Selecting C-suite executives is a major responsibility. Yet, per industry experts, unsuccessful executive hiring is the single biggest problem in business today. In a recent survey of 180 chief HR officers, more than half of respondents said they had observed at least one failed executive-level hire within the last five years. Some estimated that as many as 40 percent of high-level hires during their tenures had imploded. The collateral costs are staggering:
- Payouts in the $60 million to $100 million range have been experienced to release failed CEOs.
- Direct costs alone can reach $20 million. If indirect costs such as missed business opportunities and suboptimal operations are factored in, the impact of a CEO downfall can cost a company more than 30 percent of its stock price.
The leading reasons behind bad executive hiring decisions include:
- A need to fill a position quickly.
- A lack of reliable talent intelligence.
- Poor sourcing techniques.
- A shortage of qualified recruiters to facilitate the process.
- Failure to thoroughly check references.
- A weak employer value proposition.
Use these strategies to avoid such pitfalls and effectively make executive hiring decisions:
Define your ideal candidate.
The first step in successful executive hiring is developing an accurate understanding of the traits you are seeking in a candidate. Profile top contenders by credentialing, cultural fit and personality.
- Do not make decisions based on preconceived notions. Use data analysis for maximum objectivity. Avoid dysfunctional decision-making. For instance, repetition bias occurs when hiring teams begin to believe the most repeated messages about candidates versus the most valid ones. If a CEO continually brings their favorite people before a board and repeatedly recommends them, the board begins to accept their statements with blind belief. This can lead to a disastrous bandwagon effect.
Target your search.
Use all the resources at your disposal to pinpoint top talent. To achieve this, start by turning to your professional contacts, your recruiter and your current high-performing employees.
- Build relationships with passive candidates. They generally need more coaxing and hold greater negotiating leverage, but the end results are well worth the investment. Passive job seekers are 33 percent more likely to want challenging work and 120 percent more likely to want to make an impact once hired.
Plan and prepare for the hiring process.
Develop the strategy you will follow to effectively evaluate candidates. Be prepared to dig as deeply as necessary to get the answers you need.
- Ask behavioral questions that require specific responses based on actual experience. Evaluate candidates on consistency, transparency, proficiency in your industry, and performance efficiency. Their responses should showcase their functional skills and self-management strengths.
Take your time.
Avoid cutting corners or rushing your hiring decision. Focus instead on thorough candidate assessments. This often means interviewing the best ones more than once. It always means checking references, deep diving into backgrounds and pulling out all stops to ensure skill and cultural alignment.
- Keep your selection process as objective as possible. Focus on facts and data. Performance histories and presentations provide only a limited glimpse into a candidate’s potential. Integrate formal assessment tools into your selection process.
Do you need expert advice in finding your successful executive-level hires? Contact the BrainWorks team and benefit from resources like our proprietary Talent Evaluation Process – a model based on our belief that superior talent is the number-one driver influencing ongoing organizational growth. Read our related posts or contact us today to learn more.