010: How Rod McDermott Got Out of the Way to Help Scale His Recruitment Firm

What key moves led to McDermott + Bull’s accelerated growth and stellar reputation in staffing?

Thank you to ContentApp for sponsoring this episode! ContentApp makes is easy to centrally manage, distribute and track documents, images and videos. Give employees, partners or customers easy access to relevant content on mobile or web.

I try to remind myself: people learn more from failure than they do from success. So, if you allow your people to fail, they'll learn from it.

Show Notes:

  • That one guy who knew he wanted to be a staffing executive (3:04)

  • McDermott + Bull’s ideal client (4:42)

  • What is Project Activate? (5:18)

  • The lessons learned in recessions (9:02)

  • Organic growth versus investment (12:36)

  • M + B’s approach to acquisitions (14:25)

  • Lean Sigma Six Training (15:08)

  • What would Rod do differently? (17:50)

  • On the importance of not running a desk (20:22)

  • The surprising method Rod uses to create company culture and hiring the right person (21:39)

  • How to retain talent? (24:12)

  • How to find talent (26:21)

  • How will M + B reach it’s goal of $50M? (28:58)

  • Does growth come from marketing or branding? (31:17)

  • The important lesson Rod learned from a partner before his death (36:14)

  • The value of philanthropy (38:11)

Additional Resources:

If you are interested in listening to more recruitment business stories or wish to share your recruitment business journey, head over to The Journey Up and listen to other informative and inspirational episodes! Feel free to contact me, David Alonso, with questions and comments.

Episode transcript


David Alonso  0:12 

Hey everybody, this is David Alonso and welcome to another episode of the journey up podcast where we explore business success stories and lessons learned from the very best CEOs in the recruitment industry. On this 10th episode, the journey up I met with Rod McDermot, who is the CEO and co founder of McDermott & Bull executive search. This staffing firm has over 50 employees globally, and was recently recognized on the Forbes list of the best recruiters in executive search for 2019. Rod has so much passion for recruitment, business and charity and it was absolutely inspiring being able to talk to him. I got the chance to meet with Rod in his office in Irvine [California] was just a short trip up from San Diego. And whilst I was there, I really got to understand why they are so successful. On this episode we discuss hiring process, growing organically, company branding, lead development and so much more. I'm excited for you to hear this podcast. So without further ado, let's hear from Rod.


David Alonso  1:12 

Okay, I'm at the office today of McDermott & Bull with the CEO and co founder. Rod, Pleased to meet you. Thank you for allowing me to come to your office for that.


Rod McDermott  1:23 

Yeah. Thanks for joining us, David.


David Alonso  1:25 

It is a great office. How long you been here for?


Rod McDermott  1:27 

God? You know, that's funny. I don't know. We've been in business almost 19 years, we were down the street for between three and four years. But as I've gotten older, I cannot gauge time anymore so that ...it's somewhere between 13 and 15 years. I have no idea. We just re upped our lease. We took on  50% more space, because we've been growing. And so we're here for a long time.


David Alonso  1:47 

Good. And for those who are listening don't know we're in Irvine, California. Is that where you always been based?


Rod McDermott  1:52 

Yeah. So when we founded the firm, we literally were down the street in an office ad we'd still be there today, but they during our leasing negotiations they weren't that great. And they didn't think we're going to leave. And so we looked down the street and it was the easiest move we've ever done. Literally, it was a midnight move, pack the stuff on on some dollies and we took it down the street. No trucks.


David Alonso  2:12 

Yeah, yeah. And you alluded that you've been doing this for a while. So tell me how long you been here for what is your journey up, so to speak, to get to where you are today. Tell me about it.


Rod McDermott  2:20 

Yeah. So I've been executive search for over 20 years. We founded McDermott & Bull. It'll be 19 years in January. I worked for a national firm based out of Chicago. I was in the Irvine office. And right around the the tech wreck, we decided we were going to leave, my partner Chris Bull, when he was over at the other firm as well. We were being recruited by a couple of big firms, Korn Ferry being the biggest and the one we probably got closest to. And then over Christmas of 2000, we said, hey, maybe there's another opportunity and that was maybe starting our own thing. So we decided to leave our old firm and then start our own thing, which we did in January '01.


David Alonso  2:53 

And what did you study at university? Was recruitment always your dream? Or was there a different...


Rod McDermott  2:58 

Was it anybody's dream?


David Alonso  3:00 

Next staffing person as well, it wasn't my dream, but it all works out in the end, right?


Rod McDermott  3:04 

Yeah, I know. I don't think any actually that's not true. There's one person who works for us that actually was thinking about recruiting from the age of 16. The true story, the only person... I'll tell you the story really quick, just because it's interesting. I said, How the heck did you think of this? Nobody ever thought of this business. And he says, one day I'm dropped off in front of my high school, I'm up on the steps and I see a friend of mine, get out of a Bentley. And he comes up and I said, whose car is that and he goes, that's my dad's. I ask, What does your dad do? He goes, he's an executive search consultant. And the light bulb goes off. And this kid says, I'm going to be an executive search. I'll swear to God, from 16.


