Egon P.S. Zehnder (MBA '56)
Founding Chairman, Egon Zehnder International, Inc.
What matters to Egon Zehnder? Sure, the founder of one of the world's largest executive search firms believes that new hires must possess piercing intellectual skills and résumés that ring with accomplishment. But Egon Zehnder International is looking for a lot more in potential employees. "Our primary goal is to gauge the integrity and empathy of these young men and women," he says.
If you think it's hard to get into Harvard Business School, consider what it takes to land a job as a consultant at Egon Zehnder International, one of the three largest executive search firms in the world, with billings last year of almost $300 million. Applicants-all of whom must have an advanced degree such as an MBA or Ph.D.-face a gauntlet of 25 to 35 interviews with partners and associates in at least 3 of the firm's 68 offices.
What's the point of such an extensive and intensive process? That question draws a quick response from the firm's eponymous founder as he sits at his desk in Zurich, where he single-handedly launched the firm in 1964. "We're looking for a lot more than intellectual ability and accomplishment," says Zehnder in a resonant voice. "Our primary goal is to gauge the integrity and empathy of these young men and women. We need to learn about their values and judgment; we want to find out if they're warm, honest, and sincere. All of this is critical information for our firm, which depends so much upon camaraderie, collaboration, and trust."
Zehnder utters these words with considerable passion, since he created the unique corporate culture in which these qualities are so fundamental. In 1976, as Egon Zehnder International continued to grow and prosper, he decided to give up his majority stake so that ownership could be spread equally among all the partners, regardless of when they joined the firm. In addition, he established a compensation plan that has nothing to do with the revenues of a particular office or the client billings of an individual partner. Instead, paychecks are calculated according to a formula that takes into account base salary, an evenly divided partner's share of the profits, and another share based solely on seniority.
Candidates who pass muster find themselves part of a diverse and far-reaching organization that functions, in Zehnder's words, as "one firm worldwide." "Our approach to compensation forces us to hire consultants who have little interest in self-aggrandizement," he wrote last year in the Harvard Business Review. "We must hire people who are team players, who get more pleasure from the group's success than their own advancement." In addition, he continued, "our seniority-based system requires us to find people who want to stay with the company for the long haul."
Another linchpin in Zehnder's vision also sets the firm apart from all others in the field. Clients pay for services rendered, period. There are no contingency fees at the end of a search, no percentage of a newly placed executive's salary that flows into the firm's coffers. According to Zehnder, that practice-as widespread as it may be-is incompatible with the role of a professional, whose only focus should be on what's good for the client. "Our commitment to clients first is a guarantee of the integrity of our advice," he asserts. "Sometimes that means the best person for the job is already in the company."
Although Egon Zehnder International is also involved in helping corporations find outside directors and in appraising the effectiveness of management teams in meeting their companies' strategic goals, 75 percent of its work is in the area of high-level executive search. In his more than forty years in the business, Zehnder has seen many trends come and go in management practice, but the qualities he and his partners value in a prospective CEO remain constant. Once again, integrity and character top the list, he points out fervently. Beyond that, the top executive's tool kit includes motivational skills that can inspire employees at all levels of an organization, the ability to communicate and cooperate with others, and a talent for solving problems and resolving conflicts. A certain amount of humility is an important part of the mix, Zehnder adds. "What isn't is the boundless ambition that has been the downfall of too many CEOs in recent months."
Although he retired two years ago, Zehnder still comes to the office just about every day, sharing his experience with colleagues and clients who regularly seek his advice. But some things are different, he laughs. "I work only five days a week now. No more Saturdays."
When he was just 34, Zehnder took a very big risk. In the age of the organization man, he wanted to be an entrepreneur. When failure was a lasting badge of dishonor, he was eager to start a business that was foreign to most Europeans. With limited resources, he was ready to take advantage of an opportunity others disdained. After all this time, he still takes nothing for granted and warns against even an iota of complacency. "Overconfident, highly educated professionals are frequently the least willing to change," he told his colleagues in his valedictory remarks as chairman. "But to preserve the outstanding legacy of our momentum, this firm needs to be open continuously to change." The career of the founder is a case study of the benefits of that philosophy.