Interview with Peter Szabo, SpenglerFox President for North America
SpenglerFox has a few searches going on in the US market at present. But I feel it would be better to start with a general overview of what’s happening on the North American market. SpenglerFox generally manages its business through two channels: organically (i.e. using internal consultant resources) and through partner networks.
My role in this process has two aspects. On one hand, I have worked for several years as SpenglerFox’s Chief Partnership Officer and my focus has been to develop the company’s global presence. In that role I made it a priority to look for partner companies that match the SpenglerFox DNA, if you will. We were looking for search and consultancy partners to boost our Practice Group work in Life Science, Industry and the Consumer Space. My previous brief was thus to build local (and sometimes regional) partnerships in areas where SpenglerFox did not have offices. Today, I can honestly say that this work has paid off: SpenglerFox now has a truly global reach; and in the past few years we have continued to move into new regions: Central Asia, the Nordics, expansion in the
Middle East, etc.
I believe the networked or associated approach is working incredibly well for the company. The SpenglerFox internal consultant team has worked to develop long-term partnerships that today generate repeat cooperation on new projects. Part of our consultants’ brief is to nurture business partnerships and to follow up with regional partners on new project ideas and leads. As you may have guessed, the SpenglerFox partner network is my "baby". Having been involved from the very start, I’m most often the person you come to in SpenglerFox to find the right consultant from our network: this applies both to our internal team and to SpenglerFox affiliate partners. Today alone I’ve received a range of diverse requests, where one client needs support in Brazil, while another Belgian client sent a request for support on a project in the United States. So you can see our reach is truly global in nature. Clients come to us not just for local, but also for their global needs.
By moving to the United States, I have more or less become SpenglerFox’s brand ambassador for this market. I now help pave the route for existing SpenglerFox clients in Western Europe, Central and Eastern Europe and the Middle East to access the US, or more broadly, the North American market. My main role is to help these partners get a foot in the door. On the flip side, my team also focuses on developing partnerships with the US-based headquarters of multinational companies.
SpenglerFox provides support to these businesses and also to (so far) more US-focused businesses that have an interest in expanding outside the North merican
market. For our European and Middle Eastern partners, we do the contrary: we help them with their entry into the US market.
One of my favourite aspects of this new position is that it truly builds on the work I have done for SpenglerFox up to now. During my tenure at SpenglerFox, I have worked in all regions of the world. I have passed through numerous countries and understand and know the specific business processes and cultures in markets all over the globe. I feel I can honestly say that I can in almost all cases refer the right consultant for a specific job. This stems from my experience with and research on individual markets and working, in the past, for the headquarters of North American businesses operating in the European Union and also for Asian businesses that have since expanded to the US market.
Local assignments are an important part of my work here. I work with a set of colleagues and partners on the ground. I must admit that it takes some time to learn about and understand a culture; and I feel that in the case of the US or North American market this will take more than 1-2 years.
That said, our growth model here will be similar to the global one: both organic and through partnerships. I think it’s important to mention here that SpenglerFox has taken a big step in launching on the US market. This is something that we have been discussing internally at SpenglerFox for almost a decade now. I think we’ve chosen the right time to take this step, given that the US market is recovering and bouncing back from the Great Recession.
I would also mention here that SpenglerFox is a very open-minded company and for some time signals had been coming from both sides (from US and European/Asian clients) that opening offices in the US was the next logical step. It was our past partnerships and specific project work, along with customer needs, that motivated us to do the US launch. Our network was sending us signs saying "we need you" and so we listened to it. It is also important to recognize the global business reality: Europe is stable but more or less flat in terms of business growth. Germany continues to be the motor for the EU economy. But we, at SpenglerFox, felt the US economy would bounce back sooner: that there would be more business opportunities in this arena. We wanted to jump in and be part of that expected growth and help customers bounce back from the crisis.
Looking at the US market, I would say that there are not so many NEW trends. Take, for example, the energy market: energy does not disappear, it transforms. So I would characterize the US market as "evolving". There are some industries where growth will remain flat, but in others will expand. I think one important hing that has happened over the past six months are changes in the USD/EUR exchange rate: you have a strong dollar, which won’t likely help growth in US exports.
Generally speaking though, we have a seen strong growth in service requests to SpenglerFox, i.e. compared to 2012 and 2013. Our 2014 was a bit quiet, but all
indicators so far this year suggest that 2015 will be a strong year for business. Even US government statistics offer reasons for optimism. Among them are drops in unemployment levels, where we are also starting to see growth in hires at the management level. As companies start to grow, they need skilled management to lead their teams and this is a positive sign for us.
