Signium International

The answer is yes, but with subtle differences depending on each case. As I already explained in my previous post, “Executives’ salaries: justified or exorbitant?”, a trend perceived some years ago was the increase in financial executives’ fixed salaries. This increase was an attempt to balance the final compensations received by these directors in relation with previous successful and much wealthier years. The real value of the bonuses received annually by these executives, and which depend on the results and benefits obtained each year by the company’s performance, is what mainly has suffered depletion due to the crisis. In any case, what has not happened, at least in general terms, is the continual increase of these salaries.

And “do the executives accept this?”. A friend of mine asked me this question one day while we had a coffee and so we discussed this matter in detail. “It depends…”, I told him. In presence of this widespread managers’ salaries stagnation, as a headhunter I have noticed three very different situations: those professionals who are comfortable with their current position; others who, even though are currently employed, are open to changes of their current job positions; and, finally, a group of executives who remain unemployed. What happens with the first of these groups of executives, those who are not looking for a change because they are satisfied with their position, is that they leave us, executive search professionals, with less ways to approach them. In these cases, the principal motivation for a change is normally the proposal of a lucrative economical offer in comparison with their current conditions. Thus, without an offer, the motivation for a change simply does not exist. Obviously, the project is very important, though given the market’s uncertainty, this type of candidates usually demand a number of benefits (golden parachute, seniority, redundancy clauses, etc.) which are not being offered. Consequently and as a result, one always ends up discussing about money.

At a midpoint is the second group of professionals: those executives who are not comfortable in their current projects, or those who believe that they cannot grow or that they have already reached the ceiling in their professional opportunities within their current workplace. In this case, a partial conformism exists. In other words, it is possible that these professionals would not accept a change for a salary lower than their existing one; however they are normally open to change when the offered salary is more or less equal to their current retribution, as long as behind this offer they also find a development project or perspectives for change or improvement which could lead this executive to be recognized as a leader in the new company.

Finally, we have those unemployed executives, definitely the professional niche where we have noticed the highest conformism. Honestly, I have found cases of professionals who have accepted positions which I never imagined they would accept. These executives are normally willing to earn a lower salary in exchange for returning to the labor market. And, unless the project undertaken represents a very stimulating challenge for the professional, what usually follows is that once the market recovers, this professional will abandon the project. And the market will recover, because it already begun to do so. Therefore, this situation is as it’s often said: “short-term gain, long-term pain”.

As I said, in the financial sector microcosm (the one I know the best), things have started to change in this sense. For some time now, in Signium International Spain we have started to notice how more and more firms are hiring executives. Thus, it can be said that a true desire and need for hiring new professionals exists. Always think positive, never negatively, as a certain soccer coach used to say.ç

To answer this question without fear of making a mistake it is necessary (even before thinking about answering this question) to begin with the establishment of guidelines which would determine and appraise what is and what is not exorbitant regarding executive salaries. In my opinion, there is no doubt that the first measuring stick to evaluate an executive in this regard should be the value that he or she provides to the company. The equation is clear: as long as the value provided by the executive is higher than the salary perceived, the retributions received by these directors are justified by the company, even if they seem exorbitant to public opinion.

Following this train of though, I cannot stop asking myself why people continue to be surprised and annoyed by the fact that great company heads, such as Alfredo Sáenz, Banco Santander’s CEO, for example, earn 9,2 million Euros a year; yet accept with pride that sportsmen, such as Cristiano Ronaldo, receive almost the same amount per year. After all, Sáenz, the highest paid executive in Spain, was also responsible for Banco Santander’s 2010 result of 8,943 million Euros, the highest of all Spanish banks, and one of the top on an international level. Isn’t this enough justification? Back to the subject of the proposed guidelines: On the basis of what should the value of Cristiano Ronaldo be perceived? Advertising income? Goals scored? I am sure that, unlike the opinion of many Real Madrid fans (and, as a matter of fact, I am a fan of this team), these achievements are not more justified than those reached by the afore mentioned banking executive. I even think the opposite. And I maintain this opinion, despite all the condemning voices which continue to rise against the high retributions earned by these investment bankers, who have featured cases such as “Madoff” or “Lehman Brothers” as if these salaries were the only sources of all the damage produced in these cases. I only wish for an easier explanation.

