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September 17, 2019

The Risk in Hiring

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In his book, The Frontiers of Managementbusiness guru Peter Drucker wrote the following about people decisions: “No other decisions are so long lasting in their consequences or so difficult to unmake. And yet, by and large, executives make poor promotion and staffing decisions.” In fact, Drucker observed that the “batting average” of executives in this area is no better than .333, with a full one-third of their decisions qualifying as “outright failures.”

Though we might prefer that he were wrong, we know Drucker is probably right. Far too often you swing and miss when you make a new hire. Far too frequently, you call the references, you double-check the facts, and you still get it wrong. They interview well and appear presentable, but show up for work and turn out to be a complete loon, a horrible fit, or seemingly incompetent.

How does this happen? You would never hire someone with a bad resume. You would never call back someone who cried hysterically during the interview. But therein lies the complexity of the problem. These aren’t the people that you are hiring. You are hiring the individual with the impeccable resume and the impressive references. You are hiring the individual that was well spoken and polite. So how is it still happening? Are people lying on their resumes and faking it during the interview?

Maybe, but I think it is more likely that most individuals hired for leadership and management positions really were good at their last job. They really did well in college and really are proficient in all things Microsoft Office. Unfortunately, though, proof of historical competency simply is not a guarantee of future success or fit within an organization. What, then, is?

The Supporting Cast

During the 90s there were few television shows that even approached the popularity of Seinfeld. It was more than just a successful sitcom; it was a cultural phenomenon that seeped into our everyday lives. I imagine it was this impact of the show on popular culture that made television executives confident that new shows featuring Seinfeld cast members would be similarly successful.

Almost every cast member, in fact, got their shot and the results were largely disastrous.

Consider Jason Alexander’s Bob Patterson. Forget for a moment that you have never heard of the show. I had to Google a clip myself to verify that it actually happened. Why didn’t it succeed? George was one of my favorite characters on Seinfeld. His self-deprecating humor and constant professional and personal failures made him a sort of “lovable loser” that everyone could relate to.

Seeing him in his own show, though, made one thing very apparent. The character George was funny because of the supporting cast assembled around him. The supporting cast— other actors, the writers, and the situations—allowed him to find his comedy sweet spot. The producers of Bob Patterson were never able to recreate that environment and enable Alexander to succeed.

No one’s success, whether on television or in the workplace, is purely a result of their own efforts. There is always a supporting cast that creates an environment that allows success. Some people only succeed under a certain type of management or with a certain type of support structure. For some, it may be a particular incentive program, work schedule, or organizational structure that enables success.

For those making hires, it is critical to understand as well as possible both the support structure under which a potential employee thrived in the past and the support structure within your own organization. This doesn’t mean that you need to alter your organizational structure for each new employee. It does, however, mean that you need to consider the differences between a potential employee’s past supporting cast and that of your organization. Are the differences superficial issues that are easily managed? Or are they fundamental differences that may hinder success?

The Obvious Hire

The most intelligent, most talented individual isn’t always the right hire. Do you need smart people in your organization? Of course. Do you need talented people? Absolutely. More than those characteristics, though, you need people who fit the critical needs of your organization.

University of Arkansas football fans learned this lesson in a particularly acute and public way a few years ago. After losing their head football coach to a myriad of personal transgressions, the Razorbacks found themselves in college football’s “no man’s land.” It was the middle of spring and they had no coach.

Enter John L. Smith, a former Razorback assistant who had left months earlier to take the head-coaching job at his alma mater, Weber State. On paper, Smith seemed like a perfect solution. He was an assistant on the previous year’s staff. He had years of head-coaching experience and the players loved him.

So how did it work out? In a word—tragically. A team with national championship aspirations went 4-8 and lost to Louisiana-Monroe at home. The Arkansas season was the sports equivalent of the Bob Patterson show.

It would be easy to say that Smith’s tenure was a failure because he simply wasn’t a very good coach. However, Smith’s success at other institutions makes that at best an overly simplistic explanation. The talent of the team alone should have overcome any deficiencies in Smith’s skills. What, then, happened?

Bad Trade

The Arkansas athletic department made a critical mistake in the hiring process. They misjudged their most important need. Because of the talent of the team and the coaching staff in place, they determined that continuity was more important than strong leadership. They hired a coach they felt could act as a caretaker and maintain the status quo. In reality, because of the turmoil of the offseason, continuity was never a viable option. What they needed was leadership. What they needed was someone who wasn’t attached to the old mess, and who could plot a new course for the organization and lead in that direction.

Few, if any hires, will be perfect. And frankly, obsessively searching for that perfect hire— what recruiters call the ‘purple squirrel’—is rarely as fruitful an endeavor as we might hope. In reality, every hire is a trade of sorts. Because no hire will have every attribute you desire in exactly the right proportions, you trade one set of attributes and talents for another. Knowing your critical needs allows you to make the best trades for your organization.

Closing the Gap  

Every new hire comes with a certain amount of risk. There will always be a gap between historical competency—what someone did in the past—and future competency—what they can do moving forward. But many of the things that comprise my brag sheet from the past might not translate into my new job. We act like it always does but every boss or owner knows it doesn’t always happen. There is a risk gap.

Every time I get a resume I am reminded of a meeting I had with the CEO of a large financial institution in the deep south. His company was among the tops to work for every year and he had the street reputation as being remarkable in his hiring of senior leaders. His secret? He said: Learning how to read below and between the lines on someone’s resume. In other words, finding the things that create the gap between their past and their future, and filling it in. Or at least be fully aware of those going into the tenure.

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