The New Kingmakers Of Executive Placement
Charles Tribbett iii has logged 16 years as an executive headhunter, working with companies ranging from United Airlines to Sprint. He is a calming presence, well respected, universally liked. Over the past two years he has placed several vice-presidents at Nike and proven he could find diverse candidates. Even so, when the company was looking to hire someone it could perhaps groom to be CEO William D. Perez' successor, Tribbett was the underdog for the coveted assignment. That's because he was up against Gerard R. Roche, the blustery kingmaker whose influence extends across Big Business -- and the man who had in fact recommended Perez for his job. Many companies would have chosen Roche, but Nike asked Tribbett to conduct the search, which is still under way. "Charles really understands what we need in the position," says Wes Coleman, Nike's head of global human resources.
Executive recruiting, one of the most exclusive businesses around, is finally opening up its membership. And that is paving the way for fresh faces in the C-suite. The big headhunting firms are all promoting new search talent, including John Thompson at Heidrick & Struggles International Inc. and James Citrin at Spencer Stuart. But perhaps the most notable additions to this elite world are Tribbett and partner Andrea Redmond, co-directors of the CEO & Board practice at Russell Reynolds Associates Inc. The pair has been shaking up the corporate world as they help put in place the next generation of business leaders: Mark V. Hurd at Hewlett-Packard (HPQ ); Jamie Dimon at Bank One, now JPMorgan Chase (JPM ); Glenn Tilton at United; Gary Forsee at Sprint Nextel. And they are quietly working on a search to replace the CEO at a major company. "Their judgment on people is extraordinary," says Dimon.
For years this high-stakes business has been ruled by Roche, 74, senior chairman at Heidrick, and by Thomas J. Neff, 67, chairman of the U.S. arm of recruiting's second-biggest firm, Spencer Stuart. In his 42 years, Roche has been involved in about 185 CEO searches; Neff, who has been at it for 29 years, some 150. Meanwhile, Redmond and Tribbett claim about 50.
Under much of Roche's and Neff's reign, the process had boiled down to a sophisticated game of fetch. During the go-go 1990s, "the whole issue of CEO succession became about attracting a star," says Citrin. At times, Roche and Neff have pulled CEOs from a cozy club of luminaries, or "tall ships," as Roche calls them, whose "masts of talent rise above the pack's."
For example, when Jack Welch named Jeffrey R. Immelt as his successor in late 1999, Roche plucked the much heralded runners up, placing James McNerney at 3M Co. (MMM ) and Robert Nardelli at Home Depot Inc. (HD ) Then last year, Neff tapped McNerney to fill the vacant Boeing Co. (BA ) job. He also lured John Mack, an ex-Morgan Stanley (MWD ) president, out of retirement when the Morgan CEO position opened up again.
But the corporate world is changing, and along with it, the game of executive search. Today's workforce is far more mobile than it used to be. Loyalty has been usurped by mobility, even at the top. CEO turnover now matches the normal attrition rate for all employees: just about 12% a year, according to quarterly surveys by researcher BNA Inc. The rate of CEO dismissals among the world's 2,500 largest public companies increased by 300% from 1995 to 2004.
At a time when China and India are the hot markets, Latinos the surging population, and Gen X workers are replacing aging baby boomers, the old way of recruiting leaders doesn't have the same appeal. Redmond, 49, is one of the few women at her level in the industry. Tribbett, 50, is regarded as the highest-ranking African-American. They each argue that their gender, cultural perspective, and relative youth allow them to offer their clients a different worldview than that of Neff and Roche. "There's no inner sanctum more controlled by elder white males than the world of CEO recruiting," says Joseph Daniel McCool, former editor of Executive Recruiter News. "Andrea and Charles represent fresh perspectives in an industry that is in many ways antiquated."
Together they are trying to get companies and their boards to think differently about leadership. "We're going to go beyond the top 10 companies for CEOs," says Tribbett. When he and Redmond are on assignment, they try to become insiders at the company, familiar with its troubles, prospects, and culture. That allows them to suggest candidates whose names the board of directors might not even recognize. Mike McGavick, for example, was an unknown insurance executive running a unit of CNA Financial Corp. (CNA ) when they recruited him for insurer Safeco Corp. (SAFC ) McGavick transformed the company from a bleeding business into a profitable player and has recently become a serious candidate for the U.S. Senate. In December they found his replacement: Paula Rosput Reynolds, the head of AGL Resources Inc. (ATG ), an energy holding company. Mark Hurd had a low profile at middling NCR Corp. (NCR ) before Redmond and Tribbett convinced HP's board to meet with him. So far, he has led HP to two straight quarters of earnings growth. In hindsight, Roche says, he wishes he had let Joie A. Gregor, a female partner at Heidrick, bid for the job. Instead, John Thompson and CEO Thomas J. Friel made the pitch. Two highly accomplished recruiters, but "two white guys," Roche laments. A member of HP's board acknowledges part of Redmond's and Tribbett's appeal: "They are not part of the ol' boys, been-there-done-that, know-everybody network."
