Thinking Like an Activist During Your Job Search
by Mitch Wienick, President, Kelleher Associates
There has been an increasing number of articles written recently about so-called Activist Investors such as William Ackman, Carl Icahn, and Nelson Peltz and a growing group of others who have started to mimic their strategies and tactics in operating hedge funds that take significant positions in target companies and then lobbying for a variety of “improvements”.
While many people have strong views pro and con regarding activist tactics, their effectiveness, self-dealing, and ability to genuinely create long term competitive advantage and value for other shareholders, there is no doubt that they have a very disciplined methodology for approaching their targets which have parallels in performing a successful job search.
Activists typically follow the following game plan:
- Quietly build ownership in a target company.
- Push for agreement to their change agenda.
- Ramp up the pressure as their major deadlines approach and launch a proxy fight.
- Release of detailed White Papers and accompanying press releases regarding what they see as target company shortcomings and how they plan to create value.
- Win, through a vote or a settlement (e.g., their ownership interest is bought out at a premium) or lose and “go home”.
So how does an Activist game plan translate to a job search strategy? I believe it does in the following ways:
An effective job search requires the identification of target industries and target companies. As the saying goes, if you don’t have a destination any direction will do. At Kelleher we find that our most successful clients, with our assistance, develop a clear idea of where they want to land and why. This has to be really considered carefully with decisions made based on solid analysis, good judgement, common sense and attention paid to what the market will and won’t accept.
Once a client has identified a number of high interest target companies, he or she needs to put together a change agenda. What I mean by this is that the client has to be able to identify a target company’s core problems and how he can help solve them, or a target company’s opportunities and how she can help capitalize on them, or, finally, a target company’s challenges and how she can help meet them.
While it takes some genuine effort to determine a company’s problems, opportunities, and challenges, clients can do this by studying a company’s website and use search engines, focusing on product or service announcements, press releases, senior executive speeches and presentations, annual reports, SEC filings, stock or debt offerings, analyst reports, social media comments, and industry trends and issues just to name the most obvious sources. Activists do this type of research. So must job seekers who need to be well informed.
The job seeker equivalent of pressure exerted by activists is to find connections into a company at relevant levels within relevant functions, business units, and departments. These may come from personal connections with employees of the target companies, networking contacts who can make introductions into the target companies, professional service providers (such as an accountant, lawyer, investment banker, insurance broker, compensation consultant, etc.), and vendors or customers who have ongoing and close contacts with the target company (and often an entire industry).
Next, based on the intelligence and information gathered from the previous two steps, the job seeker’s analog to release of a White Paper is to assemble an outline or presentation which lays out in some detail what they would do once onboard. Sometimes this takes the form of a 30-60-90-180 day plan; at other times it can be a Power Point presentation, or a position paper. Whatever the format, it forces job seekers to think through and present their value proposition to a prospective employer, and it serves as a real differentiator versus other candidates who may be vying for the same position.
Finally, the ultimate “win” in the search process is for the job seeker to secure a bona fide offer that can be successfully refined and negotiated during the normal back and forth between the candidate and the company.
And, of course, while it’s never a happy situation not to secure the position which you’ve been targeting, job seekers need to be practical and resilient and move on to other potential opportunities when they are not selected for the role they were most recently seeking. Just as activists are not always successful — for example, Nelson Peltz and his Trian hedge fund were recently defeated by DuPont’s CEO Ellen Kullman in a highly visible and vitriolic shareholder vote, but they have licked their wounds and have moved on to other targets such as Sysco Corporation where Trian was recently awarded two board seats without a proxy fight.
It seems clear to us at Kelleher Associates that active job seekers can take some key lessons from activist investors when searching for their next position to enhance their chances of securing a desired role in a targeted company.