Fifteen years ago I met with the healthcare practice leaders at a large, global executive search firm. During my conversation with one of the Senior Associates, we compared notes on search methodology and execution. What I learned was surprising. One of the first steps taken at this firm when starting a new search engagement was to compile the “off limits” list – the people in their database who would not be contacted about their client’s open executive position regardless of their qualifications and potential interest. The Senior Associate explained that it was necessary due diligence to avoid conflicts-of-interest among the partners and their various client relationships.
I understood the explanation from the search firm’s perspective, but was struck at how counter it ran to my philosophy of focusing exclusively on the client’s goals. What if the right candidate for their client was excluded because the search firm deemed them off limits to protect a partner’s relationship with another employer?
To be clear, all search firms have an ethical obligation to not recruit executives from their own clients. It’s a basic principle of trust, honoring relationships, and good business practice. Our role is to help build teams, not tear them down. For big, multi-office firms with many partners and clients, the off limits list is compounded by sheer numbers and can significantly restrict the candidate pool for any given search.
As an example, if the firm recruited a Chief Operating Officer for a regional health system in New Jersey, it would then be blocked from contacting the Chief Nursing Officer or a Vice President at that same organization about leadership opportunities with another client in Pennsylvania. Multiplied by the firm-wide client list, the off limits barrier takes on real significance. This problem has become more acute as the healthcare industry consolidates to fewer, larger health systems.
Unlike other professional services that serve the healthcare industry (e.g. legal, public accounting, consulting, I.T., revenue cycle), engaging services based on volume and scale in executive search comes with a potentially big risk: The missed opportunity to evaluate and hire the very best candidates because they were flagged as “off limits” or “blocked” from consideration.
A blocked candidate may be fully qualified and open to new opportunities but not brought forward because they are interviewing with one of the firm’s other clients for a similar type role. More than a few senior executives over the years have expressed their frustration to me as a result of this scenario.
In my view, an executive search firm should never impose barriers to accessing talent for the client organizations they are engaged to represent. Likewise, they shouldn’t prevent fully qualified leaders from exploring a career opportunity because they are managing competing interests among clients. The firm’s singular focus should be uniting the client organization with the most highly qualified candidates that are available through an inclusive search process.
Well-resourced and skilled boutique executive search firms have far less exposure to off limits concerns and can help organizations proceed with a search that is laser focused on their objectives and not shackled with conflicts-of-interest. By aligning with fewer strategic clients and managing a limited number of projects, each client search is given the highest priority. Among the first steps taken by the project team will be to identify who will be contacted about the opportunity, instead of who will be avoided.
Healthcare data tends to draw a positive correlation between volume and quality. Performing more complex heart procedures or hip replacements will lead to better patient outcomes and safety. However, the reverse may be true when conducting a search for executive talent to lead a healthcare organization. Volume can threaten quality if access to the best candidates is being limited by competing interests.
Your thoughts and feedback are welcome.
If you are interested in a conversation about healthcare, executive search or career change, please email me: jkiernan@managementpathways.com.