We also continue to hear confirmation of this trend throughout our partner network as well as from competitors: everyone is overstretched at the moment and they are hiring consultants to manage the increased workflow. Today, the USA is a candidate-driven market. Openings for managerial roles are on the rise; hence, good candidates are able to be selective in their job search process; without the need to jump at the first opportunity. This creates pressure for quicker decision-making on the employer side; especially when companies are fighting for top talent.
At present, I see the oil or energy markets pushing a domestic boom. There has been a lot of talk and concern about US energy independence in recent years and this has pushed US businesses to maximize efforts to exploit domestic resources. Beyond that, I would name the Life Sciences sector as one of particular nterest. US healthcare reforms are driving growth, and new technologies needed for home care are pushing innovation and new business expansion. We also see significant growth in some new or upcoming parts of the healthcare sector (i.e. the bio science and bio similars pharma). Additionally, even in the US, people realize that a focus on prevention could noticeably improve their health; hence, there is higher demand for healthier food (organic products). This is impacting the consumer industry in a variety of ways; namely, we see significant job growth in organic food-related industries.
On the other hand, some pharma businesses are struggling due to their limited product pipelines, while in the FMCG sector fast food companies grapple with the need to reinvent themselves. It’s worth noting that we encountered these trends much earlier in Europe. However, here in the US, they have come up more rapidly. This is because access to investment capital and greater openness to risk-taking helps new ideas develop much faster on the US market.
However, again, we see here signs of evolution and disruption: it is smaller, newer players that are filling gaps for product and/or service demand. For example, then I recently spoke to one of our partners in California they reported a boom in their business. When we first met 2-3 years ago, they said the market was "stabile but stagnating." Now they are considering a move to new offices as they will soon run out of space (due to extra hires that are directly related to increasing customer demand). This particular San Diego partner told us that their current overwhelming workload is literally driving them to look for more space. They noted that they have more demand now than they did before the crisis. So we hail this as a positive sign for growth: they are a very niche company but can’t keep up with demand. If they have strong demand, this means more business for other, more established companies will follow.
I would also add on a brief mention of the manufacturing industry here. There is a visible trend of growth in domestic manufacturing. You can see that US manufacturers are growing, despite the trend toward extinction over the past 20-30 years. This is a positive sign for the market: going forward it will create more jobs. For example, you see this trend to a degree in the automotive industry, where we have noticed a recovery from the earlier crisis. And the good news is that support industries are growing from this upward trend as well.
We currently see a trend where European companies’ sister offices are being brought over and/or their existing business expanded in the US in order to make the most of the local economic rebound. This applies to a wide range of industries: from finance, pharma, industrial, energy, etc. to firms producing consumer goods. The key factor here is that they are importing knowledge from their home countries or from other regions. That said though, we find it important to help our clients understand and face the fact that the US market is, in many ways, different from the European one. You immediately notice upon arrival that processes are different than what you had perceived from the outside. One must adapt to the way it is done here. It's not easy and one needs local experts, talent, managers to facilitate that understanding. Many have struggled due to wrong strategy selection. European companies coming to the US often feel that they can copy processes and strategies from their home country or other traditional markets, but they soon realize that when doing so, success is not guaranteed. You have to make assessments and employ the right Americans to get the job done.
European management transplants do not always work out. The "cut/copy/paste" is not a winning model for the US market. You have to learn about and understand the market and adapt to local trends and needs. You need local management to help with the "translation" and transition of their HQ’s goals.
One thing I find particularly interesting (and very surprising) is how Europe has surpassed the US in the fluidness of administrative systems. EU processing times are much more transparent and fluid. I see US administrative and bureaucratic procedures continue to run into bottlenecks. The things you take for granted in Europe are now causing procedural headaches in the US – this was definitely a surprise for me. Similarly, the structure of the healthcare system also creates difficulties in processing and meeting worker needs. And educational costs (at the university level) have begun to throw a wrench into employment processes: these costs make US nationals more expensive to employ – even at entry level.
In the US market, just like anywhere else, it is the understanding of the market, local culture (this often differs from one US region to another), people's behaviour, decision-making processes and the speed and complexity of business that company executives and managers need to comprehend before making tough decisions. This applies to new investments and M&A plans; as well as expansion of existing businesses. I believe companies like SpenglerFox can provide vital support as companies travel the route to market. At SpenglerFox, a balance of local understanding, coupled with our local consultants’/partners’ long-term experience, is further supplemented by strong organisational understanding based on our team’s presence both here in the USA and in our clients’ home markets.
