As founder and president of an executive search firm in Boca Raton called the Curtiss Group, William E. Frank Jr. makes a living by working contacts and mining informal conversations for nuggets of opinion and insider news. And he knew that Rummell - an 11-year Disney veteran who was chairman of the Imagineering unit - was used to taking calls from headhunters. In fact, Frank had called Rummell before about other openings in the corporate stratosphere.
This time, Frank wasn't just after advice. The call was the opening bow in a minuet during which he would successfully woo Rummell for the job of St. Joe's chairman and chief executive officer [FT, May 1997].
"By the time we first contacted Peter, we had probably made 1,000 phone calls, and he was one of six candidates," Frank explains. Rummell met St. Joe's demands for someone with both operational and real estate experience. At Disney, he managed theme park, resort and other commercial development activities, including the company's new town, Celebration. In addition, Frank knew of Rummell's two separate stints working in the Jacksonville area, first creating Amelia Island Plantation in the 1970s and later managing Arvida's Sawgrass residential development in Ponte Vedra Beach.
On the personal front, Frank knew that Rummell's wife, Lee Ann, had family in Florida. So, when Frank called, says Rummell, "In general, I said I was not interested. But I also said, tell me about it."
Two weeks later, Frank flew to Los Angeles and met with Rummell in the theater of his Beverly Hills home. Next came a clandestine meeting with the St. Joe board of directors in a hectic two-day period during which Frank had to play the politics of headhunting, secretly shuttling Rummell along with two other finalists for the job in and out of town. Rummell arranged to stay with a friend in town rather than risk being seen in a hotel. "I was careful because I didn't want to have to answer a bunch of questions about what I was doing there," he recalls.
Such highly competitive courtships are occurring with increasing frequency - and intensity - as growing companies turn to search firms to find new talent. And headhunters like Frank who master the art of the chase can profit handsomely: Rummell's pay package included an annual base salary of $600,000, stock options worth an estimated $35 million and up to $5 million in other considerations, including a signing bonus. Under the usual arrangement in which the search firm's fee equals one-third of the executive's first year's salary and bonus, the Rummell deal brought in "hundreds of thousands" of dollars for the Curtiss Group, the richest payday in its 17-year history.
"Much of what we do is convince people who are happy where they are that they could be even happier someplace else," says Frank, an affable 49-year-old who left a vice presidency of human resources at ITT Corp. in 1980 to found the Curtiss Group, named after the Miami Springs street on which his first office was located.
Frank, who moved to the Sunshine State soon after graduating from Pennsylvania State University less than 30 years ago, says the Curtiss Group concentrates on headhunting for Florida companies. Its current client list includes Sensormatic, Motorola, Arvida, AutoNation and Sunbeam. Coups such as the Rummell recruitment have led Frank's firm to extend its reach by opening offices in Tampa, Brussels and, through an alliance with the accounting firm of Coopers & Lybrand, in all major South American cities.
That growth is emblematic of what's happening throughout the search industry in today's bullish, streamlined economy. More than 4,000 executive search firms are prowling North America for executive talent, most operating from headquarters in New York City and vicinity. The nation's three largest retained search firms - those paid a retainer to identify and present to their corporate clients top-level job candidates - had combined revenues of more than $350 million last year. Each reported growth of almost 25%.
The two largest executive recruiters in the world, New York's Korn/Ferry International and Chicago-based Heidrick & Struggles, recently opened Miami offices, in part to serve big corporate clients expanding into Latin America [FT, Aug. 1997]. But even mid-size companies on the look-out for key people at the boardroom level are turning to experienced headhunters to narrow the field of candidates.
"This is the boomerang effect of the corporate downsizing five or six years ago," explains Tom Rodenhauser, managing editor of Executive Recruiter News, a New Hampshire-based trade journal. "Companies are looking for talented people as they rebuild positions they lost. And they are looking for people who can handle a variety of jobs, often what used to be two jobs. They want someone who is a real performer, rather than just competent."
With billings last year of $1.5 million, the Curtiss Group is far from being one of the largest retained search firms in the U.S., nor is it even the largest Florida-based executive recruiter. That distinction, according to a ranking published by Executive Recruiter News, goes to Tampa's Cypress International, which reported 1996 revenues of more than $10 million, an increase of 26% over the previous year. While maintaining a low profile, Cypress International has been steadily growing since its founding in 1974, says Executive Vice President Tom Cook.
The chase
The Curtiss Group's success in luring Rummell from Disney serves as a primer in the workings of the high-stakes recruiting game, which often seems to involve as much cloak-and-dagger sleuthing as bargaining over stock options and salary.
It begins with networking, explains Frank at his office in the Curtiss Group's headquarters in a Boca Raton bank building. In today's corporate ethos, loyalties do not run deep. And candidates for top-level jobs don't come from the ranks of the unemployed, but rather from corner offices. That means headhunters have to stay on top of who's in play. Over time, Frank says, headhunters amass dossiers on hundreds of prospective top executives, with notes on everything from what challenges may intrigue them to what sports their children prefer.
Executives ask more from their employers these days than big salaries and perks. "They also want to know if a company is a fun place in which to work," Frank says. Family considerations have become a big consideration as well. "What we pitch is the job and opportunity, the right challenge," he says. "But it's not just the job. We have to convince the candidate that his family is going to love it here, too."
In Florida, he says, that means emphasizing the weather, while putting the best spin possible on the state's education system. "Education is the toughest thing to sell in Florida," says Frank. "We almost always end up talking about private schools."
The competitive situation also dictates that headhunters must operate with discretion, even stealth. In recent years, for example, Frank has negotiated contracts in a Bolivian forest, a mountaintop cabin in Norway, and conducted, in one 24-hour period, a jet-set series of interviews with job candidates in Denver, Cleveland, Chicago and New York City.
In Rummell's case, Frank got the tip that St. Joe was looking for a new CEO from a friend, Walter Revell, who's on St. Joe's board of directors. The Curtiss Group then had to beat out the top three search firms - Korn/Ferry, Heidrick & Struggles and SpencerStuart - for the contract to do the search for St. Joe, which was looking for both a new CEO and a new direction for the company, a staid behemoth with million-acre real estate holdings in north Florida.
In presentations to St. Joe's board of directors, Frank and the Curtiss Group's managing partner Bob Beatty, a buttoned-down, 45-year-old former Marine Corps officer with executive search firm experience in New York, pitched their familiarity with Florida. They also played up their company's boutique size. In the search business, Frank explains, most firms practice "client blockage," meaning they won't recruit a candidate for one firm from the ranks of other firms they represent. Revell says Frank's flexibility and the potential for fewer client conflicts were important in St. Joe's decision to pick the Curtiss Group.
With Rummell now in Jacksonville running St. Joe Corp., Frank and Beatty are looking to the future, confident that the traffic in executives will grow even more brisk. "With more competition and new markets, companies must continually change," says Frank. "Positions become obsolete and even the best executives find themselves insecure."
Rummell acknowledges that the dynamics of today's corporate culture make change a constant for top managers. "People build their careers by moving not just up the ladder in one company, but by moving to different ladders in different companies. I built my career by making strategic moves that way." A telling sign: After just a few months on the job, Rummell has already begun getting calls from other executive recruiters. With a five-year contract, he says he's not going anywhere, "so headhunters don't need to call."
Really, he's asked. You don't even want to hear from them?
"Oh, no," he says. "I'm at St. Joe, happy as a clam."
And if they call anyway?
"Well," says Rummell with a knowing smile, "let's just say we've upped the ante."