The ‘F’ Bomb: How poor FIT dooms new executives to fail
When an executive who looks great on paper does not work out in practice, leaders are often left scratching their heads, trying to figure out what went wrong. Sometimes, they decide to do a postmortem of the recruitment process in the hope of identifying one tiny misstep that they can blame for the entire failed endeavor. Those taking this approach often ask questions like the following:
- Did the hiring team look carefully enough for the technical skills required to excel in the position?
- Did they take the time to gauge whether potential hires had sufficient prior experience in the industry??
- Did they fact check the candidates’ CVs, and was the referencing truly robust???
If the answer to all of these questions is “Yes,” then why did the newly hired executive ultimately flame-out? That’s the million-dollar question. Well, maybe not a $Million, but certainly a lot!
Did you know that 40% of new executives fail, and it’s mostly due to poor fit? Recent research by the Corporate Executive Board shows that making the right cultural fit will improve quality of hire by as much as 30%. For the average Fortune 500 company, this shakes out as a $16 million boost in profits and a saving, by avoiding rehire costs, of over $850,000. Those are figures worth paying attention to!
I’ve seen this time and again. A prospective client comes to us with a mess on their hands; they managed the process for hiring a key leadership role internally, paying careful attention to ensure they satisfy their checklist of skills and credentials they wanted from the hired candidate. Within a year after hiring the new executive, they are looking for a new replacement.
It seems counterintuitive, but very often internal human resources departments, as well as countless ineffective recruiters, and certainly many hiring managers, will overlook fit in favor of hiring candidates with glossy CVs and shining credentials. And while many will say they value ‘cultural fit’, they most often lack the skills and the tools to assess candidates for fit. The result is that, while the candidate seems to check all the right boxes, they later fail, usually with the first 12-18 months. They either leave for another opportunity that is more closely aligned with their values, style and aspirations, or they are terminated out of exasperation.
This is 100% preventable. There are many reasons for such a dismal outcome, and while a strong on-boarding program can alleviate problems early on, it is clear that cultural mismatch is costly on many levels.
Unfortunately, cultural fit is the most underrated, and misunderstood, facet of making a great hiring decisions. A newly hired executive may have the intelligence, business experience and financial acumen to perform well in a new role, but skills and experience are rarely the reason for failure.
Attitude/personality and conflicts with people contribute to nearly 70% of all executive failures. In fact, only 22% are due to lack of skills and capability.
For example, an executive whose credentials look stellar and lists many impressive metric-driven results on their resume may interview exceeding well. They may be quite likeable with an engaging personality, and the hiring team is enamored with those impressive metrics.
During the interview process, however, they never become fully aware of the executive’s operating style, which is authoritarian in nature, making all the decisions, and driving their team to the brink in order to exceed performance targets. This individual will fail, unable to effectively lead if hired into a culture where collaboration, innovation and work-life balance are imbedded into the core values of the organization.
Still, even when hiring managers say they are truly looking for the right cultural fit, it isn’t easy. As noted in recent research by McQuaig Institute, 65% of hiring executives report having a hard time finding a cultural fit when recruiting, a 14% increase over 2014.
This looks to be a direct reflection of the very tight talent market we find ourselves in 2015. Additional reports by the Conference Board and others corroborate these findings. In order to be successful in building the leadership talent in your organization, it is paramount to pay attention to this and other current trends in the War for Talent.
Building great leadership in your organization requires the proven science of assessing talent and understanding their specific leadership characteristics. It is the art of applying this knowledge to each specific position within your culture, and the objectives for that position, that is critical to successful leadership acquisition.
Fixing the Problem: Hiring for Superior Performance
First, we find most hiring managers cannot really define what an outstanding performance in the role actually looks like. If you want to hire superior talent you must first define superior performance. Traditional job descriptions and recruiters are typically focused on lists of duties and responsibilities, bullet points of required experiences, skills, and academics. But that does not define superior performance, nor ensure a successful hire.
It’s what you DO with what you HAVE that determines success, not what you HAVE.
Five Steps to Making the Right Hire:
- Define Outstanding Performance for the Role: Start by framing the position in terms of S.M.A.R.T. objectives; include both specific short and long-term objectives as well as the particular challenges, hurdles or road blocks that the individual has to overcome, or environment in which he/she has to operate, to achieve the job goals;
- Be Clear on the Year One Objectives for the Role: After defining the S.M.A.R.T. objectives, clearly and succinctly define the “must-have” year one objectives, which if met, will define success for the individual;
- Define the Skills and Experience for the Role: Now that you know exactly what you want this person to accomplish, be very focused and specific on detailing the ‘gotta haves’ and the ‘nice to haves’, but at the same time, be willing to flex if a candidate brings other relevant and overriding qualities to the table; I’ve seen client miss out on great talent only because they were too rigid and could not get beyond needing to ‘check the boxes’;
- Define the Critical Behavior Competencies for the Role: Clearly identify the key behavioral competencies you believe will be required to be highly successful in the role, in your company, in your culture; when doing so, integrate a “cultural fit” metric into behavioral competency criteria.
Having defined Outstanding Performance, in other words the ‘Performance Profile’ as well as the behavioral competencies that make up the ‘Behavioral Profile’, you now have clearly identified the Ideal Candidate. Now, onto Step Five!
- Measure and Assess Candidates’ Past Performance, Skills, Experience, AND Behavioral Competencies: This is the delicate blend of art and science that so many recruiters and hiring managers simply miss. When qualifying, interviewing and assessing candidates, your focus must always be framed in reference to the PERFORMANCE AND BEHAVIORAL PROFILE of the job. Using a scorecard for each candidate, assess how well potential candidates ‘FIT’.
Utilizing this approach in over 20 years in executive search has shown that the above steps, in tandem with a deep sensitivity and knowledge of how to apply the art to the science, will dramatically increase your ability to make outstanding hires, i.e., those that quickly assimilate into the team, can lead effectively, and ultimately make significant positive impact to the company’s success.
Many times, working with executive recruiters and leadership consultants enables companies to avoid the pitfalls of cultural mismatches that crop up down the line. Epsen Fuller Group’s Performance Based AssessmentSM utilizes a robust assessment toolkit and is customized to meet each client’s unique needs and accurately assess cultural fit during the recruitment stage. This approach provides clients with the insight and context they need to make smart hiring decisions that will not only ensure a hire is a good culture match for organization, but also one that delivers long-term success.
After all, wouldn’t you rather use the ‘F’ word as a competitive advantage, rather than an expletive?