In general terms, I believe that the fairest executive compensation policy (please note that because of my professional specialization I always write with the financial sector in mind) should include a fixed salary in accordance with the current market conditions, aligned with the amount received by homologous professionals, and a variable salary, related to the achievement of the company goals. Depending on the performance of each professional within the company, this added value would equate to: fringe benefits, international growth, team development, expense reductions, etc. Anyhow, beyond these variables, the most important fact is that a significant part of an executive’s total compensation should be linked to objectives agreed by the company.

In this sense, a regulation of the variable salary has developed over the last years in the financial sector, to some extent due to the following of the established European norm. The bonus received each fiscal year by an executive of the finance sector is normally divided in: one third in cash, another third in company shares paid over three years, and a final third which would be paid in five years. Due to the preservation of this way of payment, the real value of these bonuses is currently lower than in previous years. The other trend in the sector has been to increase the fixed salary in order to decrease the gap; that is, the difference, between the total compensations received previously and at the present time. What is the common reaction of these executives given the evidence of this salary stagnancy or decrease which is inherent in these times of economical crisis? That question deserves to be answered in the extent of an entire post, specifically, the next one.

The first problem detected was the lack of transparency and the absence of accounting statements from the Board of Directors to the company’s shareholders. Precisely, the expression “Say on Pay” comes from this lack of the shareholders’ opinions regarding the CEOs’ remunerations. The first example of legislation with the goal of promoting these principles of “good corporate management” appeared in United Kingdom and was introduced in 1988 as “Combined Code on Corporate Governance”.

“Fulfill or explain”. This was the requirement that UK’s legislation imposed on listed companies. These companies had to fulfill the “good corporate management” principles or they had to explain the reasons for which they decided not to comply. Anyhow, because of the poor observance of the Combined Code, another step forward towards this regulation occurred in 2002 when the Remuneration Report Regulation was created. This regulation enforced the idea of voting regarding the CEOs’ remuneration (even though this voting maintained its counseling nature) in the shareholder’s annual meeting. Since these UK reports, many countries such as the United States and international organizations such as the European Commission have developed and proposed new reports and codes of “good corporate management”. In Spain, these regulation attempts have been manifested in some articles of the Sustainable Economy Act.

What does fate have in store with the enforcement of this new law? Until now, in the case of Spain as well as the cases of United Kingdom and the United States, the enforcement of the recommendations regarding the CEOs’ remuneration has been poor. Only 35% of the companies have fulfilled the recommendations about the general meeting. Thus, the majority of cases still are those in which the shareholders do not even participate in this decision, or those in which even though voting against the CEOs’ and top executives’ remunerations report offered by the Board of Directors, this report has been stopped from moving ahead.
It seems obvious that by acting this way the Board of Directors should be aware that they risk being replaced by the shareholders, yet the reality is another. The diversity that currently exists among shareholders usually causes very different reactions, without a doubt very far from promoting a collective action, including rejections like that of the directors (the refusal by the Board of Directors to take into account a negative result of a voting). In addition to all that was previously explained, there is another problem: the Boards of Directors try to give the image as to be independent, but really they are not. This impinges on the total independence of the “say on pay” practice, which makes it that much more difficult.

Another additional difficulty to the limited “true” independence of the Board of Director’s members can be found in the fact that in practice it is generally very difficult to count on reliable information in some fields. The reason is due to the fact that this information is usually created and presented by the executive staff to which they want to control.

Definitely, during the next months we will see the real effect of this legislative piece. We will also prove if this new regulation attempt is enough to solve the great doubts, which currently have resounded once again, about the determination, the possibility of demanding and the tax deductions regarding the retributions received by the chief executives of big companies. No doubt that to make everyone happy, the most convenient way would be to face this situation from a realistic perspective, which should be far from the populist demagogy as well as from the rest of existing lobbies. And it wouldn’t be a bad thing if the companies, by themselves, introduce in their compensation policies clauses that could decrease the differences between the best and worst paid individuals in the company.

