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EGON ZEHNDER INTERNATIONAL - EXPERTISE
The right road
Focus and specialization at Egon Zehnder International
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Growth is one of those constants that every company needs in order not merely to survive but rank among the successful players. At Egon Zehnder International there was always general consensus that the firm wanted to grow. The only question concerned the manner of growth. In line with one of the founder’s premises, growth was not to be pursued for its own sake, but always primarily as a function of quality. Every option offering an opportunity to expand the existing business had first to be measured against this high standard. So the issue with which the partnership has been confronted time and again over the years is how can the original service of executive search be improved, modified, or complemented by – from the client’s perspective – meaningful new services?
The outcome of these in-house deliberations, often involving intense debate, has always been similar: Rather than tending towards expansion into un-familiar fields of business, the firm has consistently opted for organic growth centered on its core competence. The point of departure for all of its activities is always the objective assessment, selection, and development of top executives, in line with a system developed and constantly refined over four decades and which encapsulates the unique expertise of Egon Zehnder International. The standard and quality of whatever the firm undertakes is invariably measured against the benchmark of the capabilities and knowledge acquired over the years in the field of executive search.
As a result, in the course of time, Egon Zehnder International has not so much diversified its operations as rounded them out. The assessment of business leaders and analysis of management teams in the course of Management Appraisals are conducted to the same standards as those applied in executive search. The same applies to the firm’s board appraisal and search activities.
Growth in a niche
To this day, executive search accounts for the lion’s share of the firm’s annual revenues from consulting activities – contributing in the region of 80 percent. That said, over recent years there has also been a dynamic rise in demand for Management Appraisals. The origins of this service date back to the wave of privatization of state-owned businesses in South America in the late 1980s. The essential idea at the time was to assess the suitability of former civil servants for management roles in a market economy.
Time and again in thousands of executive-search selection and assessment processes it has emerged that particularly gifted managers demonstrate a very specific kind of skills and potential – be it in terms of expert knowledge and leadership behavior or entrepreneurial thinking. Particularly in times of global upheaval in the business world, many corporate leaders came to realize the importance not only of identifying and recruiting such talents from outside the company, but also of appraising those already on the payroll – identifying the high potentials early on, fostering their development, and thus having the ideal management team in place to respond efficiently to changes within and outside the company.
New impetus was added to the search for top managers by the international debate over the nature of good corporate governance. Here too, in the early 1990s the main focus of attention was on globalization and the resultant radical changes in financial market and corporate structures which took on unparalleled levels of complexity. How could such developments be objectively and effectively controlled? The series of balance-sheet scandals at the end of that exciting decade often cast a less than favorable light on the members of a number of supervisory boards, who had either grossly neglected their duty of supervision or quite simply been out of their depth.
Nowadays, it is increasingly common for seats on the board no longer to be assigned automatically in line with seniority, but for a targeted search to be conducted for directors who match the demanding requirements of the role. In 1994, Egon Zehnder International responded to the growth in demand for board search by acquiring PRO NED. Today, this organization, which was originally set up by Bank of England to promote the appointment of professional directors, is part of the firm’s worldwide Board Consulting practice.
Specialized generalists
Board Consulting is just one of a number of practice groups within Egon Zehnder International which bring together the firm’s consultants and partners. Along with Board Consulting, Executive Search, Management Appraisal, and Venture Engine, the full list of global practices now includes Financial Services, Consumer, Life Sciences, Technology & Telecoms, Insurance, Private Capital, Industrial, and Services.
In principle, the firm’s philosophy expects each consultant to present a general knowledge and experience of as many industries and functions as possible. On top of this, in the late 1980s the firm’s consultants began exchanging notes in what were initially informal industry practice groups. This came in response to the impact of growing complexity and internationalization which led clients to look increasingly for consultants with an in-depth understanding of their companies and operating environments, whose expert knowledge would enable them to find suitable executives with the ideal skill sets.
As these searches now no longer stop at national boundaries but can span the globe, consultants also require a global knowledge of their markets. They must be familiar with all of the main competitors and the people who lead them. So it seemed only logical to focus Egon Zehnder International’s experience and expertise in the various sectors. Within the firm, the practice groups see themselves not as closed circles, but as centers of competence whose knowledge and know-how is at the disposal of every consultant and partner across the firm. As a result, the practice groups align well with the top priority in the firm’s codex of values which states: “Clients First.”
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