Ever wonder what the best and brightest recruiters are doing to find top talent? Matt Schwartz, Founder and President of MJS Executive Search offers up his thoughts on recruiting, retention, employer branding, company culture, the job market, and shares his methodology on transformational talent.
MP3 File | Run Time: 38:26
Brandon: Hey, thanks for the download today! This is your host, Brandon Laws. In today’s episode, I interview Matt Schwartz. He is the Founder and President of MJS Executive Search. They are located in New York. They are a boutique retain executive search firm working on searches throughout the United States and Canada. You can learn more about Matt and MJS at MJSearch.com.
In our discussion today, Matt and I discuss recruiting, the importance of the employer brand, company culture, what makes an employee successful, and much more. Enjoy the episode.
Brandon: Hey, Matt! It’s great to have you on the podcast, welcome.
Matt: Thank you, Brandon!
Brandon: So Matt, you’re the founder of MJS Executive Search. You specialize in transformational talent. Tell me what that is.
Matt: I founded MJS 15 years ago after about four years as a Principal at Heidrick & Struggles and then five and a half years with a boutique firm in New York City. If you think back to 2002-2003, the dot com boom and bust had just happened, companies had gone through spending millions of dollars building brands that disappeared overnight and companies were a little gun-shy to focus on marketing at that point.
We realized that if companies were going to be hiring and moving forward in their marketing efforts, that marketing better be measurable. A lot of the work that we did early on was focused on direct and database marketing, a little bit of email marketing. But then as time went on and we started to see the trends that companies were going through massive digital marketing transformations in their business. And so we then changed our positioning to digital marketing transformation.
While working with American Express, one of their organizational development folks was so intrigued by some of the unique innovative roles that we had filled, she said, You’re probably not just involved in digital marketing transformation, you’re involved in business reimagination on behalf of your clients. And I said, Well, we are an executive search firm. I can’t take credit for reimagining their business. But we can take credit for helping them find this unique talent that will help them get there. And that’s where transformational talent came about and I’ve since trademarked that term.
What that means to us is basically roles that have never existed before within our client’s business, skillsets that are not organic to the company or the industry, or roles that need a significant upgrade due to an infusion of digital marketing or technology whether working with a consumer goods company to financial services organization, travel and hospitality, B2B, industrial, all of these companies are in need of this type of talent, and that’s what we specialize in whether they’re a cutting-edge organization or a company that’s looking to play catch-up in their marketplace.
Brandon: I resonate with what you just said so much. I’m a Director of Marketing for a regional company in Portland, Oregon, and just in five years’ time, the evolution of my marketing role has changed so much because of technology. And I’m sure this isn’t just true of marketing positions but other industries as well where the needs change for positions and it is interesting that you’re helping your clients find positions that don’t necessarily exist yet but there’s no perfect job description or there’s no current LinkedIn profile that probably matches those positions. What are you doing to really find those diamonds in the rough?
Matt: We don’t fabricate people, obviously. We like to say that we invent them. And the way in which we do that is we are often looking for a mix of skills, a combination of skills and experience that tells a story and allows this person to be relevant for this role.
I’ll give you a quick example. A handful of years ago, PepsiCo had bought back their bottlers. With that acquisition they acquired vending, fountain, and cooler equipment. They really weren’t in that business, they were in the business of creating and marketing and selling beverages and snacks. But they realized that a vending machine or a piece of fountain equipment was an amazing opportunity to make a deep connection with their customer base and they were calling that “retailtainment.”
So imagine taking a vending and turning it into a giant touchscreen with facial recognition, the ability to play a video game or sing karaoke with Beyonce before you get your drink while having a mobile payment, obviously, but also having the machines connected wirelessly so they could collect data for manufacturing supply chain maintenance insights, right?
They came to us and said, Hey, can you find us engineers with MBAs who have created a product or a service that had never existed before, changed the market, changed the paradigm, and could bring that skillset and that thinking to recreate vending, fountain, and cooler equipment?
We were looking at the Googles and the Apples and the Microsofts and a number of other highly-innovative companies. Ultimately, our first placement was one of the individuals who helped create the Xbox Connect controller on behalf of Microsoft. He had this dynamic experience. He actually had had some packaged goods experience earlier on his career. But he would have been the first one to tell you that coming from Microsoft, he never in a million years thought his next stop would be a packaged goods company. And he went on to have a number of years of great success driving this initiative on behalf of PepsiCo.
