Daniel Meiland heads one of the world's best-known executive
search firms, Egon Zehnder. The firm, which specialises in CEO
and senior executive searches, fared relatively better than its
peers through the industry's cold hard winter between 2001 and
2003. Now the fifth largest executive search firm in the world,
EZ is considered a pioneer of sorts in its area: it was the first
to have consultants specialising in specific industries; and it
was among the first to follow a one-firm model (it has offices
in 39 countries around the world), with partners getting to share
profits (as opposed to a commission-based model). Meiland, a former
McKinsey & Co consultant, has done his share of searches (his
toughest was one where, hounded by the media while he was trying
to find a CEO for a well-known company, he got the entire board
to check in for a flight, diverted them to a bus on the tarmac,
drove them back to town where the entire floor of a hotel had
been reserved, and got them to meet with candidates), and was
in India recently (Egon Zehnder completed 10 years in India this
year). He met with Business Today for a discussion
on EZ's Indian operations and the future of the executive search
It's six years since you were here last
and 10 years since your first visit. Do you sense some changes?
Can you feel some changes in the country?
Yes, these are obviously coloured by India
playing a much bigger role globally, so you hear about it constantly.
I live in the United States and the influence of Indian business
and the acceptance of the 'brains' from India to run major corporations
in the country has been very pronounced. Ten years ago, India
was something that you talked about. It was a big market. You
said, almost like a consumer goods company, 'There are many people,
they do have some money, so there must be a market and therefore
we should be there'. If you talk to big corporations, they all
probably did the same thing, saying, there must be a fantastically
big market for us (in India). And then things started taking time.
What's happened is that because of the brainpower and the acceptance
of that globally, the whole view of the world on what is happening
in India has changed enormously over the 10-year period, but especially
since the bubble burst in 2000. India has become, in many ways,
the driver. When you then come here and look at it, you see the
enormous contrasts. A lot of the India I saw 10 years ago hasn't
changed all that much. And then you come to (a city like) Delhi
and you see how things have changed and how the opportunities
have expanded enormously in India.
From the point of view of global searches-say, a large multinational
corporation is looking for a senior executive-would India be more
important than China?
If it is a global firm and the position is
based in the US and Europe, India by far. There are not enough
top managers who have surfaced that way in China (as they have
So, do you do lots of such searches that
When corporations come with a big CEO search
or top management search... I have been in this profession for
28, 29 years. In the old days they never meant it when they said,
'Search globally'. Less than 5 per cent of the searches we did
were truly international. These days, almost a 100 per cent are.
Of course, India plays a part in that, and the office in India
will get a call saying, 'This is the position and is there anyone
in India we should consider?' Also, there are people from India
who have succeeded outside and they are certainly on our list.
Global searches from India, where an Indian company comes to you
and says, 'You have to look for someone outside India' happen
constantly. There's compensation and other things that play a
role in attracting these people. Like in any country, they have
to say, 'We'll take one or two people'. The top, top, top people
you can do that (hire globally), but if it is further down, it
will destroy your compensation structure.
|"We do not hire from competitors as
we do not want to contaminate our culture"
Do you have an increasing number of senior
executives coming to you and saying, 'I am open to working in
We have an increasing number of successful
Indians outside who are open to coming back and working in India.
I would be saying something that is not truthful if I were to
tell you that lot of people who are not from India come to us
and tell us we are open to working anywhere in the world, including
India and China. That tends to be at a level just below where
most of our searches happen. Younger people see this (India) as
a frontier. You have become what the West was in my generation.
I come from Europe and the West was where opportunities were.
Where do you see your industry headed?
What trends do you see emerging?
We call it a profession because we are focussed
not on running Egon Zehnder as a normal business; we want to run
it truly as a profession. This may sound banal to you, but I truly
think that you cannot focus on the money in a profession like
ours; it is a by-product. In our 41 years of existence, we haven't
made profits only in two years and I think this is because we
focus on the professional aspect of the work that we do for our
You will see, in our profession, a split
between those firms-and there will only be a few of them-that
are capable of concentrating on what they do and not what they
earn. It is kind of like the transition that happened in investment
banking where years and years ago, it was much more of a 'professional'
endeavour, where investment bankers worked for the client, not
thinking about the fees first. Money and people is a dangerous
mix. It is like a drug. The money became so big, that it became
the focus. I personally think it is a pity that so many investment
banks have gone public, through an IPO, having to answer first
whether they have money growth and find out where they can get
that, and (finally), 'Let us invent things that will get us the
money'. Our focus is just the opposite.
Ten years from now, you will find only a
handful of firms in our business that continue to do this. The
rest will be running after the money. There will be room for them
but it will become a transactional business.
I do not see our firm go much beyond the
services we (currently) offer over the next decade. There are
plenty of things we could do (but we won't). We probably know
more of the movers and shakers in the world than anyone else.
That's our livelihood. We know the people who make decisions.
We meet with them (regularly). We have their confidence. There
are so many private equity firms and big investors who have tried
to get us to use these contacts to find business for us. That
would be a natural if you want to just maximise the money you
want to make.
|"Younger people see India as a frontier
like my generation did the US"
How do you hire your people? What do you
look for in them?
We do not hire actively from any of our competitors.
That may be foolish, but we have a very distinct culture and we
do not want to contaminate that. We need to look for people who
have 'self-selected' and been 'selected' many times through their
life. That's why we like education; we are the only executive
search firm in the world that requires at least a master's degree,
if not a doctoral degree. If people don't have it, we may help
them get it, and we may even pay for it in some cases, if we really
like them, but they have to have it. The second thing is, they
must have worked for organisations where it was difficult to get
in, especially in the early years. One of the reasons that we
have so many ex-McKinsey people-I happen to be one of them-is
because McKinsey is very strict in its recruitment. If they (our
people) come from investment banking, you will see that they have
been in Goldman Sachs, Morgan Stanley, Lehman Brothers. Why? Because
it is very difficult to be picked by these organisations. These
criteria are the easy ones. Then, we have to decide whether the
person will fit into our organisation. We do that through a lot
of interviewing. In the last 25 years, no one has entered our
firm unless they have met between 25 and 40 of our consultants,
in quite a few offices around the world. We allow a few of them
to say 'I am not sure' but if three or four say that, the person
will never get hired. We are not a firm that likes to hire and
then say it isn't working for us. So far, we have been lucky.
Our turnover rate is less than 3 per cent a year in a profession
where the average is over 25 per cent. It has become almost a
family thing. We would never, for instance, hire someone because
he has 'contacts'. We have enough contacts. What we have seen
is that people who think they have many contacts can never convert
If you look at the stage the headhunting
industry is in India...
We don't call it that (we call it executive
... what stage is it that? Is it in a
It is in an enormous growth stage. When we
came in here we thought the same thing that happened to us in
other countries would happen here too. That pattern was that our
main clients would follow us into those markets. Around 70-80
per cent of our business in those markets was what we did for
these clients. A different trend emerged. When Egon Zehnder International
was set up in India, that was the time when family companies were
professionalising, other strategic management consultants had
grown very fast for two to three years before that and probably
were advising these companies, and almost from Day 1, two-thirds
or more of what we did in India, at fee levels similar to that
we had for other companies in other parts of the world, was for
Indian companies. If we were to continue to grow for the next
10 years at the same rate at which we have grown in the first
10 in India, then, we would end up being as big as some of the
large it services firms here. Ten years from now, India will be
among the top four countries for us.