Chad Oakley 2024
Will Bachman, Chad Oakley
Will Bachman 08:01
So hello, and welcome, everyone to the current state of the consulting market. I’m so thrilled to have with with us again today, Chad Oakley, who is the CEO of Charles heiress, Charles Eris is one of the leading retain search firms in the United States for searches related to consultants and former consultants. That’s just one of their practice areas. I’ll let Chad tell you a bit more about it. So excited to hear Chad’s perspective. He was with us last year, he gave us some perspective on what it was shaping up in 2023. And looking forward to hearing his perspective on what the forecast and the outlook looks like for 2024. Chad, over to you.
Chad Oakley 11:25
Awesome, thank you. Well, I really appreciate that. And thanks for having me back. And it’s great to see everybody in the Umbrex community and happy 2024 hope everybody’s doing well. So maybe just to start, I’ll give you just a little bit of context of who we are at Charles Harris. And what we do, just so you kind of know where my context is coming from and what I’m going to be sharing with you all today. So as will mentioned, Charles Harris is an executive search firm. We’ve been in business now for 55 years, we have roughly 90 people on our team, and we have a series of practices. And one of those practices is a strategy practice. That’s a practice that I started 21 years ago when I joined the firm when I left Bain and Company and came in to Charles Harris. And that’s a practice that has since completed just over 1300 searches for strategy talent during those 20 years that we’ve had that practice in existence. Our client base is really twofold. 50% of our clients are private equity firms within the firm’s themselves, whether on the deal side, or the portfolio operation side. And then of course, private equity firm portfolio companies, another half of our client base are corporations, right? Those could be fortune 500, publicly traded firms down to smaller mid market firms that are privately held that maybe not owned by private equity sponsor, if you will. The majority of the people that we place within this practice probably at one point worked for a consulting firm, like a Bain BCG or McKinsey but we we certainly work with people from all walks of life and truly across a whole host of experiences and in skill sets. And so that is one of our practices. We also have a corporate development, finance and accounting practice, and then an engineering operations and supply chain. Practice. So that’s a little bit about Charles Harris, if you will, here’s what I thought that we would do team is I thought that we would spend a little bit of time talking about three things, I’ll share some perspective on three things. And then of course, I’d love to open it up for questions and anything that I can help with, I’d be happy to. So first thing, why don’t we start by just talking about the market for Strategic Services? Right. In other words, the market for consulting, and the market for consulting is often a bellwether for how companies are thinking about strategy these days. So let’s start with just a market update, I thought would be helpful. Secondly, is maybe why don’t we train? I’d love to translate that a little bit into what are we hearing from Chief Strategy officers in the corporate world? Right, we talk to a lot of Chief Strategy Officer. So what are they telling us right now. And I’m guessing that Chief Strategy officers, for many of you might be a primary customer base for what it is that you do in your roles. And then thirdly, maybe I’ll share a little bit about the advice we are giving to Chief Strategy officers right now on how to make themselves maybe more valuable to their companies in a down market, right, you know, you know, less likely to find themselves caught up in a downsizing. Right, which is happening now. And will probably continue to happen for the first six months of 2024. What is it that Chief Strategy officers can do to make themselves more valuable in their current world? And that’ll help you maybe to think about how you’re interfacing with Chief Strategy officers as well. So maybe we’ll do those three things and then and then we’ll, we’ll open it up a quarter. Okay. So hey, let’s start with the market update. Okay. So, you know, here’s what I love to say in a market like this, let’s say so there’s the good news is is that the need for strategy never goes away. Good companies are always talking about strategy, what’s next, where to play, how to win, where are we going, all that kind of stuff. So, a strategy never goes out of style, right? However, strategy does go in cycles, and often when the macro environment is down, or if there’s just hesitation about where it might go. And right now, as you all know, a lot of hesitation in the marketplace right now fear that the market is headed down or has the potential to head down. When that happens, strategy can and often will take a backseat, right? Just like for any other infrastructure, a back office line, I’m in the business, right? A strategy group is overhead. At the end of the day strategy is overhead in many cases, and so when you see a market like this, and companies retrench, right, and companies kind of move back to their core back to basics, if you will, they will often slow play or in some cases, outright stop extraneous initiatives. And that will often impact the work that a strategy team or just a consulting group is doing. I’m also a huge believer, and as I’m sure many of you know, that the best companies double down on new and exciting strategic initiatives during a downturn and 10 to way outperform the competition when the market rebounds. I hope that that is the case of the companies that you are supporting. So right now, because of this down macro environment, overall, the market for consulting services in general is down and down significantly. This is probably best evidenced by what is happening with the major consulting firms, right, which is that in 2023, all the major consulting firms, Bain, BCG, McKinsey, Deloitte, ey, Accenture, etc, were down. They were all down. And they were down relatively significantly, they certainly weren’t out. They were down, but they definitely weren’t out, right. But revenues were off for those firms, Project counts were off for those firms. And as the year progressed and 2023, it really only got worse, unfortunately, I can assure all of you that the consulting firms are really hoping that right now is the low watermark for them. And that demand is only going to increase. But they aren’t seeing any significant improvements just yet. There are a lot of people on the beach right now in that world of consulting much more than they’ve ever experienced in probably the last five, five plus years. So it is a tight market right now. So what a consulting firms do in a down market, right, they roll out their recessionary times playbooks. I know that we are not officially in a recession. But it feels like it in their world right now. Right. So they’re pulling the levers that they know to pull in recessionary times. Right. They they have lowered bonuses dramatically. You know, in 2023, they lowered profit sharing dramatically in 2023. significantly reduced annual raises. They slowed promotions. Right. Many of you might have seen that McKinsey announced 1/3 fewer partner promotions and 2023 relative to 2022. They also all the firm’s delayed start dates, right. All of the big three strategy firms Bain BCG and McKinsey all three of them delayed the start dates for some portion of their class of 2023 to the first half of this year. 2024. Right. And they all reduce the size of their incoming classes of new hires, right? You many of you may probably saw in the Wall Street Journal this week, there was an article that, you know, 2023 was not the best year to graduate from college of business