We are delighted to announce the hire of Dr Eva Wuellner, Regional Practice Group Leader, MEA - Family Businesses and Technology “Based in Dubai, Eva will support our clients in both Executive Search assignments and Human Capital Services projects (Leadership Development, Assessment Centres, HR organization…). Having worked in multinational enterprises and family groups (Unilever, Amazon, FANUC, Lindab, Wadi Group), Eva has gained a broad cultural and professional expertise while working in Germany, Luxembourg, Russia, Czech Republic, Hungary, Egypt and Kuwait. Along her career, Eva grew her expertise in Talent, Change and Performance Management and Recruitment/Talent Acquisition. Eva holds a Master degree in Economics from the University of Passau, Germany, and an MBA General Management from the European University of Economics and Management in Luxembourg. She earned a Doctorate of Business Administration from Surrey Business School, UK, with the doctoral thesis titled “Talent Management in Luxembourg”. Eva is a fellow of the University Forum of Human Resource Development (UFHRD) and the European Institute for Advanced Studies in Management (EIASM). Eva speaks German, English, French, Italian, Spanish, Arabic, Russian, and Portuguese.” Says Cedric d'Halluin, Partner, Emerging Markets - Middle East, Africa, Russia, Turkey. “I am thrilled to join a multi-cultural team of Executive Searchers and HR professionals in a company that is grounded on high ethical values and family spirit with a strong customer-centric approach.” Says Dr Eva Wuellner, Regional Practice Group Leader, MEA - Family Businesses and Technology.
Xenia Becker and Cedric d'Halluin of SpenglerFox collaborate with GoINPHARMA to discuss compliance and globalization changing approach to leadership search in pharma and healthcare. Executive search and recruiting have changed rapidly over the past decade. Most of these changes stem from a deep restructuring of client needs. Whereas, some 10 years ago, businesses were asking executive search firms to fill top leadership and sales management roles, clients, in the past half-decade, started asking for placements in the fields of Market Access or Medical Affairs. The way larger pharma companies approached their business had changed. Many went from a commercial sales view of doing business to adopting a more scientific approach to bringing goods and services to market. Demand for leadership with deeper technical know-how grew. In emerging markets, the situation is not that different. Compliance issues have had a big impact on how corporate HR picks new leadership hires. The expat vs. local approach to hiring has come full circle. Initially, expats were brought in to emerging market countries to mentor and help with transition and economic restructuring, then local talent hires gradually replaced them. However, during the last five years or so, the environment in many emerging markets (i.e. Brazil, Russia and Turkey) has changed. Markets have become more regulated and subsequently ways of doing business have changed. Market buzzwords no longer include “expansion”and “adding headcounts”; instead, headquarters for multinationals in these markets now speak of “compliance” and “rational growth”. Because of new regulatory demands, company leadership teams are generally more cautious and calls for expat-influenced management have once again grown: due to their more extensive experience in handling compliance-related decision-making. Management and Leadership Skills Candidate skills have always been important. However, businesses (as our clients) have gone through significant evolution and this has changed their demands. If you go back a decade, it was very likely that a German company filling an executive post abroad preferred to, and did, hire a German candidate. This is no longer the case. Also, mobility is an increasingly important factor. More businesses seek people for leadership roles who are willing to relocate. This fact breaks with previous industry standards where business executives and upper-level managers focused primarily on career development. They took on a position expecting to advance within that specific worksite (geography). Today, however, markets like Germany are opening up to foreign talent: businesses are putting knowledge and skills at the top of their recruitment qualification wish lists. Key Skills in Demand Soft skills have grown in importance. This is particularly true for the pharma industry, and this stems from the fact that regulatory norms have changed a lot over the past twenty years. Previously, sales teams (and their leadership) had much more freedom in their approach to business. However, this has all been halted by regulations that look to curb potential corruption. This means that companies have had to look for new ways to build relationships with healthcare professionals. Businesses need leaders that keep an eye on compliance and work within the letter of the law and focus on sales team monitoring. Alongside that, pharma businesses now also place greater importance on executives’ ability to manage multicultural teams and to work within so-called matrix organizations. This means leading and providing guidance not only for local business units, but also therapeutic divisions, which can be a challenge. A further critical skill is executives’ ability to optimize production processes. Business leaders now look more at efficiency alongside improved production. This has been the case for the past few years: businesses are looking to minimize waste and focusing on lean management tools. The Great Recession did much to push this trend. Prior to the economic slowdown, there had not been such a big need to focus on efficiency. Now, this has all changed. Clients have excellence centers for lean management in pharma production. This, in turn, has changed pharma companies’ approach to talent sourcing. Previously, businesses had been more conservative, i.e. they hired talent with pharma backgrounds for pharma roles. Yet in recent years, they