The New Face Of Executive Recruiting

An audio interview with Mark Evans, Managing Director of the Technology & Communications Group at DeLoitte & Touche Consulting, explores the trend of recruiting executive high-tech talent from outside the industry.

Recruiting, specifically high-tech executive recruiting, is one of the key challenges facing the industry today. And, of late, executive jobs are going to candidates who may not always have seemed likely in the past. DeLoitte & Touche Consulting has studied this trend and their findings can be found in articles from the company's Technology Trends publication here at Solution Provider University.

Carol Ellison: I'm Carol Ellison, Sr. Online Editor at VARBusiness magazine and we're talking today with Mark Evans, Managing Director of the Technology & Communications Group at DeLoitte.

Mark, welcome to Solution Provider University.

One of the articles here at SPU notes examples of very high-level executives leaving the ranks of brick-and-mortar corporate America to join high tech start-ups. Let's talk about why this is happening. And now that the dot-com mania on Wall Street has cooled and options aren't quite the attraction they were this time last year, is this still very much the trend?

Mark Evans: Well, certainly options are not the same attraction that they were a year or 18 months ago. That's absolutely true, but I think we can really set that aside because, for many of the people we're talking about here, this isn't as much about money. A lot of the folks we're talking about are already financially independent.

I think in many cases, the money or the options is just a way to keep score in terms of how they measure their success. I think what's going on here is that the venture capital that has flowed into early-stage companies over the last couple of years, particularly dot-com or Internet-related companies, is enormous.

First quarter this year, $17.4 billion was invested by venture firms and, of that $17.4 billion, 93 percent went into technology and communications companies. There's a tremendous need to grow these companies and to place experienced management teams in them. There's that huge need for people. The logical place for these companies to go is more mature companies with seasoned management teams that can bring in their experience to help in what, in many cases, is a small group of people with significant technical talent and great ideas but, perhaps, little or no management experience in terms of running the company. So I think this will continue. And I think the people that are making the move from more traditional corporate America to these early stage companies see it as a way to have more direct involvement in building another success story. They may have already been successful in terms of building the company where they're at and they want to do it again.

Ellison: How successful are these brick and mortar execs when they shift gears into high tech? Do they hit the ground running when they get here?

Evans: I think the answer to that is a little bit yes and no. Yes from the standpoint that what a lot of these folks bring is great managerial capability. They understand how to run organizations, manage people and do things that really are necessary in larger organizations. What they may lack, to some degree, is a sense for how to manage an organization that is transitioning so quickly, adding people very, very quickly and [one that] is a very different environment from what they're used to. So I think there's some adjustment on both sides. But clearly the managerial talent and the ability to help a company transition from a small organization to a much larger organization is one of the key things that these managers from corporate America bring.

Ellison: For high-tech companies seeking executive talent, this sounds like a hiring strategy whose time has come. Are you finding that to be true?

Evans: Absolutely. These companies are positioning themselves to grow two, three-, four-fold a year in their early stages. That means they're hiring lots of people. Many of them have an interest in going to the public markets. They need to have enough infrastructure in place in terms of management capability that they can feel confident the company can manage the growth and that they, in turn, can make the underwriters--and the public who will be buying their securities--comfortable that that's a good investment.

Ellison: In one of the articles here at SPU, an executive recruiter at Korn Ferry International notes a 20-fold increase in requests for chief technology officers as opposed to chief information officers over the last year. We've noted a new acronym CXO is also being bandied about. Is there a fundamental shift in job responsibilities going on here, or are we talking about a new alphabet soup in terms of job titles?

Evans: I think it's a little bit the former rather than the latter. I think this whole concept of CXOs really relates to the fact that it takes a very talented group of senior executives to make an organization successful. It isn't solely the purview of the CEO. And I think that's really what the CXO-alphabet soup, as you call it, refers to.

I think the distinction between chief technology officer, as opposed to chief information officer, is a fundamental difference. I think if you go back a number of years, people would think of a chief information officer as someone responsible for the MIS group--someone who would make sure the reports and information necessary for others in the organization to manage the business would be available--as opposed to a chief tech officer where, I think, the expectation is there's a much broader responsibility--not only providing information within the company, but also overseeing how the company does business. I mean, this whole transformation companies are going through to become e-enabled is all about using technology [and]leveraging technology to be more successful at running your business. I think that's a critical part of this chief technology role that really wasn't a part of the chief information officer role.

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