David Alonso  3:36 

 Never heard that.


Rod McDermott  3:36 

Yeah. And his father is a big biller. He was the biggest at Korn Ferry and now has his own firm, quite large global. But yeah, it's an interesting story. So for me, I came out of UCLA was an econ business major and went to New York worked for Citibank in the city for a while and then they asked me go to Texas for a couple of years, which I did then want to get back to LA and they didn't want to lose me in Texas. So I was playing a little internal politics. I had a job with the LA guy, which was a promotion. And my boss in Houston said, No, I need you for another year. I think I was 23, almost 24 at the time and a year was a lifetime. Yeah. And so I ended up getting a job with a bank based in LA that was the fifth largest bank in the country at the time since acquired, back in 1991, by Bank of America. So I did that for a while. And then I left banking '91 and started starting businesses. I got into recruitment, executive search in 1999. So I had a couple of businesses in between and the job I had right before getting in this was a VP of Sales and Marketing for computer security company.


David Alonso  4:37 

So tell us about the actual types of clients you deal with the type of work you actually do.


Rod McDermott  4:42 

Yeah, so our firm is pretty diverse. We call it multi specialty firm. So I do a lot of work in aviation and aerospace partners that do work with private equity companies, consumer products, technology, healthcare, Life Sciences, nonprofit, we actually hired a partner in New York. Just recently, who does a lot of work in the nonprofit space. So we're kind of in just about every sector out there, we don't do really any government work we do a little bit, but not much. We don't really chase it down. But we're in just about every sector.


David Alonso  5:12 

And I can see you've got a couple of logos on the wall here, you've got your M+B logo and your Project Activate, so tell me a little bit about this one?


Rod McDermott  5:18 

 Sure. Sure. So one of the things I like to do is start companies. And so at McDermott & Bull, we started our search from 19 years ago, we started MB interim leaders about seven or eight years ago. And that's a business where we take folks that have come to us through our executive network primarily, okay, we've had an executive network for 18 years with over 10,000 senior executives in it. And some of these people said, Hey, I want to consult or I'd be open to consult or maybe I'm looking for my next job. But if there's an opportunity to go out and stay engaged and make some money, I'll do it. So we started that business coming out of the last recession when a lot of companies had need but didn't necessarily want to get married. You know, we call it rent a Ferrari without buying a Ferrari. We started that business that's been quite successful. It's growing very rapidly. Fastest growing segment our business today. And then Project Activate we just started this year. And it's really, it's a different business altogether. But it's about taking what we've learned over 20 years of, you know, seeing people run their own job search, helping them through the executive network, at least at the executive level, run a job search, and then taking it to non executive folks. So we're actually our first market that we're going after, what we call fresh outs, kids that are just coming out of college to maybe they've come they came out three years ago. So kind of that was fantastic. I'm about to graduate to I graduated in the last three years. And what we find is there's a lot of folks not mean, necessarily, I mean, I knew I knew what I wanted to do. My senior year, I went back to New York and started interviewing with banks in January of my senior year. Well, I had second interviews in February, and I took a job in February. And there's a lot of kids out there like that. And then there's some that either don't know what they want to do when they graduate or they don't know how to get it. And so Project Activate is about teaching them how to identify your vision then once you identify maybe one two or three things that you'd be okay doing that would be kind of on track to your dream, building a plan around how to attack that how to get there. Who are the potential companies I should work for? Who are the people within those companies I should reach out to? Because a lot of these kids, they're just applying for jobs on the internet. And everyone I talked to says, Yeah, I've sent out 100 resumes


David Alonso  7:19 

Oh, no real thought about what they're applying for either.


Rod McDermott  7:21 

Yeah, they don't know what they're applying for. And they don't know who they're applying to. And they're one of 1000 coming over the internet to these companies that never call them. I can't tell you how many stories I've heard from kids saying, I've sent over 100 resumes. I haven't gotten a single response, nothing. And so it happens a lot. And then the last piece is this accountability piece, which, you know, we need to keep them on track. You know, I always say job searches like sales, but you're selling yourself short, which is the hardest product in the world to sell. I have a benefit because I've been selling myself for over 20 years.


Rod McDermott  7:53 

But a lot of people can't do it.  So we're teaching people how to do that. You know, the Career Centers are great at the universities because they show kids what can be possible and they represent some companies that want to come on campus. But there's a lot of kids that aren't there yet. And they need more one on one. So Project Activate is a two day workshop, 16 hours and followed by some one on one coaching and mentorship, kind of throughout their job search process. So it's, it's more intensive, and more I would call it hand holding for people that need it. And we call it filling the gap. Bridging the gap between college and career.


David Alonso  8:26 

It's fantastic.


Rod McDermott  8:27 

Yeah, it's a it's a passion.


David Alonso  8:28 

Yes, real buck. And I can feel it's great to actually be opposite you here to see your passion sort of shining through here.