Redmond and Tribbett are both high achievers who have overcome animosity and even tragedy to get where they are. Redmond was born in Glen Ellyn, a middle class suburb of Chicago. While still in high school her older brother died in a car crash. Then, just a year after she graduated from college, her father passed away after suffering a stroke. To help cope with these losses, Redmond threw herself into her job as an internal recruiter at The First National Bank of Chicago. But the banking world wasn't for her, and she left for Russell Reynolds' Chicago office in 1986. There she adapted to the itinerant lifestyle with ease. Better yet, she displayed a knack for sensing when a candidate was right for a job. "I've seen hundreds of recruiters," says Peter Crist, a Russell Reynolds partner at the time who now heads his own firm. "She has some of the best instincts I've ever seen."
Tribbett, too, made a strong impression early on. In 1989, at age 34, he had already emerged as one of Chicago's top young professionals. He grew up on Chicago's South Side and attended Catholic school to avoid the sub-par education of the neighborhood's public schools. After college and a stint on Wall Street, Tribbett had become a successful corporate attorney when Mayor Harold Washington appointed him board chairman of Chicago's huge McCormick Place convention center project.
It took Russell Reynolds the better part of a year to recruit him. No wonder. The firm's culture was characterized by its white-shoe conservatism. Russell C. Reynolds Jr., the founder, was an East Coast blue blood who graduated from Yale University. In the 1970s, Reynolds used to have a black man shine his shoes under the table while he was conducting business, according to McCool, who has studied the firm's history.
Redmond helped persuade Tribbett to join the firm, and five years later, in 1994, the two were promoted to co-managers of the Chicago office. Tribbett and Redmond have since relinquished the management roles to focus on placing top executives and board members.
As difficult as it sounds, Redmond and Tribbett are yoked as equals. "Like brother and sister," Redmond says. Although one will take the lead in a search -- Redmond knows financial services; Tribbett is more comfortable with regulated industries -- together they discuss every detail, and both are available to talk with the client. But the real strength of their partnership is their yin-yang personalities. Redmond is fiery and spontaneous; Tribbett is reserved and diplomatic.
The duo produced a sleeper hit for HP last year. In early January, 2005, Redmond got a call from Patricia C. Dunn, the chairwoman of HP's board of directors, whom Redmond had recruited. Dunn wanted to talk about finding a replacement for the smooth-talking Carleton S. Fiorina, who had just been ousted.
The HP selection committee was looking for a roll-up-your-sleeves-and get-it-done CEO. Someone with an eye for the bottom line. A leader with the ability to manage multiple, even disparate, business units without a breakdown in execution or teamwork. And they wanted this person in six weeks, tops. Sources familiar with the HP board's thinking say Redmond and Tribbett landed the job because they were prepared to move at that fast pace.
More than anything else, the HP experience demonstrates Redmond's and Tribbett's talent for bringing unconventional but winning candidates to the table. They presented a list of about 15 contenders. Some were perennial targets, such as McNerney and Motorola Inc.'s (MOT ) Edward J. Zander, sources say. But half were people that HP's directors had never heard of. Among those no-name candidates was Mark Hurd, then CEO of Dayton-based NCR. Although NCR is a profitable $6 billion maker of automated teller machines and big computers, with six distinct business units and more than 28,000 employees, "there was no one on the board who had ever heard of Mark Hurd," admits one of HP's directors. And no one thought NCR had the complexity of HP.
Even so, Redmond and Tribbett were certain Hurd was right for the job, and they worked hard to open the minds of the board members to that possibility. "If someone shoots you down, you have to come back another day and say, 'I listened and understand what you are saying, but I would like you to hear me out on this,"' Redmond says.
Finally the HP directors consented to meet him. But among themselves, they figured this Hurd character had no chance. At his interview in March he answered a flurry of questions with virtually all the right answers. The board's conclusion: It couldn't "sacrifice skill for a big name," says one member. On Mar. 29, HP appointed Hurd CEO.
The HP post was the sort of stellar opportunity that doesn't come around often. Luring a candidate to take over troubled United Airlines in 2002, on the other hand, truly tested the pair's skills. The right guy for the job, Tribbett thought, was Glenn F. Tilton, who had helped Texaco Inc. through bankruptcy. Tribbett knew Tilton from work he had done placing senior managers at Texaco. Over steak at a Houston restaurant, Tribbett laid out his proposal without sugar-coating it. "If it's a tremendous challenge, he says so," explains Tilton. "That's a very significant thing."
Challenging is a good way to describe Tilton's job these days. In December, 2002, he led United into bankruptcy, where it has languished ever since. Now, as he brings it out, he's catching grief for a proposal that would give the company's top 405 executives stock worth $105 million, at least $15 million of which would go to Tilton. The controversy underscores the fact that even the best-qualified of Redmond's and Tribbett's recruits can falter on the job. That's why Tribbett had been so candid from the get-go. "If you were me, would you take the position?" Tilton had asked him. "No," Tribbett said. "But I'm not you. You might be crazy enough to do [it]."
|Corrections and Clarifications "The new kingmakers" (People, Jan. 30) should have said that in early February (not January), 2005, Patricia C. Dunn, chairwoman of HP's board of directors, called recruiters after former HP CEO Carly Fiorina resigned.|
By Roger O. Crockett