“It’s About Engagment”

A conversation with Korn/Ferry International’s BECKY STEIN and ANDREW LIPSHER.

Some companies are “born digital” (just think of Facebook or Twitter). But most are in the process of “going digital” by adding online commerce, services or communication capabilities to an established organization. Similarly, say Becky Stein and Andrew Lipsher, senior client partners at Korn/Ferry International, there are two types of talent: digital natives – those accustomed to technology enabling almost every aspect of their lives and communities, and digital immigrants – those who have learned this technology like a second language. Where the recruitment process gets interesting is the convergence between these different organizations and executives, when going-digital companies recruit digital natives to senior positions, or when born-digital companies seek talent from traditional companies. That is when sophisticated assessment practices and a sensitive onboarding process become critical elements in the success of the organization and the individual.

Becky Stein specializes in recruiting senior executives in the consumer, retail and consumer technology industries. Currently, she serves on the Global Consumer Market’s senior leadership team, heading the firm’s digital and multichannel commerce efforts. Before joining Korn/Ferry, Stein was managing director of a global executive search firm in San Francisco, where she served as head of the consumer sector for the Americas. Before entering executive search, Stein was general manager of F.A.O. Schwarz’s West Coast flagship store in San Francisco.

Earlier in her career, Stein worked on the OTC trading desk of an investment firm and was director of investments for a privately held investment fund in New York. She also served as a legislative assistant for the dean of the Pennsylvania delegation in the U.S. Congress. Stein earned a master’s in business administration from New York University and a bachelor’s degree in international business and finance from George Washington University. She also holds a certificate in international management from the Stockholm School of Economics.

Lipsher’s career has spanned nearly 20 years of corporate development, strategy, mergers and acquisitions, and investment in media, entertainment and technology. Before joining Korn/Ferry International, Lipsher was the senior vice president of corporate development at Clear Channel Media Holdings, where he led the global M&A, strategy and corporate development efforts in the radio and outdoor businesses. Before Clear Channel, Lipsher was a partner at Greycroft LLC, a venture capital fund, where he focused on digital media and consumer Internet investments.

Earlier in his career, Lipsher held senior executive roles at Interscope Geffen A&M Records (a division of Universal Music), News Corporation, BMG Entertainment (a division of Bertelsmann AG) and Warner Music Group (then a division of Time Warner).  After leaving Warner Music, he joined Maroley Media Group, the private equity firm founded by the former chairman and CEO of Warner Music. Lipsher holds a B.A. in history from Yale University and an M.B.A. from Northwestern University’s J.L. Kellogg Graduate School of Management.

Q: When you talk about digital trends, are you talking about the marketplace or talent?

STEIN: The answer is both.

LIPSHER: As digital becomes more and more prevalent, the needs of talent and organizations are becoming more and more closely aligned. If you look at the digital landscape, it can be boiled down to four buckets: two in talent or leadership, and two for organizations.

Q: What differentiates them?

LIPSHER: At the end of the day, regardless of industry, there are today really only two kinds of companies, those that are born digital, and those that are going digital. Born digital are the companies like Facebook, Twitter and Instagram, the pure plays, that have only ever existed in the digital context. The others are companies that are in one way or another going digital because they have realized that they have to. Maybe they’re being dis-intermediated by digital players, or they’ve found that the best way to communicate with their clients is via digital means.

Q: And on the leadership side?

LIPSHER: It boils down to the same thing; there are those that are digital natives, who have never worked in any other kind of environment, and there are those that have adapted to it, who have typically built their careers in traditional organizations. Becky and I belong to that second group. We are digital immigrants; as conversant as we are in the language, we began our lives in an analog world.

Q: What do these different categories mean from a recruitment perspective?

LIPSHER: The interesting trends center around digital natives joining born-analog companies, and digital immigrants joining native companies. At a macro level, that is how we’re beginning to frame the issue both in the marketplace and with talent. We are defining a set of attributes that regardless of industry or function define those categories.