Rod McDermott  8:34 

Yeah, Maddie and I are working on that. And and we'd like to say we're going to change the world now.


David Alonso  8:40 

When you mentioned before about the recession, obviously you've gone through pretty big one, you know, last time around. There's a lot of talk, as we know, and I'm sure that's going to happen in the near future and so forth. Was there any dealings in the last time that you can kind of apply to make sure you're not hit as hard? I'm presuming like everyone else, you were hit hard. Oh, I know. I was unfortunate lost myself in business back then. So yeah. very aware of that sort of period and maybe some things to do or not to, from, you know, from the lessons learned really.


Rod McDermott  9:07 

So I do have a few call me after the recession and asked me how they worked out couple of my ideas. But, you know, if I, if I go back to the first recession I was in, in this industry was the tech bubble bursting back in 2001. And that was not a broad based recession. If you look back in history, we've only had ever had to massively broad based recessions, the Great Depression and the Great Recession, where it affected every industry. And basically, if you go back, if you go back to, you know, the early 90s, it was aerospace and real estate, if you go back into the 80s, you know, it was energy, a lot of oil and gas.


Rod McDermott  9:45 

I was in Houston in the mid 80s. And it was a depression in Houston. If you were in the oil and gas business. It's funny, it's a recession to everybody else. But if you're in that business, it's a depression, depression. Yeah, I mean, you'll have 30-40% unemployment in an industry. This last recession was like that in that it affected so many things. So my hope is that in our lifetimes, we never experienced anything like that again, but I do know will experience recessions. And generally if you look at recessions, you can figure out what areas what sectors might be affected.


Rod McDermott  10:14 

So let's go back. I was doing a lot of work in the tech space, back in 1999, 2000, 2001, when the recession hit, and we followed it all the way down. You know, it was, remember b2c companies first, it was b2c that was big deal, then it was b2b. And so we shifted, you know, from and then we went to more of the the macro providers of technology. So the networking companies, the folks that were doing connectivity, things like that, we literally followed it all the way down to the chip level companies that were building chips. Ultimately, the entire supply chain got affected... if we're not starting new venture backed companies.


Rod McDermott  10:48 

I'll give you this example. I had clients that were gateway and Toshiba, and then I had clients that were startup tech companies, the startup tech companies would recruit somebody else who would, not me, I wouldn't recruit from my clients but would recruit people from Toshiba Gateway. So human gate would call me and say, Hey, we just lost five people in this one department, we need to go re staff it. So yeah, startup tech companies that would hire us to do search or somebody to do search. Yeah, these guys that would hire us to replace the people that they lost. All the while these venture backed companies are raising all kinds of money. And they're buying Cisco switches and they're buying. Lenovo, IBM, I was gonna say back then it was IBM, but they're buying IBM laptops and HP laptops and Dell and doing all that. So you've got this huge supply chain that's supporting this and then all sudden the IPO market, it peaked right. The stock market NASDAQ peaked in March of 2000.


Rod McDermott  11:38 

And then it started going down. And the IPO market went away. So all these venture capital firms had no exits. So what they started doing is they started not investing, because they needed to keep the money that they had left for the companies they'd already invested in. Because the IPO market it sounds a lot like today. It sounds a lot like it really and I was talking to a couple of money manager friends of mine I said this reminds me '99, 2000 they said oh yeah and with what happened a couple weeks ago with we work they said you know, there's always something that might trigger trigger something that might be it. Yeah, we don't know. And so if the IPO market and you saw peloton went out last week and then went down, yeah, you know, and it's a real company, no earnings, but that was what was happening in 99 2000. You remember important companies like Pets.com, right and toys.com toys com went out. They could have bought Toys R Us the next day.


David Alonso  12:27 

Yeah, similar things in England.


Rod McDermott  12:29 

So it's crazy.


David Alonso  12:30 

Your view on like organic growth versus investment. Is this all funded yourself? Or?


Rod McDermott  12:36 

Yeah. So we have not raised a penny of investment capital. It's just it's more of a philosophy. There's actually a few companies that have raised private equity in the executive search space. Private equity firms and we do a lot of work with them and they're great firms, but they have an exit strategy. You know, I'm an investor in a fund and as a limited partner, I want to see my money back. Plus, you know, income So I don't want to let it ride. We don't have any plans to ever sell our business, we're growing. We want to bring more people into our company continue to grow the business, if anything, we have plans to maybe start creating some liquidity for some of the senior folks and actually bring in the employees as a shareholder. So that's part of our plan.


David Alonso  13:20 

Yeah. And I'm walking in, I walked into the office today is very vibrant. I can see training going on, I can see great self and a lot of people on the phones, it seems it feels like a great place to work. Where are we at now as a business? Where are you at revenue wise or employee wise? Where is the company currently sitting at?