school, Harvard MBA class of 2023, still has 20% of their graduates without a full time job, which is a really high number in that world. Right. So the white collar world is challenging. Right now in in many regards. However, while the market is down, it certainly isn’t healthy. For starters, McKinsey said they promoted you know, 1/3 fewer well, that still means that they promoted two thirds that what they did the year before, which isn’t all that bad, right. And while the strategy firms are certainly managing people out at a slightly more aggressive pace than they have done in the past five to 10 years, those rates aren’t anywhere near what we saw in 2009. During the Great Recession in 2009, during the Great Recession, our phones rang off the hook from people who had been let go from a consulting firm. Right. And so this means that there are definitely more consultants on the beach right now relative to normal times. And it means that consulting firms are overstepping their current projects. Without question, right? There’s, there’s probably a lot of a buy one project team and we’ll give you a second for free type of thing. Like a consulting Bogo, so to speak, right? So hey, there’s a lot of that going on. Because the consulting firms are doing everything they can to keep their people busy, but they aren’t going through layoffs. They’re not going through major layoffs at all. And that’s a pretty positive sign. Right? So I think the consulting firms are banking on the fact that 2024 We’re gonna start to see a solid rebound for services. I don’t think we’re going to see that in the next three to six months, I think we’re going to have to get through the first couple of quarters and 2024, before we really start to see that rebound, but they do believe that it’s coming. And I do believe that it probably doesn’t get a whole lot worse than right now. So for those of you on this call that are maybe finding some opportunities for yourselves, or you’re keeping yourself busy way to go, right, you’re probably in a pretty good spot. And for those of you who aren’t, keep a positive attitude, because I do believe that things will continue to improve as the balance of 2024. Continue to move forward. So our first topic, where’s the consulting market? Bottom line, pretty straightforward. The market for consultants right now is way down relative to years past, we haven’t seen the change in the tie just yet. Fingers crossed, that happens in the in the very near future. Okay. All right. Let’s pivot to what that kind of means in corporate strategy. And what are we hearing from Chief Strategy officers from incorporations? Right? Team, I know that not all of you do strategy work, a lot of you do all kinds of different work. But I suspect that Chief Strategy officers might be a client base that you serve, or hope to serve or are involved as a stakeholder in the work that you type to do. So hopefully, the perspective of the chief strategy officer will be helpful for you. So let’s talk about that. Right. So a down market affects all facets of what you know, how a company is going to think about strategy consulting, right, and corporate strategy is no different. In conversations we’ve had with Chief Strategy officers in the market, we’re definitely hearing more and more that companies are slowing strategic projects, they’re slowing special projects, they’re slowing extraneous growth initiatives, or in some cases, cancelling them altogether. We have also seen a an uptick in the number of corporate strategists that have been caught up in a layoff or, frankly, are nervous that perhaps a layoff is coming, and that their job might be on the line. So they want to get on our radar screen right to position themselves in a worst case scenario. I will say this, there is one bright spot for independent consultants, like I think many of you serve in that capacity. Right. And that is that we’re hearing from a ton of Chief Strategy officers, that they’re overwhelmed with work right now. Because they’re not able to build out their teams in the way that they would like, or they’re not able to go out and engage, consult, you know, big consulting projects, because they simply don’t have the budget, and therefore they’re doing all of that heavy lifting themselves. So what this may very well allow for is some contract support, right. And I’m guessing that many of you might be seeing some of those opportunities where Chief Strategy Officer, they don’t have the budget for a full time resource, they don’t have the budget to hire a full time team from a major consulting firm, but they might be able to squeeze out enough budget to bring on, you know, one or two individuals for a period of time on a contract basis. And so hopefully, you might be, you might be seeing some of that as well. So if I think about our second topic, which is what are we seeing in corporate and corporate, we’re seeing, we’re seeing, you know, fewer opportunities, as well. But those Chief Strategy Officer still have the same many of the same tasks. And so their hands are full. If you can connect with those individuals and see if you can be a contract solution for them. That’s probably not a not a bad approach, if you will, let me also mention mentioned this, and think about different types of companies, right? So think about fortune 500 organizations, we have found over the over the year, that the five years we’ve been in business, right that fortune 500 companies, when they retrench, they retrench harder, okay, so they they, the word comes down, we’re not going to spend any money, every penny is a prisoner type of thing. And it’s harder for those organizations to kind of pivot in those situations, relative to a private equity backed company, private equity firms, they’re on a timetable, they’ve got a win, they’ve got to win in the next three to five years, they tend to have a little bit more flexibility. And they also tend to be more willing to spend money when they know it will help them to make money. So for those of you who have not really kind of pursued that private equity angle, I will encourage you to do that. And maybe we’ll if we want, we could talk about you know how you can connect with those individuals and things like that towards the end. But before we do something like that, maybe I’ll get to my third topic, which was, what are we saying that Chief Strategy officers right now. So as I mentioned before, we talked to a lot of strategy officers. We’re hearing a lot about from then about what I just shared, right? Companies are slowing or canceling strategic projects, focusing on retrenching back to basics, so to speak, and many of them, you know, they want to get on our radar screen just out of fear, if you will. So we’re always happy to get this individual on our radar screen. But we also just try to provide a little bit of advice and guidance to strategy leaders about how they can create greater stability or stickiness or just kind of job security as a chief strategy officer in a market downturn. In other words, ways that she’s treasurer ops can make themselves more valuable at their companies, which reduces the likelihood that they that they’re Are they are their function gets caught up in a riff, so to speak, right. So there’s three things in particular that we help chief strategy officer just just to think through that we’ve seen over the years that other Chief Strategy officers have done that really helped them. So the first trend is kind of what I’m going to refer to as short term versus long term. And so what I mean by that is, we have found that Chief Strategy officers that are working on initiatives that add value in the distant future, that three to five, or maybe even 10 years out, those jobs are more at risk in a time like this relative to their peers, that are working on initiatives that create measurable impact in the next 612 to 24 months. I’ve mentioned