Question: How hard has Korn/Ferry been hit by the downturn?
Answer: What we've seen is absolutely unprecedented. This was a company that was running at about $900 million of global revenue, and within 15 days that went to $400 million. It happened overnight because CEOs around the world horded cash and just focused internally.
Q: So what did you do?
A: We had to make some very tough decisions in terms of our cost structure, and we had to reduce it by over $300 million. And when you look at our costs, it's really people and real estate. We've reduced our work force, we've asked employees to take personal sacrifices days off unpaid, reduced salary levels and reduced benefits.
Q: How difficult is it for you to let people go?
A: It's the most challenging thing, and I've done it five different times in my different careers. Downsizing a work force, certainly for me, is not a good thing to do to tell somebody that has a family that they can't make their mortgage payment, that's very difficult. But as tough as those decisions are, you have to think about the other employees you have and trying to protect as many as possible.
Q: But you've done it before at Korn/Ferry.
A: When I came to Korn/Ferry seven and a half years ago, it was a company that certainly had its challenges. The company had been privately held for 30 years, went public, and unfortunately blew through all the capital it had raised in its IPO and went through all of its working capital. Then, there was the perfect storm: The dot-com bubble burst and then you had Sept. 11. So, the work force had to be downsized by literally two-thirds.
Q: Did you ever think that you would have to do it twice?
A: When the dot-com bubble burst, followed by Sept. 11, there was a part of me that said, "Never again will we go through something as severe." But it was literally a white-knuckle ride when the markets collapsed (in October).
Q: How did you land at Korn/Ferry?
A: I got involved here through a personal investment I made. I started following the company about eight years ago, and I've been here for about seven and half years.
Q: So you reached out to the company for a job?
A: I did reach out to them, which is unusual. Generally, people don't go to jobs, jobs go to people. But I really thought that the culture at Korn/Ferry was going to be a blend of the culture at KPMG and Jefferies & Co., where I had been before, and I was absolutely right. It was the best decision that I've made professionally and I never looked back.
Q: But the company was in trouble when you joined.
A: The culture and the brand was something that definitely attracted me to the company. And that culture and brand doesn't die, it survives through cycles.
Q: How did you get your start in your career?
A: I graduated from USC in 1984 and my first job out of college was with KPMG. And from there, I went to Jefferies, which at the time was headquartered in Los Angeles. And then I joined an Internet and consulting startup called Guidance Solutions, which I had raised money for when I was at Jefferies.
Q: So you've been in Los Angeles for your entire professional career. Are you a native?
A: I was born in Inglewood, but I was raised in Kansas. My dad was in World War II, and when he got out of the service, he got out in Los Angeles and spent time establishing a court reporting business. And when I was young, we moved back to Kansas where my family is from.
Q: Do you have any siblings?
A: I'm an only child. Today I have five kids, so maybe that was an outcrop of being an only child. They are ages 7 to 16, four girls and one boy. The boy is right in the middle, so I think he will be set up with a lot of dates and girlfriends in his life.
Q: Where in Kansas did you grow up?
A: I grew up in a very small town of about 8,000 people. A farming community right in the middle of Kansas called McPherson the cultural mecca of the United States.
Q: Was your father still busy with his business when you were growing up?
A: My parents had me rather late in life, for that time very late they were both in their mid-40s. So my father was retired and my mom worked for the state.
Q: How did growing up in a small town shape you?
A: The lifestyle is different. As you can imagine, in a town of 8,000 people not much changes. The Long John Silver has become Taco Bell and the Taco Bell has become Long John Silver. I think it grounds you. And certainly for me, it taught me that what I do is not who I am. I mean, Korn/Ferry is in 40 countries around the world, and you can get really caught up in this. It starts early in the morning and I shut my BlackBerry and phone off at about 10:30 at night because I would continue to get calls.
Q: So it sounds like you've got a hectic schedule. What's your daily routine like?
A: For example, this morning was time spent with our employees around the world talking about where we are. This afternoon will be a number of meetings around strategic initiatives, and tonight will be CNBC to talk about the economy.
Q: How often do you go on TV?
A: I go on TV pretty regularly. I love speaking in front of people, and the Internet and TV are very effective mediums for one of our strategic pillars: to extend and elevate the brand. I view that as one of my primary responsibilities, so I spend quite a bit of time doing that.
Q: How much interaction do you have with clients?
A: A fair amount, but most of my involvement with clients is really meeting boards, meeting chief executives and thanking them for their business and trying to get business. So, I'm not so involved in the actual trade craft of our leadership consulting business or our outsourcing business or our flagship search business. It's more about client service in general.
Q: Are there times when a client hasn't been pleased with an executive the company has placed?
A: The search business is about 70 percent of our business. Every day around the world we place about 30 executives in new jobs. So when you have that kind of volume, you are bound to not please a client. I had a situation just two weeks ago when I was in London. The chief executive was not happy and I talked to him directly. What I've found is that honesty is the best policy. So if we make a mistake, we've got to admit the mistake. But more importantly, it's not good enough to talk about the problem, but what's the solution.
Q: So, I imagine you're working with some high-profile executives. What's that like?
A: There are a lot of talented people we come into contact with, but it's our policy not to talk about our clients. That's part of what we get paid to do, be discreet. Today, we've got three Fortune 50 succession projects under way; we've got a mandate from a high conglomerate to rebuild their board. With those types of engagements, we have to be pretty sensitive to what we are doing.
Q: I'm assuming that you travel a lot since most of your clients are multinational corporations.
A: Yes, I'm not in Los Angeles very often. Out of 30 days, probably 15 to 20 percent of those are spent in Los Angeles.
Q: That's a lot of time away from your family, do they ever travel with you?
A: No, because it's like mobilizing an army. So, the sad part about it is that some day I will regret that. I try to go in and out. I will fly to Singapore and 24 hours later, turn around and come back. The trips are very short and very intense, they are compacted with a lot of stuff and that's the best and worst part of the job. The best part is meeting people, seeing different cultures, and the worst part is traveling and maintaining that work-life balance.
Q: Those trips must be hard on you.
A: You get used to it, you develop a routine. You know what flights to take, and the great thing is that from Los Angeles almost any flight internationally is overnight so you sleep and when you get to wherever you are going, you hit the ground running.
Q: How do you maintain a work-life balance?
A: The biggest struggle that I deal with is work-life balance. It's constantly at the front of my mind. We live in Westlake Village and have a second home in Newport Beach. So we go down to Newport Beach on the weekends. That's our sanctuary. It's a place where we can get away and where I don't do much work.
Q: I see that you've got an executive office putter. Do you play much?
A: Well, at one point I thought I would be a professional golfer. But one thing led to another, and I ended up at the business school at USC. I do play occasionally, and for me it goes back to the philosophy of it's important to have the right balance and those kinds of outlets. So, that's the reason for the putter, just like the pictures of my family, to make sure that I remember that there is balance to life.
Q: How did you meet your wife?
A: We met at KPMG.
Q: Does she still work?
A: She works harder than I do (raising the kids). She spends a lot of time at school; she could be a teacher for the amount of time she spends at school. And she does a lot of fundraising for the school.
Q: Who's been the most influential person in your life?
A: My dad, clearly. He taught me that actions speak louder than words. He would say that over and over again. And leadership has very little to do with intellect, but a lot to do with listening and learning.
Q: Any other good advice you've received over the years?
A: Yes, from a board member by the name of Ed Miller, who is a financial services executive who ran AXA Financial. His advice to me was anytime anybody walks into your office no matter what the topic is make sure they feel better when they leave. I try to have that in my orientation whenever I am around the world with any of our employees.
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