Rod McDermott  13:34 

Yeah, last year, we did in the US we did a little over 16 million. This year, we'll probably get closer to 20 million in the US. We've been expanding internationally as well. So in Europe, we're out of Amsterdam, that business we bought two and a half years ago with our partners over there, to the top builders at the firm partnered with us to buy it and that business will do about two and a half times what it did when we bought it. Same thing in Canada. We partnered with somebody in Canada who's 20 Your search veteran and rather than work for a firm that was kind of resource constrained, we said, Hey, how about set up a McDermott & Bull Canada do with us. And so we're partnering, we're moving into a space literally today that we took down that'll house 15 people. And it's a little nerve wracking because we only have, we only have five, hopefully, six and another week. So we have a lot of work to do.


David Alonso  14:22 

Do you see acquisitions as a way for you to sort of grow?


Rod McDermott  14:25 

Yeah, you know, we haven't, we haven't really done that we've acquired what I call single single, so a couple of individuals who had their own companies, we've acquired them to come on board, but I don't know, you know, I think there's so much that goes into culture fit and how you do what you do, right. So we do it a little differently than a lot of firms. You know, we found from our clients, our clients love the quality of the work that they get from us and other retain firms, but they wanted to go faster. And so we went took our entire company through Lean Six Sigma training a year ago, so that we can move faster and not take short cuts. We would actually get the same work done, but get it done more efficiently and faster. And what it's done is it's reduced our time to fill significantly.


Rod McDermott  15:08 

I give an example, in my practice, before we went through Lean Six Sigma training, we started doing things where we, you know, we just made it a rule that if our recruiters or somebody that they really liked, we had 24 hours to accept that interview on our calendar, right? Prior to that, if I was busy, or I travel or something else going on, I might say, you know, I can't do that for three or four days. Now. It's 24 hours. And even if I'm traveling, I'll do a video interview with somebody. And so I can do a face to face from wherever I am, even in Europe can wherever 24 hours, if I like that candidate, I've got 24 hours to submit them to our client.


Rod McDermott  15:44 

So again, I'm not taking shortcuts. I'm doing all the same work I used to do. I'm just doing it faster is there, you know, when we kick off a search, one way that we can figure out if we're correctly targeted as we identify the first 25 names and reach out to them within the first 24 hours, you'll start to see a theme. The theme here is 24 hours. So all things when we when we kick off a search, and we write a spec for our client, we have one to one and a half days to get a draft back to the client. Because if we can do that it's still fresh in the clients mind go to be quick. Yeah, they haven't moved on to some something else. Yeah, but it historically, and even at my old firm, I mean, we would we thought we were fast. And we would do it within three to four days. the hiring manager is now on to something else. And maybe they're traveling and so now all of a sudden, it takes three or four days for them to get back to us. So now you don't have a spec you can use for a week and a half.


Rod McDermott  16:34 

In our model, we have a spec we can use usually within two or three days, and so we can start sending it. I'm interviewing candidates within we two. Were done submitting our slate to our client, usually within week four. So my practice before we kicked off Lean Six Sigma training to the whole company. We got our time to fill under 60 days, which is pretty phenomenal given the industry average industry average.


David Alonso  16:55 

Yeah. What is it?


Rod McDermott  16:55 

 It's around 120 days for the retain businesses. Yeah. So we were half so we We'd like to say to our clients, listen, you're going to pay the same but you're going to get your resource two months faster. That's 17% more of a year,


David Alonso  17:07 

I'm sure you're not missing the trick by not advertising that or promoting that stat to prospect clients.


Rod McDermott  17:12 

Oh yeah, we are doing that a lot.


David Alonso  17:15 

I can see how involved you are in the business and then I've obviously met with Angela your co founder not in person but I have spoken to her and that's great that you got those two senior people see you still active it doesn't look like you're retired to the golf course or anything like that at all. At what point...


Rod McDermott  17:29 

I'm not old enough. And my golf game isn't very good. Well I'm sure it is fun to play...


David Alonso  17:36 

There's lots of things you do in your spare time Yeah. But was there a kind of point in your growth to get where you are 16 million that you kind of wish if you took on that person earlier may have fueled the growth was there like a key higher that maybe you was a little bit reluctant? You know, looking back?


Rod McDermott  17:50 

Yeah, actually it was a couple of things I think it was it was not only key hires but it was also this is gonna sound weird, but  Angela was not a co founder of McDermott & Bull. She was a co founder of MB interim leader. OK, so the interim side so she's been with us 10 years started as a recruiter on McDermott & Bull. And then actually was my right hand person on a lot of the initiatives I was working on, including starting in the interim. So when we needed to get that going, we were trying to hire people, including a head of talent acquisition, which is her role. And we couldn't find anybody we liked better than her. And I said, would you do it? And she said, Yes. So that's kind of how we got that launch my partner, Chris Bowen. And when we founded the firm, we kind of divided all the stuff that needed to get done between the two of us. And we were pretty in there, we were in the weeds on a lot of stuff. One of the things that I've found over the last four or five years, if you hire really good people, and you get out of their way, and you let them do their jobs, they'll do amazing work. And you can actually scale your business. And I was talking to somebody recently, and I told him about the growth we've experienced over the last four or five years and he said, so you're an overnight success after almost 20 years.