this many times on this conversation today. In a market downturn, companies tend to retrench to their core products and services. It is not uncommon. In a market like this for a board of directors to direct the CEO to stop thinking about the 10 year plan. I know that we’ve we’ve been having you focus on the 10 year plan. Honestly stop, think about the 10 year plan start to focus on the 10 week plan. Right? Start talking on Wait, let’s think about this quarter, how do we ring the bell and hit our numbers for this quarter, right? So that CEOs mandate can change really, really quickly. And so if you’re a strategy person or a consultant working for a company, and you’re working on a mandate, that is a decade in the making, making, you are definitely more at risk relative to someone who’s working on more short term stuff. So with that in mind, we encourage Chief Strategy Officer, we encourage consultants to take an honest look at the work they’re doing to confirm that they’re working on projects that make a quantifiable impact in the short term. And so that, you know, you guys all know what I’m talking about, right? The best examples are projects that increase revenue in the short term, or decrease costs in the short term, right, and are maybe perhaps even focused on core products or services that their company sells, as opposed to new creations that are going to cost a lot to get off the ground, right. So you guys could probably tell me, you know, more than I can about these types of products, but on the revenue enhancement side, this is the types of projects that I’m talking about are things like customer segmentation, study, share of wall analysis, product launch strategies, or sales force optimization initiatives, you know, things that things are associate with the four P’s, right pricing studies, promotional strategies, kind of things that are going to ring the cash register in the very near term, are the types of things that companies care about now, in this type of market, and tend to be more willing to spend on now, right? On the cost side on the cost reduction side of things like, you know, a cost reduction study, vendor, vendor negotiation can be a big one now, right? process optimization, Lean Six Sigma type initiatives, transformation projects that have the intention of improving the bottom line, you know, all that kind of stuff. So what we’re encouraging our Chief Strategy Officer friends in the marketplace, and I’ll also encourage us any consultant is to make sure that whatever they are doing, clearly moves the needle in a quantitative way. And does so in a way where we we set a target, we lay out the milestones are exactly how we’re going to get there, we’re going to realize that revenue increase, we’re going to realize that cost savings, and that a CEO, and the board of directors can get behind and say yes, that helps me in the short term, let’s do it. Let’s make that investment. So that’s number one, they’re working on things that, you know, are short term quantifiable, as opposed to long term distance stuff. The second piece of advice we give the Chief Strategy officers to just create more stability in their role is is to take on more than just strategy. Right? So in other words, create a strategy and type of role, right? So add to their responsibilities and do so a little bit more formally, take on other functions as well as strategy, right? In some cases, they can be classic adjacencies, to strategy. So like the most classic adjacencies that we see to strategy, if you will, our strategy and corporate development, right, which is very powerful for strategy and transformation type initiatives, which is very powerful. But we’ve also started to see situations where strategy individuals maybe take on some not so classic adjacencies, such as communications, or we’ve also seen kind of employee experience roles, like something that would fit into human capital, F PNa. And big data management sometimes kind of falls within that. That’s Chief Strategy Officer consulting space, AI, very popular new topic where companies have got to wrap their arms around it sometimes, you know, the Chief Strategy officers saying, hey, I can help with that. Let me take the lead on that. See how we can leverage this. Some cases, these additions are reflected in their title, but in other cases, they are not, but the role expansion is definitely there. And, and so as you’re thinking about engaging with client bases, that might be a chief strategy officer in a corporation. If your area of focus is one of those other areas that I just talked about communications employee experience or something like that, bring that to the table, bring that skill set to the table, because I think a lot of Chief Strategy officers could could leverage that capability as well. Okay. So that’s kind of the second area where we’re encouraging chief strategy officer to do is create a strategy and role within their business. The third and final trend that and just piece of advice we give to Chief Strategy officers is to make sure that they’re they’re building out a team, and to have a team of individuals that just create more security for them in the marketplace. Now, this is hard in the down market, but we know how hard that isn’t a down market. But if they can leverage a team, it tends to make their world a lot more stable, right. So when a chief strategy officer has a team, and that team, by the way, can absolutely be contract 100% can be contract doesn’t have to be full time individuals as well. But when when you’ve got that team, the strategic messaging proliferates throughout the company faster, you’ve got more players on the field, if you will, so to speak, and more people singing the praises of the strategic efforts. So the word simply spreads faster throughout the company is more likely to become a part of the fabric of the organization. Secondly, you know, strategy, people and consultants tend to be pretty darn smart. And they tend to have a broad skill set that can find ways to add a lot of value, even if they’re not working on classic strategic initiatives, right. I mean, we’ve never Charles’s have never heard an executive say, you know that consulting toolkit just doesn’t add value around. Nobody ever says that, right? They always say the opposite, which is, man, if I could just get more of these analytically minded, hardworking strategists who can tell a compelling story I would take over the world, right. So if a troll if a chief strategy officer has a team, odds are they are finding ways of adding value throughout the organization, which tends to make the strategy function and the consulting function stickier in a company. In fact, I will say this. We have a ton of Chief Strategy officers tell us that part of their stickiness and their stability in their companies is because they become known as an individual who brings Rockstar talent to the company. And that Rockstar talent goes on to do great things. In other words, they are a feeder, the strategy group, that consult internal consulting group becomes a feeder of future stars in the business. Right. And so, Chief Strategy officers are always thinking about that, who’s my next star, that I can seed into the business for next steps, if you will. So to recap on that third piece, right, the way that teashops can improve their job security and downmarket would be to make sure their efforts successfully move the needle in the short term as opposed to the long term and then add to their jobs. Goodbye, taking on additional functional responsibilities. Okay. All right, team. That’s, that’s what we got. Well, so I’m going to pause for a second because I know we’ve been going on for a little bit. And I want to make sure that I’m answering questions, that kind of stuff. But that’s kind of what we’re seeing in the marketplace. Hopefully, there’s something in there. That’s helpful for folks.