If we look back, this is not as strange as it seems to be. In the United States, General Electric voluntarily introduced more transparency in their SEC (Security Exchange Commission) reports. And these improvements were later followed by the majority of the participated companies, in part due to the pressure of their own shareholders and in part because of the SEC’s coercion. Regarding Spain, our country is not a meritocracy (yet) in the business sector; and therefore, to introduce all these procedures is much more difficult. Despite the previous statement, the positive fact is that because Spanish companies are beginning to be present in the most demanding markets, these practices will inexorably be imposed. Just give it time.

The Sustainable Economy Act, which came into force on the 6th of March, has introduced an obligation for the listed companies to annually release a report about the retributions earned by CEO’s and to submit it to the counseling vote at the general shareholder’s meeting. In my opinion, this piece of legislation proves the necessity to deal with one of the company matters which has generated more controversy over the last decades and on an international level. Moreover, the financial and economic crisis that we are going through has reinforced the general interest in this matter. Specifically, one of the most significant and attention driving issues mentioned in the press as well as in public opinion, are the excessive retributions received by certain chief executives who have carried out, at the very least, a poor performance.

Maybe one of the most blatant cases, which has recently given rise to a lot of written opinions, is the one of BP’s CEO, Toni Hayward. Some media titled the news in the following way: “BP ‘fires’ its CEO with a millionaire pension while announcing record losses”. Ray R., Occidental Petroleum’s CEO, was also criticized by the media and rejected by the majority of shareholders of his company, after receiving a compensation of $ 160 million, while the corporation he still was administrating was going through a complicated financial period.

Besides the fact that these compensations are excessive, another complaint heard regarding the remuneration of chief executives is that their involvement with the company’s results is poor in the long-term and excessive in the short-term. In my opinion, Toni Hayward’s case was severely and unfairly criticized by public opinion, due just for this reason that his departure occurred in a complicated moment of the company. BP’s CEO was granted a year’s salary, as well as the right to withdraw part of his retirement pension which has been estimated to reach approximately 11 million pounds sterling. Nevertheless, it must be said that in Hayward’s favor, he left behind twenty eight years as head of the company, during which thanks to him as its CEO, the company reached great achievements.
These and other examples invite me to ask myself about the complex matter that is on the basis of which variables should the CEOs remunerations policies of a company be regulated. I have no doubt that there has to be a connection between the performance of the company (the results obtained by the company) and the CEO’s retribution. But, which should be the fairest connection? Moreover, which is the individual’s and which is the environment’s influence over the results? Should the goals by which these executives are evaluated be aligned with the goals of the rest of the companies of the competitor firms? Or, should each be graded by their own standards? Which company is exactly comparable with another one?

Beyond these and other cases in which for one or another reason an existing moral problem becomes obvious, it is necessary to arrive to the root of the problem in order to understand why, despite the different regulation attempts, there is no successful case yet. However, I will reflect on this matter in my next post.

The abbreviated answer of this question is: “inviting them to dream together, in an attainable and realistic way”. I’ll use this post to answer this question at length. First of all, before even thinking about embarking our company on such a great mission, my advice is to take your time and reflect on if you really exert leadership over your team or not. If the answer is no, it would be better to start from the beginning: “How to Prevent Conflicts from the Board of Directors”. I’m absolutely sure that it is possible to make a company’s personnel feel its colors, as well as that without leadership from the projects’ “initiator,” it would never reach a satisfactory conclusion. A director can manage to make his team believe in his word, and therefore feel enthusiasm and passion for the same cause, when he gains respect not only for his competences, as my fellow Santiago would say, but also for his values.