David Alonso  18:56 

Sometimes it can feel that way.


Rod McDermott  18:57 

Yeah, and it's true because we The first you know, 13 or 14 years, we were so involved in everything I think we became the governor of the impediment to scale. And now, we've hired great people. We have people leading marketing. I'm pointing to Bianca, who's back there behind one of the cameras. We have people leading our recruiting effort. We have people leading search consultant recruiting and development. We used to do all that Chris and I did it all close. Yeah. But now we have other people doing it, and it's helped us on. So we're definitely out of the weeds. Now, we focus more on vision and where we're trying to take the company.


David Alonso  19:34 

How do people do that? Because I do podcast with many, many people and a lot of people still run the desk sometimes by preference. I also get the sense that they just can't make that next jump. Is it a personality trait? Is it business acumen what is what you know so much of the businesses 10 employees or under? How do you make the jump? What is it? Is it a combination of things, but doesn't it really boil down to the CEO at the end the day to make those business calls?


Rod McDermott  19:58 

Yeah, I think so. I mean, I look at they're so many companies that have been able to do it and we were stuck for a long time. I mean, getting to 10 million was a really, really big deal for us, right? And then it's okay, how do we get to 20? What do we do? And so it's been hard, I'll be candid with you, it's been really hard to not dive back in, I have to resist the urge to dive back in and either take over or put my spin on something.


Rod McDermott  20:22 

You know, one of the things I try to remind myself, people learn more from failure than they do from success. So if you allow your people to fail, they'll learn from it. And they won't do it again. If you robbed them of that opportunity, because you jump in. Yeah, maybe you'll be the hero there. But you're also going to be the impediment to scale. Because one person can't build a $20 million company you need a team is able to do it in 20 million is not our vision, our vision is 50. And even then it's not our vision, it's 100. Let's keep growing and it's more than just the dollars. It's more about. We have a great firm that we consider family. I know most of the families so the people that work for us and We hire people from, you know, New York, Dallas Europe all over, I get together with them, we hang out, we break bread, and I want to meet spouses and other folks. And so we try to operate it like a family. So it's more about getting people in there like us that we're going to like working with.


David Alonso  21:17 

So yes, you have remote workers. Yeah, really? Yeah. And what about when you actually hiring people? What is the quality you look for? Because obviously, culture is a big deal for you. So two questions. What is culture for you guys? You know, I can sense that I can tell, by the way talk about family, but I think culture gets branded around quite a lot nowadays does Yeah. And how do you actually get that good culture, but what does it actually look for, for a key higher? What you're kind of top things you look for?


Rod McDermott  21:39 

So this is very unscientific, but if I meet somebody, if it's an hour meeting, and I want to get out of there and 45 minutes, I'm not gonna hire that person. I don't care how much they bill. Yeah, if it's an hour and I go over, which I'm prone to do, and my assistant hates me for that, because she backs my calendar up. Then I set up more times and these are people that I want to get to know.


Rod McDermott  22:00 

So for me it's it's more about a feeling of is this a person I want to spend two days in the car with in Dallas going to visit a lot of their prospects and customers and spending time with them and spending time with their family and we just hired a guy in Dallas. And before we pulled the trigger, I was on my way to a aviation show in Oshkosh, Wisconsin, and I'm a pilot, so I was flying myself and our team. So I said, Hey, listen, I need to stop for fuel on the way can't make it non stop to Oshkosh. So can we meet for lunch in Dallas and his daughter's in recruiting to bring your daughter bring your wife bring your daughter and so we all had lunch, and it was great. And I got to know the whole family. And so I kind of liked doing that. It's very unscientific, but I don't hire people without having them over for dinner to my house. I get my wife involved in a lot of it. She doesn't suffer from hope like I do. So you know, when I look at somebody and I want to bring them on, I'm like, Okay, this person could really help us in this market. We really badly need somebody in this space and they could be the answer to it and my wife steps back and she doesn't look at that. She's like this A good person or not? It goes. Yeah. And sometimes you say, Yeah, don't hire that person.


David Alonso  23:04 

So it sounds to me like you would definitely cut a big biller out if they were toxic in the office.


Rod McDermott  23:08 

Oh, yeah, yeah, yeah. And we have Yeah, we have. Yeah, yeah, we had we had one point. This is going back to pre recession. We had our biggest biller who's actually good guy and a good friend, but was a glass breaker around the office and we had a talk with him one day and said, this is gonna sound really weird because you're our biggest biller, but we think you belong at one of the big firms. They don't mind that because you bill a lot, so they'll overlook that. We do. Yeah, we can't build the kind of company we want with you here. And when he left, something interesting happened. We saw a million and a half walk out the door and back in the early 2000s. That was a lot of money. And we didn't miss a beat everybody else that the air started circulating around the office get. Everybody else took deep breaths and they built their practices. So certain people suck all the air out of the room. And again, really good guy like him and I know he's different, but we need To make those changes for us to build the kind of company we wanted to build, and


David Alonso  24:04 

How do you retain them, and obviously paying well and so forth definitely seem to have the right environment to thrive. But how about progressing people? What does that look like?


