Choosing the right Candidate – What I have learnt from top CEO’s
It is well known that the right Senior Executive placement can have an exponential impact on the profitability, and consequently the share price, of a company. Well published and celebrated icons such as Steve Jobs, Jack Welch, Lars Sorensen etc are examples of CEO’s that have lead companies with significant impact felt for decades.
Unfortunately, the reverse is also true, hiring the wrong leader can damage an organisation irreparably. A list of worst performing CEO’s, who have been directly responsible for decimating companies, could be compiled very easily ( I choose to omit such a list). There is no better environment than the English Premier League to see this concept unfold before one’s eyes in real time. A manager in the Premier League that has an under-performing team will inevitably be sacked. The Premier League manager graveyard for 2016 includes;
- Dick Advocaat (Sunderland)
- Brendan Rodgers (Liverpool)
- Tim Sherwood (Aston Villa)
- Garry Monk (Swansea City)
- Jose Mourinho (Chelsea)
- Steve McClaren (Newcastle United)
- Remi Garde (Aston Villa)
- Roberto Martinez (Everton)
How to ensure you choose the best
I work with hiring managers to help them source the best person for a particular role. We go through a thorough filtering process to ensure that we present a shortlist of the top Candidates. Then the company takes over, they are faced with the challenge of choosing the best Candidate for the job. How does a hiring manager choose the best Candidate?
The good news is that there isn’t one simple, scientific answer. In my experience through working with various companies, there are some very different approaches available. This is good news because the solution to choosing the best Candidate really does differentiate the good companies from the great ones that are able to hire and retain consistently great talent. The most successful and profitable companies invest significant time and focus in attracting, selecting, and retaining top talent. Here are some of the lessons I have learnt from working with great CEO’s to attract top talent;
1. Hire slow and exit fast
Hiring great talent should be thorough and take the time that is necessary. The simple truth is that the hiring process should never be rushed. There is always pressure to hire a Senior Candidate; there is a gaping hole in the corporate structure, the team needs leadership, top employees don’t enjoy uncertainty and will start looking to move, the next offsite strategy session will be held in 2 months’ time etc. In the face of such pressures remember to pause, hiring the wrong Candidate will set the company back significantly, much more than delaying the process by a few weeks or months. On the opposite end of the “HR Value Chain”, if it is clear that if an Executive is in the wrong position, a quick exit process will prove to be mutually beneficial.
2. How strategic is the hiring process?
When hiring Senior Candidates, discern if it the process is an “HR function” where the CEO conducts an interview as part of the process or is this a strategic process driven in partnership between Line and HR? I have seen CEO’s of great companies that prioritise the interview and selection process above almost everything else. They drive the process with extreme strategic importance and ensure that all the right stakeholders are involved.
3. The interview process
How many interviews should a Senior Candidate go through? Who should the Candidate meet? Should the Candidate meet key members individually or as a panel interview? Many great companies require Senior Candidates to meet many stakeholders, preferably individually (within reason), so that each member can have a chance to assess and evaluate the Candidates properly. Interviews should be properly structured to elicit the right outcomes and allow key stakeholders to compare notes afterwards. It is not uncommon for senior candidates to have north of 8 interviews before an offer is extended.
4. Assessments, do they add value?
I am afraid the Jury is out on this one. There are much polarised and diverse views on the value that assessments add to making the best hiring decision. However, many top CEO’s consistently rely on assessments as an important input into the hiring process. Recently, I worked with a CEO who would not advance a top Candidate for a Sales Director role because the assessment results were not top notch. The Candidate had jumped through all the hoops, met all stakeholders, and then the assessment results brought the interview process to an abrupt end. On the other hand, I have also worked with a top CEO that told me he never uses assessments to evaluate Candidates. He shared with me the reason; “I once hired a Candidate for an Executive position based on his positive assessment results and this individual was a complete disaster, I never used assessments again”. This CEO is one of the most celebrated CEO’s on the JSE, known for attracting and retaining the best talent. He runs a thorough interview process, ensuring that he interviews every senior prospective candidate, leverages his network extensively to get input regarding candidates and relies on his gut a lot. He has been hiring great talent for 30 years.
5. References, are they necessary?
References are routinely done by companies and recruitment agencies alike. Most references paint a very positive picture of almost all Candidates, but does this really add value? I have learnt that, in the end, it depends on how they are conducted. If references are done as a routine, tick box exercise, I would argue that they probably don’t add much value. However, I have learnt that references done by the CEO or hiring manager themselves tend to yield more useful results In addition, references contacted should preferably not be the one’s supplied by the Candidate. The market is “small” and one should leverage their network to validate the performance of a certain Candidate beyond their listed points of contact. An honest, frank 3 minute conversation with a person in one’s network regarding an opinion of a candidate is worth significantly more than an hour reference given by a referee offered the candidate on their Cv.
Putting it all together
A deliberate and strategic approach to attracting and selecting the right Senior Candidate is a significant lever in the hands of the CEO. A company’s share price and PE rating is not determined by the historical performance of the company but rather by the confidence the market has in the management team to continue to deliver on their strategy. Consequently, choosing the right senior hire should become and remain a top strategic agenda for the CEO and Executive team as a whole. It is critical to get it right, there is a saying; “walk slowly initially so that you can run fast later”.