Lynn Bignell and Janet Tweed wanted to grow their personal-service firm beyond the time and talent they'd brought to the business. They found they had to give up a lot
ONE FRIDAY EVENING, THE FOUNDers of Gilbert Tweed Associates took a very important person out to dinner. He was their newly found president, due to start work on Monday morning, and it was time to celebrate with a 12-course meal at one of Manhattan's upscale Chinese restaurants. Gilbert Tweed, a more than $2-million-a-year executive-search firm, desperately needed an experienced executive to manage the firm's fast growth. It had taken founders Lynn Tendler Bignell and Janet Tweed almost a year to find the right person.
On Monday morning, when the executive arrived for work, Bignell and Tweed refused to sign his contract.
He hadn't flunked on his table manners. He hadn't slurped his wonton soup or eaten his egg roll with his hands. But after a few hours together over dinner, the founders feared that they had made a big mistake -- that he wasn't the right person to head their company after all.
That executive was but one casualty in a continuing struggle at Gilbert Tweed. The firm set out in 1983 to meet a challenge that most growing professional-service enterprises must eventually face: how to build value into the business that is separate from the individual talent and personality of the founders. Personal-service companies are easy to start: often a typewriter, a telephone, and a spare bedroom are all that are reeded. But most such companies never grow beyond the time and energy that the founder can devote to the business; clients, after all, want to work with the person whose name is on the door. To build equity in the company, so that it can eventually go public or be sold, the founder has to build an organization that can prosper without her.
It isn't an easy task. Gilbert Tweed hired the wrong people, closed down two brand-new offices, and lost at least $250,000. Its experience, at least early on, was a textbook case in how not to build value in a professional-service firm.
From the very start, Gilbert Tweed's main assets have been the energy and skills of its founders, Lynn Bignell (formerly Gilbert) and Janet Tweed. Bignell, a native New Yorker with a degree in mathematics from the University of Florida, first met Tweed in the late 1960s, when they both worked in the Manhattan office of Dunhill Personnel Search, a large employment agency with franchises nationwide.
In 1972, after a couple of years at home raising babies, Bignell decided to start her own company. "Pretty soon, I had so many clients that I needed help," she recalls. "I remembered Jan from Dunhill, so I called her and said, 'How would you like to come and work for me?' Her answer was, 'Well, I won't work for you, but make me a partner and you've got a deal." It was a felicitous match. Bignell's specialty at the time was finding sales and marketing executives, while Tweed had concentrated on recruiting engineering managers. That combination of strengths kept big clients with diverse needs -- like Exxon, Digital Equipment, and Xerox -- coming back.
Gilbert Tweed's main appeal to these clients has been its thorough approach. A widespread practice in the executive-search business is to pull candidates from a vast file of resumes accumulated over the course of many previous searches. Beyond that, research is often limited to a fairly perfunctory round of phone calls to a long-standing network of acquaintances. Relying on last month's or last year's information saves recruiters time and money. But it sometimes yields executives who have been job hunting or job-hopping for years, or who may in some other respect not be exactly what the client has in mind.
Gilbert Tweed, by contrast, starts each search anew. A staff of 10 researchers delves into companies across the country and comes up with candidates who most closely conform to the client's wish list. Usually, these managers aren't even in the market for new jobs, and have to be coaxed to consider moving -- a knack, clients say, that Janet Tweed in particular has honed to a fare-thee-well. Form Physics Corp., a high-technology firm in San Diego, has hired three executives through Gilbert Tweed. President and chief executive officer Stanley Zalkind explains with admiration: "Jan has a way of getting inside people's heads. She knows how to get executives to put their private reservations and second thoughts about changing jobs right out on the table, where they can be dealt with directly."
Once, the company, after a protracted and frustrating search, spotted an executive who seemed ideal for a lofty post with a New York manufacturing company. But he lived in St. Louis, and unfurled a daunting list of personal reasons for turning down the move. He didn't think he could afford the right kind of house in New York's notoriously inflated real-estate market; he and his family were devout Mormons, a faith not widely practiced in the Northeast; and his youngest child, legally blind, had just settled into a suitable school after a couple of false starts. Gilbert Tweed's research department got busy and located a tiny town in suburban Connecticut with relatively sane housing costs, an active community of Mormons, and a reputable school for sight-impaired children. "So the candidate, his wife, and I went up there," recalls Stephanie L. Pinson, a Gilbert Tweed vice-president. "The Mormon elder met us at the realtor's office, and after we had looked at some lovely houses, we all went off together for a tour of the school." The candidate had been prepared to accept the position when his employer in St. Louis countered with a better offer.
Bignell claims that 75% of the managers Gilbert Tweed has placed are still working in the same companies after five years. Of those, 60% were promoted at least once in their first two years, and fully half of that group has since moved up again. If Bignell's estimates are correct, these numbers are among the highest in the business.
In its first decade, that kind of performance helped propel Gilbert Tweed's annual revenues past the $1-million mark. Yet partly because of the meticulous methods it uses to find corporate stars, the firm's costs have always been stellar, too. "We provide more service than profitability really calls for," Bignell concedes with a rueful half smile. "I don't know whether to be proud or embarrassed about that." Since Gilbert Tweed is still privately held, Bignell isn't inclined to say just how pallid its profits are. But, she says, "we're probably not even in the top 20% in profitability in this business."
Paltry profits have not been the only problem. Throughout that first decade, the two founders ran the firm on a shoestring. They had only a fuzzy notion of what and where their costs and earnings were, while revenues grew willy-nilly, without benefit of formal financial controls. Bignell and Tweed thought of their enterprise as a fledgling that might not survive, even after it had clearly taken wing. "We moved five times in seven years," remembers Janet Tweed. "We kept taking short leases -- partly because we were always adding staff and needing more space, but also because I think we couldn't believe our own success. We didn't want to sign a long-term lease, just in case we weren't in business that much longer."