Brandon: You’ve had a long recruiting career it sounds like. What’s one of the aspects that have changed the most since you first started?
Matt: The need for retained executive search at the level that we work has shrunk a bit and that’s because there are just outstanding recruiting departments within organizations. One of our largest clients is Fidelity Investments. They have over a hundred recruiters. And our top clients are outstanding search professionals, they are incredible.
But when it comes to some of these super highly specialized roles where we may reach out to three, four, five hundred people in order to get the two to five qualified and interesting candidates that are right for the role, open to their location, right for the culture. They don’t have the bandwidth and, in some cases, the knowledge of some of these more cutting-edge skills to be able to make that happen.
So again, I think corporate America especially has done a fantastic job of building world-class search organizations and they’re great at what they do.
Brandon: Why do you think some organizations, large, small, why would they have an in-house recruiter versus hiring somebody who may already have a network built up of talent?
Matt: Two things. If roles are repetitive and commoditized, it’s much easier to do because you could build your own database. In some ways, we all have the same resources but it’s how you go about it. If you put a $100,000 individual who could save the firm a million dollars in recruiting fees, it’s obviously a massive cost savings. They could even pay these people significantly higher than that, but there are a lot of junior and mid-level recruiters that can save companies millions of dollars in recruitment spent.
Brandon: How much of the recruiting process has become impersonal because of technology? With LinkedIn and some other communication tools I’m sure the recruiting process has completely changed. What’s your perspective on that?
Matt: It depends which perspective you’re looking at it from. I would say our approach is highly personalized, definitely is not impersonal. But when a job seeker is applying to a large organization, it feels incredibly impersonal. There’s a lot of technology involved with the applicant tracking systems that they use. They’ve got deep HR and legal requirements that they need to meet as far as reporting.
And again, we’re part of that process as well. We’re, again, a retain search firm so we don’t work on the job seeker side but I do some public speaking and hear a lot of frustration from people who are applying to companies and really feeling like they’re in a massive black hole and have trouble making connections with organizations and getting noticed.
Brandon: Well, it’s interesting because for those job seekers, where they’re just engaging with a gated form, applicant tracking system, and other technology where there’s no personal touch. Doesn’t that impact the employer brand quite a bit? Like after a while, they just have a bad experience. Either they don’t get to the interview, they don’t hear back. Don’t they start to review on Glassdoor.com about how bad the experience was that just kind of snowballs form there?
Matt: It does, it does. But it’s clear, the best companies and the companies that are awarded as the best places to work, they are aware of that and definitely do a lot to push their employer brand as much as possible. I love what GE has done in the last few years with their commercials and giving people awareness that, Hey, this is the cutting-edge place to work and you could be a software developer inside GE and have an amazing high tech experience and not have to go to Silicon Valley or New York to get that experience. And that’s incredible.
So I think GE has done that. Again, have they done that on behalf of job seekers that are trying to get employed by GE? I’m not sure. But again, you see this employer branding out there more and more and more.
Brandon: Your executive search firm, you don’t have the impersonal process. You must have high touch, it sounds like you’re a boutique firm. What are you doing differently compared to some of these big corporations that have their in-house recruiters and have job seekers engaging with technology? What are you doing differently to make sure that you’re staying in front of people and that they have a very tight connection with you?
Matt: You are absolutely correct. We are extremely high touch. But from the very first contact, we, me and my team, we hope not to waste anyone’s time. We are very brief and to the point in terms of who we are and what we’re looking for and who we’re working with and the location of role.
Our first touch will most likely be through some sort of email or InMail correspondence through LinkedIn. But then from there we hope to answer their questions, screen them very quickly, and make sure they realize that we’re not a body shop looking to throw people in to see if they stick.
Because of that alone I think people often thank us for our transparency and our honesty in the sense that we’re going to let them know quickly if we think they are right for the role or ask them if they are open to be a network or a source for other candidates who could be appropriate for the opportunity. I think too many search firms get accused of reaching out to candidates and saying, Hey, I looked at your profile or I read about you online and you could be perfect for this job. And very often, until you actually speak to that person, you can’t make that claim that they’re perfect for a role. There are so many nuances that go into it. So that’s one aspect.