Having said this, I now proceed to tell you about my experience on how I made Burger King’s employees feel the colors of this great fast-food chain, and how this experience developed. Soon after I started to exert as this company’s General Manager for Spain and South Europe, I realized that almost any employee was proud of working for Burger King. What they really wanted in that moment was to work for McDonald’s, identified as the leading company in the sector. At that time, we were the second-ranked company in the sector. Anyway, that wasn’t the real trouble to solve. The root of the problem was that everyone was convinced that, independently whether we worked a little or a lot to change this situation, we would always be second. But they were mistaken, and I made them aware of this fact. One day I told them that we could exceed McDonald’s if we were determined to do so. Next question: In what? The achievable dream I proposed to them was to beat the leading company in opening new restaurants within a period of four years. This would happen exactly on June 30, 2004. And that was how all of us, little by little, began to share a same dream. The organization started to focus on a goal which, sooner or later, all the team decided to believe in and support.

We assumed it as a game where anyone could play. We placed a board where we could see all McDonald’s’ and Burger King’s open POS in our headquarters’ reception, and we updated it monthly. This board also displayed the countdown of the months to go up until “the impact”. As we got closer to the goal, we managed to make people begin to believe in this goal. Clients, employees, suppliers, etc. began to feel proud of the company to which they belonged. One year before the deadline, our great dream even started to appear in the papers and everyone talked about us in our business area.  This made our feeling of commitment even more profound. A way to visualize this change is that at first only I used the Burger King polo-shirts and T-shirts to go to the office (instead of the traditional suit and tie); and by this time (a year before the deadline), we were many who used Burger King garments and felt proud of being recognized as employees of this company. For me, this was one of the most visible proofs of the fact that people now felt the colors of our company. We were the same team, the same products, the same company, but now we had turned into 100% passionate people who shared the same dream.

Finally, June 30, 2004 arrived, and on that precise date BURGUER KING opened the restaurant that made us beat McDonald’s in number of POS. Of course, there was a lot to celebrate and we spared no expense.  We celebrated that finally we were number one! Everyone bet on “believing” and we achieved our goal. It was really impressive!

“Where people are found conflicts are found”, no doubt of that. Therefore, we shall start from the premise that “managing people always implies, to a greater or lesser extent, managing conflicts”. From this point of view, the principal task of a company’s board of directors is to establish and perform practices which minimize conflicts at an internal level. In this post I will share with you some of those habits that have given me the best results during the 22 years I was in charge of retail chains as their Managing Director. I will not cease to repeat that the advice and practices you will find below have been applied only to the retail sector, hence, they may possibly be useful only within this context and not in others. In any case, I believe that sharing my experience is convenient because I am sure that at least the Retail Managers who adopt this approach could prevent conflicts in their companies.

Make it clear that anyone can grow

In big companies we usually find an unwritten practice which consists in assuming that managers which belong to certain functional areas -such as Finances, Operations or Marketing, for example- have more possibilities of reaching a Managing Director position than those belonging to other areas –like HR or Legal. This cultural custom normally leads to tension between the company’s departments. Personally, I’ve always liked creating companies where anyone could grow, regardless of the business area to which they’re devoted to. In the Retail sector, besides having a very good performance in your functional area, a profound knowledge of the business is necessary. And, as the logical thing is to be a good worker in your direct work, the one who reaches the Managing Director position is he or she who has the profoundest knowledge and better implication with the business globally understood, that is understood as a POS network supported by a head office. And it’s also who lives it more.

Avoid conversations between two

I’ve always tried to summarize my directive and now consultant experiences with the following principle: “If you don’t have the solution, you’re part of the problem”. This adaptation of Les Luthiers’ famous sentence has prevented me not only from having people in my office complaining about others, but also from people distracting themselves from their work. Therefore, I’ve always tried to avoid conversations where two persons talk about a third one who is not there at that moment. It’s clear to me that the problems must blossom and not shut off, because the latter could be worst. Moreover, I believe that the proper way to treat problems should be in meetings, held in or out the office, and attended by all the implicated parties. My way to solve these inevitable quarrels is practicing team building activities with all the Directors. Besides, these activities are also very helpful in building an accurate mindset of the business out of which we all make a life of: our POS.

