Alan J. Kaplan
Connecting financial and growth-minded institutions with the next generation of leadership
Alan Kaplan is the CEO and founder of Kaplan Partners. Established in 1994 in Philadelphia, Kaplan Partners is a retained executive search and talent advisory firm that helps organizations fulfill critical roles and meet evolving leadership requirements. The firm specializes in executive search, board advisory services, and management assessment and succession planning. Clients include technology companies, private equity funds, community banks, nonprofits, and more.
JEFF MACK: Can you take us through the process of hiring a new CEO? How much of the equation is about tapping into your existing network—i.e. who you know?
ALAN KAPLAN: We do a lot of prospective client education, whether it’s a CEO at a conference—which happens all the time, where somebody says, “I’m thinking about my succession, the board’s thinking about it, and we’re not just quite sure what to do—would you come and talk to our board?” And we will go in and we will say, “Look, these are things you need to think about as a board of directors where the CEO who is at a certain age or certain stage when they may not be here. Think about the process, think about timeline, think about those dynamics and give them education.” And sometimes, six, 12, 18, 24 months later that turns into a client; sometimes, we educate them, they bring somebody else into and talk about the business and the other person gets the business.
One thing about the executive search business that people don’t always appreciate is that it’s a process business. Everyone assumes it’s “Who do you know?” And sure, we know lots of people, we’ve got a big database, and we have access to the latest technologies and resources that are out there, but this is a business about process at the levels that we work. When we execute a process, we know we’re going to run that process until we’re going to be successful for that client.
That process starts with due diligence from really two perspectives. One is: What’s the role in the organization that we’re involved with? We need to understand the state of affairs of the company: What needs to be done? Where is it today? Where does it want to go? Is it a turnaround, is it in crisis, does it have challenges? Is it growing really well and it’s firing at all cylinders, and we want someone not screw it up but think strategic about how they get to the next level? What is the role, what is the state of affairs of the company? Really, really important. So, when you are talking about a CEO in a bank or CFO in an industrial company, each one of those candidates potentially might bring some different things to the party, and being able to parse that’s really important.
But the other part of the process is due diligence around the culture: What’s the culture of the organization? How do decisions get made? How does the CEO run their team, if the job reports to the CEO? What’s the culture in the boardroom? And all those dynamics.
When you bring the cultural oddities, and the position assessment and evaluation, and understand the organization, you can craft a picture of what the right solution’s going to look like for a client.
And then we get into the sort of unglamorous job of researching candidates in the market—you know, making 150 to 200 outreaches in a typical C-level executive search assignment, to whittle that down to dozens of in-depth phone interviews to 10 to 15 people—we might actually meet in person for a couple of hours—and also run an assessment tool, the Predictive Index, on those candidates as well along the way. And then we get into the whole interviewing process and advising clients around the structure of the interview process. In many cases, we have boards that have said “I’ve never hired a CEO before,” or “I’ve hired a CEO on a nonprofit for a board I sit on, but I’ve never hired a bank president or software company president before. Help us understand the process of interviewing: what kind of questions to ask.” So, we work with them to try to help structure that, set that up.
And then you run through that process, and there’s a candidate validation and referencing piece. There’s candidate closing piece in terms of negotiating, structuring compensation packages—which has gotten very complicated: if you’re public company and a named executive officer, it’s got to be competitive and it’s also got to be defensible in the eyes of the shareholder community. And then making sure once you get everything resolved, and contracts and agreement signed, that they’re transitioning well, the family or spouse is transitioning well, if there’s other folks involved in that situation, and we think it’s really important to stay in touch with both sides of that equation for up to a year afterward.
So, it is a big process. It’s not just who you know. Who you know is nice, but who you know is not enough to get it done at the levels that we typically get activated with.
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