Making Critical Appointments

“40% of senior appointments fail within 18 months” *

I found this 2009 statistic from Heidrick & Struggles thought-provoking.

In2Search is a small, specialised search consultancy. Our numbers are different. 75% of executives appointed by us since 2007 are still working for our clients. But this is no reason for complacency.

We have looked afresh at what contributes to success for the appointments we have made. Whilst each appointment is a unique experience for the company and the individual, there are learning points.

1. High risk projects
2. Past experience as a factor
3. Alignment of expectations
4. Hiring…

4.1 Ambitious people
4.2 In narrow markets
4.3 Currently unemployed

5. Relocation and family issues
6. Managing after appointment
7. Conclusion – Expect More

1. Some appointments – perhaps all – are inherently risky

Search consultants are frequently engaged in more risky or critical appointments. It helps to have a professional from outside the organisation and its management structure, and who specialises in the relevant recruitment market.

Clients often make hires because they are looking to stimulate change. Typical examples include: bringing in new sales management to change the sales activity from farming to hunting, recruiting from a different sector or geographical market that the company wishes to target, or appointing a new leader to impart a fresh team dynamic or strategic direction.

Increasingly, we see companies struggling to manage succession within their slimmed down organisations. They have to choose between recruiting someone who is capable of succeeding now, but who may get frustrated while waiting, or a candidate who is not yet ready but one has to hope will develop into the successor the business needs.

Consequently many companies favour a conservative approach. Some insist on considering only candidates with a close experience and sector match, but miss out on finding someone really strong or acquiring new perspectives and ideas from other sectors.

Success in business involves taking well-judged risks, and an experienced search consultant should be able to contribute to understanding and managing these risks.

2. Past experience and performance is the best indicator of future success.

We recommend spending time getting to know the candidate. The more we learn about his or her past, the better able we are to assess their fit to our needs. It helps to get a number of different people to talk to the candidate during the selection process. This can surface new information, develop buy-in amongst colleagues, and prepare for success. Indeed, one of the benefits of engaging a specialist headhunter is that the method involves seeking recommendations from close colleagues with first-hand knowledge.

It is important to listen to what referees say. They may be selected by the candidate and inclined to give only positive comments. However diligent questioning by an experienced reference-taker can develop a more balanced picture to add to that gleaned directly from the candidate, including especially an understanding of their limitations as observed by previous colleagues.

3. Alignment of expectations

This is a really important success factor. Candidates must be aware of the challenges there are to face, what is expected, and perhaps what the previous incumbent has done or not done. Hiring executives must set realistic expectations and achievable business plans. It can be hard for an incoming executive to know what is realistic and achievable in an unfamiliar organisation. Stretch is fine, as is ambition and confidence, but all within reason. Otherwise we are creating the conditions for disappointment and failure.

However we should not be shy of aspiring to find candidates able to affect real transformation. Some excellent hires have been made when we have brought in someone with just the right background to achieve what was previously thought unachievable by those inside who lacked the skills or experience, or who were bound or constrained by prior negative history.

4 Hiring

4.1     Hiring ambitious and career oriented people – a double edged sword

“The cook was a good cook, as cooks go; and as cooks go she went” (Saki)

One school of thought is that we should always hire the most talented person available. They will challenge preconceptions, find growth opportunities and better ways to do things, and return much more than their cost to the business. If they should move on to another business within a certain period of time because they see no career development inside, then that is acceptable.

Others contend that they want to find someone for a particular role who will stay for an extended period rather than expecting to move on in the organisation. The function may be important, and the specialist knowledge and skill required may take time to acquire. To replace such an individual can represent a big cost.

Candidates should be clear what career development they can expect in the future, but casting any role as a ’dead end’ serves no one. As consultants we think it important to challenge the starting assumptions and be prepared to consider candidates who bring something more than the minimum.