Make them understand what the true business is

Related to the previous point, a personal conviction I have always had is that when friction exists within a Retail chain it’s because the teams are really far from the POS. Even though some have called me loony for this, I’ve always liked that managers and other head office professionals spend time working with POS employees. For example, “One day working in a restaurant” was one of the initiatives I carried out as Burger King Spain and South Europe’s CEO. Also, another teambuilding activity, this one for the 40 managers with the highest positions in the company, was named “One week in a road”, in which we spent seven days visiting and working at the restaurants. This kind of initiatives makes the realization that all of us are part of the same business possible in head office employees. It also makes them more flexible and helps them empathize with their coworkers. For instance, after enduring a rush our Finance employees start to understand why the cash desk cannot be closed in the agreed hour. Of course, none of this would be possible if the general directors “don’t practice what they preach”. I remember a story related with this: a headhunter had wanted to meet with me for a while, but my schedule was full. Therefore, I suggested getting lunch together. He asked where, and I told him that in the Burger King of Hortaleza Street in Madrid. That day I had to work in that restaurant, and when he arrived I was mopping the floor. I still can clearly recall his surprised expression when I approached him and told him who I was.

"Leadership" in a firm can be defined as the "El Dorado" pursued by all Managers within their teams. Those who achieve glory in the quest, find in their hands the key to opens all doors to success for the company, while managers who fail or do not even try are left to achieve their goals by only the word of their authority. Honestly, I would not be in the shoes of any of the executives from the latter group. During my 22 years as a professional in Retail and Franchise management, I always tried not to deviate from that particular road towards El Dorado. And it was my constancy along that path which allowed me to attain things as incredible as having all employees on board with a shared dream, making everyone feel proud to belong to that company and as they often say, that "feel the colors "of the brand.

How do I do it? While it may not be the only way, I am convinced that these following concepts will help you to continue taking firm steps towards your goal: fostering leadership in your teams. The advice or behavioral suggestions that you will read below are very simple, perhaps even just common sense or "truisms", but as my colleague Alfonso Rebuelta mentioned in his post, "back to basics”, getting back to the essential may help us rediscover our way.

A manager should lead by example.
"You can never demand from others what you do not demand from yourself."

This is a maxim that one should always keep in mind in their day to day. I personally used to be first to the office and last to leave. Also, in my free moments I tried to visit the chain’s points of sales to greet people and worry a bit about the day to day. Retail chains, by nature, require a special type of leadership that is very close to its sales outlets.

For example, a habit that I have always liked to implement in all companies in which I have participated is to provide my mobile phone number to everyone. If our stores are open 365 days a year, the CEO of the company should also be operative 365 days a year, and in turn, of course, all the managers that report directly to him/her. Experience tells you that, in practice, the number of calls you receive is actually very small. In reality the Manager of each point of sale only gets in touch with you when absolutely necessary. However, the tranquility that this act gives them all allows, in most cases, for them to solve the problems that arise themselves. In short, an Executive in the Retail sector needs to internalize that he/she works for a company open to the public 365 days a year and that the central office’s only reason for existing is to provide continuing support these business units.

But of course, you have to pick up the phone.

The business world works like your private life.
"Treat others as you would like them to treat you. "

In 2 words: Be empathetic. If there were a manual on the "rights and obligations" of a boss, I'm sure it will never include a chapter on how a leader has the right to disrespect others.

On the other hand, I've always liked to blend the personal and professional with those people who have been in my direct line of command. I think to win leadership of your team you must have time for your employees, both for professional issues and personal ones. I consider between 4 and 6 people to be the ideal number of professionals in your direct line of command. If you have more, it’s very difficult to interact properly with them and keep them motivated. Personally, I've always liked to know when their birthdays are, those of their spouses and children, their anniversary, and so on, in order to make some small gesture towards them on each of these special moments in their lives as people.

I realize that I passed by some important stops on this imaginary road towards leadership. So, in my next posts I will return to today’s last point to try to show how my experiences can provide valuable ideas for your work. In particular I will try to recommend some practices to minimize conflicts between departments, and I will tell you a case study that will surely convince you of the importance of leadership by having all your employees "feel the colors" of your brand.