Q: Clearly companies that are going digital are motivated to seek out native digital talent. What kinds of challenges do they face?

STEIN: If you do the math, digital natives tend to be younger, and they as of yet may not have had the management experience in leading other people. The second piece is if you hire them straight from the born-digital pure-play companies, they have a certain cadence to them that is different from the way decisions are made at the more traditional companies that are going digital. Cultural fit is a much-overused term, but one aspect is that the path to decision making is not always as thoughtful for digital natives because it’s so rapid at pure-play companies, it tends to be “ready, fire, aim.”

LIPSHER: The other issue is that at pure-play companies the organizations tend to be much flatter than at more traditional companies. It’s not just decision making; it’s management style, execution and expectations. The other thing that is different is the scope of responsibility. Not to put a negative spin on it, but at digital companies it’s a land grab; seize the opportunity, roll up your sleeves and get it done, irrespective of your title or job description. In traditional companies, roles are much more clearly but also more narrowly defined.

Q: What are “going-digital” companies looking for in digital native talent?

STEIN: What they want is somebody from a best-in-class organization, somebody that knows what “great” looks like. You know, if you’re in consumer packaged goods, you’re thinking of Pepsi or Procter & Gamble. In digital, you think of Amazon or eBay. But that creates another issue. Those companies have only been around 15 years or so, and people who got there early on mostly have made enough money to retire. After 10 years as an early hire at a great digital company you quite likely are wealthy; with 10 years at P&G you’re just joining the ranks of the VPs.

LIPSHER: There is also a whole set of compensation expectations and differences. People who join born-digital companies know they’re going to take a lower base, they’re going to work 24/7 for a few years, but they’re hoping to get rich on the stock. People who join traditional companies are more the “gold watch after 25 years” people. They’re more likely to ask about the 401(k) program.

Q: So how do you lure digital natives to traditional companies?

STEIN: The answer is that brands matter. For every Amazon, eBay or Facebook, there are hundreds if not thousands of companies that were hot in their day but don’t exist anymore. There is an enormous attraction to a company that has been around for 50 years and matters in the mind of the consumer. People do find it incredibly exciting to be at the forefront of these companies that are going to lead the change in their industry to a new level. For example, in financial services American Express is at the forefront of going digital, so it’s very exciting to recruit people into American Express.

LIPSHER: Are you going to be able to attract all born-digital people? Of course not. But to those open to being wooed in that direction, these people are bulls in china shops; they see themselves as change agents. They can say, “Look what I’ve done in the born-digital world. Now see what I can do in the going-digital world.” It does in fact play to a kind of arrogance. One reason you’re willing to take low pay and work 24 hours a day is you believe wholeheartedly that what you’re doing is so right and what everybody else is doing is so wrong.

Q: Doesn’t it create a lot of tension for a new hire to come in with that attitude?

STEIN: There is an evangelizing and a teaching role that you’re going to have at the going-digital company that you didn’t need to spend your time on in the born-digital company. At this point most companies want to be digital, but there is a fear of the unknown and they don’t even know the right questions to ask. That is a very uncomfortable place for a CEO to be. You have to put your trust in someone else, someone you don’t know well yet.

Q: What can companies do to make that relationship more comfortable?

STEIN: In the past, a lot of emphasis was spent on the recruitment, and while that may still be true, there now is just as much emphasis spent on the onboarding. It is an educational process for the company as much as for the executive coming in. There is also more attention paid to career development and retention. There are so many jobs and so few qualified executives, you really need to ensure that they’re happy and successful in their new positions. That is equally true at both the born-digital and the going-digital companies. Some companies have latched on and done very well with the more sophisticated training tools. In the born-digital world, both Amazon and eBay have extremely sophisticated senior HR people. But recruitment is also changing. A lot more attention is being spent on assessment. Learning agility, knowing how to get to the right answer without knowing the right question, that is the most critical attribute in people who are going to run your digital efforts. You simply don’t know what’s going to come out tomorrow.

