by Marshall Goldsmith for Success Television
You just spent a lot of time and money to recruit a higher performer. But, what if you knew in 18 months, they’d be gone and you’d have to start the process all over again? What would you do differently?
Turnover rates for all senior executives have increased significantly during the past decade … in excess of 50 percent. In fact, they’re up over three times the rate that they were throughout most of the 1990s. Over 64 percent of new CEOs (whose data is most readily available) fail to make it through their fourth year in the job, while 40 percent are gone in 18 months.
The problem is not that executives can’t do their jobs, says Nat Stoddard and Claire Wyckoff recently wrote about this in their book, The Right Leader: Selecting Executives that Fit. The problem often lies in the fact that they may not fit the situation well enough to deliver the changes expected of them. By “fit” we mean how well an executives’ character (especially their values and beliefs) aligns with the culture of the company where the necessary and expected changes must be delivered. If the character of the leader is not closely aligned with that of the organization, then, as Peter Drucker originally pointed out, followership will not occur … people won’t trust a leader who doesn’t share their values, and, without trust, they will not follow him or her. It is this lack of proper “fit” that causes so many senior executives to fail.
The following are a few suggestions for reducing the risks of cultural conflict that can be costly for the organization and hurt morale:
1. Know thyself. Candidates should take a number of psychological and behavioral assessments. It is vital for them to understand themselves as fully as possible … especially their business-related beliefs and decision-making processes. It’s also helpful to identify those aspects of different cultures that they relate to and those they don’t. Hiring managers can also ask questions that unearth the candidates values and decison-making processes to see if there’s a fit.
2. Inquire about the cultures at hand. The candidate should be aware of whether the managers they are interviewing with treat culture as “that soft ‘people’ stuff?” That in itself tells a great deal about the relative importance of culture in the organization, and its members’ understanding of the challenges facing newly appointed leaders. What is your organization’s culture? Is your vision different from what manager practice daily? How are you making sure a new leader succeeds?
3. Candidates can use their network to verify what they have observed about the company’s cultures. Former employees, suppliers, or consultants can shed light on what they will actually encounter. Candidates can ask to permission to talk to a few potential peers, direct reports, your boss’s boss, and members of the board. I’d advise they think through the questions to ask about “how things get done around here” to get a sense of how much agreement there is about the makeup of the organization’s culture. On the organizational side, do you know what vendors, former employees, etc. would say about your culture? Could this be blocking you from hiring the best and the brightest?
While the higher up someone goes in an organization, the more important the fit becomes…and the more difficult it is to recover from a situation that “just didn’t work out”. Similarly, the organization suffers from the cost to replace that executive, not to mention the affect on morale and loss of productivity.