The other aspect is because of LinkedIn and because people can do an advance search and get a very long list of potential candidates, a lot of recruiters are incredibly lazy where they just go and send InMails to every single one of those people that comes up on a search result where my team and the researchers actually go in and look at each one, one by one with a fine tooth comb. So where a lot of other firms have less than 20% response rates, ours is closer to 40%, over 35%.
Matt: Yeah, based on the fact that we are laser-focused. So again, that laser-focus will increase our hit rate but also people are appreciative that we are reaching out to them because we truly think that they could be a good contact or source for us as opposed to just sending out to people and saying, Who are these guys? They clearly don’t know what they’re doing because they’re sending me this note that has nothing to do with me. The LinkedIn search results are great but they’re not perfect. So we are very aware of who we’re sending information to.
Brandon: I imagine it really depends on the position that you’re searching for to match somebody up to. But what are pieces of the profile on LinkedIn? It sounds like that’s part of the main tool that you’re using. But what are the main pieces of the profile that you look for and what are some red flags for you, maybe not filled out information or things like that?
Matt: First of all, sometimes some of the most sparse-looking profiles can be some of the best candidates. Maybe they are so focused on their job and doing what they’re doing that they don’t feel it’s that important. They could be rock stars in what they do. I mean there are even a number of very senior executives who say, You know what? I don’t even need to be on LinkedIn. And they’re not there at all. So that’s the first thing. I’m not going to say don’t put stock in the profile, but it’s not the most important thing.
To flip it on the other side is when we get a new retained search for the client, we help build the job description with them, we set their expectations. But then we create what we call an acid test, which is the three to six key criteria that a candidate must have in order to be qualified for the role. Those criteria are things that we can get companies to base examples on to be able to provide back to our client.
But then behind the scenes we also have to have the lens of understanding our client and their culture to be able to say, ok, these are the hard skills. These are the hard examples that these people need to have in order to be qualified. But then do we see any other nuances in their style or personality that are going to either align or not align with our client’s values?
Brandon: I was browsing your website before we hopped on today and I ran across a blog post that you have about LinkedIn endorsements. And you actually kind of confirmed what I already thought about the endorsements feature. Can you share with listeners what you claim as the truth about LinkedIn endorsements and how recruiters actually kind of see those in the profile?
Matt: There really isn’t much value to them. Any given day, LinkedIn serves me up a number of people that they are looking for me to endorse with keywords and areas that are appropriate. Basically, the endorsements are used as part of different keywords to help build the SEO of candidates’ profiles and they are not a true representation. There is a huge difference between a true reference of a candidate than the endorsements on LinkedIn. They really have very little value or stock in terms of building that individual’s credibility.
Brandon: Going back to your comment earlier about how LinkedIn isn’t the end all be all and that some highly skilled people, executives, aren’t even on LinkedIn. How are you finding those people and are they finding you organically or are you sort of plucking them from some other place?
Matt: That’s a great question. If people are talented, they’re known. There is something about them. Seth Godin says it best, someone may not be famous but they’re famous to the family or within the world that they’re in, they’re famous, right? These people could be speakers at conferences, they could have a podcast or a blog, they may publish whitepapers in their areas of expertise. These are all things that we look for beyond just finding them on LinkedIn. They could be award-winners, whatever their area of specialty is, there’s often some sort of an award program where these people are recognized at some point in their career. Once we find that initial nugget, we will then dig deeper to search them out and figure out where they are today and go pursue them based on our understanding of their background.
Brandon: What are some of the skillsets for leaders that are in just high demand right now?
Matt: So, we are seeing a huge influx of people needed in the big data and artificial intelligence arena.
Brandon: Yeah, yeah. I thought you’d say that.
Matt: That has been game-changing. The most sophisticated clients know they need to utilize data, they need to get deeper in terms of personalization and content curation on their websites, security and fraud protection is at the forefront of everyone’s mind. Utilizing all of the insight that they have from every customer contact whether it’s call center or whether it’s retail, whether it’s knowledge-based, whatever it may be, those are all opportunities to gather data and create product improvements or process improvements for their organizations. So definitely one.
Brandon: Safe to say it’s always technology relate at some level.
