Welcome to our new Market Intelligence Report.

Our quarterly newsletter has been given a new name and a new focus. We renamed our newsletter Market Intelligence Report because we will be offering you the latest in market intelligence and market trends. This is valuable information you need to make informed decisions: whether you are at a point in your career when you are determining if you are ready to test the waters of the talent marketplace, deciding who you need to add to your management team, or you are determining your company's HR needs in this area. In each issue we will discuss that quarter's most significant trends in the executive talent market, and how you can expect them to impact you and your company.

As 2005 opens up we've already experienced a noticeable upsurge in activity especially with "C" level positions. With the economy starting to recover, companies are demonstrating that they are ready to bring new leadership onboard to move them to the next level of success.

We'll be discussing which sectors of technology and operations are experiencing the greatest growth. We'll also give you insights into how this increase in demand will impact both the compensation and retention of key executives, as well as what new roles are likely to be created and added to management teams like yours in the coming year.

In this premier issue we will be discussing some of the market trends that are impacting you now: the rise in importance of the HR executive, the changes you will be experiencing in the interviewing process, the impact of Sarbanes-Oxley, and one of the hottest areas in search - Operations.

We also welcome any suggestions from you on topics you'd like us to discuss, and your feedback and opinions on the perspective we bring to you.

In future issues we will continue to discuss the trends that will continue to impact and define the world of technology and operations and influence your career decisions.

The rise in influence and importance of the HR executive is one of the biggest changes in today's executive search process. To ignore the power and value of the HR organization is to put your career at risk.

If you are looking to move up the corporate ladder you must build a positive working relationship with HR. Your HR contact will be a valuable partner to you starting with your first interview and throughout your entire career at your company.

In today's market, HR functions as the gatekeeper of their company. In many major corporations they may have the authority to approve not only a position's specifications, but also the level of the position and compensation package as well.

When you come in to interview for an executive position whether as an internal or outside candidate, the HR executives are the facilitators of the interviewing process. They not only have significant input in determining who you will meet with, but will also set the standards for the selection process - establishing criteria that may include behavioral and intelligence tests, and the required educational background you need to be accepted into their firm.

Human Resources has moved from the administrative department (hiring, benefits processing, etc.) into an arena where they are major decision makers and advisors in the business enterprise as a whole, and act as organizational consultants. HR Managers are now valued advisors to their company's executive team. Rather than only responding to a manager's requests for change, HR is in a position to anticipate what changes are required. HR has become a pillar of business, and contributes alongside all other functions to building the commitment and loyalty of employees. HR is far more focused today on strategic activities such as managing and optimizing workforce performance than they were in the past.

As an executive, when you need to add key talent to your own team, HR can prove to be both a valuable resource and ally. Because of their knowledge of the competitive nature of the talent market and through their relationships with their search partners they can assist you in developing financial and staffing forecasts as well as helping you to establish your budget for talent acquisitions They can also help you evaluate the candidates on the basis of how they will successfully interact with the other key executives of your firm.

One of the biggest trends today is to treat HR as a true partner to the executive management team and decision maker in the hiring process.

In the good old days, when you got called in for an interview, you dressed in your best dark suit, brought along copies of your trusty resume, hoped that you would make a good first impression, and at the end of the day go home with a job offer - but that hiring model has changed in 2005. Today there is a more scientific and business-like approach being adopted for the interview process. Here are some of the changes you need to be prepared for:

1. There's a whole lot of testing going on - candidates at the executive level are undergoing a battery of tests to assess business aptitude, leadership qualities and personality fit. Those candidates, earning outstanding scores on tests such as the Caliper test, gain a definite advantage over their competition who may be stronger in their one on one interviews, but who don't perform as well on the tests. When taking these tests regard them as one of your most important steps in the interview process (the difference is you're being evaluated in writing instead of verbally).
   
   
2. Homework counts - companies want assurance that you understand their business model and that you've kept up with current news about their firm. Ask insightful and informed questions not only about the position you are interviewing on, but about the company and its strategy going forward. They will rate your suitability for the position and your cultural fit as much on the questions you ask as the answers you give.
   
   
3. Enough about you let's talk about me - if you think the interview is about you, you're mistaken. In 2005, a successful interview is about convincing the interviewers that bringing you on board is to their benefit, and will make their company more successful. You need to emphasize those experiences where you've made a difference in the past at your firm, and how the business benefited from your contribution. The days are gone where you were only asked to review your past work history.
   
   
4. Passion and Commitment - you need to convey a real passion for what you do and a commitment to getting things accomplished. No company wants to feel as though you see their opportunity as merely the last stop on the career express. The interviewer at 4pm will want to see the same level of interest and energy that the interviewer who met you at 9am encountered.
   
