What it means in practice
Recruitment businesses are especially exposed to this specific failure mode because their core value creation happens at the desk level, through individual consultant relationships with clients and candidates, often organised around highly autonomous specialist teams. A firm-wide strategic priority — expanding into a new market segment, say — depends entirely on individual desks choosing to act on it, and desks with strong existing relationships in their current specialism have every immediate incentive to keep serving those relationships rather than investing time in an unfamiliar new direction the firm has decided is strategically important.
A concrete version of this plays out whenever a firm decides to expand into an adjacent specialism. Leadership may correctly identify a genuine market opportunity and communicate it clearly at a firm-wide meeting, yet six months later find that almost none of the new pipeline has materialised — not because consultants disagreed with the strategic logic, but because every day presented a choice between spending an hour on a new, unfamiliar market where they had no existing relationships, and spending that same hour on their established specialism where a placement, and the commission attached to it, was considerably more certain.
Why it happens
The structural reason this coordination gap is sharper in recruitment than in many other business models is that desk-level performance is usually measured and rewarded individually, and individual reward does not automatically align with firm-wide strategic direction. A consultant who ignores a new strategic priority in favour of their existing, well-performing specialism is not behaving irrationally — they are responding entirely sensibly to how their own performance is measured. The strategy sits at the firm level; the incentive sits at the desk level; and unless those two are deliberately connected, the strategy simply competes, unsuccessfully, against every desk’s existing, better-rewarded priorities.
Steven Kerr’s research on reward systems names this precisely: organisations that reward one behaviour while hoping for another get the rewarded behaviour, not the hoped-for one, regardless of how clearly the hope is communicated. A firm’s leadership can genuinely, sincerely want its consultants to invest in a new strategic direction; if the compensation plan still pays out purely on placements made within existing specialisms, the firm has — without intending to — built a system that makes ignoring the new priority the individually rational choice. This is not a matter of consultant attitude or buy-in. It follows mechanically from what is actually being measured and paid for, and it would recur with an entirely different set of consultants placed in the same structure.
Where this varies
The gap tends to be narrower in firms with more centralised commercial structures, where desk-level autonomy is lower and firm-wide priorities can be directed more forcefully, and wider in firms that have deliberately built a highly autonomous, entrepreneurial desk culture — often a genuine strength in generating individual desk performance, but one that makes firm-wide strategic redirection correspondingly harder. It also varies with how directly a firm’s new strategic priorities connect to individual consultant incentives; strategies that come with genuinely adjusted targets or rewards for the new direction see more actual uptake than strategies communicated only through firm-wide messaging.
This is sharpened further by how visibly desk performance is typically reported inside a recruitment firm. Individual billings, fill rates, and margin are usually tracked and displayed with far more granularity and frequency than any measure of contribution to a firm-wide strategic priority, which means the existing, familiar incentive is not just present but constantly reinforced and visible, while the new strategic direction — even when genuinely important — often has no equivalent visible tracking pulling attention toward it week to week. This asymmetry in visibility is itself worth naming as a separate, compounding factor alongside the incentive gap described above.
Market conditions add a further layer of variation. In a tight talent market, where consultants can place candidates relatively easily within their existing specialism, the opportunity cost of investing time in an unfamiliar new strategic direction feels especially high, because the existing work is both comfortable and reliably productive. In a softer market, where existing specialisms are themselves under more pressure, the relative appeal of a new direction can shift, not because the firm’s strategic communication has improved, but because the existing alternative has simply become less attractive by comparison — a reminder that uptake of a new strategic priority is not purely a function of how well it is communicated.
Where this shows up
People working in recruitment businesses will probably recognise this pattern first. The wider Professional and Knowledge-Based grouping and the other sectors page show how it presents elsewhere.
Questions worth considering
- If this firm’s strategic priorities changed tomorrow, what would actually change at the desk level, and what would simply continue unchanged?
- Are desk-level incentives currently aligned with the firm’s stated strategic direction, or do they point toward existing, familiar work instead?
- How would the firm know if a new strategic priority had quietly failed to gain traction at the desk level?
Your team is facing similar challenges?
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