Heidrick & Struggles International, Inc.
Heidrick & Struggles International, Inc.
Incorporated : 1953
Employees : 750
Sales : $329 million (1998)
Stock Exchanges : NASDAQ
Ticker Symbol : HSII
NAIC : 56131 Employment Placement Agencies
Heidrick & Struggles International, Inc. is one of the largest executive search firms in the world, and the largest operating within the continental United States. The company provides its services to the entire range of industries, and focuses on identifying, evaluating, and recommending highly qualified candidates for senior executive positions in companies around the world. Heidrick & Struggles operates a network of 59 offices in the United States, Europe, Asia, Africa, the Middle East, and Latin America, and has formed strategic partnerships with search firms in both Germany and the Republic of South Africa. With the demand for talented senior executives increasing at a dramatic rate, the company since 1995 has grown significantly, with worldwide revenues increasing at a compounded rate of 25 percent annually.
What has developed into the one of the most successful international executive search firms was founded by two men in 1953, Gardner Heidrick and R. Struggles. Both had served in a number of executive level positions, and had worked their way up the corporate ladder. Yet the two men were dissatisfied with their careers, and longed for a new and exciting challenge. As the corporate environment and culture began to change during the late 1950s, Heidrick and Struggles recognized the need for a firm that would identify and recommend highly suitable candidates for specific positions at the highest level of corporate management. Incorporating their company in 1953 and locating their headquarters in Chicago, the two young entrepreneurs decided to use their own names to identify the company.
Heidrick & Struggles soon garnered a reputation for personally identifying and placing candidates in the banking, insurance, and accounting industries. Many of the firm’s placements during its early years were in management and marketing. While the company prospered, its operations grew at a relatively slow pace until the arrival of Gerard Roche. Roche was a graduate of the University of Scranton, located in Pennsylvania, having received his B.A., and he also earned an M.B.A. from New York University, working for it at night while he toiled away during the day. Gardner Heidrick identified Roche, who was working as the vice-president of marketing at a division within Mobil Corporation, as the best candidate for a position with Milprint, a subsidiary of Philip Morris located in Milwaukee.
Heidrick was so impressed with Roche that, rather than placing him with Milprint, convinced him to work at Heidrick & Struggles in the New York office. Heidrick had hired Roche not only for his display of intelligence and aggressiveness, but also for his charm and engaging personality. Little did Heidrick and Struggles know that their firm would never be the same after Roche’s arrival. Much to his credit, Roche personally changed the way headhunting was done in the United States. From the very first day, Roche began his job with a methodical search for job openings. He would search tirelessly for positions that needed filling in major corporations, and then convince their management that he was the person who deserved to be entrusted with the responsibility for finding that individual. Then he would search Heidrick & Struggles’ data bank for possible candidates, and use his extensive list of corporate contacts to put together an initial list of 50 or 60 names. After having narrowed down the list to between three and five individuals, he would then present them to the prospective employer for evaluation. A meeting between the candidate and employer then occurred, and before long a contract was signed. Using this method, Roche claimed a success rate of nearly 85 percent.
Working at Heidrick & Struggles during the mid- and late 1960s was easy for Roche. A natural-born salesman, he easily persuaded rising young executives to change jobs and loyalties at a moment’s notice. The offer of a $5,000 to $10,000 raise enticed many executives to accept a new job offer even though their old job was just as promising. One of the secrets to Roche’s success at this time was his willingness to meet with people on a one-to-one basis over dinner, at breakfast, for a game of golf, or even by entertaining clients at his own home in Chappaqua, New York. This personal touch, along with the unbridled enthusiasm and respectful professionalism he brought to his job, made Roche one of the most trusted and respected headhunters within the industry.
Growth and Expansion During the 1970s and 1980s
Roche was clearly the rising star in the company’s firmament, and his success during the 1970s continued unabated. Roche regarded everyone he met as either “a prospect, a candidate, a reference or a client.” This attitude enabled him to fill over 150 positions during the decade of the 1970s alone, with approximately one-fourth of them presidential or CEO positions. By 1978 the company’s board of directors was convinced that Roche should be appointed the chief executive of Heidrick & Struggles. Yet even after this appointment, Roche continued to carry a full search load for two years. At the beginning of the 1980s, he was poised to personally place some of the major talents in the corporate world, including: Thomas Vanderslice, who was convinced to leave General Electric in order to head GTE; Edward Hennessy, who jumped from his position at United Technologies to assume the top job at Allied Corporation; and Robert Frederick, a GE employee enticed to become president at RCA.
As the 1980s progressed, Roche began to expand the number of employees in both the Chicago and New York offices, as well as initiate a grand strategy to make Heidrick & Struggles more of an international executive search firm. He opened numerous offices throughout Europe, and established a reputation for the company as one of the more aggressive and successful executive search firms in countries such as England, France, and The Netherlands. The company’s board of directors, however, decided that Roche could not maintain a full client search schedule while also managing the operations of the company, so they promoted him to the position of chairman both as a reward for his success and as an attempt to help him manage his time better.
