Lately I’ve been talking about leaders and what differentiates the best from the rest with the cost of bad hiring decisions, which easily reach thousands of dollars. (Need quick proof? Try this calculator from ADP). If you search for data on the cost of a bad hire you’ll find it: 6 to 12 times the hire’s compensation is just one estimate I came across recently. Ramifications beyond cost radiate out into the marketplace. You don’t even want to think about what your firm’s bad hires have cost you in market repute and customer confidence.
We all know the usual drill regarding filling an open executive position. The board or other C-suite execs update a job description. Someone in the Human Resources department researches what similar employers pay in salary and benefits for that type of work. Word goes out through various channels—social media, headhunters, traditional advertising—and here I’m hoping the hiring company has done a reasonable job building its employer brand. While HR picks the truly qualified candidate resumes from the applicants, decisions get made about the interview process, and the executives who’ll be part of that process start trying to find room in their calendars for the meetings to come. References get checked and short lists of candidates start visiting HQ for interviews.
All good so far. But here’s where I feel too many hiring processes go off the rails. You meet a candidate in one extremely structured setting. We’ve all rehearsed that dance, most of us from both sides of the desk, and its no surprise that anyone above average enough to get invited to interview is most likely going to perform well. And that’s just the problem: You interview actors going through a script. You have very little opportunity to deeply know an individual before the typical final steps in the hiring process take place, selecting a candidate and finalizing the terms of the engagement.
I suggest that three actions could radically improve the outcome of this dance.
1. Share a Meal. Is dinner with the executive candidate part of your interview process? Where I come from—I was born in Iran—a meal is never just a meal. It’s a social occasion in which people can relax and get to know each other better. For any critical role in your company, include a meal in the hiring process. During a meal you get a chance to know the individual—not just his or her professional demeanor, but the personal behaviors that reveal more about what you’ll get if you add this person to your team.
2. Meet their valuable relationships. I’m referring to the “2AMs” in your executive candidate’s life—the people who’ll take her call at two in the morning, the people who would give immediate access at any time, no questions asked. Most important among the “2AMs” is your candidate’s life partner. Call it by any name you like–spouse, significant other, dyadic love unit—the point here is that the way somebody treats a significant other is a telltale sign of how they feel about relationships. Does your candidate show respectful, courteous, kind behavior toward his or her partner? Or do you see condescending, belittling behavior toward the person who is supposedly a soulmate? Behavior is very consistent. Observable behavior gives you the best indication of that person’s natural state. Not the act you saw in the interview, but who he or she is by nature.
3. Travel together. Mom always suggested, “If you want to really get to know somebody you’re dating, travel with them.” Like just about everything she told me, this is worth hearing. While on a trip together, you get important clues about your travel-mate’s innate and learned behaviors. You see how they organize their material as well as their time. You see how well they deal with adversity, what stresses them out. Do they keep a calm demeanor throughout ups and downs? When you get to the hotel and the reservation isn’t right, do they go off the deep end with the front desk clerk or do they stay positive? Do they pursue achieving the desired outcome, not assigning blame?
When we interview executive candidates, most of us do an excellent job of vetting education, experience, and perceived fit in the role we’re trying to fill. However, we do a lackluster job in determining candidates’ ability to quickly identify and intentionally build great strategic relationships. We learn nothing about their ability to take a long view on relationships, their talent for nurturing and sustaining key contacts both inside the organization and outside of it. We could learn a lot more about the executive-level candidate if we took the time to eat, meet, and travel together.
But even after if you assiduously include these three actions in your senior-level hiring practices, it’s still possible to get a poor fit. For that reason, I recommend that hiring organizations bring their new executive hires in as a consultant, rather than an employee, for an introductory period of three to months. As Dan Pink says, it’s a Free Agent Nation, right? Your new hire is as interested in getting this right as you are. Bring her in, put her in her new role, with all applicable authority and responsibility. I’m convinced, positions matter less than performance. Titles and employment terms are not the point here: “dating” is. Tell her, “You own the function. Show your stuff. Run this department, or division, or whatever.”
During this trial period, you and your new hire get to “date.” You explore if this is a fit. I’m assuming you’ve assessed technically competence before offering the position. What you’re looking for now is the manner in which they build relationships. You can always teach somebody about a new market, market dynamics, key players. The learning curve differs, but any qualified executive candidate can be taught those aspects of the business and its market. What can’t be taught is how to dramatically change individual behavior. When you hire an adult, you get the behaviors they’ve developed up to this point, period. When it comes to behavior, the first 30 days will give a pretty good indication of what you’re going to get. After 90 days you should know exactly what you’re going to get. You have to determine: Are these the behaviors we want? Will this individual contribute to sustaining our company culture and nurturing our strategic relationships?
You—the hiring organization—are on trial during this period too. It’s worth observing how you stack up at measuring, motivating, compensating, and inspiring the behaviors you prize. If you cannot give your firm an A, then consider what you need to change.
If the candidate gets less than an A grade, you have to consider: is this person worthy of an investment to try to change? Is she or he coachable? On the flip side, is the individual so desirable it’s worth adapting the organization to find a role for this person??
These are tough questions. If you are uncomfortable with your answers, quit trying to make a bad hire work out. It’s time to determine how quickly, within legal and ethical limits, you can cut your losses and move forward with someone else. Because in my experience, situations involving bad hires tend to get worse before they get better, and the cost and damage involved cannot be avoided or undone.
Hire well, and everything else your organization strives toward will come more easily. Hire poorly and the inverse is true. To beat the staggering cost to business of poor hires, find ways to eat, meet, and travel with your executive candidates.
- Make time for a meal with each candidate, to get a better chance to know them and assess their personal behaviors.
- Meet each candidate’s significant other(s). Spend sufficient time to assess the behavior and values they display in close personal relationships.
- Travel with each candidate, to judge resiliency, organizational skill, and emotional maturity.