Matt: It is. The second thing is media. Companies that were spending hundreds of millions of dollars on television ads were all of a sudden finding obviously that people are all watching TV. Their ads are less effective. They need to spend dollars in a much more focused programmatic fashion. Finding those leaders who know how to do that with significant media spends is super, super challenging. We’ve been tapped to find those people as well, anything related to disruption in technology.
We recently had a placement where the candidate needed to figure out what technologies are needed to help the associates of this organization communicate and collaborate across the company because where the older generation might be ok receiving 20 emails a day from corporate, the new generation kind of looks at that as white noise and very slow. How can it look more like Facebook? Do they use Slack? Do they use Facebook for work? Do they use Jive? Whatever it may be, but having one central individual get a deep understanding of what the employee population looks like evaluate the different technologies that are out there and figure out what’s not only going to suit the organization but then choose it and implement it and gain usage across the enterprise.
Brandon: When you’re doing a recruiting gig for, let’s say senior leader of some sort, it could be president, CEO, I don’t want to go necessarily to the marketing leader necessarily, but what’s the balance between understanding these technologies and knowing what you need for the business and also being a great people leader? Because it seems like the leaders of the past, definitely they’re great people leaders, know how to inspire action, they hire the right people. But now it almost seems like what you’re seeing is people who also have a very deep understanding of these technologies and what the business needs from a data standpoint.
Matt: You bring up an amazing point. We recently conducted a research project on behalf of one of our clients that was looking for Quality Chief Digital Officer. We looked across their competition as well as many other consumer-centric data-driven companies that they respected. And more and more, we didn’t find the kind of rock star candidates that we would expect to be in these roles who were somewhat all-knowing and super strategic. Instead, we found these organizations had put in very strong leaders who knew enough to be dangerous, had a great sense of where the industry was going and what tools and skillsets they needed to make their organizations successful. And then they would have a number of key direct reports that were functional experts in these different areas to be able to drive the success of their organizations.
Brandon: I’m sure you run across a ton of talented people. I’m really curious, when you say, Here’s a great candidate for this employer but maybe they’re not a match, what are great candidates with talent looking for when it comes to an employer, culture, compensations, specific benefits? What are you seeing?
Matt: Two things. The number one reason why our candidates often make a move beyond just the compensation increase is the strategic challenge that they are going to be facing. They really are interested in it for the intellectual opportunity but also an opportunity to make a difference within their organization that they’re moving on to.
And that’s a huge shift from where things were in the past. It used to just be like, oh, go from one job to another job but it wasn’t such a tectonic shift as it is today. That’s has been fascinating, how often I hear that across the candidates that we’re talking to.
Secondly, companies have had to get really smart and creative in how they compensate their people because if you want someone from some of the most cutting-edge technology-driven organizations, the Googles, the Facebooks, the Amazons, even Microsoft has come a long way, you’re going to have to figure out how do you overcome the performance-based compensation that an Amazon has where their stock is just going through the roof and although they pay people with relatively low base salaries compared to the market, the stock just blows them out of the water as far as being far and beyond what other people are getting paid in the marketplace.
So being really creative and being able to attract that talent and having the right mix of compensation both base short-term bonus but also a long-term incentive is something that companies hopefully have thought through in order to attract these high-valued people.
Brandon: I assume that you work with a lot of large clients and it sounds like you do. Maybe you work with some small and medium-sized ones as well when you’re looking for executives. What is something that each of those groups can offer the talent that the other really can’t? There may be certain benefits or work challenges that a large employer can offer whereas a small can’t, and there’s something probably unique a small company can offer that the large can’t. What are those?
Matt: In some cases, the larger companies have more resources. They potentially could have better technology. The perks within some of the larger organizations can be tremendous whether that’s subsidized meals and great work campuses, those sorts of things.
So that’s one side of it, but employees typically know if they’re a better fit for a larger organization of a smaller organization. Larger organizations, although they may talk a big game and want to move quickly, their speed is often really hampered by the layers of management leadership approval processes and et cetera.
If someone knows, hey, I need to be a lot more nimble, I need to be closer to the senior leadership team to be able to push things through faster, maybe their ideas would be heard faster and they’ll be able to implement things faster than they would if they were with a small organization, I would say those are a handful of things that I definitely see that sets a smaller versus a larger company apart.
Brandon: Before you and I started recording we were talking about the three reasons why employees are successful. Can you mention those points? I thought they were great.