Once, a very successful someone in business told me that two most important things a manager should consider to have successful careers are "income" and "people". On first hand, what is essentially being asked of a manager is to deliver results, i.e. to generate income. However, on the second hand, a manager is "sold" by his team. That is to say, an Executive does everything through others, so it is so important that, as noted in the previous post, this Director knows how to win the admiration of his employees. It is impossible to get the desired results if the team is not motivated and the Director has not understood how to attract those employees with his/her vision.

This being the case, I find it appropriate to note that the concept of leadership has changed a lot since its beginnings just a century ago as a "manager" position. Historically this role was occupied in an organization in a generational manner (as in inherited). The figure of the professional manager, as seen today, is a relatively recent invention. In its infancy, this figure was originally associated with efficiency. The Director was asked to be a great performer. Today, while “results” can not be neglected, as an Executive one also needs to know to lead the way and therefore, in addition to performing, also act as a visionary of the company. In the previous post we talked about "values” as a fundamental prerequisite if a Manager wants to gain the admiration of his/her employees; "talent" and "maturity" also came up. However, I wouldn’t want to end this discussion without mentioning the 3 skills, which, in my mind, are more important for the correct fulfilling of a Director’s responsibilities. I am referring to: leadership, communication and teamwork. And when I say "team" I’m not referring to just divvying up the task, but to actually seek out and find the best available resource in each moment. It looks easy, but in fact, judging by the mistakes many managers make with this simple concept, is not.

These blunders and behaviors that undermine the credibility of Directors and their team’s motivation are usually because of a situational personality; that is to say, an Executive who manages depending on his/her mood, or even with the manual in hand. As they say "rules are made for normal situations”, but there are exceptions, where you can only come out victorious (and possibly even stronger) when one leads from one’s values. Other behaviors not compatible with value-based leadership are going around (or over) an employee, belittling him/her, replacing him/her, or not leading by example. In all these cases, apart from not getting optimum results, it is more than likely that this Manager’s department or organization will experience a “brain drain". In contrast, when management gains the admiration of its subordinates, it becomes the main element in retaining of talent. In my experience, the draw that an admired Executive can have on his/her team is amazing. If, as a Director, you have the opportunity to put these skills into practice, my advice is to experiment with your team and surely you will come to appreciate the benefits that I have mentioned here. Do you think your employees admire you or fear you? Examine your results and you’ll have your answer.

Before answering this question, I think it necessary to make a preliminary consideration. Among the many categories into which different types of employment could be organized, there is a very comprehensive distinction, easily understood by all, which, in order to develop my thoughts in this post I must clarify. Simply put, one hand we have those jobs whose development depends on ones use of the "brain", and on the other, those which are governed mainly by one’s "muscles". In the first case, we speak generally about “professional” industries (consulting, banking, technology, etc.) and in reference to the latter, we speak generally about those business models where the Directors or Managers also serves as foremen.

Having made this distinction, it should be noted that although no doubt the ideal business relationship between executives and employees must always grow along a path of the admiration and respect, the reality of these two segments is usually quite different. Although in those more cerebral work environments the Director hopes to be seen as a leader (I will explain how) and he/she, in turn, sees his/her team as part of a necessary symbiosis, in those cases where the work is more physical, the Executive is often viewed by their employees with some trepidation, that is, as someone they should flee, what often feeds into the belief by those same Managers that if he/she was not "the whip" no one would work and therefore unfortunately behaves as if he/she really held such instrument of oppression.

