Executive search

What this seat actually does

Search firms find senior people who are not looking. In an acquisition context the usual need is the seat the departing owner occupied, or a finance leader capable of operating a larger combined business, or the layer of management a seller was told to build before going to market.

That last case is worth naming. Sellers are routinely advised to build a management team that can run the business without them, because a company dependent on its owner is worth less. That advice is correct and it takes years, which is why it belongs in the preparation window rather than in the process.

When you need one

On the buy side, as soon as diligence shows a management gap you will have to fill. On the sell side, as early as possible, because a management layer hired eighteen months before a sale is credible and one hired three months before is a line item.

How they charge

Usually a percentage of first-year compensation, sometimes retained in installments against the search. Retained search commits both sides; contingent search costs nothing until it works and gets correspondingly less attention.

What to ask before you hire

• Have you placed into a business immediately post acquisition, where the culture is unsettled?
• What is your guarantee if the placement leaves inside a year?
• How will you describe our situation to a candidate, including the parts that are hard?
• Which of your own clients are off limits to you for poaching?

How to compare candidates

• Sector and level fit matters more than firm size.
• Ask how they handle a candidate who asks whether the company was just acquired and whether that is a risk. The honest answer is a good sign.

The mistake owners make

Hiring the seller’s replacement in a hurry after the seller has already gone. The vacancy is visible to customers and staff long before the new person arrives, and panic hiring in that window is expensive twice.

What this is not

Not an interim executive, who fills the gap now rather than filling the seat permanently. The two often run in sequence.

The Institute accepts no payment from any advisor, takes no fee tied to any transaction, and does not place or refer professionals for compensation. This entry describes a role, not a recommendation of any firm.