THE SECOND INDUSTRIAL REVOLUTION: A CATALYST FOR A NEW PROFESSION

During the Second Industrial Revolution (1870-1914), businesses – especially those in the United States and Europe – changed dramatically. Innovations contributed to a period of accelerating industrialization: the expansion of rail and telegraph lines improved access to markets and lowered costs for the movement of parts and finished goods; new, efficient methods of production made the process of turning raw material into a finished product faster and more efficient. These dramatic shifts created a need for leaders who could adapt to the changing business landscape and the demands of scale.??

Management consulting firms like McKinsey & Company, and Booz, Allen & Hamilton stepped in to fulfill this need by recruiting executives who could implement a recommended strategy to solve a client’s problem. In 1914, Edwin G. Booz said, “Often the best solution to a management problem is the right person.”??

And thus, executive search was born.??

FROM MANAGEMENT CONSULTING TO EXECUTIVE SEARCH?

Before World War II and through the 1940s, several early retained executive search firms were founded as offshoots of management consulting, four by McKinsey & Company and Booz, Allen & Hamilton alumni and two by alumni of major accounting firms. McKinsey and Booz Allen also operated their own executive recruiting functions. (McKinsey exited the field in 1951 when Ward Howell left to start his own firm, while Booz Allen continued searches for clients until 1980.)?

The search consultants who came out of these firms applied the tenets of management consulting to their endeavors from the start, thus laying the foundation for the legitimacy of retained executive search as a consulting discipline.?

ECONOMIC BOOM & GLOBALIZATION: THE RISE OF EXECUTIVE SEARCH?

The end of WWII led to a wave of economic expansion and globalization that reached across North America, Western Europe, Japan, Australia and the newly industrialized economies of Asia: South Korea, Taiwan, Singapore and Hong Kong. This was fueled largely by the growth of international trade.??

Businesses jumped on the opportunity to expand their reach. Organizations also moved away from the tradition of developing and promoting managers from within. Business leaders more frequently sought skilled, experienced executives from outside their organizations.???

As the demand for top talent grew, so did the need for retained executive search. Executive search firms began popping up around the globe, ready to find and place skilled leaders in C-level, executive and board positions.

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