At this point I would like to focus this discussion on the first kind of work described, the brain kind. I have mentioned at the beginning a personal belief into which I would like to dig a little deeper. On numerous occasions I have heard Executives wondering what he/she could to make his/her employees "like him/her". In my view this is the wrong approach. The question that should be (and it is clear that something is going wrong if it’s even necessary at this juncture), how one should behave to be "admired" by his/her team. "Admiration"- here is the crux of the matter. Can a person without values be admired? A Manager can’t be either. In the best of circumstances a person who does not behave ethically, with dignity and integrity could come to earn the respect of his employees for his/her technical skills but nobody would want to be like this manager nor imitate him/her. Of course, these values go beyond age or experience, and rather depend on talent and a certain level of maturity - the minimum requirements that an Executive should establish to reach successful business results and therefore also with his/her employees. The benefits of living during all 24 hours (and not only during the 8 at the office) in an honest manner are incalculable. It’s worth a try.

If the impressions that I intend to share with you in this post seem recently familiar, perhaps you may find the reason in the special devoted to this topic published in this past weekend’s edition of Expansion newspaper. For this report, the newspaper wanted to have the professional opinion of Signium International Spain and that is why maybe if you bought the paper on Saturday or Sunday you will find some similarities in what I say here. However, I did not want to miss the opportunity to advantage of my thoughts for this special collaboration with Expansion to also share in our blog some of my conclusions on the matter.

Along these lines, the question one asks almost instantly when thinking about employment and the legal sector in Spain is what this year holds for the legal profession in Spain? Overall, one could say that in 2011 the sector will continue adjust its teams to the firm’s real workload needs. This trend will be felt on several fronts: firstly, the adjustment that started a few years ago will continue to affect the hiring of new graduates. And on another, this goal of efficiency will also mean promotions to Senior Associate or Partner will be scarcer, and therefore one’s advancement will become harder. Another of the general trends we will see in the sector is the continuous flow of partners from competing firms. These hires will be better received if they can bring with them their client portfolio. Sector concentration will also be another tendency in this market. My prediction is that during the 2011 firms will continue to merge or acquire other firms, seeking to offer the highest number of discipline areas as a way of dodging obstacles created buy the current economic recession.

Returning to the question of Partner appointments or promotions, I would point out that in my opinion, beyond the fact that opportunities have been reduced, what has really happened is an adjustment to reality. Therefore, it would be more correct to talk about a situation of containment to correct the excesses committed in the boom years. What happened during these years is that the position of Partner was too readily given to professionals whose actual contribution to the management, development attitude was not adequate. As a result, the figure of Partner was devalued, in billing and compensation per partner, as well as causing the numbers of Associates to swell beyond those really needed for business. As we have been tracking since 2005 in the annual sector remuneration study published by Signium International Spain, this decrease in revenue sharing between Partners is not a result of but rather precedes or accompanies the general compensation slowdown experienced all industry segments. This study that I referenced can be found in the studies section of our website.

Finally, I can’t end this post without making reference to the areas in highest demand during 2011. Specifically, the biggest growth will be in financial and banking law - particularly in the regulatory area - and criminal and procedural law in their more advisory capacities. The other areas that will also grow are labor law and some specific areas of tax law. In conclusion, adjustment of teams and Associates, industry concentration, restraint of wages and new opportunities in come practice areas. That, according to our perspective, is what will happen in employment in the legal profession in 2011. What actually occurs will be seen by all over the next nine months.

For those who work or have close contact with the financial world, it’s nothing new to read headlines like: "The financial world looking for work ... in any other sector" or "Bancaja Madrid to spend 1,200 million for early retirement to 4,000 employees.” For a while it’s been clear that the banking sector is witnessing its own catharsis. And in this process of purification "by force" many institutions have been obliged to begin a restructuring process that has meant the end, in a single stroke, almost half of the savings banks in Spain.  More specifically, we know that institutions and labor unions have reached agreements that involve letting-go some 13,000 employees across the sector. Cleansing measures which, according to the Bank of Spain, must occur in the next three months.

Savings Banks being faced with this delicate situation, different questions come to mind: what was done wrong in the past by Banking Executives so as to reach the terminal point where they are today? What will happen to those 13,000 bank executives who have been, are, or will be soon expelled from the system? And finally, what will the future hold for professionals that remain or those who aspire to work in the banking sector?

