At Four Seasons, Diversified founder is on a $100 million roll
This column was first published on The Philadelphia Inquirer, to view the original piece click here
“It’s wonderful to have the Four Seasons back,” said Judith von Seldeneck, founder of executive headhunter Diversified Search, and member of AltoPartners Global Operating Committee, before a crowd of 150 people on Tuesday. The group was gathered to hear Four Seasons president Christian Clerc praise his newest hotel, atop Philadelphia’s tallest tower, the Comcast Technology Center, high in the fog on a wet fall day.
Von Seldeneck recalled how twice a week she used to grill boss candidates and hiring clients over breakfast at the old Four Seasons’ fancy Fountain Room Grill, in the company’s previous Center City location, two blocks north, and closer to Earth, with windows on the Benjamin Franklin Parkway. “I attributed a lot of our success to that,” von Seldeneck cracked.
By coincidence, her firm’s fastest growth has occurred since the old Four Seasons shut down in 2015 to make way for the smaller, loftier, Comcast-hosted hotel.
Diversified billings totaled $16 million in 2016 and reached $45 million last year. They will top $100 million this year, propelled by acquisitions of Grant Cooper, a St. Louis health-care search firm, in June, and Koya Leadership Partners, a Newburyport, Mass., firm that finds presidents for colleges and other nonprofits, in July.
The purchases — Diversified hasn’t disclosed terms — followed von Seldeneck’s partial sale of her business to ShoreView, a $1.3 billion (invested capital), Minneapolis-based private-equity firm that is making Diversified the base of a much larger boss-finding firm.
Von Seldeneck says the group has three more acquisitions “in the pipeline just for C-suite executives” — chief executives, chief financial officers, and other bosses. The company’s biggest current targets include life-sciences companies. She brags that she got Jefferson University Health System chief executive Stephen Klasko his first job, as an obstetrician-gynecologist at Lehigh Valley Hospital, where he was also department chairman and residency director.
She thinks there’s room to focus more on financial services, if her group can find a good cultural fit among the Wall Street executive search firms.
She used the Clerc event, which Diversified hosted — part of a monthly luncheon series parading business people before clients and prospects — to introduce her company’s top team. It includes chief executive Dale E. Jones, who previously ran one of AOL founder Steve Case’s foundations, and Denielle Pemberton-Heard, the company’s Washington-based general counsel, a veteran media-industry lawyer.
The firm, which von Seldeneck founded, is part of AltoPartners, the international alliance of executive search firms with 57 offices across 34 countries.
Von Seldeneck is that rare founder who has built and sold her company, bought it back, and found new owners. She sold a controlling interest to the national firm then known as AccuStaff in 1998. It was a poor cultural fit, joining line-staff hiring to boss recruitment, von Seldeneck now says. She led a buyback of Diversified in 2004 “for one-third of what they paid.”
Next, she awarded nonvoting stock, valued at $25 a share, to senior employees. That worked well, “until they started retiring. We spent $7 million of our profits buying shares back.”
Why didn’t she set up an employee stock ownership program, as Philadelphia insurance agency Graham Cos., Wawa Inc., and several Philadelphia-area manufacturers and engineering companies have done? Von Seldeneck was willing to share ownership, but like late Comcast founder Ralph Roberts, von Seldeneck insisted on keeping control of the voting shares.
Which she did. Over the next 13 years, those shares gained 5½ times in value, before Diversified sold a large stake to ShoreView, fueling the recent acquisitions.
Von Seldeneck also has side investments in the specialized personnel field, including STEMconnector, a Washington-based tech recruiter whose clients pay recurring membership fees.
Her coinvestor in that venture is Ira Lubert, the former Penn State board chairman and Valley Forge casino owner who cofounded the Lubert-Adler, LEM, and LLR investment funds, which rank among the largest investment managers based in Philadelphia.
Clerc called the Philadelphia Four Seasons, with its Jean-Georges restaurant and subtly changing “digital art” displays, a model for his chain’s next ventures. He praised manager Ben Shank as a man who listens to chamber and kitchen staff so they will trust him with the things that need to be fixed. That is what you do, Clerc said, in a business where the lowest-paid people tend to spend the most time with customers. And he pointed out that manager Shank had himself worked in the old hotel as a youngster in the early 1990s, “serving breakfast to Judee von Seldeneck.”