Will Bachman 32:44
Fantastic. Great overview. Chad. First question comes from Dina, a couple of people had similar questions, talk to us about any sort of segmentation you can provide of, are there any bright spots or by either by industry or by functional area, where you do see some activity? Where if people perhaps, you know, some people on this call are multi talented? Do several types of things. When you’re going to the market right now? Are there some functional areas that you should highlight?
Chad Oakley 33:15
Yeah, great question. We Yes, the short answer is yes, we are seeing more opportunity in industrials. And I think there’s a couple of drivers of this right. Number one, there is a significant on shoring movement, for industrial manufacturing in the United States. Many of you will know that we went through an offshoring phase, where manufacturing just simply wasn’t done in the US. For significant content, we a lot of stuff got moved out, outside of the country, that has actually reversed. And so a lot of companies are now doing heavy manufacturing in the United States. And within the world of strategy within our strategy practice, where we’ve seen the most growth and the most, you know, where we’ve maintained the most is in the industrial space. Right. So that’s definitely one. One space that we’ve definitely seen more opportunity. And, and there is no question that industrial companies that are doing more manufacturing internally, it just creates more opportunities for them, and they need more support in that regard. So industrial would certainly be one. And I would also say that the air if us kind of went to the opposite side, we’ve probably seen more of a slowdown in our consumer packaged goods, space in our retail space. So, you know, when the market when we feel like a market downturn is often caused by a lack of consumer spending, right, consumers have historically driven the US economy, you know, historically. And so, if we have fears that consumer spending is going to reduce itself, who’s that going to hit the hardest that’s going to hit retailers and that’s going to hit consumer packaged goods, you know, consumer focused organizations. So we tend we’re seeing less less opportunity and those two spaces. But one of the things I want to mention, as I mentioned before, private equity continues to be a hot and heavy market. deal deal flow is way down to deal flow is way down. You know, 2022 was the largest year of merger and acquisition deals in private equity in the history of that industry. And 2023. Right, last year was one of the lowest amounts of deal volume that the private equity market has seen, because, of course, the Fed raised rates and money became a lot more expensive. Valuations came down, and so sellers were not as willing to sell their companies. However, if I’m a private equity firm, I still own a portfolio of companies, I might be doing less acquisitions. But I’ve got to make sure that my existing portfolio is reaching its full potential. So we continue to see, you know, private equity firms reach out to us and say, Hey, I need a new EX, for this portfolio company, because that for that function within that portfolio company is not reaching its full potential. And so if I can’t stress this enough, if you’re not engaging with this private equity world, I will encourage you to do so they are always looking for ways to add value to the portfolio company, and they will spend money when larger fortune publicly traded companies will not.
Will Bachman 36:21
We’ve had a few questions chat about artificial intelligence. What? So it’s sort of a two part question number one, what are you hearing in terms of the potential impact on consulting in general from AI? And part two is what sorts of AI related projects or roles are you seeing?
Chad Oakley 36:39
Yeah, great question. Um, you all should know that we do not specialize in AI, nor are we having any of our clients say, Hey, can you help us understand AI? Okay. So it’s possible that they’re going to other organizations or search firms that maybe specialize in AI, but AI is so new, I really don’t think there’s a ton of organizations out there that that are, are dedicated to that space. And we work with so many different private equity firms and, and corporations that my guess is we would be hearing more about it. Frankly, I think AI is just still so new, that companies are still trying to figure it out. How do we really use this? What can we really do with it? How can it really, I think everyone knows it’s going to be big, but they haven’t really figured out exactly how big or exactly how best to leverage the technology. And so we’re not seeing what’s not being talked about in our conversations. And and I’ll be interested, see if we, if that’s different a year from now, but right now, it’s not a huge part of conversations that we’re having right now. Well, I’m sorry, you had a two part question. One was on on AI. What was the first part? I’m so sorry? Yeah.
Will Bachman 37:48
So in terms of longer term, the impact on consulting Do you see? Have you heard people, you know, Chief Strategy officers talking about that? They’re, you’re going to, you know, hire Chet GPT instead of McKinsey.