have switched up their search approach in the quest for efficiency. Now, it is common that a pharma company will look, for example, to the automotive sector to find the efficient leaders it needs. In emerging markets, retention and development of executive talent is just as important as the search process. Businesses increasingly focus on leadership development and use of assessment centers. Executive HR teams have moved from mass recruitment of new employees to intense development of existing teams; businesses are moving away from operational approaches and focusing more on strategy. They put more effort into strengthening the teams they have in place, rather than running external searches. One could say that companies have moved from an expansionist view of doing business to a strategist one. Impact of Technologies and External Influences Businesses increasingly talk of pushing forward with technological advancement; for example, as part of phenomena like Industry 4.0. However, the key ask organizations now have for their leadership at present is greater creativity. Businesses want their executives to be more flexible. You also see a greater push for a bottom-up approach to leadership versus traditional top-down models. Company leadership increasingly feels that customer-facing team members have a more direct relationship to the consumer: they have direct feedback on what the market wants. A specific reality impacting emerging markets involves local manufacturing. This is the case in Brazil, Russia, Saudi Arabia, South Africa and Turkey. Governments now have requirements that businesses invest in local manufacturing in order to get approval for price reimbursement for medicines and medical devices. Essentially, companies must localize production or they get booted from the market. This creates a further dilemma for multinationals as the talent for managing production is not always readily available on local markets. Overall, this is part of a broader cycle involving the expat/local/expat-hybrid recruitment cycle mentioned earlier. Some businesses have looked to bridge the expat-local talent gap by recruiting via national diasporas. They put together special packages to bring their countries’ expats back to their home markets. This has been a preferred recruitment strategy for emerging markets in recent years: businesses search among talent that has relevant, important cultural ties but who have also worked in different cultural environments and can offer a fresh perspective. The Future Executive Executive talent must increasingly be people-oriented. Businesses are shifting away from hierarchical leadership; these days, the focus is more on the team. This also stems from generational changes within businesses where younger leaders place greater importance on meaningful work assignments. Meeting this need has also become critical due to a lack of talent in many areas: need for retention is a key motivator. Leaders also need to focus on the needs of their teams and what younger generations now expect of work environments. For example, perks like home office have become standard. Whereas, a decade ago this was rare or unthinkable, most businesses now offer a mix of on-site (workplace) presence coupled with home office days. On-site vs. home office arrangements also place a new set of demands on executive leadership. Directors need better communication skills and they have to invest in developing trust across teams that may not be physically present on a daily basis. Executives have to check in regularly with their managers and lower-level teams and agree on reporting schemes that satisfy both sides. In emerging markets, executives increasingly expected to focus on effectiveness and efficiency. For example, you see pharma companies moving to an FMCG mindset. As the market for OTC products begins to grow more rapidly, sales demands a more aggressive approach. Pharma companies are looking for consumer-empathetic (consumer-minded) talent to drive and manage operations. Moving Forward: Take-aways As has been summarized in the text above, global economic forces are rapidly changing what businesses need from their top executive management. Our view at SpenglerFox is that clients must consider leadership placements within the framework of ever-changing business environments. Top executives will need to put together teams that can work within new regulatory structures, run flexible organizations that react quickly to new production needs, and introduce management styles that accommodate multi-generational employee teams. Investment in the development of forward-thinking and strategy-focused executive talent will ensure that your business succeeds on global markets in the coming decade. For more information please contact Xenia Becker Image credit : rawpixel
We are delighted to announce the appointment of Maciej Kotowicz, Country Manager - Poland. “It is with great pleasure that I announce our latest addition to the SpengerFox Group, Maciej Kotowicz, who will assume the role of Country Manager – Poland. Maciej will be based in Warsaw, one of our firms strategic hub locations and drive further growth in Central Europe as part of our overall business strategy.” Says Jens Friedrich, CEO of SpenglerFox Before joining SpenglerFox, Maciek spent the past 12 years as a Partner at Heidrick & Struggles in Poland. His focus has been on Executive Search and Leadership Advisory mainly within the Consumer and Industrial space in CEE. Prior to that Maciek gained substantial experience in General Management as the MD of Tate & Lyle as well as in strategic HR as the HRD of Ahold. “I am delighted to have joined SpenglerFox during this exciting chapter in the companies history and bring my experience to grow and develop the business and team in Poland as well as across wider geographies of SpenglerFox. To succeed in this industry you have to be a true expert and that is the minimum requirement of our clients, the generalist era is over” Says Maciej Kotowicz, Country Manager - Poland of SpenglerFox