When Russell Reynolds decided to start his own executive search business in 1969, he knew the fledgling industry had a dubious reputation. So-called headhunting firms were viewed as scrappy and freewheeling upstarts.
To counter that perception, Reynolds crafted a classy image for his new venture. Like many risk-taking entrepreneurs, he adopted a "spend money to make money" mindset. Soon after setting up shop, he moved the firm's Manhattan office to a Park Avenue skyscraper. And he decorated it lavishly.
He asked his secretary, a gifted pianist, to buy a Steinway piano for the reception area. It cost more than $25,000, a small fortune back then. "Then I asked her to play the piano every day during the lunch hour," Reynolds recalled. "Appearances are important, and the piano added to our ambience."
He didn't stop there. On a London trip, he bought paintings by Winston Churchill and hung one of them in an interview room. "I was building an image," Reynolds said. "I wanted to attract the right kind of clients."
Focus On Quality
This "quality attracts quality" strategy worked wonders for Reynolds. Over 24 years, he grew Russell Reynolds Associates, or RRA, into a global powerhouse in executive recruiting with about $96 million in revenue. The firm helps companies fill nearly any position ranging from CEO to legal counsel.
Reynolds, 92, says a key to his success is surrounding himself with people of unshakable character. The most important ingredient: integrity. "I think the world has forgotten what the word means," he said.
To this day, he has wide arms of acceptance for those who display respect and compassion for others — even if he's initially taken aback by their actions. When he and his wife returned from a cross-country flight a few months ago, it was 11 p.m. and they were tired. He met his personal assistant in the terminal and expected to head home right away.
"But (my assistant) said he had to go back to baggage claim for something," Reynolds said. "I was annoyed, wondering what was going on." As it turns out, the assistant saw a woman struggling with her bags and sought to help her. Reynolds nodded approvingly once he understood.
Russ Reynolds: Spot Talent And Nurture Go-Getters
As a master talent spotter, it's not surprising that Reynolds knows how to hire promising go-getters to work directly for him. Among his many star recruits, one stands out.
In the early 1990s, he told his trusted aide that he was thinking of retiring from his firm. The 29-year-old aide replied, "I'm thinking of leaving too. I want to launch an internet company."
"I invested some money, really as a gift," Reynolds recalled. The aide, Halsey Minor, wound up cofounding new media firm CNET, which CBS acquired for $1.8 billion in 2008. Reynolds' modest investment ballooned in size.
"He could think for himself," Reynolds said. "He had a very sharp mind." The takeaway for Reynolds: When you give smart young people a chance, there's no limit to how far they can go.
In evaluating talent, Reynolds starts sizing up people in the first few seconds. "First impressions are extremely important," he said. "Does the person make good eye contact? Do they have a good handshake?"
He also gauges their personality. Positive, glass-is-half-full types tend to shine. "Are they happy and well-adjusted?" he said. "Or are they constantly complaining?"
Reynolds: Find The Right Partner To Build A Company
From the start, Reynolds had grand ambitions for the firm. He also knew that in order for it to grow into a big business, he'd need a partner.
A former banker, Reynolds contacted another banker — Lee Getz — and asked him to sign on. Getz agreed.
Reynolds was so convinced that the firm would thrive that he gave Getz roughly one-third equity in the business. Together they invested $10,000 in late 1969 to launch it. Like many startups, the firm hit speed bumps. At one point early on, six weeks passed with no new clients.
"I was apoplectic," Reynolds said. "You need new business coming in to keep it going" because each client assignment is short-term.
Restless and eager to kick-start the firm, Reynolds took what he calls a leap of faith: He started a profit-sharing plan for his 13 employees. He spent $50,000 to launch the plan while moving the office to luxe Park Avenue, thus doubling down during a recession.
By late 1972, the firm hit its stride. Revenue topped $2 million, new assignments flooded in, and Reynolds opened a London office.
Take Leadership Lessons From Your Life
After graduating from Yale University in 1954, Reynolds joined J.P. Morgan (now JPMorgan Chase) as a trainee. But the U.S. Air Force soon assigned him to serve as a navigator bombardier in its Strategic Air Command.
"I considered it a great privilege to be in the military," said Reynolds, who had joined ROTC in college. "I learned the concept of organizational structure. Even though you may think you're smarter than (higher-ups) are, there's respect for authority. There's not a lot of back talk."
As he matured, Reynolds fine-tuned his leadership traits. Rather than manage employees, he preferred to manage the firm's culture. By inspiring people and creating an environment where they could thrive, he spurred them to excel. He also liked to recognize diligent team members — to catch them doing something right.
"Great leaders don't look for praise," he said. "They give it." Another key to great leadership is keeping a cool head amid adversity. Setting the right tone reassures fretful staffers to persevere.
"Russ was at his best when things were at their worst," said Steve Scroggins, a longtime RRA executive who's now retired. "He wouldn't panic or get flustered. He stayed focused." In the mid-1980s, three of the firm's seven executive committee members abruptly left to start a competing business. It shook the remaining executives.
"A couple of us were more angry than Russ was," Scroggins recalled. "He was very calm. He said, 'I wish they had done it in a more professional way, but it's better that they not be here.' He had told two of them that they weren't going to be his successor, so he probably expected it."
Reflecting on his 37 years at the firm, Scroggins marvels at how Reynolds laid the groundwork for success. Aside from giving Getz a large minority share of the business, Reynolds enabled managing directors to buy stock in privately held RRA.
"He'd say, 'I want to own a smaller piece of a bigger pie,'" Scroggins said. "He wanted to grow the business. He had no qualms about diluting his interest."
Russ Reynolds' Keys:
- Pioneer in the executive search industry who launched one of the first big headhunting firms in 1969.
- Overcame: Early struggles to build his firm, including a six-week stretch of no business.
- Lesson: "Great leaders don't look for praise. They give it."
