Hollywood Gives Headhunters a Recruiting Role : Management: New technologies and complexities are forcing the entertainment industry, which has rarely hired outside the ‘old boy’ network, to open up the process.

Hollywood has always been known as a company town. When it came to filling jobs in its plush executive suites, the new kids on the block usually came from just around the corner.

Nowadays, executives are also likely to come from another corner of the world, or at least another neighborhood. New technologies, minority hiring concerns and the complexities of the global marketplace have forced entertainment chiefs to look beyond their inner circles.

The trend has sparked a crush of competition among executive recruiting firms. Companies that once wrote Hollywood off as too loony or too inbred to merit attention have beefed up their staffs, hit the schmooze circuit and even hired public relations firms to tout their services.

Stephen A. Unger, a managing director of entertainment at Korn/Ferry International, the world’s largest search firm, said recruiters have finally found a niche for themselves. “We are not Hollywood’s kingmakers,” he said. “But we are certainly consultants to the kings.”

Among the new breed of executives discovered by Hollywood headhunters is Orion Pictures Corp.’s finance and operations director, Neil McCarthy, initially one of 250 candidates. Another is Live Entertainment Chairman Wayne H. Patterson, plucked out of a retailing position in the Midwest after the brutal murder of the company’s former chairman, Jose Menendez.

Salvatore J. Iannucci, a co-founder of Brad Marks International, which deals solely in entertainment industry hunts, said the trend toward outside hiring began with the advent of cable television, video and other mediums that required new executive talent.

The mergers and acquisitions of the 1980s, which helped bring a new corporate culture to Hollywood, also generated more business. New owners of media conglomerates were more open to outside expertise than their predecessors, according to Iannucci.

“There was no tradition,” he said. “They were starting from scratch. And they needed to recruit the best-qualified management for these slots in a scientific fashion.”

Walt Disney Co. reportedly is in the vanguard of executive search users in Hollywood. Recruiting firms are attached to most of its divisions, either on a retainer or contingency basis. Andy Heck, Disney’s director of employee relations, said headhunters are most often used in connection with high-level corporate, technical and overseas positions.

Other studios employ outside talent more sparingly. A Columbia Pictures Entertainment spokesman said his company uses headhunters to fill an average of two positions a year.

Fox Inc. Chairman Barry Diller, considered one of Hollywood’s most innovative executives, said recruiters are handy for filling jobs that can’t be staffed from “known sources.” Diller estimated that his company has used search firms five to 10 times in the past two years.

“Sometimes it works, sometimes it doesn’t,” he said. “It’s very hit-and-miss. It’s hard to come in (to Hollywood) from outside. . . . There are certain artificial barriers.”

Leading the list of barriers is the “old boy” network that has existed since the days of silent films, recruiters say. Robert Fell, who opened the first recruiting firm specializing in entertainment in 1975, said many studio executives still use headhunters as a last resort.

Gary Kaplan, who founded Korn/Ferry’s entertainment division before going solo a few years ago, agreed that Hollywood has yet to catch up with other industries, despite recent strides.

“There still tends to be a lot of Rolodex recruiting,” Kaplan said. “When there’s a management shake-up, most companies tend to look for someone they already know.”

When Hollywood beckons outsiders, it tends to be in connection with technical rather than “creative” openings. Financial, administrative and legal specialists are among those most often sought.

But there are significant exceptions. Great American Communications Corp. last year hired Korn/Ferry to find a new president and chief executive for Hanna-Barbera, the animation company behind such classic cartoons as the Jetsons and the Flintstones.

The company needed someone to “re-spark” the creative process at the venerable studio, according to Korn/Ferry. The search firm screened more than 250 candidates before Great American settled on David Kirschner, 35, an independent film producer specializing in family fare.

Orion’s McCarthy was also found by Korn/Ferry. In that instance, the success-starved New York-based entertainment firm wanted an executive with a good strategic and financial background, according to the firm. McCarthy, a former senior vice president for finance at Disney, emerged from a long list of candidates to take the job earlier this year.

Filling Hollywood’s executive suites has its rewards. Search firms generally receive an amount equivalent to one-third of the executive’s yearly pay when a placement is made, and salaries in Hollywood’s uppermost corporate positions often approach $1 million a year.

David Lord, editor of Executive Recruiter News, said Hollywood, with its high-salaried positions, is clearly alluring. “Percentage-wise, there’s probably been tremendous growth in the use of search firms there,” he said. “It has emerged from invisible to noticeable.”

Yet search firms try not to be too noticeable. The work done by recruiters is generally confidential. Most companies do not publicize the names of their clients, and most of the top entertainment companies will not publicly discuss their recruitment activities.

Among the most active Hollywood headhunters are Fell of Fell & Co., Unger and William D. Simon of Korn/Ferry, Harry Usher of Russell Reynolds Associates Inc., Brad Marks and Iannucci of Brad Marks International, Kaplan of Gary Kaplan & Associates, Karen Folsum of Spencer Stuart & Associates and Judy Havas of Heidrick & Struggles Inc.

Spencer Stuart opened its Los Angeles-based entertainment division three years ago. The company now has 15 full- or part-time recruiters assigned to the entertainment division worldwide. “Entertainment is growing faster than any other department,” Folsum said. “Hollywood is a business, like any other, and resistance to recruiting had to break down.”

Korn/Ferry’s entertainment business has doubled in the past year. Ten people work in the firm’s Los Angeles office. Simon said non-domestic offices also work on Hollywood searches.

Like many Hollywood recruiters, Simon and Unger once worked in the industry themselves. That’s one way of countering Hollywood’s legendary cliquishness. Entertainment recruiters also tend to be active on the social circuit and even serve as panelists at show business conferences.

The most delicate entertainment recruiting task in recent times was replacing Menendez, the charismatic and hard-driving Live Entertainment executive killed in 1989.

Carolco Pictures, which holds a majority stake in Live, a diverse company best known for video distribution and retailing, took 10 months to replace Menendez. The search eventually yielded Patterson, the former chairman of a discount chain called Pace Membership Warehouse Inc.

Patterson’s appointment was popular with the financial community, which is no small consideration when public companies are choosing top executives. Patterson’s skills were well matched to Live, even though he had no entertainment experience, according to an analyst who asked that his name not be used. “Two-thirds of Live’s revenue comes from retailing anyway,” the analyst said. “And the video division was already well in tow.”

Recruiters like to claim that most of their searches are similarly successful, though there are those in Hollywood who maintain doubts.

Many executives still chafe at the notion that good help needs to be recruited. There also remains a certain respect for those who make it the old-fashioned way: by clawing their way to the top.

“I am not sympathetic to the difficulties of entering into this business,” said one executive. “I overwhelmingly know that if you want to get into this business, you shall.”