How to pick the right man for the job
22 April 2016
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Hello and welcome to another edition of Old Mutual Live Business, my name is Chris Gibbons. So, you think you’re a good manager. You manage to hit your targets, you manage to keep your budget under control, but here’s a question for you.
What is your success rate when it comes to hiring good people? If you’re like the rest of us, my guess that it’s probably around 50%, hopefully a little bit above that. But chances are it won’t be by much. Certainly that is my own personal experience and it’s what many of the business leaders I’ve spoken to down the years tell me.
So, is there a way of improving that strike rate? Finding better people perhaps or just as importantly, a way of weeding out the unsuitable candidates before you even offer them a job. After all, in the modern world, it can be exceptionally difficult and costly to ditch a non-performer. Rather not employ them in the first place.
We’re joined now by someone who has extensive experience in this area, especially when it comes to finding candidates for the board or the executive committee. He is Chris van Melle Kamp of Spencer Stuart in Johannesburg. For those of you who may not know Spencer Stuart, suffice it to say, it is one of the world’s leading executive search consultancies. Also known in the vernacular as Head Hunters.
Chris van Melle Kamp, thank you for joining me on Old Mutual Live Business. First off, when it comes to better hiring, the basics don’t change, I wouldn’t think. Whether it’s at the very top of the company where you operate or even at the very bottom?
Don’t neglect the basics
Chris van Melle Kamp: I think that you’re absolutely right, there are some fairly ongoing basic issues that have got to be focused on and one must get right. But there are increasingly, in the last couple of years, new nuances that have come into play.
Mainly because we understand more about what makes people good, what makes them great executives and we understand more about how to really identify the qualities that we’re looking for and I would say that one of the basics, to start with, is to really understand what you want this person to do.
CG: Before we go deeper into that, it is worth noting that the consequences, of course, of getting it wrong at the very top can be rather more alarming than say, and I mean no disrespect to anyone, getting it wrong with say a filing clerk.
CVMK: Yes, I think the consequences of a bad hire at the top are dramatic and that can have an impact on share price. It can have an impact on reputation. It can have an impact on the top team if things go wrong.
Where to start
CG: How do you begin, where do you start?
CVMK: I think the most important thing is to really understand exactly what you’re looking for. I think very often when companies go out into the market and look for a new CEO or a new CFO, they haven’t always fully understood what they really want this person to do. More importantly, what they want this person to do going forward.
It’s one thing understanding what the current person has done or what the current role requires. But as we know, businesses change, businesses shift, strategies shift and strategies change. It’s important to try and align people coming into the organisation as much as possible to the current and future strategy of the organisation.
CG: Are there any warning signs early on Chris, that the person sitting in front of you is not up to scratch?
CVMK: Not always and I think this is what I refer to earlier in saying that there have been changes and nuances of the work that we do. I think very often and we know that in the past we’ve instinctively felt that somebody was going to be great at a new position. Then found out three or four or five months later that they were an absolute disaster. I think the root cause of those mistakes has been two-fold. One is a lack of real assessment, proper assessment and a lack of aligning the person to the culture of the organisation.
How to do a proper assessment
CG: Then how do you go about doing what you call a proper assessment?
CVMK: Well, there are a variety of tools in the market, many different psychometric tools are available. Spencer Stuart uses a very specific toolkit of our own that we’ve designed for our purposes. But there are many very good assessment methodologies that can be used to identify the person’s executive intelligence, their emotional intelligence, their skills. One can really get a very good idea of what a person is capable of currently and down the line if you use the right assessment methodologies.
CG: So way beyond the basic CV.
CVMK: Absolutely. The basic CV is just the start, it’s merely the start of the conversation.
Is a track record a good indicator?
CG: A brilliant track record, no predictor of future success or is it?
CVMK: It is and I think it’s an important component of the assessment. I think obviously we look at what people have done, where they’ve been successful, how they’ve been successful. The kinds of drivers that made them successful in the various roles that they’ve taken on. Clearly this was also linked to their reputation in the market.