4.2      Making recruitment decisions when the options are limited

Many searches we conduct for industrial companies are working within a disappearing skill and experience base. As companies do more with fewer people, become more specialised, introduce flatter structures, and provide fewer internal development opportunities, they find they need increasingly to look outside to fill skill gaps. Not surprisingly, other organisations in their sector are in a similar position.

As a result, the choice of potential candidates from such searches can be limited. Positions and responsibilities may need to be adapted, and more time allowed for induction and knowledge acquisition.

In these situations, we usually advise that recruiting people with a very narrow experience base – even if it fits closely the client’s sector – brings at best only short-term benefits. On the other hand, intelligent candidates with good qualities and experience from an adjacent sector can readily acquire the company-specific knowledge they need and bring with them valuable new ideas and perspectives.

4.3      Recruiting people who are currently unemployed

The stigma associated with a period of unemployment, especially for people in mid or late career, has largely disappeared. Indeed it provides professionals with the opportunity to reflect on their own interests, on what they bring to an employer, and to develop a realistic sense of their value in the market. They can be more open to change, self-development, and to relocation.

From the perspective of a recruiter, we can find already willing candidates with more experience, with realistic salary expectations, and with an appreciation for and commitment to their work which is sometimes missing from candidates who have enjoyed long-term security. It is important, however, not to make assumptions but to test out these attitudes carefully.

A clear risk is employing someone who may consider themselves overqualified and underpaid, and put their efforts into finding a better role. A close study of candidate behaviour during the recruitment process can provide clues to these attitudes and inform a judgement on the likely outcome.

5. Relocation, and other family issues

Relocation is another significant risk factor. The employment contract is not with the employee’s partner or family. However it is important during the recruitment process to build a picture of candidates’ domestic circumstances and how they will be affected by taking the position. It can be interesting to observe how different people handle their nearest and dearest when considering a career move. Many candidates withdraw from recruitment processes when first discussion with a partner reveals resistance to relocating. Other candidates need to be prompted to discuss it at home before the process goes too far.

One can never be completely protected from surprises, but it is important fully to explore the background circumstances.

6. Managing after the appointment

It is tempting to imagine that after putting all this effort into recruiting an outstanding individual we should let them get on with the job, and look forward to great results after the first 100 days.

Engagement with and support of the team around the new hire is essential.

In general, the right balance needs to be struck. Managers need to be supportive but not over directive.

We tell candidates that it is important to work for people who want you to be successful. This is one of the most important criteria when selecting an employer. So In2Search candidates often have this in mind during their interviews and company visits, and they will be expecting this impression to be confirmed after they have started work.

7. Conclusion – Expect More

Our clients typically use executive search only rarely. Some have rather low expectations going into a recruitment project because of previous negative experiences. They can be suspicious of the transactional, fee-oriented reputation of the recruitment business, and reluctant to trust their recruiter.

But when they do, they can be surprised to discover they are able to attract by search a quality of candidate that can challenge those around to reach higher.

Many commentators on current recruitment trends point out that in the future the most valuable recruitment partners for hiring executives and in-house talent managers will be the specialised consultancies with in-depth industry knowledge and experience.

Such firms can offer close consultant attention and the ability to identify candidates using both contemporary tools and traditional sourcing by recommendation. They have the credibility to develop direct relationships with sources and candidates, and can present the opportunity convincingly and in detail, then provide objective and experienced assessment of capabilities and fit.

For successful recruitment to critical positions, we recommend selecting a consultant who is prepared and able fully to understand the business. Take steps to create a trusting partnership, and remain fully engaged throughout the search process.

 

* The Economist 24th August 2013

“…an internal review by Heidrick & Struggles in 2009 found that 40% of the people it placed in jobs left within 18 months”

The statistic first appeared publicly at the time in a Financial Times interview with the company’s then Chief Executive Kevin Kelly who stated: “We’ve found that 40 per cent of executives hired at the senior level are pushed out, fail or quit within 18 months. It’s expensive in terms of lost revenue. It’s expensive in terms of the individual’s hiring. It’s damaging to morale.”

 

Andrew Milton-Thompson