Rod McDermott  24:12 

Yeah, so what we try to do is develop career paths for everybody at all levels of the company. You know, the the gal who's our controller now, who handles everything finance started as a researcher right out of college, and she kind of moved up into various different jobs and then took over and now she runs all finance and accounting for us. We have a number of stories like that. So we try to promote from within, it's the devil we know, I know, it's the antithesis to our business. But if we don't have the right resources in house, we'll go out and we'll bring the resource in. But we want to show career path. I think, for me, if I think of myself, I stagnate after two years. I need to change my job every two years, which is one of the reasons we've started all these companies. It keeps it keeps it fresh.


David Alonso  24:52 

For you, obviously very approachable CEO, you seem like a really nice guy and so forth. But I can imagine you can make some difficult decisions when you need to. what makes a good CEO be able to kind of make those, you know, decisions from being the nice guy to approach when you invite them around to your house for dinner and so forth. So how do you have that conversation where the kind of the boundaries of these guys,


Rod McDermott  25:09 

yeah, so I, you know, I kind of look at it as if we're, you know, let's say we're running a professional football team, we need to put players on the field that are going to help us win games, and ultimately win the Super Bowl. If we've got the wrong players on the field, or they have the wrong motivation, or they don't necessarily want to play on the team, they might be great people, but they're holding back the rest of the team. So we just have to look at it from that perspective. I try to do that, you know, even Obviously, I'm not going to fire my kids, but even with my kids, my wife and I talk about what's acceptable behavior around the house and you kind of have your norms and when your kids go outside of those norms, you know, you have to pull back the leash a little bit. We do that here with our people as well. So what is it we expect of you? If you're delivering that great, you'll move ahead, you'll make more money, you'll get raises, you'll get bonuses, if not, we need to either fix it put you in a role that you can succeed at and or movie out, because you're going to hurt us in our ability to win Super Bowls.


David Alonso  26:06 

Yeah. As far as finding talent, do you do anything different about reaching out finding people? Or is it the normal recruitment pool that's out there that everyone seems to be going through recruiter channel, you don't even definitely to try and find some, some real gems in the market and it's a drive the business forward,


Rod McDermott  26:21 

We've gone to what I would consider ancillary businesses where we can find people that work for maybe for profit universities, right. And so they're doing admissions right. It's kind of a sales job. They're talking to a whole bunch of people they're trying to trying to get them in to come and take a look at their product. We've had really good luck, our sales leader for our interim business, started as a recruiter here at McDermott & Bull, okay, she's matriculated all the way up. She's been with us not quite 10 years now. She came from one of those places. And so we were able to get her in, she didn't have any fear of the phone. She was able to qualify folks. And so it made her a good recruiter. And then from there, we continue develop her. So it's interesting. We've had some great success getting people that are experienced recruiters. And we've had some amazing failures. Yeah. So we try to open our minds to ancillary businesses that have taught people some of the skills and as long as we meet somebody that's got that core culture fit that we're looking for, right. There's somebody we want to hang out with. There's somebody we can build up and we can move ahead. We can teach them this.


David Alonso  28:36 

So we mentioned like employees to help fuel growth, right? That's obviously a big part of it. But how are you going to get to 30, 40, 50 million as you mentioned before, you know, obviously branding, etc. So what's the sort of vision of growth look like? What is the expansion plans? like can you kind of like, summarize all of that for me about how you're going to make this a $50 million business in no pressure?


Rod McDermott  28:58 

I was gonna ask you that. David, how are we going to do? Well, so we've made strategic decisions to be in certain markets. So obviously we're headed in Southern California, we do a ton of work down here. But we just opened up in New York and we also opened up in, in Dallas just recently. This is in the just our US markets. So we want to build out just like we're doing in in in Europe, in the Netherlands, we started with with two builders, and now we've got five and we continue to grow that we've got a total of eight people there. And then in Vancouver, we're doing the same thing. So here, we plan to grow out our Texas market, we plan to grow out our new york market. Each of those folks has an area of expertise that they brought to our firm and we're trying to fill in blanks around them. In some cases, they'll be leaders, they want that that opportunity to lead the office. In some cases they they might or might not want it and if they don't, that's okay. We can build as well. We can build around it but we want to build critical mass in certain markets. What does it look like to initially go off to a market like Texas though because you mentioned a below


David Alonso  30:00 

Right, and hopefully they've got business to bring that would be the ideal scenario. Is that always the case?


