Why is it that some 40% of new CEOs are fired, or “retired,” within their first 18 months, and 64% of them never make it to their fourth anniversary on the job?
Virtually all of our business at KeyStone Search with founder/CEOs happens after they’ve had one or more failed hires for the same position. These clients are reluctant to spend dollars on executive search and only take the plunge after they understand first hand the significant costs of hiring the wrong person. They have experienced the costs of lost momentum, stunted growth of the business (or losses, worse yet), direct severance package costs which can be one to two years salary and benefits and staff turnover due to stress created by the failed executive.
These CEOs understand the business can’t afford another hiring mistake but don’t know where they went wrong. They only know that the person failed on the job. The individual had a track record of success, was poised and confident, and had all the “right answers.” Therein lies the beginning of their problems… they didn’t ask the right questions! The CEO probably didn’t probe deeply about the things that matter - values. They didn’t ask about values or didn’t know what values they were looking for! Values such as honesty, integrity and work ethic are meaningful, yes, but more important are the values that are unique to your organization. Many entrepreneurial leaders haven’t defined the unique core values that drive their company’s culture. Having the right skills and experience and being successful in one company only translates to success in another company when there is a match with that company’s values and culture.
Nat Stoddard and Claire Wyckoff are the authors of The Right Leader, Selecting Executives Who Fit. They suggest that to ensure that a leader fits, two key changes to the traditional selection process must be introduced. The first change is to rigorously define and measure the organization’s overall culture. The second change is to carefully assess the final candidates’ characters–their values, beliefs and business philosophies. The mantra “If you can’t measure it, you can’t manage it” applies to culture and character just as well as it does to Six Sigma or Lean management programs.
The recession will be over some day, but the world is only getting flatter, and the business landscape more competitive. Do whatever it takes to understand, identify and create a common language to describe your unique culture. Then, dig into more than candidate’s skills and track record. Don’t wait until the next time you’re losing sleep over a bad hire to think about adding values to the hiring equation.
Bob Schoenbaum