Executive Search

Hunting For New Business

Kienbaum Jochen and Fabian by Frank Beer
Father and son Kienbaum high above Düsseldorf city. Foto: Frank Beer/Handelsblatt
  • Why it matters

    Why it matters

    The executive search and consulting business is changing rapidly as new communication and social networks develop.

  • Facts

    Facts

    • Hamburg-based XING is a social network of business professionals that shares ideas and job possibilities.
    • Kienbaum’s specialty used to be filling middle-management positions with salaries between €60,000 and €90,000, but that business has suffered.
    • The company now mostly focuses on positions starting at €100,000.
  • Audio

    Audio

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The Kienbaum personnel and management-consulting firm occupies one of the most exclusive addresses in Düsseldorf – the top four stories in the north tower of the Hafenspitze, overlooking the Rhine River. Modern art hangs in the corridors and offices, but the head of the company, Jochen Kienbaum, has little time to enjoy them.  The personnel consulting business is more challenging than ever and his company is under pressure. Mr. Kienbaum is preparing his son, Fabian, to take over the company some day.

 

Handelsblatt: Mr. Kienbaum, you just turned 68. When are you going to retire?

Jochen Kienbaum: I’ll certainly remain the boss for a while longer. I feel fit and motivated. But we are also using the time to prepare a successor. In a family firm like ours, it is especially fulfilling when the successor is a family member, Fabian. Above all, he must be an identification figure and brand ambassador.

Why do you think your son, Fabian, is the right choice? After all, you have six children.

Jochen Kienbaum: In professional terms, Fabian is extremely well prepared. He studied international management and has experience at an international management-consulting firm. He has always been interested in the business and learned a lot listening at the family dinner table.

Fabian Kienbaum: I’m involved in onboarding and currently handle our digitalization strategy and our positioning as a family firm. I also coordinate our operations in Berlin, with a focus on the public sector. I am a member of management and participate in important strategic decisions.

Your revenues in personnel consulting are declining, in particular, your bread-and-butter business of filling middle-management positions with salaries between. Is this all be caused by XING, the Hamburg-based online social network of business professionals?

Jochen Kienbaum: The market for personnel consulting is changing rapidly. Even renowned firms have disappeared because they couldn’t or wouldn’t face up to the new challenges. The social networks and a more open communication have certainly changed the business too. A dent in the business is quite normal considering these market developments — that’s true for us as well as for our competitors. As a result, we’re regrouping and offering a range of relevant consulting services for persons and organizations. We’re also positioning ourselves higher and now only seek and consult for positions starting at €100,000 ($116,000) gross annual salary. We don’t take on lower orders, with exceptions for longstanding clients.

Your consulting firm has lost a few dynamic individuals who started their own business, such as Matthias Meiffert with HR Pepper. Or some have switched to competitors, such as Anke Hoffmann to Deininger. How did that happen?

Jochen Kienbaum: Of course, the departures had an impact on us, commercially and to some extent for me personally. But now I can see that some of the departures were positive. The fact is that we need another type of consultant. Strong egos are a thing of the past, at least here in our offices. The future belongs to team players. We no longer need lone wolves and rainmakers.

Change is good to a degree, but to this extent it is counterproductive. Weren’t well-known, brilliant individuals consultants with years of experience and excellent contacts   your main asset.

Jochen Kienbaum: In recent years, we have gained many more consultants than we have lost – more than 300 consultants now work for Kienbaum. We have wooed several established consultants away from competitors. Nonetheless, we would have liked to prevent a few departures. I acknowledge that. But there were and are controversies during the sort of repositioning we are aiming at. In that respect, we are like any other firm.

How do you intend to make your mark in the executive search market in competition with top dogs such as Egon Zehnder with ― I’m exaggerating here ― young, unknown team players? The personnel consulting market functions, particularly in top management, through strong personalities and years of trusted collaboration at an eye-to-eye level.

Fabian Kienbaum: The market is changing. It is no longer a matter of search and find ― and that’s it. Personnel consulting now focuses more on team-fitting and cultural adaptation. Projects begin with more diagnostics and appraisal issues. Then comes the searching and finding, finally the onboarding. In addition, there are subsidiary consulting services in such areas as salary structures, organizational issues and image. In short, the process is not always over when the person has been found for the job. As personnel consultants, we aren’t suddenly gone when things become serious, when the daily work begins. Lone warriors, such as those you have named, are often overwhelmed by this complex and drawn-out task.

You are not only involved in personnel consulting; with Kienbaum Management Consultants,  KMC, you also have a management consulting firm whose self-confidence is considered to be greater than the revenues and results it achieves. What will happen to it?

Jochen Kienbaum: KMC has every reason to be self-confident. It contributes a solid half of our overall revenues. What is more, we intend to link personnel and management consulting more closely. In the future, there won’t be an either-or mentality or thinking in blocks. With the new type of consultant and a broader orientation within the field, we are embarking on new markets.

But will that be successful? With annual revenues of €112 million, most recently in 2013, and around 300 consultants, aren’t you too small to be a serious competitor for the McKinseys and Roland Bergers?

Jochen Kienbaum: We see ourselves as the big player in the niche. We consider ourselves to be a comprehensive personnel and management consulting service focusing on people and organizations. And every strategy begins and ends with personnel. This focus is unique.

Fabian Kienbaum: Our goal is not to serve only DAX companies. In particular, our customers are German mid-sized and family firms, where we enjoy widespread credibility and acceptance.

From time to time in your industry, there is loud talk of mergers. Deloitte and Roland Berger were already on the verge. Is there any possibility of a merger with one of the large auditing firms such as Deloitte or Ernst & Young?

Jochen Kienbaum: Not for us, but certainly for others. We have been repeatedly approached on this issue, but have refused to engage in initial talks. We are so special in our culture that it wouldn’t make sense to engage in a merger. We are and remain a family firm.

Fabian Kienbaum: I can only second this. Why would we do such a thing?

Well, expansion abroad is always a reason that is given.

Fabian Kienbaum: We grow abroad along with our clients. Today, foreign business constitutes only around 20 percent of our business, and our goal is more than half. But we are working toward it with patience and a sense of proportion.

Tanja Kewes is a senior reporter for Handelsblatt and writes a weekly column. To contact the author: kewes@handelsblatt.com.

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