Rod McDermott  30:04 

Yeah, for the most part. Yeah. I mean, we've actually grown our own. But what we find is, it's harder to grow your own outside of Southern California for us. So given that this is our head office that a lot of our top partners are here, people can learn from them. So we've brought in folks, you know, if you look at me as an example, or Chris Bull, we didn't come from this industry, we had to learn it random being the president of our company, he came in as a lawyer, he didn't have any book of business stuff, and we taught him the business. So we're pretty good about teaching people how to become successful search consultants in this market. We haven't figured out yet how to do that outside of this market. And so outside of Southern California, we're primarily going after folks that have books or business already that are already experienced in retained executive search and they can bring that over. So in New York are our partner there has a long background in nonprofit and diversity. And so she's doing more work in that space and then in Dallas, our partners comes out of the healthcare space. So he's bringing a lot of relationships and healthcare, but also wanting to do some regional stuff as well, which is why we want to support him in technology and consumer products in industrial.


David Alonso  31:10 

Do you feel like growth comes from extra hires and sales or more from branding and marketing? How do you think you're going to go and get that new business?


Rod McDermott  31:17 

That's great. Bianca would probably have a really big opinion. I think I'd like to know for myself as well, you know, because it's a little bit of both right. But nowadays, I just wonder, I just wonder if if the people with the right answers are going to get in that scale? It's a great question I've always looked at as marketing, get the fish close to the boat. Sales, get them in the boat. But I'm old school, right. And I'm an old school salesperson. And so I'm starting to rethink that.


Rod McDermott  31:44 

And you know, we're using branding like we've never used it before. We are doing lead development things. We're doing a bunch of events that that we've been doing for years, but we're actually doing bigger scale events, CEO forums, things like that, that continue to brand us but also Bring the right people together in a room as another way that we can touch them. So, you know, we want to be known as thought leaders in a lot of the lot of the areas that we work. You know, for instance, in aviation and aerospace. during some of the trade shows, I have an interview series that I do with CEOs and will usually pick a topic and we'll go out and ask multiple CEOs on the same topic, their perspective, we have thousands of people that watch these, and I get a lot of responses get a lot of new business opportunities from that. Well, we're brand new, yes, you know, and then ultimately, we get more business out of it. When we started our aerospace aviation practice, really strategically as a practice, I had one client in that space five years ago when we were doing a few hundred thousand a year. Last year we did combined $3 million in that practice. So I think if you continue to do these things, you build a name for yourself opportunities arise, they know who you are, they see you at events, you're credible.


David Alonso  32:51 

You get business, I also think is great for the employees to see the CEO out there hustling as well. You know, I think there's something for them to aspire to this.  I think that's important for them to be part of that as well.


Rod McDermott  33:02 

 I like that. I'm a sales guy at the core. I just always thought sales doesn't happen here, it happens outside, we have to go to the customer and I love going to the customer, I love visiting customers or prospects. And I like going to shows we have an aviation show coming up the end of this month in Vegas. And we'll probably have 25 meetings over two days with CEOs of a lot of the big companies and I just I love telling the story and hearing their stories. Sometimes we help our clients in ways that we don't get paid for. It's not about putting a person in a company sometimes I have one of our big clients and there's another company as a prospect and they should get together. And so I've told them both and they both want to meet now I've heard I'm hosting a meeting at the show in Vegas between these two guys. There's no search there, nothing at all. It's just about them doing business together. They will come.


David Alonso  33:47 

Yeah, it will always come Yeah. What about next 24 months if we take the recession pending potentially out of the equation, anything disruptive to the market staff in recruitment or just search that you're Worried about or anything you want to share about that?


Rod McDermott  34:03 

Yeah. So I think that this whole idea that we've engaged in this Lean Six Sigma training and the idea of getting the time to fill down significantly so that we can actually add value much sooner at client side. That's not a novel concept. So I think people that do that will put themselves at the leading edge, because clients have told us for a long time, I love search, you know, the way it works, the quality is good. Not everybody loves it, by the way, but when they when they have a great experience, and they have a great result, they really see the value in it. Why is it takes so long? And even the best candidates say the same thing, what is it takes so long, so I think we have an opportunity to kind of reinvent our business, if we can take some of the extraneous time out of the process, and put that into actually working on that engagement.


Rod McDermott  34:49 

You know, imagine you only had one search, what would you do? Right? And so putting those kind of metrics in place to make sure that we can do that. The difference with our firm is we have resources. We have really, really well trained researchers, we have really great recruiters. We have search consultants that either we've developed internally or they've come with great skills. So we can bifurcated parts of the job, from research from recruiting among great people who can it's like, you know, building anything, right? How long does it take us to move up a product through our plant? If we had one person building it from the beginning to the end, it take us a long time.


Rod McDermott  35:24 

If Tesla had one employee building one car, it would take years. But because they have teams and people doing their best jobs, they can move cars through the factory in a day or two. And so that's what we're trying to do here is it's not a factory approach per se, because every job is different. But there are certain things and this is why Lean Six Sigma. I'm amazed that more service companies haven't adopted it. Yeah, yeah, we had a sensei that we hired to come in and train our company and his biggest business these days is service, either service functions within manufacturing companies like HR, or in some cases, service companies. You You're just not hearing it a lot. It's really become in vogue in the last three or four years now. We've heard about in manufacturing for 20 years or longer.


