How Did Heidrick & Struggles Get the Microsoft CEO Search?

How Did Heidrick & Struggles Get the Microsoft CEO Search?

As a former founding member of Microsoft’s executive recruiting team I was absolutely outraged to learn that retained search firm, Heidrick & Stuggles, was given the search to replace Microsoft’s CEO, Steve Ballmer.  How in the world could this happen?  After all, Microsoft has some of the most talented internal executive recruiters in the business.

Yes, I know.  I’m a bit biased.  I still look back with pride on the work we did and the people I worked with during those early exec recruiting days – many of whom are still there.  But the fact of the matter is most members of the Microsoft’s exec recruiting team are former retained search firm consultants and in most cases – much more qualified than any recruiter at H&S (or any other top firm for that matter).

There is no doubt that Microsoft’s executive recruiting team could easily and more effectively execute the search for the company’s CEO, AND, do it much better, faster and definitely much cheaper.  Yes, I said much cheaper because the likely search fee for the CEO search will be north of $400,000 if the comp package is close to the amount Steve Ballmer currently makes and the fee is the traditional 33.3%.  I realize that the search fee is really not a big consideration for Microsoft given how much money the company generates.  However, as a former talent acquisition leader I know that $400,000 goes a long way to adding additional resources to an entire recruiting department, instead of lining the overpaid pockets of H&S.

Let’s say for argument sake that Microsoft’s Board wants to ensure that no rock is left unturned when looking for a new CEO.  They hire a search firm as a bit of “insurance”.  I get it.  I don’t understand it… but I get it!  So why select H&S and not Spencer Stuart or CTPartners, or Russell Reynolds?

Please notice that I did not suggest Korn/Ferry among the other top firms.   Know why?  Korn/Ferry was the firm that recruited former Apple exec Ron Johnson to the CEO position with JCPenny and sadly, we all know how that turned out (hint – what is the opposite of creating $3.5B in marketcap?)

So again I ask, why H&S?  Clearly the reason can’t be because of the keen financial stewardship of the firm’s own CEO, Kevin Kelly.  Sorry, I meant to say the FORMER CEO.  In July, H&S announced that Kelly was stepping down from the CEO role after his not-so-stellar  7-year run as the company’s chief executive.  Call me cynical but perhaps Heidrick’s Board finally noticed the 55% drop in the company’s stock price during Kelly’s tenure ($36/share to $16/share) and the corresponding 45% drop in marketcap ($572M to $310M). But I digress…

I guess the one saving grace for Microsoft is that Kevin Kelly wont be leading the search efforts for Ballmer’s replacement.  At the time of the announcement saying he was stepping down as CEO, the firm said Kelly was staying on as a Partner – focusing on executive recruiting.  I noticed, however, a few short weeks later, the firm announced (quietly) that Kelly was leaving altogether.  I am just guessing here but I think the next CEO search Kelly will be doing is for a new CEO job for himself!

Well, sufficed to say it is quite the coup for H&S to land the CEO search for Microsoft.  Its a high profile search with a large pay-day.  I think the only fair thing to be done now is for H&S to hire Microsoft’s exec recruiting team to recruit for their new CEO.  While the search fee would clearly be lower, I know the search execution will be much, much better.  But then again……I’m a bit biased!

Glenn Fox is the founder and CEO of SL8Z Recruiting Marketplace. A 20-year veteran of recruiting, Glenn was the head of recruiting for AOL, a founding member of Microsoft’s executive recruiting team and a principal with Korn Ferry International.
  1. The fact that an outside firm was hired to tackle the challenge of finding a new fearless leader for Microsoft is encouraging. Microsoft’s languishing stock price is a function of boring leadership that frowns on innovation and excitement. I cannot get excited about purchasing another Microsoft licensed product compared to similar purchases at Apple or other IT firms that address the underlying human emotions engaged by the IT world. Microsoft has become the “GM” of the IT world. They are relatively in the same spot as IBM when IBM was facing loss of market share and customers. The new leader has to bring Microsoft back to the days when people were excited to go to work there. I am a PC’ er and a diehard fan of Microsoft products, but its time for more sizzle and a little less analysis by paralysis.

  2. You’re one of the least informed and most arrogant person I’ve had the unfortunate experience to stumble across recently.

    First, Korn/Ferry did NOT do the JC Penny search. I’ll let you find out on your own who did since you seem to think you’re a really plugged in guy.

    Secondly, I seriously doubt that having some HR people trolling for candidates is the board’s idea of fiduciary responsibility.

    Third, whoever is doing the search at Heidrick (probably John Thompson, the same guy who recruited Eric Schmidt to Google) is much, much more qualified to objectively assess talent; Microsoft has an extremely insular culture which breeds exactly the type of arrogance you’ve just displayed in this post.

    • Thanks for the comment Bill.

      KFI did do the search for JCP CEO search (I know which partner and also know who engaged them). And before you cast aspersions on the internal team at MSFT you should perhaps do a quick search on Linkedin and see the profiles of some of those exceptional search professionals. They are NOT simply run of the mill HR people who would troll for candidates. Most of them have been Partner level professionals at top search firms like Korn Ferry, Spencer Stuart and even H&S.

      Finally, let’s be honest – – any 3 year senior associate could do the CEO search for MSFT. The pool of possible candidates is VERY small as there are only a handful of executives with the scale and breadth to take on that challenge.

      Thanks again – Glenn

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