Chad Oakley 38:00
Yeah. Um, no, we have not heard anyone say that whatsoever. You know, look, I will tell you that I’m definitely using chat, GBT, I use it. I’m not gonna say every day, but I use it twice or three times a week. And I suspect that many of you are in a similar boat, right? You actually are using it for a handful of things. On the last Sunday of this month, we will be releasing our 2024 current consultant compensation study, it’ll be our 14th annual, my good friend Laurence Lau, who I saw is on this call from the Golden Company is a major contributor to that study, Lawrence, thank you again for doing such amazing work for us on that. But I had to come up with some some. There’s some explanations in that study. And I use chat GBT to take my content and make it sound a little crisper. Right? So I think we’re all probably using the technology. And that’s and that and that way. But you know, AI is not at a place at all, where it’s doing real, true experimental thinking for us. And that’s what consulting is right? And so, down the line, yes, I have no doubt that AI is going to impact all of our jobs, right? It’ll impact every last industry in some way, shape or form. We are not seeing any companies yet. Say, I don’t think I’m gonna have to hire anybody or I don’t think I’m gonna have to engage in contract recruiting. I don’t think I’m any resources. I’m just gonna have ai do it all. We haven’t heard anything close to that taking place.
Will Bachman 39:31
Ted, you offered earlier and I’ve had several requests here, messaging me, would love to hear a bit more about how to go after work with private equity firms. So I’ve heard mixed guidance in the past. You know, some private equity firms have told me, You know what, everybody comes and tries to pitch us the operating partners. The best thing is to actually go to one of our portfolio companies, do some work with one of them and make a test case that then, you know, we can sell to other portfolio companies. In other cases, people have had success, you know, sort of reaching out to operating partners and building those relationships. What’s your advice very tactical on how an independent consultant can kind of bake into a P firm? And should you go for, you know, a top 10 global firm or maybe work in a try to go for a more mid size or smaller firm? What are some of your thoughts on PE?
Chad Oakley 40:24
Yeah, it’s a great question. And so Tim, the good news, and maybe even the bad news as well is, there’s no perfect answer this because every firm operates a little bit differently. Okay, so we, in the last five years, we just literally built this deck, because we, it’s now 2024. But in the last five years, we have completed searches for 100. And I think it was 45 private equity firms from every side from from the very largest firm from the KKR, and the Bain and Company down to midsize firms and everything in between. And we have absolutely learned that every firm works a little bit different. So but let me tell you what your options are. And then I’m also gonna give you advice on exactly what I would do like very tactical things that we’ll talk about, right? So private equity firms, for the most part, they have two groups within them. I’m sure many of you know this, but there’s the deal side, right, the guys who are responsible for identifying potential acquisition targets, doing the valuation doing the negotiation, landing the deal, you know, buying the company, right, those are deal side guys. And then most private equity firms not all, but most private equity firms will also have a sister group to the deal side, which is portfolio operations. That’s a team of individuals who don’t really have a lot of responsibility or any responsibility for getting a deal done. But once the private equity firm owns that company, their job is to make sure that that portfolio company has the right people in the right seats, they’re doing the right things, they have the right strategy to realize their full potential so that when they do exit that company in five to seven years, they do so at the at the best possible deal price, if you will. Here’s the thing. Here’s where the challenge comes in. Different private equity firms give different levels of authority to each of those groups, we work with some private equity firms where the deal team, they’re in control, they might have a portfolio operations group. But the portfolio Operations Group is not calling the shots, the deal team calls the shots 100% portfolio operations team is really just to execute what the deal team tells them to do. We also work with private equity firms where the portfolio Operations Group has as much power as anyone on the deal team. And when that portfolio company is acquired. They own it. The port buffers team owner, they make all the decisions, if you will. And so the short answer is there’s no, there’s no perfect way to go about it besides approaching bone, okay. And here’s the way that I would do it. We have found that, you know, if you reach out to a private equity deal, person, and you say, Hey, I’m an independent consultant, or I’m in my world, I’m a search partner, and I can help you find great talent, want to talk? Crickets, you’re not gonna hear anything back, right? You have to be very specific of the exact skill set that you can do. And we, I will encourage you, because this is what we do encourage you to go and talk about a specific portfolio company. So if you go to a private equity firms website, and you look up their team members, almost all of them list to other team members are because they’re bragging about the impressive backgrounds of those individuals. Those those profiles will often tell you which portfolio companies, that individual has been a part of served on serves on the board of who was part of the deal team or something along those lines, I will encourage you to reach out to that individual with something that think about what your what’s your competency is what your spike is, what’s the service that you want to provide. I’m going to I’m going to use a simple one, just for argument’s sake, vendor negotiation, right, you’ve got tons of experience on procurement, vendor negotiation, you can help to save money, I would, you know, say something in my email title to that private equity partner, vendor negotiation experts for this portfolio company, a specific portfolio company, you’re much more likely to get that private equity person to open up and say, right, what is this? They’re talking about one of my portfolio companies, right? And in that email, you’re effectively saying something along the lines of I so and so this is who I am, we’ve never met before. You don’t know me, but this is what I do. I help companies like this company that you own, save money by negotiating with vendors. And then you have a couple of data points that demonstrate the quantifiable success that you’ve had in that space. For instance, my last two projects, I was able to save my first client, which hopefully was kind of a similar company to the one that you’re talking about. I was able to save my first client 17% across five vendors. My second one, I was able to save them 30% And I am confident that I’ve could do the exact same thing. If you partner with you on this company, that’s the kind of thing that because if I’m that private equity partner, what am I thinking about? I’m constantly thinking about how do I improve the EBIT? Da by this? That’s what it’s all about for these guys, right? How do I improve EBIT, da, so I can do that by raising revenue and maintaining costs or lowering my cost structure. So when I see Wow, here’s a person who has direct experience improving the EBIT da at a business, that’s someone that I’m a lot more willing to engage with, if you will, now, so that’s going directly to the private equity individuals will, could you also go to portfolio companies all day long. And I would encourage, I mean, this is not an either or this isn’t, and I would do everything I would find out. And by the way, if I’m the CEO, or the CFO, or the CEO, anything for a private equity backed portfolio company, I’m in the boat with a private equity firm to do one thing, improve the EBIT da of my business. So they have that same pressure, though that same passion for improving revenue, revenue, revenue or decreasing costs. So this isn’t just go to one go to the other this is go to everybody. Recognizing that each firm operates a little bit a little bit different.