   
5. Be prepared for a long haul - the interview process is going to take much longer than it has in the past. With fewer executive hires being authorized, each hire is considered to be a very crucial decision. In 2005 the new and expanded interview process may require that you meet not only with your potential boss and HR , but also with the business leadership - up to the Chairman of the company, your potential peers and maybe even your potential direct reports. The interview loop that in the past consisted of 2 or 3 rounds can now extend out to 6 or 7 rounds of meetings. The good news is that even before you start with your new company that the people at Security will recognize you , and you will know where to park.

Because making a hiring mistake is very costly for both the hiring company and the candidate, the trend in hiring now is for the people on both sides of the decision making process to put in the time and the effort to ensure that this is the start of a successful long term relationship - it is no longer love at first sight.

As a result of Sarbanes-Oxley (SOX) today CIOs and IT departments are becoming integral to corporate compliance efforts, thus raising their visibility throughout the organization. When Sarbanes-Oxley was crafted in 2002 to strengthen corporate governance and restore investor confidence, little was known as to the role the CIO and their IT departments would have to endure. It is just not the legislation act that is causing the shift in roles but the corporate governance regulations that must be adhered to.

The impact of Sarbanes-Oxley compliance is to make many people realize just how complex IT is while they try to uncover all of the hidden components that must be addressed and tested. IT systems are so large and companies have become so dependent on their infrastructures that the potential for failure is increasing. Concurrently, while the changing regulatory environments have made the CIO more visible, that doesn't necessarily makes the role more important. That's because the primary onus is still placed on the CEOs, Chief Financial Officers, and individual business unit leaders, with the CIOs being a support function for compliance efforts. The CIOs are there to explain to senior management whatever has to be explained. While their duties are essential, they are still not chiefs in the same sense as the CFO. They may however develop a closer partnership with the CFO as IT becomes more involved in the finance function. CFOs and operational executives want more evidence that IT is doing what they are supposed to be doing, they want them involved in data integrity, security, and systems controls.

Some experts believe that the increasingly complex regulatory environment will raise the profile of the CIOs, if only temporarily; some IT leaders foresee a negative impact on their careers as business becomes much more risk adverse. At this time it is hard to say whether regulations will heighten or diminish the role of the CIO. Some believe that the IT function is becoming even more important to the success of today's business. But as organizations are forced to address IT issues in order to comply with regulations, responsibility for IT may no longer be left to the CIO, individual directors or heads of departments may share in the responsibility for their division's use of technology.

In 2005, clearly, there are many ways that the regulatory landscape might play out for the CIO. It will definitely depend on how executive management responds to the pressures.

While Information Technology executives have been dealing with the critical importance of aligning technology with the businesses they support, Operations executives are becoming more involved with this same business alignment requirement. This has increased the importance and demand for first rate Business Operations executives.

We are finding that the business model has changed in some organizations in order to align technology with the businesses. This new model provides for day-to-day interaction between the business and operations executives and their staffs to ensure that the processes, platforms, procedures, systems, and infrastructure are fulfilling current business needs, as well as providing the necessary scalability to accommodate future growth.

Operations develops the business requirements and then interfaces with Technology to ensure that they provide systems that support these requirements, with the Operations leadership responsible for delivery of these systems. (In some organizations, Business Information Officers within I.T. have the same role, i.e., developing the business requirements for new or expanded systems and handing them off to Systems Development for implementation, while retaining system delivery responsibility and accountability.)

Another trend which is reinforcing the impact of Operations on the business is the merging of Operations and Technology under an SVP or EVP of Operations & Technology, including but not limited to, global financial institutions.

In line with this shift, senior Operations executives today are often well educated, excellent communicators, with a clear understanding of the businesses they support, and are being groomed for CEO and President roles.

To illustrate, we are currently conducting two senior level searches for Operations executives for two large financial institutions, each with potential compensation packages of $1 million or more.

Candidates for both positions have had the following attributes in common:

• Outstanding communicators and leaders of large staffs, from 100s to 1000s.
  
• Graduates of excellent universities, including Ivy league schools.
  
• Very strategic regarding their approach to understanding and supporting the businesses, while at the same time highly focused on day-to-day delivery.
  
• Possess the balance between being a collaborative team player with their business and technology partners, while having the ability to push back as needed to manage their expectations.

In summary, the two trends in 2005 which have important implications on how businesses are managed, and the potential impact on career opportunities, are:

1. Operations executives have increased their impact on organizations through their expanded role as the glue between the business and technology, a paradigm being played out on Wall Street, including hedge funds and other financial institutions, and
   
   
2. Technology & Operations functions are being consolidated under one senior executive, who more often than not comes from the technology side of the organization, particularly when the CIO has had some experience in Operations.