Q: You mentioned learning agility. What are some other attributes you’re looking for in these assessments?

STEIN: Tolerance for ambiguity. Businesses and organizations, especially digital companies, change organically all the time, so somebody has to be adept at being effective when you don’t have a clear-cut job description or clear-cut goals, because even the numbers that matter can change. For example, people used to think the important statistic was the number of Facebook “likes” you had; now it’s about the engagement you have there with your customers. Flexibility, adaptability, these are enormously important.

LIPSHER: I would add that patience, consensus building and listening skills are critical. Our assessment approach is a framework approach, but every organization is unique and has a unique set of objectives, cultural issues and historic challenges.

Q: How do you ensure these new recruits’ success?

LIPSHER: One important element is to be very thoughtful once they come onboard. They have to have the wholehearted support of senior executives. There has to be the company understanding that they are going to shake things up, that they are definitely going to upset the immune system. The important thing is it’s a shared responsibility to ensure somebody’s success. It’s the individual’s responsibility to accept the fact that the company is trying hard, but there’s going to be an education that’s required. The company has to accept that it’s going to require different ways of thinking on their part as well. And it’s not just a different way of thinking, it’s a different way of acting. They’re going to have to support the person in different ways. This can involve re-imagining processes, how decisions get made, the allocation of resources, how different departments work across each other and more team organization as opposed to silo organizations.

STEIN: It goes all the way up to the support of the CEO. In the companies that truly care, the digital leaders are having brown bag lunches with the CEO once a month. The mentoring is going both ways. The CEO is mentoring the 25-year-old, but the 25-year-old is mentoring the CEO about this new way of connecting with customers.

Q: So this really is a two-way process.

LIPSHER: On a macro level, it’s a recognition on the part of the organization that by bringing in someone with a different set of skills, they have raised their hand and said, “We would like to find a different way to succeed going down this path.” Offline businesses can add an e-commerce component and it’s not a major change, it’s just opening up a new revenue channel. But by deciding to bring in these kinds of people, the born-digital people, it’s a recognition that something is strategically lacking in the organization. My view is that organizations that bring in these people have to take more institutional responsibility for their success. At the same time, born-digital people who come into these organizations have to throttle back their expectations and develop patience. While these organizations may not be aircraft carriers, they are certainly battleships and they don’t turn rapidly. You can’t just come in and make pronouncements and expect them to change. Success depends on both sides of the equation coming more and more to the middle and understanding why they’re both there.

Q: What about the opposite migration; what are the issues when born-digital companies recruit digital immigrants from traditional companies?

STEIN: E-commerce companies will often hire executives who will bring in the merchant skill set. Amazon hired a rock star from the Gap. When onboarding people from that direction, it is critical to make sure that they will be comfortable with faster decision making, without data or with imperfect data.

LIPSHER: What’s really interesting about this space is that when people talk about talent or organizations they think about a hard set of skills. While the quantitative skills need to be there, a lot of this is about a qualitative set of skills. Although the “culture” word gets thrown around, it is a big part of what is driving this. A lot of peoples’ success is not because they are the smartest people in the room; it’s that they have the cultural sensitivity to accept the differences while they’re trying to change things. This is why the assessment piece is so critical, because it gets to cultural fit and the ability to fit in a given organization.

Q: What kinds of companies need to concern themselves with the migration of digital talent?

STEIN: This touches every single industry. It’s not just confined to consumer electronics or technology or entertainment. It’s also health care, financial services, steel mills, educational institutions. Every single industry is changing to adapt to a digital world. This touches every industry and every function.

LIPSHER: Especially with digital, because it’s not simply “Our CFO just quit, find us another.” The search firm’s role is more about becoming a trusted adviser. It’s about understanding business strategies, helping you understand what resources you already may have in-house versus those you may need to bring in. This is not a cookie-cutter approach; it’s not replicable across every opportunity. This is about building relationships at the C level. It’s about what the implication of talent is, and how it can help them or hurt them.