Will Bachman 46:11
said your firm is a bit of a bellwether, for particularly the strategy practice, for the market for people with consulting background. In addition to consulting consulting revenue, tell us a little bit about what you’re seeing for the job market for people like us who have, you know, spent time at a consulting firm, you know, perhaps some people on this call might be thinking about looking for a full time role at some point. Last year, you shared some numbers on how many searches you had active and so forth. What’s your, you know, give us a perspective on the current job market for full time roles?
Chad Oakley 46:46
Yeah, great question. I can’t remember exactly what the number would have been last year. But our high watermark in 2022. Let me give you a couple stats we held last year 2022, we completed 255 searches. That’s not all strategy that’s across different practices. Our strategy practice probably had 17 completed searches in that regard. They also just talked about active searches. So our high watermark as an organization in 2022, was 155 searches at one point and 2022 with 155 searches, we are staffed to maybe handle about 120. So you can imagine what was going on in it here. They were chickens with their head cut off and run around like crazy. Today, right? 112. So high modern walk was 155. Today, we’re at 112. Today, so the market, like I said, the market is down, but the market is is not out. The we’ve been in business for 55 years. Our record year best year in our company’s history was 2022. Okay. Last year, was our second best year. Okay, so last year was down but not that bad. Right. And so that’s kind of where the good news is, there’s still definitely opportunity out there in the marketplace. Now, let’s talk for a second about if you if you’re looking for more of a full time, if you want to pivot from being a contract consultant into a full time role. Let’s talk about that for a second. And what I encourage you to do in a in a in 2022, the greatest market for talent, the best candidate market in the history of United States, probably literally in the history of the market was so tight, generalist skill sets when every day, when every day, right? The Swiss Army Knife wins in a booming market, right? Because companies are saying we just need talent, they can do a little bit of everything, get them in here, we’ll find a way for them to add value, they’ll find a way to add value. However, in a down market, which is the market we’re experiencing now, the generalist skill set is not as attractive. But companies now don’t call us and say just find me a really smart general athlete, and we’ll make it work. They call me now and they say, Chad, I have a need, I need someone who has these seven competencies. They’ve done these seven things, and I really don’t want to compromise on. Okay. And so what I’ll encourage you to do is think about what are your spikes, right? And again, making sure that those spikes that you bring to the table will add value to that organization in the near term, not in the distant long term, right? You want to be doing you want to be able to say to a hiring authority, I can help you move the needle in the next six months, not the next six years. And so think about the spikes, right? Maybe it’s mentioned my example before, maybe you’ve done a bunch of procurement studies or organizations or vendor negotiations, things like that. That’s a spike of yours. Call that out. And by the way, you know, most of us, if we’re really honest with ourselves, most of us have maybe two true spikes that we can bring to an organization so don’t don’t fall into the trap of saying pick a card, any card I can help you right. You know, kind of say look, these are the two areas where I I can really make a difference for you in the in the near term.
Will Bachman 50:05
Chad, I know your firm is primarily focused on North America, for folks in Europe, Asia, rest of world. I know that you do also have partner firms. And what’s your perspective? What What can you offer about anything that is different in other geographies from what you said about the United States?
Chad Oakley 50:23
Yeah, so I’ll actually have a lot more context on this. In March, I’m going to Barcelona to meet with all the heads of the SR firms. So the Charles Harris is the US representative for an international coalition of search firms that goes by the name of inner search, we have sister search firms in 50 countries. But the sense I get right now will is that you know, the global market is down. I mean, there’s no one part of the or one part region of the world there might of course, there’s always bright spots. But there’s no region in the world right now. That is that is really humming. And so I think the market overall, for full time roles is down in the global market. But again, I can’t I mean, I, the part that I’m most nervous about what I’m saying, is it I am concerned that it sounds more negative than I think it really is. Right? So there is stuff happening out there. Like I said, we had our second best year ever last year. So there’s definitely still hiring that’s taking place. But I do believe the first six months of this year, it’s going to be a little bit bumpy. Things get a heck of a lot better. When Jerome Powell, if he’s the guy who will do it. When Jay Powell, the head of the Federal Reserve stands up and says, It’s official. It’s it’s a soft landing. Now we’re heading back up when that happens, I think you’re gonna see some really nice moving. I don’t know if Jay will, Jay Powell will ever actually do that that might be outside of his purview. But we need somebody like that, to stand up and say, good news, everybody. It’s only good. It’s only going up from here. When that happens, I think things are good. Until that happens, I think we’re going to be still bumping along this road, kind of slow and steady, so to speak. But so this is, this is a frog kissing game right now. This is a roll up your sleeves, kiss the frogs, whether you’re wanting to be contract, or whether you want to go full time, you got to put in more activity to get the productivity that you’re looking for. But if you do it, there’s opportunities out there.
