Great hires / Bad hires: How to Tell the Difference Before You Make the Offer! ~ July, 2009
You hire someone. They don't work out. They leave. What is it that you remember and say about them in the past tense? It's rarely the fact that they didn't know how to work the numbers, or that they couldn't put the pieces of a widget together. No, it's almost always their soft skills that generate conversation-their personality, character and values.
Two recent scenarios from my personal experience serve as good examples: A multi-generation family-run, team-oriented company in Michigan was about to hire a sales person who had all the skills needed to fill the role and an impressive track record. Before making the hire, they wisely chose to get an assessment of him. In an interview that was part of the assessment, the candidate went into a rage when questioned more deeply about his background. His temper was missed in the normal interview process. Discovering this major flaw before they made the mistake of hiring this key person saved the company hundreds of thousands of dollars.
Another company was not so careful and made a bad hire. This company had strong values: everyone counts; everyone is part of the team; decisions are made by consensus. When a candidate with a strong hierarchical bent was hired, he lasted just thirty days. The disruption was significant, as were the costs.
A PEG 's world
When a private equity group buys a company, your strategy is short-term change through organic growth. You may purchase larger companies for their great management teams and proven track records, simply replacing the CEO with one who can lead the company in the desired new direction. And you may put together an entirely new management team that's experienced in change management to lead smaller companies. In either case, hiring bold leadership is required to meet your investment goals. Why bold?
A successful CEO in a typical corporate situation can change companies and adapt well, given a little time: get to know the team before being hired, maybe replace a few team members over the course of a year or so, build a support system, think about some new initiatives....
Contrast that scenario with the new CEO of a large-company PEG investment who touches down in a new culture with no internal support and no knowledge about where to get information - and is immediately tasked with setting a new direction for the company. Or, the CEO of a smaller portfolio company who takes on an entirely new management team that hasn't worked together before and yet has to set a course of change for employees who are probably resisting every step of the way.
Change is difficult in any situation, but leading change in a portfolio company takes a leader with special fortitude, flexibility and judgment-someone who is bold.
Go beyond the tactical
Most companies tend toward the tactical in their hiring practices, focusing on long lists of competencies, specific experience required and other hard skills. These are important, of course. Equally important is how the person you hire will fit into your culture, their soft skills. No one would list drama queen, insensitivity, trouble meeting deadlines or poor ethics as qualities they'd like to bring into their companies. But, by not checking out the soft skills, those are exactly the traits you risk hiring. You may also lose your A-players when you make bad hires; they don't have to tolerate a difficult work environment. As many companies have experienced, the costs and other consequences of a bad hire can be extreme.
Begin with the end in mind
The solution? Begin with the end in mind. Start by thinking about the soft skills that will fit into your organization; then consider the hard skills necessary for the job. Culture, then candidate.
Your company's values should serve as the foundation for hiring decisions: Who are your customers and how do you choose to serve them? What gives synergy to your teams? Who are the great hires in your organization and what about them helped them succeed in your culture? And what was it, specifically, that kept others from fitting in? These are things you need to understand even before you write the job description. And they tell you what to look for in the interview.
What is it you need to learn in order to understand a candidate's culture fit? Following are some of the things you need to get to in the interview process and through assessment: How they treat other people on the team; how the people they work with will most likely relate to them; how their interpersonal skills will impact their performance and that of the team; what motivates them and what turns them off; how they process information; how well they communicate; how they react under pressure; how they demonstrate leadership-and how all of these things mesh with your culture. Understanding a candidate's hard skills is definitely the easy part of the hiring process.
Take your time interviewing. Ask candidates about their previous job, what they liked and didn't like, and then let them talk. Don't be afraid of silence. Let the candidate fill the gaps. You'll discover much of what you need to know. And as you interview and assess candidates, keep in mind that cultural fit can't be developed.
As Jack Welch said, "You cannot have a black hole in your organization where a star should be." A star for your company is someone with the hard skills to do the job and the personality, character and values that match your culture. Anything less is a high risk business decision.