Matt: I recently watched a video by a guy Patrick Bet-David. He talks a lot about entrepreneurship and leadership. And he had come up with the three reasons for him were attitude, effort, and progress. I took that and thought about the people that I’ve hired or the people we placed within our organization and noticed that people with great attitudes often seem to be able to stay with companies. Their jobs are often not in danger.
I was part of a fast-growing pre-IPO startup in the late ‘90s and it was amazing how many of my peers just complained about the leadership, complained about the mission, complained about all the things that we were doing because it didn’t make sense to them.
I have spent a lot of time with the CEO and the COO and heard their visions of going public and understood that it was all about driving as much business and revenue month-to-month to tell a great story to Wall Street. Ultimately, the organization did not go public but those people that went around and just were the Debbie Downers all the time, they weren’t with the organization very long. The organization grew from about 90 people back down to 5! Again, people with attitude definitely were either able to stay and be successful or were out the door.
I had one employee in my organization for a number of years who is just a rock star. And then I started to see her performance started to fall off, I had some conversations with her, I ultimately put her on notice. When I ultimately decided to let her go, she came back and thanked me for a great four and a half years and a tremendous opportunity and how much she learned.
But her attitude was what was so amazing because when things were great, she really took ownership and acted as if it was her own company and didn’t need that kind of handholding to make decisions and take initiative within the organization. And that was a big reason for her success for many years before things fell off.
The second is effort. If people are coming in to the office at 8:00 o’clock and leaving at 5:01, they’re probably not going to be looked at as people that are really pushing the envelope and trying to get ahead within an organization.
I remember back when I was a junior recruiter at a boutique firm with about 18 people. There were three of us feeling almost 60% of the searches within an 18-person search organization. And I sat there and said, Wait a second. I’m not working weekends, I’m not working to hours in the night, I’m just focused on the phone, recruiting all day long. I was filling somewhere in the neighborhood of 21 searches, the next person was about 19 or 20, and then the third person was 17 or 18. After the three of us, the next highest number of searches filled by one recruiter was 10. So we were doubling the volume and not putting in that much more effort. It’s understanding that you got to put in the effort, you need to put in the time but that doesn’t mean working 24/7.
And then lastly is the idea of progress, adding value to the firm, helping to move it forward, being invested in its success. That’s the difference between someone that is a keeper or someone that’s really just calling it in and is looking for the better for just a paycheck.
So finding those employees who are really invested in the progress, looking to them for ideas and insights in terms of how you can grow the organization, how you can improve your culture, and how you can drive and be true to your values. All are great ways to look at your employees.
Brandon: The thing that strikes me about those three points, about why employees are successful, the attitude, effort, and progress, those are things that you would know after the fact, after you already recruit them and hire them into your organization. What can hiring managers or recruiters do to tease those things out to figure out that this person is going to have a great attitude, will put in the effort, and will care about the progress that they’re making?
Matt: Let’s go back. I talked about our acid test, right? For any search, you have the top three to six key criteria that a candidate must have regardless of the role. Whatever the role, junior, senior, you can always create this acid test. From there, not only are you building examples to understand, but say this person is maybe a lower level, less skilled employee where you’re not looking for deep technical efficiency or examples. Maybe it is more about attitude.
I’m on the board of the New York chapter of a global not-profit and we were hiring an administrator for the firm. And we knew that that administrator needed to have a high degree of customer service focus to be able to deal with the members who are CEOs of businesses in and around New York.
So, we would ask questions about have they ever worked in restaurants or retail and tell us about an experience with a challenging customer and how you dealt with it. And all of a sudden that question alone, although it has very little to do with what their day-to-day job would be, was very telling in terms of their style and attitude. It was probably the biggest disqualifying or qualifying question in the interview process.
The second thing is I encourage companies to interview based on the values of the organization. You can hire and fire based on your company’s values. You make it very clear what the values are, you can talk to them about some examples of how they match up to those values or how they resonate with the values in the organization and then if someone who is not performing or not acting with integrity or in a way that reflects the values of the company, you can have constructive conversations with your employees around how they’re matching up to these values and give them an opportunity to either improve upon it or leave the organization.
Brandon: Matt, you’re a fan of the Profit First methodology by Mike Michalowicz. How does this play a role in the productivity of employees?