We take references, we speak to people who have worked with them, we speak to people that they have reported into. I think those are really important parts of the overall equation is that past record. It’s a clear indicator of somebody’s capabilities, but it’s not necessarily an indicator that they’re perfect for this role.
CG: Before we come to the alignment with the culture of the prospective employers company, academic qualifications, helpful maybe. But I think we all know many top business leaders who barely made it through high school.
CVMK: I think particularly in the emerging markets we find a lot of really incredible general managers, chief executives who have really come up through the hard knocks. Have not necessarily gone through an academic qualification programme. But what we do know is that in other countries around the world, particularly in Europe, academic qualifications are regarded as being important.
It depends on where you’re operating and what the reigning demand are in the market in which you operate. As you get more senior and as you move up the ranks. Those academic qualifications become less important, I think. They’re good, they’re nice to have, they’re indicators of certain levels of academic achievement and dedication, but it’s not a key driver for us.
May tick all the boxes – but not for you
CG: There you have, sitting in front of you Chris, someone with a brilliant track record who has the academic qualifications. Whose references have all checked out, excellent CV, all of that stuff. But there’s no guarantee that candidate will align with the culture of the prospective company.
CVMK: Yes, and this is a really important piece of the puzzle. We’ve done some really interesting research over the last couple of years in Spencer Stuart globally. We’ve really looked at some of the key issues that impact on the introduction of new executives into an organisation.
We also looked at some of the areas, tried to understand why certain executives that had been appointed to senior roles failed. As you know, one often learns more from understanding failure than understanding success. We found that in more than 60% of the cases where we looked at failed appointments, it was because of a culture misalignment with the organisation that they had moved into.
What we’ve developed and I know there are a number of organisations that are working on this, but we have a particularly powerful tool which can actually measure the culture diagnostic of an organisation. Which measure the cultural alignment between the individual coming into the organisation and the culture of the organisation itself.
CG: You really have to have an understanding of the organisations culture before you can even think about hiring someone.
CVMK: Yes, it’s the first time that we’re actually now in a position to actually measure these things.
CG: All well and good at board level, at ExCo level, at Spencer Stuart level. But this is a very expensive level, a very expensive process, in the middle of the company. What advice would you give to the mid-ranking executive?
CVMK: When hiring?
Hiring down the ladder
CVMK: I think at the mid-levels, many of the same principles apply. Obviously one might want to scale down on some of the high level toolkits that we use, but the same principles apply. Understand exactly what you want from the person. Assess them properly. Have a look at the cultural alignment because there are different ways of looking at that. But really understand that as best you can.
Then I think in terms of middle managers, you’re probably not that focused on their future capabilities. You really want to understand what they can do now, what kind of track record they’ve got. What kind of impact they’re going to have in the short term, coming into the organisation.
CG: Again, do as much homework as you can, talk to people they’ve worked with before. Find out if they’re potentially toxic in any way, do your homework.
CVMK: Yes, and I think the other component that we often forget is that people move into organisations that they feel attracted to. They like to work for great brands, they like to work for organisations with a great reputation and try and find out from the person why they are interested in working for you.
There’s a requirement, but then there are various push and pull factors that make people happy or unhappy in an organisation. It’s in those kind of conversations that you can often find out whether the person is really the right person for you. If they understand why they’re actually looking to join the organisation.
CG: Very difficult to do at ExCo level, at board level, but is there a case to be made further down in the organisation Chris for longer probationary periods? I know our labour law in South Africa doesn’t like that.
CVMK: Yes, I think probation periods are very helpful, they give both parties an opportunity to sort of scope out whether this is really working or not. I personally quite like the idea. I think it offers a bit of a safety mechanism, but I don’t think long probation periods are really that effective. I think within the first 2-3 months you should know more or less whether this is going to work or not.
CG: Sound advice there from Chris van Melle Kamp of Spencer Stuart in Johannesburg, Chris, thank you for joining me on Old Mutual Live Business.
CVMK: Pleasure, thank you Chris.