In today's hyper-competitive business environment, organizations can ill afford to "mis-hire" – especially at the senior-most levels. Yet, bad hiring decisions are made all the time. These mis-hires are costly, disruptive, demoralizing and difficult to undo. The Globe and Mail spoke with executive recruiter Hart Hillman, senior partner leading the global technology search practice for the Bedford Group/Transearch International in Toronto, about finding Mr. or Ms. Right for those critical C-Suite roles.
How common are mis-hires, and why do they happen?
It is far more common than we are to believe. The problem is that if you go at it just by the seat of your pants, or hire intuitively … you have less than a 50-50 chance of having a successful hire. What we mean by successful hire is somebody who is there for at least three years and hitting out of the park, being successful in their roles.
That's not to say that you shouldn't have intuition when you hire or use emotional connection and all those intangibles, but without a process, you have less chance [of getting it right]. You have to bring rigour and methodology to the hiring process.
What are the costs of a bad hiring decision?
While it may be hard to quantify the cost with 100-per-cent accuracy … one of the most credible surveys was done in the book, Topgrading, by Bradford Smart. He postulated that the cost of a mis-hire to an organization ran to 24 times that executive's first year's compensation … taking into consideration such key elements as total costs of hiring, compensation, time in role, severance costs, mistakes, lost opportunities, morale, disruption.
Just ask Tim Cook, CEO of Apple, about the cost of a mis-hire. He recently hired John Browett from [electronics retailer] Dixons in the U.K. to serve as Apple's retail chief. Mr. Browett was relocated to California and he was awarded a $56-million (U.S.) "golden hello" over five years. It was Mr. Cook's first big hire [as CEO]. In less than seven months, he concluded that Mr. Browett was the wrong person for the job. A costly mis-hire indeed.
One of John Browett's more controversial moves at Apple was to reduce working hours in the stores, a move he later reversed. What else do you think went wrong?
The company should have done more due diligence around his style. I suspect they hired him based on his track record at Dixons. But Apple has a very strong culture, and people watch you from the moment you walk in the door …
Typically, people don't get fired for [lack of] skills and experience. Almost 90 per cent of the time, that's not the problem. People get fired for cultural or team misfit, they get fired for behaviour.
How do you avoid a mis-hire? Your firm uses a methodical approach that requires clients to do a lot of groundwork before they even embark on their talent hunt. What are some of the key strategies?
Part of what you have to do in a proper acquisition of talent is get everybody on side, you must get agreement up-front [from the key hiring managers]. What skills and experience are critical to the success of the role?
Define and measure culture fit; define and measure team fit; accurately and rigorously establish performance fit. This means that a scorecard should be developed for the role … around financial outcomes. What are the hard, objective scorecard elements that you [the prospective candidate] are going to be marked against? That scorecard is the same one you use when somebody joins an organization, and again in terms of how are they doing in six months.
What are the most common questions candidates ask? What do they want to know before committing to a job?
The most predominant questions, besides what does it pay and where is it located, are "Tell me about the culture – is it risk-oriented, is it cohesive, is it dictatorial? – and tell me about the team." Those are two critical components in helping a person understand what they are getting into with a new organization.
The company must know the answers, and they must be consistent answers … We bring people in from all over the world, and when they come in and speak to five or six or eight people at an organization, they all better tell relatively the same story, otherwise they are going to ruin the confidence of somebody coming in.
You are a strong proponent of what you call integration and onboarding to ensure that a hiring hit does not turn into a miss. What does this involve?
So often, executives are expected to perform from the first moment they walk in the door. We know from experience that the new hire will be under extreme scrutiny and is being constantly judged and assessed. We have several tools that we use, including coaching, mentoring and materials to ensure the onboarding process.
What do you do when you realize you have made a bad hire?
First, see if there is a way to try to fix it. But if you have exhausted all possibilities of coaching, mentoring, discussions, performance appraisal, all those things, and it is still not going well, then you have to move as quickly and as humanely and as professionally as possible for both parties …
You don't want to leave somebody who is a lame duck in an organization any longer than you have to because it affects the morale of everybody, the people reporting to them, their peers, other people in the organization who are looking to see how bad performance is handled.
The one good thing you can say about Tim Cook at Apple is that, although he made a hiring mistake, even though he got a lot of egg on his face, he took the courageous direction and remedied the mistake quickly.
Special to The Globe and Mail
This interview has been edited and condensed.