David Alonso  36:08 

It sounds to me like you have many passions. How long have you been a pilot for?


Rod McDermott  36:14 

Yeah, I've been a pilot for 32 years. And it's interesting. I was a weekend warrior up until about 1314 years ago, I would rent a plane. Probably once a month. I flew an average of 15 hours a year. And we have Catalina Island right off the coast. There's an airport they call it the airport in the sky. It's up on the top of a cliff and and they have a nice restaurant where you can get buffalo burgers. So I was kind of a once a month fairweather pilot would fly over there, get a burger.


Rod McDermott  36:39 

And then one of our first partners in our firm passed away from cancer in 2006. And he inspired me he said, one thing you don't know is the day you're going to go, so don't wait to live life. He said, I know there's been things that you've probably been wanting to do. But you've thrown yourself so much into this business, what are those? And I said, you know, I'd love to fly more. Well, I'd love to figure out a way to Incorporate flying into our business and he said, Well, you've been smart with your money you should do that. And so three weeks after he passed, he passed 10 days after we had that conversation. I had my first plane got an instrument rating through flew 300 hours that year. So up until that time, the first probably 1516 years I flew flew about 300 hours that one year I flew 300 hours so I literally doubled my hours. Got my instrument rating sold that plane one day short of a year 364 days bought my next plane, which is more of a cross country plane. Okay, pressurized nice cabin. And since then I've owned five planes. So I got to fly a plane to Europe two summers ago, which was kind of fun. criss crossing the Atlantic is crazy. Yeah, it was fun but it but I fly a lot. So Alex, did you fly? I flew last week I flew this weekend yesterday I was up in Oregon flew down and I'll be flying next week to Alabama and great stuff. Yeah, so I'll fly commercial if I'm going overseas, generally but to Vancouver. It's an nonstop for me. So I'll do that Texas is non stop. So I fly a fair amount.


David Alonso  38:04 

Let's finish up on a little bit more about the personal personal side of things. I know you're big on philanthropy. Tell me a bit some of the stuff that you do as well.


Rod McDermott  38:11 

Yeah, so I've been involved in a couple of nonprofits over the years one was called Think Together, it was an after school program for kids and tougher areas. And it was basically get kids off streets, keep them in the school, do after school, academic help to help move them along. And that was really, really fulfilling. I was on that board for probably nine or so years.


Rod McDermott  38:30 

And then I went to the Board of our local hospital where all four of my kids were born and equally fulfilling, raising money for the hospital. We just built a $70 million cancer center there. So my wife and I are sponsors of that as well. And you know, it's one of those things where if you don't get involved, I've learned this from the hospital. nonprofit hospitals don't make enough cash flow from operations to actually pay for great equipment. And if you want to have great diagnoses, you have to have great equipment and have you ever had an MRI Yeah. How strong was the MRI machine? It was, nobody knows. No, nobody ever asked that question. I never even considered one Tesla one and a half Tesla, three Tesla, it makes a huge difference in the quality of the scan that you get. So I tell people, if you're going to get an MRI, find out how strong that machine is. If it's not at least a three Tesla move somewhere else, because the quality I've had my doctor, I've had three back surgeries, the doctors will show you. Wow, this was really clear. It's really good. This is okay, I can see that. It's black and white versus, you know, 11 megapixel color, you know, all the stuff we can do with our iPhones these days, right? It's night and day.


Rod McDermott  39:40 

Hospitals don't have the money to do that. And so in order to spend that money, they have to raise it. And when they raise that money and they buy the best equipment, guess who else they attract the best doctors best doctors want to work with the best equipment so we happen to live, you know in a great place in Southern California. A lot of the doctors that work At the hospital, I'm involved in Mission Hospital. A lot of the doctors there live by the beach Laguna Beach. I mean, it's a great place. And if you talk to any of these doctors, you ask them where they're from. They're from all over the country. But they came out to God's country they love and out here, they have a great lifestyle, and they work for a great hospital that has the best equipment in the world. Some of the equipment we have is on par with UCLA, Johns Hopkins. amazing places. Why? Because we fundraise a lot.


David Alonso  40:23 

Yes, a continuous thing, isn't it?


Rod McDermott  40:24 

Yeah. And if you need the best piece of equipment, because you're in a car accident or something else, or you're having brain surgery, you don't want second rate equipment.


David Alonso  40:33 

No, I was at a pancreatic walk this weekend. So yeah, where they need to get out there. But yeah, but I could be here all day. Yeah, I know. There's a timer. And it's been a real pleasure. Thank you for sharing not only your work, but your your personal stuff that you've really been through and you're so passionate about. It really came through today. And it's been a real pleasure. And I wish you all the best success in the future.


Rod McDermott  40:54 

Thank you, David. Yeah, there's been a lot of fun. Thank you very much. You're welcome. 

  Don’t forget to subscribe in your favorite podcast app