The high turnover in President Trump’s White House staff illustrates that hiring the right person for the job does not come naturally even to the most accomplished, entrepreneurial executives. In fact, success in deal-making and wealth generation can lead to over-confidence in one’s ability to make good selections. Yet without the right team, the leader is powerless. This is the reason Hiring Right is the second of the Six Engines of Entrepreneurial Ascent®.
The President could take comfort, however, from the fact that many other leaders and organizations who should have known better have had an equally hard time getting it right. Here are just two examples of perhaps the worst hiring decisions major organizations have ever made.
The August 17, 2005 Los Angeles Times described one Fred DiBritto who had been hired through an executive recruiter for a six-figure a year administrative job at UCLA, based upon ostensibly excellent credentials and great interview skills. In reality, he was a five-time convicted felon who had faked his way into a number of jobs, including that of Catholic priest at a parish in Southern California, where the parishioners apparently loved him! UCLA fired him after being alerted by LAPD, whose staff read the story of his hire in the newspaper.
Apple Computer was in deep trouble in 1995, with the overwhelming victory of PCs and Microsoft Windows in gaining worldwide acceptance as the standards for business. Steve Jobs had been pushed aside, and Gil Amelio was recruited by the Board and hired as Chairman to turn the company around. Though a highly accomplished executive, Amelio was soon seen to be a poor fit for Apple’s culture, and he was forced out only 15 months later, with a rich severance package that Apple could ill afford. Upon his departure, according to the Wall Street Journal, a spokesperson for one of Amelio’s former employers said that if Apple Board members had simply called to check references, they would have been told what to expect.
What can you do to increase the odds that your executive hiring is effective?
- Hire for Character and Fit, as well as Competence. Functional skills and experience constitute “Competence” which is the easiest to screen for and is often the sole criterion upon which candidates are chosen. Yet executive failure in the job is rarely based on a lack of competence. It is usually because of the other two criteria. “Character” refers to work ethic, professional honesty, absence of hidden agendas, the courage to speak his or her mind, and enough humility to admit he or she does not have all the answers. It is also a part of effective leadership, insofar as the latter requires respect for others and a strong drive to help them learn and grow. Determining “Fit” requires first being clear on the culture of the company and assessing each candidate’s work style and priorities. At Apple, Amelio’s reported complaints about lack of reserved parking spaces for executives were taken as a failure to appreciate an important symbol of the company’s egalitarian culture.
- Look for Achievement Motivation. David McClelland of Harvard claimed there are three motivational factors impacting leadership, Achievement, Affiliation, and Power. All people have all three in varying degrees. McClelland’s studies showed that for the most effective leaders Achievement (the desire to accomplish tasks and achieve goals) was their strongest driver, with Affiliation, or concern for people, the next highest. Leaders for whom Affiliation is the highest factor tend to be overly concerned with being liked and consequently have difficulty making tough decisions. They often end up being neither respected nor liked. Power motivation often shows itself as excessive concern with status symbols and trappings of power, including very high compensation and control of others. Ask yourself, how much relative emphasis does a candidate’s resume place on a) accomplishments, i.e., bottom line results; b) affiliations with positions and employers; or c) titles, promotions, degrees and honors?
- Manage the Recruiter. It is a common mistake to place excessive confidence in professional recruiters. While their services are often invaluable, they cannot understand what is needed as fully as the hiring company. It cannot be assumed they have uncovered all relevant background information, as both examples above of hiring disasters illustrate. An internal executive, usually in HR, needs to provide clear direction to recruiters, hold them accountable, encourage their feedback and recommendations, and to provide support. Recruiters also need to be told not to waste interviewers’ time with the wine-tasting gambit of serving the tourists inferior samples first, followed by the vintage actually for sale which will seem exquisite by comparison. Only credible, highly qualified candidates should be referred.
- Hone Your Interviewing Skills. Interviews are the most widely used screening method, yet are shown by studies to be the least reliable. The reason? Most interviewers have not acquired the needed skills. This is akin to a mortgage loan underwriter having no skills in assessing credit worthiness. Many entrepreneurs spend most of the time in an “interview” selling the candidate on the company. To sharpen your skills, consider a training course. I recommend Paul Falcone’s book, 96 Great Interview Questions to Ask Before You Hire.
- Remember, the Purpose of the Interview—primarily to obtain information, and only secondarily to provide it. It is the time for probing. To cut through canned responses from applicants, interviewers should seek specifics. For example, all of the executive candidates I have interviewed over many years claim to be “team leaders.” When asked to describe how they achieved something through team leadership, however, surprisingly few can provide a concrete answer. While it is important as an interviewer to make a good impression, if you are overly concerned with being gracious (Affiliation motivation), you are setting yourself up to be taken in. Many executive job-seekers have had extensive coaching on how to skillfully handle standard interview questions and how to take control of the interview. Unfortunately, those who are best at landing a job are not necessarily the best at doing the job!
- Don’t Hire in Desperation. As in negotiation, so too in hiring—the person in the strongest position is the one who is willing to walk away with no deal. Too often the decision to hire is made too late, few quality candidates are actually generated, and the job needs to be filled immediately. This is a recipe for an expensive mistake. Good executive hiring begins with strategic and human resources planning, along with existing staff development. In a crunch, consider a temporary executive — even temporary CEOs are available. Look for enthusiasm and commitment. Be cautious of executives who accept an offer but are unwilling relocate—it may be a good sign they are not sure the job is for them.
- Compare Notes from Multiple Interviews. CEOs frequently request that many people individually interview candidates but fail to compare notes afterwards. While it is reasonable to expect than any individual interviewer will mention any “red flags” without being asked, it is the joint evaluation of all interview results that can be the most revealing. I was once part of a team that interviewed a candidate, in a series of one-on one interviews. We met later as a team to discuss impressions and discovered that in each interview after the first that she had quoted a significantly higher number than before for her previous salary. She was eliminated for lack of honesty. In other cases, one interviewer’s gut feeling can be confirmed or disconfirmed by a more specific observation made by another.
- Discuss Equity Issues. This factor is really a part of assessing fit, but is worth emphasizing for privately held companies. Many executives from the public sector join a privately held firm in the hope that eventually they will be enriched by an IPO. Unless you clearly intend to take the company public soon, let them know that partial ownership is not available and see if that is acceptable. If you are considering alternative incentives such as phantom stock, let them know that you intend to provide competitive rewards. What you do not want is an executive who is continually urging you to go in a direction that serves their agenda but not yours.
- When Executives Leave, Find Out Why. Many people are surprisingly candid in exit interviews, if only they are asked why they decided to leave. Insight into these factors will help you do a better job of screening candidates—or reducing turnover. In a 2015 ExecuNet survey, only one out of three executives expects to stay at their firm for another 12 months. The other two out of three are thinking about leaving or preparing to depart. With the improved economy since then, one can extrapolate even more worrying numbers. At a minimum you need to plan to replace 50% of your executives in the next year. What is your recruiting plan? How can you improve your executive retention rate?
If you would like a second opinion on your
- Selection and management of executive recruiters,
- Executive Retention
- First 90-day planning
- Executive alignment and communication
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