Will Bachman 52:20
We had a question here about from Mark on how many years of independent consulting is too many to be considered for a full time role. And maybe broadening that just a little bit? You know, for someone who’s done independent consulting for 1258 years, and is now ready to say, Okay, I’m actually ready for a full time role. I miss having colleagues, what would your tips be on how to position yourself well, and how to articulate what you’ve been doing to to best position yourself for a full time role?
Chad Oakley 52:53
Yeah, that’s a great question. I don’t think there’s any amount of time that would prevent someone from being a viable candidate from a full time role, right? I suppose there is some truth in the fact that the longer you’ve been independent, there’s, there’s going to be more questions about here. You’re really serious about this, right? I mean, you’ve been doing this independent thing for a long time, right? This is really what you want to do. There’s always going to be some of those questions. But I think those are all over comparable. Here’s, here’s the thing that you have to demonstrate, right, the number one fear that we hear from our clients that are looking to hire full time talent, if we’re ever talking with them about a contract person or someone who’s been independent for your time, the number one question without, without any hesitation is, what’s been their utilization? Like? Or is this a hard working person? Or are they independent, because they don’t actually want to work that hard, they’re not all in and maybe they they do a project here or there. But hey, look, this is a really important role for me, Chad, I gotta have a superstar that’s in it to win it, that’s gonna give 110% I gotta make sure that this person is that. And so if you’re applying for a full time role, you really need to just have a good story of this is what I’ve done. Let me lay out these projects. And oh, by the way, making sure that you’ve got individuals, clients that you serve, that are more than happy to hop on the phone and say, let me tell you how awesome this person was. Let me tell you how they made a difference for us. Right? That if you can do that, your story gets gets really good really quickly. Also team by the Way, the Truth always wins. I don’t think there’s anything wrong with a contract person saying, chat. I loved being a contract person. I got to work across a whole host of different companies. I got to do all kinds of different things. The market was booming. Rates were great. It was an awesome lifestyle. I kept myself super busy. I learned a ton. I contributed a ton. It was terrific. Well, the markets changed tab. Right? I don’t have that same degree of flexibility more because people aren’t engaging contract recruiters at the same pace. I need to move to a full time role and I’m 100% committed to doing that. That’s a fine story. There’s nothing wrong with that. If that’s the truth. Great. Own it. Nothing wrong with that at all. Right? We should all be so lucky that we’re good enough at what we do that we can go contract, right? I mean, a lot of that could just be jealous of that. So I think it’s a good story, I think it works on it that your story just don’t it
Will Bachman 55:14
said, you and your team, look at a lot of resumes, a lot of LinkedIn profiles. Talk to us in terms of what people can do some maybe Common Mistakes You see, or some ways to optimize in terms of all of the collateral. So your LinkedIn, your resume, samples of work, references, a project list, other things that you think are compelling, a personal website, your company’s website, having a blog or a podcast? What are some things that really stand out? When you’re when you’re showing candidates to your clients? Yeah,
Chad Oakley 55:50
no, that’s a great question. So the number one mistake that we see on resumes, if you will, is when an individual lists all their roles and responsibilities, and no quantifiable outcomes. Okay, at the end of the day, what people care about is how have you moved the needle in your past, because if you successfully moved a needle in the path, I suspect, you can move the needle for me. And so oftentimes, people will say, Hey, I was the vice president of this at this company. And let me show you my roles and responsibilities. And those roles responsibly talk about what they did, but they didn’t talk, they don’t talk about what the success was. So we we say to people all the time, a good resume is one that includes a lot of numbers, a lot of numbers on it, increased revenue by this decreased cost by this improved cycle time by this, you know, whatever, right? You know, reduced inventory, holding costs, whatever it is, right things where you can actually speak to something that is measurable, that thing, and I will encourage you to do the same thing on your LinkedIn profile, because the it’s much more likely that someone’s going to see your LinkedIn profile as opposed to your resume. And so if you’ve got measurable items that you can point to on your LinkedIn profile, that is definitely the most important thing to do. If you are an independent, a contract, consultant, an independent consultant, I suspect, you might have a website, where you’re kind of showing case studies or, or sample white papers that you’ve written or sample deliverables, things like that. And those are really, really good. However, if you don’t have one, do not build one, because you’re looking for a full time job. And you’re hoping to direct people to that so that they can learn a little bit more about you. Honestly, we find that that people companies often think that someone’s trying too hard, if they create an entire website around just finding another job. Right? makes it feel like Ooh, how long have they been out if they had to go to that link? Right? A good resume, a good LinkedIn profile should be good, like the combination of a good LinkedIn profile, a good resume, and Kissing Frogs on your end is all you need. That’s all you need.
Will Bachman 58:02
Chad, talk to us a bit about interim executive roles. So it’s somewhat between a full time role and more of a consulting project. How can people find those opportunities? And how do you position yourself? Well, for those sorts of roles?