Although Roche did in fact reduce his client search responsibility, due to the economic recession that hit the American economy during the early 1980s, Heidrick & Struggles fell on some difficult times. In 1980 the company placed approximately 600 high-level executives, but by 1982 that figure had fallen to just around 500. In addition, Roche was forced to reduce his staff from 100 to 82, thus putting the brakes on Roche’s strategy for expansion, at least for the short term. With these setbacks, the executive search firm of Russell Reynolds surpassed Heidrick & Struggles both in revenues and in ranking within the industry. Nonetheless, the company continued on, and Roche somewhat resumed his client search schedule to place George M.C. Fisher at Eastman Kodak, Stanley C Gault at Goodyear Tire & Rubber, and Michael C. Jordan at Westing-house Electric. These placements not only helped revive the fortunes of Heidrick & Struggles, but enhanced Roche’s reputation as one of the preeminent figures in the industry.
Resurgence During the 1990s
As the fortunes of the company were revived, Roche renewed his efforts to transform Heidrick & Struggles into one of the leading executive search firms in the world. Building upon what had already been developed during the 1980s, an extensive network of offices were established around the globe, including such major international cities as Hong Kong, New Delhi, Tokyo, Singapore, Amsterdam, Berlin, Barcelona, Geneva, Milan, Moscow, Paris, Prague, Warsaw, Buenos Aires, Lima, São Paulo, Capetown, and Johannesburg, not to mention many cities throughout the United States. By the mid-1990s, the company counted 59 offices located in 30 countries that were dedicated to serving the employment needs of major multinational corporations. By 1998 the company’s offices in Europe generated over $125 million in revenues, second only to its network of offices scattered throughout the United States.
Today, over 300 Heidrick & Struggles professionals serve Fortune 500 companies and their international equivalents, major hospitals and universities, leading mid-cap companies and emerging superstars, as well as scores of family businesses, not-for-profit and other organizations, from more than 40 offices around the world. Our common thread, regardless of culture or industry, is the ability to continuously identify and attract the best leadership and managerial talent for our clients.
Roche recognized that the continued growth of Heidrick & Struggles depended not only upon expanding its international presence, but on refining its core business and becoming the leading executive search firm for senior level positions. Under Roche’s guidance, the company began to concentrate on seven core industry practice groups, including international technology, industrial manufacturing, consumer products, financial services, healthcare, professional services, and the higher education/nonprofit sector. Heidrick & Struggles consultants were trained in building relationships with job candidates as well as with corporate clients. To better understand the needs of their clients, company consultants were encouraged to conduct thorough investigations into clients’ corporate cultures, operations, business strategies, current personnel, and overall strengths and weaknesses. Roche regarded this type of research as the only successful way to place candidates that would meet the needs of its clients. At the same time, Roche emphasized placement at the highest levels of corporate management, thus leading the company to focus on the recruitment of chief executive officers, presidents, chief financial officers, chief operating officers, members of boards of directors, and a small section of additional management positions such as departmental and division heads. By the end of fiscal 1981, over 80 percent of the company’s searches were placements for the above positions.
During the late 1990s, the company’s success continued without interruption. Heidrick & Struggles had expanded its client base from 1,800 in 1995 to over 3,100 by the end of 1998. The company employed 346 executive search consultants worldwide, with an average of nine years experience for each individual. Most significantly, however, was the company’s emphasis on a strategic acquisitions plan to continue its expansion, including the purchase of Fenwick Partners, Inc., an executive search firm based in Boston, Massachusetts, specializing in computer software, medical electronics, and engineering placements; Mulder & Partner GmbH & Co. KG, the largest executive search firm in Germany; and Redelinghuys & Partners, an executive search firm based in Capetown and Johannesburg, South Africa. All of these moves resulted in a dramatic increase in revenues, from $161 million in 1995 to $329 million by the end of fiscal 1998.
With Roche still in the driver’s seat, and with his personal involvement still at the forefront of the company’s highest level of executive searches, an even brighter future seemed likely, particularly if the firm adhered to its trademark strategy, that of combining an extraordinary degree of professionalism and know-how with a warm and engaging personal touch.
Fenwick Partners, Inc.; Mulder & Partner GmbH & Co. KG; Redelinghuys & Partners.
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Lublin, Joan S., “Heidrick & Struggles Likely to Announce Intent to Acquire Rival Fenwick Partners,” Wall Street Journal, March 30, 1998, p. A4(E).
_____, “The Right Image,” Wall Street Journal, December 29, 1998, p. B 10(E).
Quick, Rebecca, “Heidrick Holders Vote to Offer Stake in Firm to Public,” Wall Street Journal, March 2, 1998, p. C22(E).