Stephen Conner, research director at New York investment banking firm Rubin, Stern and Hertz (RSH) must replace their star semiconductor analyst Peter Thompson quickly in order to ensure revenues form clients continues to be earned by the firm. Stephen is research director and is responsible for a significant proportion of revenue that Peter had been generating. While initially considering a counteroffer, Stephen decided to not pursue that strategy and promote Rina Shea, the junior analyst reporting to Peter, to a senior analyst role to cover semiconductors immediately. Evident from the e-mails and discussions Stephen is having with other analysts, sales and members of the firm, Rina is not meeting expectations. The pressure is on Stephen to hire a replacement quickly to keep the revenue stream moving, make sure one of the most strategically important clients the company has, the PowerChip company, is pleasured, and also keep research moving forward.
Stephen Conner faces a litany of problems in solving this problem. First, there are only at maximum 14 to 15 analysts who have the level of expertise, as defined by their resumes, results and rankings in Institutional Investor (II) magazine to even be considered. Of those, many have recently moved, as Craig Robertson of Superior Staffing Services reminds Stephen early in the case. There is also the challenge of finding a candidate that will fit into the culture of the company, which is much more team-based and collegial than many other Wall Street investment banking firms. This will be particularly challenging as the candidates reflect how much the survival instinct kicks in within the industry; analysts tend to be lone wolves and look out for themselves the majority of the time. In addition to all these challenges, there is the issue of Rina Shea and her ongoing role in the company. To completely leave her out of the process would nearly ensure her leaving within a year, losing a significant investment in the semiconductor coverage in the process. Yet as can be seen in the case, other analysts, operations teams and sales people are not happy with her performance. Stephen Conner has to make a decision quickly yet risks making a bad one if he lets all these factors drive him into an urgency mindset instead of a focused one. To have made the best possible hire however Stephen will need to reinvent the recruitment process, concentrating more on a set of criteria and less on intuition (Anders, 2011).
Assessing the Candidates; What Peter's Replacement Should Look Like
Peter Thompson has a very unique set of skills that include analytical insight, strong interpersonal and communications skills, great relationships with clients and much trust throughout RSH. He also is willing to travel to clients' locations and meet with them, and this shows a "whatever it takes" mentality to succeed in this profession, as is shown in the case appendix. He has become a lone wolf of sorts, chasing deals to make him more money at the expense of the team, a development that troubles other members of the company. This aspect of becoming more self-centered seems to be an occupational hazard of star analysts, as the interview process illustrates. In reality Peter may have been on his way out for over a year, validating Tom Water's assessment from a phone call mentioned in the case.
With these constraints in mind the ideal candidate will need to have an exceptional grasp of the semiconductor industry, be immediately able to establish credibility both within RSH and with the larger clients including PowerChip Company. In addition to have an exceptional level of emotional intelligence to fit into the company culture (Langan, 2000). It is the cultural fit that can most define the success or failure of a candidate over the long-term, especially in those enterprises that are highly dependent on industry expertise. There also needs to be a healthy amount of humility and focus on how best to align one's strengths with a given culture, which is exactly the opposite of the star analyst that RSH needs to hire quickly.
Differentiation Strategies for Prospective Analysts in the Interview Process
Each of the five prospective candidates has unique strengths and varying levels of communication and collaboration skills. As investment banking industry analysts can earn up to $700,000 or more per year potentially if they are stars and their stock selections are right, the competition is very fierce. This can be seen in the arrogance of Gerald Baum. Instead of being so brash and being so "what's in it for me" as Gerald is, contrast the interview style of David Hughes, Sonia Meetha and Seth Horkum, each attempting to differentiate themselves on their innate abilities. Each candidate, including Sonia, fails however to differentiate with any insight into hwo they would initially take on the challenge of making RSH more financially successful (Mir, Mir, Mosca, 2002)
. Only Seth does this with any measure of credibility, and Sonia briefly discusses it. This is an excellent example of how not to interview; everyone is speaking purely about their abilities and not necessarily discussing how they can make a significant contribution to the firm. Being able to show, quantitatively, and with a high level of credibility just how they can attain this level of performance is key. While Seth sounds excellent on paper, his approach to defining references is not that transparent either. He could have differentiated himself more by having a list of references to call, instead of producing a package of reference quotes. This is troubling as it shows he may be attempting to move quickly though a reference phase. While each of them succeeds in defining their own unique strengths, none completely connects with the needs of RSH at such a fundamental level of make themselves the clear front-runner for the position. On thee dimensions, Rina falls far behind the other candidates, failing to show how her three years in the firm can be the most valuable. She appears to give up, despite the fact that her organizational role and socialization is well complete. She could have successfully used this factor as a differentiator yet fails to do so; in addition to knowing all the clients already and arguing for support of a junior analyst so she can excel. All potential candidates are relatively weak at differentiating themselves in terms of value; they each promote themselves however quite well without connecting to the needs of RSH as effectively as they could.
Analysis of the Selection Process
Stephen Conner is under a great deal of pressure to get a replacement for Peter Thompson quickly. Understandably he immediately calls a headhunter, Craig Robertson of Superior Staffing Services to get the search started. An initial set of candidates is found, they are screened through a two-stage interview process, and the group of candidates is narrowed down. Before doing this however Stephen calls around to those in RSH and throughout the industry that may also know the candidates and ask for their pinions. No doubt these people called are also calling the candidates they were just the subject of conversations with Stephen. By doing this Stephen has indirectly created the expectations with each candidate, as word will travel back to them eventually given how tight of a community the investment banking industry is.
In analyzing the approach used, Stephen needed to slow down and get the candidates first, then vet them through a series of external measures of their performance. He could also easily see how effective they were from the II rankings, and needed to define the criterion for the position. There is actually no job description mentioned throughout the entire process; no actual measure of performance is defined for the role, just obliquely (Kumar,…