Chad Oakley 58:18
Yeah, no, great question. So you know, it’s funny, we do not have an interim executive division at Charles juris. But we’ve been thinking about it. And so I’ve been asking a lot of our private equity clients about this very thing. Here’s what I found in the last. And the last two weeks, I’ve had six conversations with private equity operating partners, managing directors about this topic, do you use interim executives, and three of them have said, Chad, not a week goes by that I’m not dealing with an interim executive need in my organization. We use them all the time. They’re very important for us. By the way, they said that the most spaces that they use that there’s two areas where private equity firms use enormous exit the most. First is CFOs and finance specialists, right? So if you are an interim CFO, congratulations, you’re in the catbird seat, you can do anything you want. With that. I can also tell you this, without question. You can ask every single private equity firm in the country. What’s the hardest position for you to fill in your portfolio companies? I would bet a million of wills dollars right now that they would all say 95% of them would say CFO without question, right? That’s just what they all need. So if you’re in a finance, if you’re in a FPN, a role, or a CFO position or anything that is finance and accounting related, you’re in a great place, you should find a lot of opportunity for your skills and your capabilities. Okay. But the first one first error where they use interim executives finance roles. The second is transformation. Right? Can you help to run a PMO office where we’re trying to make significant It changes with them. So half of the beverage reforms that I’ve talked to said, I deal with this every single week in my life, it’s incredibly important to us. We use interim executives all the time. The other half said, Chad, we really don’t use interim executives, because that’s my job. This was someone on the portfolio operations team and said, I’m the Interim Executive, when our when our company needs that. Well, how do you position yourself for these types of opportunities? Two ways. One is there are firms that do just this. There’s a firm called that that we know well called High Point associates, they’re located in Los Angeles, some of you might be familiar with Sumeet. Gould, who runs that firm, fantastic, former McKinsey guy, brilliant team. They they do this type of work for organizations. So getting on their roster can be something that you that you won’t do, by the way, there’s a host of other company firms as well. That’s the one that I know off the top of my head, there’s other friends who can do that. So that’s one way you do it. The other way you do it is just like I said before, you’re reaching out to organizations and saying, This is my spike, this is what I do. I can help you with this. And suddenly an interim opportunity could be presented to you in that in that path as well.
Will Bachman 1:01:09
Before next question, I’ll say right now we have 137 people dialed in, before you drop off here, as we get close to the top of the hour before you drop off. Do Chad, one favor. Over the next nine minutes, put in the chat. One thing that you found surprising or interesting or most useful today, it’s always the first speaker. Sometimes you don’t know it might be a casual side comment that really resonated with people. So put those in the chat here. Next question is board roles. So how can consultants position them? Well, for board roles? We had Ron lumber speak to us in the fall? Who runs the board practice hydric soils? He talked about it? What’s your perspective, particularly for portfolio companies or PE firms? We’ve helped with some searches around that filling board roles, what are your thoughts around position yourself for board roles and get in front of those opportunities? Yeah,
Chad Oakley 1:02:07
board roles are really unique and special. Everybody, we just you know, we do very few board positions. And here’s the kicker on that. It’s not that we wouldn’t. It’s just that, and we work with a ton of private equity companies that have boards, and they certainly have awards. They don’t necessarily use us for this. And I think the reason is because board roles are easier to fill, everybody wants to be on the board. It’s like the sexiest thing going right. It was like, oh, I want to I you know, people say to me all the time, Hey, Jack, give me my Pro board roles. So everybody wants to do that. Here’s the thing. If you’re for a private equity backed portfolio company, if you’re on that board, you’re on that board to increase EBIT da, you’re on that board, because they’re trying to break into a new industry segment, and you have a Rolodex that they can leverage, or you have served as a CEO, or a you’ve been a big player in that particular industry. And you’ve seen mergers and acquisitions take place, and you can just add a lot of content value for that roll up that that private equity firm is trying to do. So a generalist skill set is really, really hard, I think, to create, you know, value on a board, it you know, it really is they want to see very specific spikes. And those spikes tend to be incredibly directly related to that portfolio company, and you knowing that industry really, really well. So I will say this, if you’ve spent your entire career in an industry or in an industry segment, and you know, that segment really, really well, I would encourage you to do some research within the world of private equity and find out who’s investing in that space. In fact, my guess is if you know that industry why? So Well, you probably already know, who’s making investments in that space. And I would encourage you to reach out to those deal side partners and say, Hey, I know this space is where I spent my entire career. I could be a good board member for this portfolio company, this portfolio company of this portfolio company, and here’s specifically how I can help you in that marketplace. But I do think it’s harder will for independent consultants to probably be a fit there.
Will Bachman 1:04:13
Thank you, Chad. So we are close to the top of the hour, I think we can actually give you a few minutes back here, prepare for your one o’clock before folks before you hop off and hit that leave button. Please do drop it in the chat. There’s been a lot of people have put their takeaways. And Chad, we will consolidate all these and get these to you. So you can see these. And we’ll also be sharing this episode as a vert on pot on Unleashed. So Chad, thanks so much for joining us before we go. Why don’t you drop just let us know where can people go to learn more about Charles Eris and particularly your upcoming compensation survey?
Chad Oakley 1:04:55
Yeah, absolutely everybody so you can learn more about Charles Harris ad, I’ll put this in the chat real fast at Chelsea rose.com. And then if you go to our strategy, we have a newsletter section, you can sign up for our newsletter, it comes out the last Sunday of every month, it’s totally for free. And every time we release a compensation study, and we do no less than three a year, right, every time we released one, you can get it totally for free. So you’ll just have to enter your contact information. There you go. Thank you. There’s someone put, or Well, I think you put that in there. You can go and look at the different studies from years past. But you can get the latest and greatest information by joining that newsletter. It’s all free. And also that Newsletter Lists every search project that we’re working on for strategy individuals for consultants. So you can get a sense, what’s the market bearing right now. And of course, if you see anything that’s interesting to you, we can’t wait to hear about you and learn more about you. So thank you. Well, that’s, that’s where you can do it. All right.
Will Bachman 1:05:57
Thank you, Chad. We will include those links in the show notes for those of you who listen to this as a podcast. Thank you, everyone for joining.
Thanks. Well, thanks, everybody. Thanks