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CEOs: Smart Strategies for Hiring Success


Securing the right people for your leadership team is a key priority and significant challenge for CEOs worldwide. Alarmingly, research suggests a hiring failure rate of up to 50% with the cost of hiring mistakes equating to almost 15 times an employee's annual compensation.

Team Capital, a consulting firm focused on executive search & representation discusses some of the common reasons for hiring errors and offers practical advice and tools for CEOs and CHROs (Chief Human Resources Officers) to navigate the search process and increase their success rate in hiring the very best individuals for the role. These are based on recommendations from Team Capital's Talent Directors, Research Associates and Advisory Council members.

THE TEAM CAPITAL CHARTER: DEFINE WHAT SUCCESS LOOKS LIKE

The first step to hiring the right person is to clearly define what a Grade A Player actually looks like for the specific role in your business – and this during the Audit phase of the search process. Real success will come from having the right person in the right job at the right time with the right skill set for the business challenge that exists. The Team Capital Charter goes far beyond a typical Position Specification by clearly laying out the definition of success for a specific role. This constitutes the following three components:

1) Focus: Clearly communicate the core of what the role is and how it addresses a business challenge. For instance: Drive the Cleantech business back to #1 market share within 2 years through new product launches and strategic alliances.

2) Impact: Define five to seven measurable business results expected from the role in order to achieve the mission. An example: Grow net sales to €3B for FYE 2010 and €3.8B for FYE 2011 through market share capture and new product launches. The “Impact” and these business objectives are SMART: Specific, Measurable, Achievable, Relevant, and Time defined.

3) Competencies: Skills, abilities, and behaviours required to deliver the “Impact” (2) in a way that fits the needs of this role and which is aligned with the style and culture of the company. It is essential to emphasize the importance of a strong competency and cultural match. The four keys to successful leadership can typically include the following competencies: strategic orientation, results orientation, influence and collaboration, and team leadership. Whereas “Focus” and “Impact” are designed specifically for a given role, competencies will often apply across many roles at a company with a few targeted adjustments.

The Team Capital Charter is designed in collaboration with key stakeholders involved in the hiring process. Once defined and agreed, this is used at each and every stage of the search process to grade and prioritize candidates accordingly. Once a candidate is hired, the Charter can be used for onboarding and ongoing performance management.

ADDING EMPIRICAL EVIDENCE TO THE HIRING DECISION

How many times have you brought in a new hire only to find out that this person interviews much better than he/she performs in a particular role? A more vigilant and analytical approach will greatly increase the overall success rate. Even highly successful CEOs, who are rational and fact based when making decisions in other aspects of business, fall into the trap of conducting limited due diligence when assessing the real fit, style and culture of a high calibre candidate. Human nature is such that we will recruit in our own self-image; this often leads to choosing a candidate who "sells" well or who reminds them of themselves in some way.

Techniques for obtaining reliable data for your hiring decision:

• Past performance: Many interviewers ask hypothetical questions. Unfortunately scientific research proves that people are very poor predictors of their own behaviour, especially when they are intentionally "selling" a potential employer on the fact that they are the right candidate for the role. Instead, specific data on actual behaviours and performance in the past is a reliable indicator of future behaviour. Focus 90% of your interview on past performance in jobs/situations relevant to the role at hand to get reliable data. Equally, leverage best in class behavioural tools and analytical instruments to provide the backbone to this process.

• Relevant to the Charter: To be effective in gathering data and intelligence most relevant for your hiring decision, focus on past experiences relevant to the Charter. Be purposeful.

• Limitations: To accurately assess a candidate you want to understand both what made them successful and where they have failed and why. Spend equal time in an interview understanding a candidate's limitations/weaknesses as you do understanding their strengths.

• Open-ended questions: The smartest interview questions are simple open-ended questions that start with: what, when, how, tell me more. The power of these questions is that they invite the candidate to share what they actually did - without revealing "the right answer" you expect. Most interviewers ask many leading or yes/no questions that don't reveal high quality data nearly as well as open-ended questions do.

Whether you are launching a new search or are at an advanced stage in the process, focus on incorporating the above factors as part of the overall search process. After establishing a clear consensus about what you are looking for, the next step is deciding where to look for suitable candidates.

About Team Capital: The Power of Teamwork
Team Capital, the leading executive search firm & executive representation service provider, is an adviser of choice for top companies seeking counsel on their talent and leadership in United States, Latin America, Europe, Middle East and Africa, and Asia. The company’s Advisory & Counsel Practice provides Chairmen, Chief Executive Officers, Vice Presidents, Non-Executive directors and Senior Executives with best practice models and private representation to drive your next career move.

Team Capital, 84 Brook Street, London W1K 5EH, United Kingdom
EMEA: Tel +44(0)208 820 1408 Fax +44 (0)208 181 4640
www.teamcapitalgroup.com

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