In response to the first question, beyond the obvious "excesses" of terms and lending which we have witnessed in recent years, I think one of the key concepts that failed, in general, was not knowing how to implement and carry out an appropriate risk management. In my opinion the system did not, at that time, have people to properly strengthen this management area. A mi modo de entender, ni las generaciones más jóvenes han recibido la suficiente formación sobre “gestión de riesgos” ni tampoco desde las Direcciones de banca se ha puesto el suficiente énfasis en estas cuestiones, por la principal razón de que jamás hasta ese momento se había vivido una recesión como la actual y no parecía prioritario. From my professional perspective the younger generations hadn’t received sufficient training on "risk management" nor had banking Directors put enough emphasis on these matters, for the simple reason that in their lives they never had experienced a recession like the present one and so it did not seem a priority.

As for the "exits," according to the plan agreed upon with labor unions, the majority lay-offs will occur through early retirement of employees over 55 years, but compensated lay-offs will happen as well. Con respecto a estas últimas, la mayor parte de los empleados que saldrán de las entidades acabarán recolocados en otros sectores y una parte de ellos, alrededor del 15% montarán un negocio con las indemnizaciones recibidas. Regarding the latter, the majority of these redundant professionals will eventually relocate in other sectors and some of them, about 15%, will start their own business with the severance received. Good luck to all.

Likewise, outgoing workers who change sectors, I believe will not do so for lack opportunities. In this sense, I agree with other professionals in headhunting and outplacement in that market opportunities exist and will continue to exist. However, it will be necessary to be active to take advantage of them. On the other hand, as seems logical, the permanent changes in the system have left their mark on the candidate profile needed by financial institutions, in addition to basic skills such as languages, willingness to travel, commercial skills and having degrees in fields other than customary ones (engineers, computer scientists, mathematicians) have gained prominence.

In short, I define the purification that the financial world is experiencing as a return to basics. Savings Banks are returning to their foundations (An appeal to wisdom lost), and in this sense I believe that what happens in the future will be positive. The financial sector is currently in a previous -and necessary- step towards taking off again and grow in one direction. In other words, the financial sector is sending down roots, and my wish for the future is that these new seeds grow healthy, bloom and shine for a long time.

Having previously began to talk about the job search process for Executives, in this article I would like to mention 4 basic principles to keep in mind during this process.

Be patient and prudent.

While it is true that the current situation is not the same as that of a few years ago, professionals actively searching for new opportunities should maintain a positive attitude at all times. At the same time, and for this reason, they should be patient and understand that repositioning themselves in the market can take about half a year. Along this line, the concept of "prudence" that one should show is always connected to that of "patience."  A priori these two suggestions seem to be very basic arguments, but quite often I have encountered in my profession that an Executive has been too quick to accept an offer that had little or no consistency with their previous positions.  Then at a later date, this professional has contacted me and acknowledged his/her mistake and wanted to try to start the job search again. However, this type of error sometimes "tarnishes" one’s professional curriculum causing harm in his/her long-term career development. Another mistake that can lead to a hasty decision to accept a job that is not really adequate is not being informed sufficiently about the company and the position in question.

Try to differentiate yourself from the rest. Study your skills.

Are you sure you know your strengths well? Before applying for a position, candidates should take a good look at their profile, understand their skills, strengths and weaknesses, and in general be able to respond to questions regarding what could be their differentiating attributes: achievements, extensive contact network, good response to change, willingness to travel, inviting personality, etc. Moreover, apart from identifying these aspects of one’s profile, the Executive should also know as "communicate" them to the interviewer.  Mastering this analysis in advance will allow the candidate to go into an interview with greater confidence and a positive attitude.

Search for motivations and surround yourself with people in your same situation.

Many professionals I know use these periods of transition to take refresher courses or expand their skill set, to study an MBA or to take up a hobby previously not possible. Another highly recommended activity would be to meet other people in the same transition process. From these relationships we often obtain both understanding and renewed strength.

Be proactive and extend your network.

As we mentioned in the previous post, it is crucial for an Executive to be proactive and to be prepared for change when in the job search process. If you really look for it, the right opportunity will come.