Matt: Companies clearly want to be successful, want to be profitable. Employees want a great place to work, they want a financially sound organization, they want raises and opportunities for growth for their careers.
Profit First is a great way to help companies get there. If we think about the old formula for profitability, it was revenue minus expenses equals profit. But in the Profit First methodology, it’s revenue minus profit equals expenses. So what the finance team or the business owner is able to create is basically, you got the revenue number, total revenue number. You always want to be profitable as an organization, so depending on the size of your business, Mike supplies the percentages in which you need to hold back in your organization for operating expenses, taxes, owner’s pay, and profit. He creates a formula.
Say you’re going to keep 35% in operating expenses, 20% in owner’s pay, 30% in taxes, then that leaves 15% for profit. By doing that, you create an automatic cap on what the ultimate expenses can be by sharing some of this information and being transparent with your employees, and you don’t have to be fully transparent, but you can share some of that information and just say, Hey, if we’re going to able to improve the performance of the company and we’re all going to get rewarded in that, we have to focus on topline revenue growth. We have to focus on reaching our profitability targets. And we need to all focus together on keeping the expenses in check in order to be able to have the money to be able to continue grow the company, give raises, share some of that profit distribution potentially and create a company that’s sustainable for the future.
Brandon: I like that because then it almost flips it to where they would now have ownership over like, Hey, we got to keep these expenses down, or, Hey, we need to hit this topline revenue growths. It just seems like giving employees some of that information would help keep them on track and take ownership of those goals.
Brandon: So before we part, I want to get your take on company culture and how important that is for businesses nowadays.
Matt: It’s incredible. I think I’ve mentioned to you I’ve been thinking a lot about what has been going on at Uber. Uber is a phenomenal product and service, I’m a huge fan. The ease of use is absolutely spectacular. I love their dream of driverless cars and the future of transportation.
But here is a company that has got staggering amounts of investment dollars behind it and if they have any chance for any sort of liquidity event, people better have the confidence in that organization and their leadership team in order to make that happen. The market is not going to just accept that Uber is the dominant force and support them if the leadership isn’t there, they have a sexist culture, they can’t keep senior employees.
Culture more than ever, and again, the Uber example magnifies how challenging it is that if you’ve got this type of either a toxic culture or one that has a horrible reputation in the marketplace, it is going to affect every aspect of what you do. And in this case, it’s potentially hurting Uber from a financial standpoint which is obviously the gauge in which most companies are measured.
Brandon: Does culture start with leadership or is this something that the employees can really help shape, mold, and kind of own?
Matt: I absolutely think the employees can shape and mold it. When an organization creates values, for example, they don’t do that in a vacuum because the Chief Human Resource Officer says, Hey guys, these are our values. They should get that from crowd sourcing or surveying or doing focus groups with their employees.
That’s what I did. I hired a former Deloitte consultant. I had written something out and did not share it with the team, but we brainstormed and we came up with different words that we thought represented the culture and the values of MJS. We came out with “quality SEARCH” and quality is quality. But SEARCH stands for smart, efficient, accountable, resourceful, collaborative, and happy clients.
And that’s really what we strive for in everything we do and that everyone that we work with. Going through that exercise and getting the team in agreement, in alignment with those things is really powerful. When I worked at Heidrick & Struggles, we had a plaque in everyone’s desk that talked about the partnership spirit of the firm. And it was there, it was amazing how much people went out of their way to help each other make sure everyone was successful. Having that recognized but also reinforced across the organization is super powerful. And again, that starts with your people first.
Brandon: Matt, this has been a really, really fun discussion. I appreciate you letting me bounce around, I wanted to make sure it captured all the areas that I knew you’re an expert in and you nailed it.
I want to give you the last word. Anything about your company, offers that you have, anything that you just want our listeners to know about you and what you’re up to?
Matt: Great. Thank you. So, we are a retained executive search firm. We are based in New York but we work nationally. We focus on senior level positions that are in the areas of, as we said, transformational talent. If you’d like to learn more about us, you can check at our website at MJSearch.com.
But also, we have a free ebook. If you’re interested in receiving the ebook, you can text MJ Search to 44222. It will ask you for your email address and we’ll ship that over to you immediately.
Thank you for having me on. I really enjoyed it.
Brandon: Yeah, thanks Matt.