a week later, they found themselves without an $85 million business, which is a huge gap to have.”
Kelly thinks about stories like that all the time — both for external customers of the executive search industry firm and his own direct reports. So while he probably could have come up with some mind-boggling strategies when he transitioned from president of Asia Pacific and Europe to CEO in 2006, a year Heidrick & Struggles did nearly $502 million in revenue, he instead focused on the blocking and tackling so many companies ignore. Rather than trying to give daily help to all 1,800 employees, his strategy was about touch points he could hit to influence the whole company, doing more work on recruiting and hiring senior talent, and creating processes to build a company culture that understood and satiated those employees to ensure that he never had any first-person, $85 million gap horror stories.
Explain the job
The first simple step in building up a company culture starts with you focusing on the people you bring in.
“It’s critical during the recruitment process that culturally and through a thorough process of referencing you find individuals that will continue to thrive in an organization that has the same values,” he says. “There is a fascinating statistic that 40 percent of senior executives leave organizations or are fired or pushed out within 18 months. It’s not because they’re dumb; it’s because a lot of times culturally they may not fit in with the organization or it’s not clearly articulated to them as they joined.”
At Heidrick & Struggles, Kelly makes it a point to help with the recruiting and hiring process of any senior employee.
“For me, bringing the right people into the organization is critical,” he says. “I probably spend 30 percent of my time on that.”
That doesn’t mean you need to sit down in HR all day and wait for people to come in for job interviews or spend your Fridays at college job fairs. A large part of what Kelly does is about articulating the company’s goals. So while he continues to let the normal chains of command vet candidates, he does the interview where the candidate can get a full view of the company’s expectations.
“I can articulate what we want to do as a firm, how we can become a breath of fresh air in a stale industry and how we want to differentiate ourselves,” he says. “Being able to articulate that is critical in getting the right talent in place.”
Kelly notes that more than half of his direct reports have worked with him for more than five years, so it’s not that he micromanages or overturns their hiring decisions. But he takes time with candidates because it sets an example about how important the process is, and he likes to get involved when it comes to making sure a candidate can fit in.
“It’s only for getting people over the line, if you will, or talking about company culture, talking about what we’re doing, that I’ll step in,” he says. “I can’t interview all 1,800 [employees], but if they are significant hires, then I’ll step in and do that. It’s about having a great team, and you’ve probably heard this a 100 times, but it’s amazing how many organizations don’t actually do it. One of the things I learned early on is it’s critical to have the right people in place to create a unified stance in where the organization is going.”
Give attention to direct reports
Once he helps get the right people at the top of Heidrick & Struggles, Kelly knows that part of his job is to keep them there so they can build the business. The touch to keeping people happy is both art and science.
“There are a lot of individuals out there across the globe who are extremely intelligent,” he says. “But in today’s world, particularly as a CEO or an executive, if you don’t have the emotional side of the equation, then you’re not going to bring people along with you.”
That requires what Kelly has termed “cultural quotient,” which is about understanding how important company culture is to success. The first part that most CEOs don’t get is you have to realize your direct reports don’t feel like you’re giving them enough credit.
“Usually, the biggest mistakes people make are not appreciating their employees — which leads to retention issues — and how simple it is just to convey to people that you appreciate what they’re doing,” he says. “(That effort) is more important than money and will keep an individual from having a situation where a key employee resigns, they have a hole, and it takes three to six months to fill that hole so they’re missing that opportunity in the market.”
Kelly says letting things get to that point would be silly, because it’s easy, and often free, to show your appreciation.
“It’s as simple as a handwritten note,” he says. “It’s communicating to them that they’re important to the firm, articulating to those individuals that they potentially have a career path if they’re happy in what they’re doing. It’s taking time to assess them and asking how they want to develop their career. I’ve had a number of experiences where I’ve talked to executives or executive teams and just having a third-party dialogue about what they’re interested in doing, how they see their career and how they can develop has gone a long way.
“This younger generation, they crave feedback, and you need to be direct. Feedback is one thing that most organizations aren’t very good at, and lack of feedback, just telling people you’re doing this right or this wrong, can lead to an individual leaving. Not giving appropriate feedback can hurt the organization in terms of morale and culture.”
Putting too much fluff in your comments can also take you away from important jobs like having those conversations with people about their aspirations.
“I found that I’d have conversations with people and I’d say, ‘Have you ever looked at this way or maybe you want to think about this next time?’ and nothing changed, and then I’d try it again and nothing changed,” Kelly says. “So what got frustrating is it took me three times as long to convey a message to somebody before they got it, because I wasn’t direct, and in today’s world, and this is one thing I know from spending a lot of time with CEOs, we all want more time. So it’s going to save you a hell of a lot of time if you can give direct feedback.”
Give employees room to grow
There’s one final step beyond just talking with and giving feedback to people about their career aspirations: using that to give them room to grow.
“There are three critical components to any job,” Kelly says. “First and foremost is interest in what you’re doing, second is compensation — and when I talk about compensation it’s being treated fairly — statistics show only 30 percent of people leave for higher compensation. The third and the most important is learning.”
Kelly has people come to the firm all the time looking for a new job, but they don’t realize it’s not their job that’s bothering them, it’s their stalled learning process.
“Individuals come to us at the senior level, when their learning curve flattens out, and they’re bored,” he says. “They usually blame the company, so they move jobs, and they find it’s great for six months, but then they’re doing the exact same thing. So how do you create a learning culture in an organization and how do you continue to push people’s intellect to have them nurture that piece of the equation?”
The answer is taking a proactive approach to the problem by adding new learning pieces to people’s existing roles.
“We implemented a training and development organization, which focuses on development,” Kelly says. “We assess people, we give them new opportunities for moving around the globe, we take some of our best people and put them around the globe to continue with their learning curve.”
That has given several people at the company a new lease on their careers.
“We just sent three people to Asia Pacific to capture the market there, and they helped carry the baton in terms of corporate culture,” he says. “They develop themselves as individuals, plus the cultural component that I talked about because they get a chance to show they could be future leaders in the firm.”
That international element works at Heidrick & Struggles, but not every company has that capability. Kelly’s main point is that, as CEO, you have to figure out what new elements people can add to their job by taking points from those conversations on what they want to do to give them a bit of growth. Those little extras can help drive retention, set a management example and grow your company.
Heidrick & Struggles has certainly seen the boom from having happy employees, pushing revenue to more than $648 million in 2007, up more than $146 million from 2006. And, again, Kelly’s not being a know-it-all, but he thinks his company culture played a role in that.
“Culture is critical to the success of an organization, particularly a culture where you want to have fun and learning, and statistics show that organizations where corporate culture is high are 20 percent more productive than their direct competitors,” he says. “So there’s a correlation between having a great corporate culture and revenue and profit, and that’s why I’m a huge advocate of it.”
HOW TO REACH: Heidrick & Struggles International Inc., (312) 496-1200 or www.heidrick.com