For some employee searches, a headhunter may be the answer

Bey Blanchard knew the time had come to confront a painful prospect: choosing his successor. Five years ago Blanchard, then 57, began considering who might take over Plasticolors Inc., the Ashtabula, Ohio, company he had founded in 1970. As he kept watch over the operations of the business that makes color and chemical dispersions for the plastics industry, he made a fitful effort to find his heir apparent. He looked at résumés and listened to recommendations from industry colleagues. But it proved a frustrating exercise.

"We'd spend four months following a promising lead," Blanchard recalls, "thinking to ourselves, This is the white knight on a charger who is coming to our rescue. Then things would fall apart, and we'd be back to square one. We needed professional help." So Blanchard hired a headhunter to recruit a new president, and in less than eight months, his successor was on the job.

Blanchard knew the benefits of hiring an executive recruiter included access to a wide network of potential employees whose backgrounds were thoroughly checked. Recruiters also pose questions that business owners might not have pondered: Does the company need a different management structure, perhaps, instead of merely replacing one executive?

Since Blanchard was undertaking the most important executive search of his career -- his chosen candidate would become president and chief operating officer and would be groomed as his successor as chief executive -- he was not looking to do it on the cheap. For that reason, he avoided contingency search firms, which are paid only when a position is filled. With no guaranteed compensation, many contingency firms can afford to do little more than throw a bundle of résumés at their clients. Retainer firms, on the other hand, receive a third of their total fee -- up to one-third of a year's salary and bonus -- up front. Usually, another third of the retainer is paid a month later, and the final third a month after that.

After interviewing a handful of recruiters, Blanchard signed on with Mark Elliott, who was with Executive Network, in Cleveland, one of the firms that had been recommended by Plasticolors' accounting firm. To make sure that Elliott was the right man for the job, Blanchard asked some pointed questions: Did Elliott have experience working with small industrial companies? He did. Did he accept that Blanchard's final decision would come down to personal chemistry as much as anything else? Elliott agreed.

Blanchard knew he would have to trust his recruiter and work closely with him. He chose Elliott because he sensed that Elliott could appreciate the spirit of Plasticolors, which valued its employees and the quality of its products. Blanchard stuck with Elliott, in fact, when, six weeks after the search began, the headhunter moved from Executive Network to become a partner at the Cleveland office of Lamalie Associates, one of the nation's top 10 executive-search firms.

To make sure that Elliott truly understood Plasticolors, Blanchard opened his company up to him. Elliott initially spent about 45 hours interviewing the directors and key employees, a rather unusual arrangement. (Since most recruiters spend no more than one working day on this kind of scouting mission, the firm was paid an extra $5,000.) But as a result, he developed a strong feeling for the character of Plasticolors.

Elliott quickly understood that Plasticolors faced a classic challenge. It needed to move from a loose, entrepreneurial style of management, in which the CEO kept a hand in most decisions, to a more formal, professional structure. The company also needed to develop new markets beyond its traditional niche -- manufacturing colorants for fiberglass plastics -- where growth had been modest for years.

Blanchard had a clear notion of who might best take Plasticolors down that path. It should be someone with sales and marketing experience in a related business, he thought, preferably someone strong in strategic planning and product development. And it had to be someone prepared to move to Ashtabula, a small (population about 25,000) city in northeastern Ohio.

Elliott set to work. Using his firm's database, he sent letters and made cold calls to about 100 candidates, quickly describing the job. He had more extensive phone conversations with about 20 of them. He met 6 in person; 3 were later interviewed by Blanchard. "At one point," Elliott recalls, "one of my industry contacts said, 'You know, there is one other fellow you might try.' "

Enter Ron Sorice, then 45 years old. He was working in Washington, Pa., as the director of sales and marketing at a division of Ciba-Geigy Corp., a supplier of ceramic and glass colorants. Sorice's background and experience seemed right. Most important, Blanchard felt comfortable with him and thought he had the capability to take Plasticolors into new markets. Sorice clearly appreciated the company's values. But could he be persuaded to take the job?

Sorice was intrigued. After a series of meetings and conversations with Elliott and Blanchard, the appeal of the job became plain: Sorice would receive an attractive equity position along with a chance to run his own show. Still, the sacrifices were just as apparent. He would forgo the opportunity to advance at Ciba-Geigy. But his major concern was uprooting his wife and three children to settle in a small Ohio town. In the end, he made the move.

Since Sorice joined the company, in July 1988, Plasticolors' sales have grown from about $11 million to $15 million this year, and employees have become accustomed to what the new president and COO calls his "very different management style." Blanchard was, in his own words, "more paternalistic, more laid-back, and more cautious." Sorice moves quickly and, with Blanchard's approval, has made some changes in the staff.

Blanchard seems happy with his replacement and remains committed to his original plan to step down as CEO in August, and, with Phyllis, his wife of 40 years, travel extensively. In the end Blanchard's headhunter found him the right man.

Barbara Rudolph is a staff writer at Time magazine, where she covers international business.


Interviewing the prospects

James Kennedy, publisher of "Executive Recruiter News," an industry newsletter, advises that once you narrow down the field of prospective recruiters, you should ask these five key questions before signing on for the search:

* For whom have you done similar work? Make sure the firm has worked with companies in your industry. Talk to a few of the firm's former clients.

* What if the new hire doesn't work out? Some search firms will agree to replace the candidate for expenses only if the executive leaves the company within a year. Nail down the specifics on this important point.

* Who will do the work? Find out at the start if it will be a partner or a first-year associate. It makes a difference.

* Do you operate on a contingency or retainer basis? You can't expect top-level service from a contingency firm. It simply cannot afford to interview and check each candidate's references.

* What is your policy on expenses? Some recruiters are reimbursed only for out-of-pocket expenses. Others mark up their costs for research and administration.