GROUP W PARTNERS, INC

By Steven M. Wade, President, Group W Partners Executive Search

    
OK, we’ve all done it, so let’s just admit it upfront.  It was embarrassing, frustrating and worst of all, it costs our companies a lot of money and possibly had negative effects on our employees and even customers. 

Yes, the dreaded “bad hire” has caused all of us, hiring managers, HR professionals and recruiters, to hang our head in shame at some point in time. The reasons for bad hires are probably as numerous as the number made each year.  But the misalignment between candidate personality and corporate culture is certainly high on the list.

     Consider this actual case study: The company, in business only a few years, desperately needed to fill a VP of Sales position. Its merchant acquiring business was getting traction and it had been over three months since the last Sales Manager left for a larger company. Finally the time was right and a nationwide search was launched.  They needed someone with heavy-duty experience that could lead the team to the next level.  Someone that could build a sales force, train, motivate and produce results fast.  They hired a recruiter and after an exhaustive ninety-day search process, found the “perfect candidate”, with all the skills and experience they were looking for.  The company even agreed to a premium salary, generous commission plan and an unheard of signing bonus!  It was a marriage made in credit card heaven, or so they thought.  Then, six months later, it happened ….. the VP quits. (Just before he was to be fired.)  The employees are confused, customers are angry and the CEO begins to think long and hard about what went wrong? After all, the candidate’s background, experience and track record all were perfect.  What could they have done differently? How can they avoid repeating this mistake in the future?

     A post-mortem on this corporate fatality indicated that the patient died from an over-dose of the wrong corporate culture.  There was a total mismatch with leadership and communication style, decision-making process and sales compensation philosophy.  The company needed a roll-up-your-sleeves, inspirational leader.  They got a “delegator” who was more interested in working on strategy with the CEO than making calls in the field.  They needed a risk-taker and change-agent but ended up with long, drawn out processes and “analysis paralysis”.  The candidate looked great on paper but lousy in front of the customer.  And, to add insult to injury, the VP of Sales had hired several individuals from his old company, all with the same issues.

     This scenario is repeated every day, in all types of businesses across all industries and positions, costing companies millions of dollars in direct hiring costs, lost productivity, employee dissatisfaction and customer defection. In this case, the CEO, with a little help from outside consultants, finally understood the mismatch on the VP’s style vs. what the corporate needed.  Despite his success in a larger company, he simply could not make the transition to a small organization and a more entrepreneurial environment.

     In discussing the importance of cultural match in the hiring process with numerous ETA members, I found very consistent opinions that it was certainly as important as skills and experience.  However, there were significant differences in how to define culture and how to really articulate their own company’s culture. So, for the record, let’s at least establish a working definition of corporate culture as “the beliefs, values, programs, attitudes, policies and customs that create and sustain the internal environment and external perception of the company.”  Or in other words, culture is an organization’s operating system that drives how work gets done.

     According to John Stieber, Sr. Consultant with Hagberg Consulting Group in Foster City, California, “understanding your corporate culture can mean the difference between success and failure in today’s fast changing business environment. However few companies really understand their culture. They tend to have an idealized view that can differ significantly from reality.”  While the ETA members I spoke with all seemed very confident in their understanding of their own culture, most acknowledged that they have really not gone to the organization for validation.  And many indicated that they thought their culture was in the process of change, some good, and some not so good. This gap between reality and aspirations, they agreed, can begin to complicate how to assess candidates for critical roles in their organization.

     First of all, “you cannot look at culture in isolation”, says Mr. Stieber.  “It must be combined with the company’s goals and strategies.  Only then will a company know if there’s a gap between what they have and what they need. Identifying the gap is critical to bringing in new employees that can help be a positive catalyst for change and closing any cultural gap so that a consistent culture begins to emerge.” 

     Global Payments’ Executive Vice President Jeffrey McWey echo’s the importance of developing one, well-defined corporate culture. “If you don’t have a clear corporate culture, the organization has a tendency to migrate to its lowest level.  We’ve worked hard to develop a strong culture that is characterized by a focus on success, teamwork, accountability and consistency”, says Mr. McWey.  “Consequently, we’ve been able to build a solid team of dynamic individuals with a tremendous desire to succeed.”

     That correlation between success and corporate culture is key.  Again, according to John Steiber, “research shows that cultures that are aligned with the demands of their business environment consistently outperform organizations that are not aligned.  And, of course, this has implications for revenue, profit and return on investment to shareholders.”

     Several companies, including HCG help organizations assess corporate culture as an important component of their strategic planning.  Through a fairly simple, online employee survey, valuable information can be obtained and used to establish a base-line for a corporate cultural profile including how to make better hiring decisions as well as improvements in employee retention and satisfaction.

     Once you better understand your culture and any possible gaps, then the process of finding, recruiting and hiring good fit candidates becomes a piece of cake, right?  Wrong.  Actually, this is the hard part, because most hiring managers go on “gut feel” when assessing candidates for cultural match.  Much of the time, they hire individuals who they are comfortable with, relate to and are most like themselves.   In fact, statistically, about 80% of all hires in the U.S. are based on personality match between the candidate and hiring manager, as opposed to a more objective analysis with how the candidate matches to the “personality” of the corporation not to mention the skills necessary to produce results.

     Since it is an established fact that there is a strong relationship between job performance and personality, it’s critical that objective, personality assessment is integrated into the hiring process. So what is the best way to assess a candidate’s personality and on-the-job behavioral traits while minimizing the “gut feel” factor?  Most all the ETA managers I spoke with rely solely on the interview process.  But unfortunately, this is where the  “gut factor” begins to take hold. In addition, research in the area of selection and hiring has shown that most internal interviews by untrained or poorly trained managers produce relatively poor results in terms of predicting a candidate’s future job performance. Asking no questions or the wrong questions to establish a candidate’s behavioral profile is usually where the problem begins.  In addition, candidates are often very adept at putting their best foot forward during the interviewing process and telling the interviewer exactly what they want to hear.

     A third-party behavioral assessment is certainly one way to better match candidate personality to the company culture.  There are a number of companies that offer these services, which range from simple, on-line assessments to customized, in-depth psychological interviewing of a candidate.   For example, Management Communication Systems in Sausalito, California, offers an assessment tool called “SelecSys” which I have used successfully in my own recruiting practice to help me and my clients determine which candidates possess the specific personality traits and behavioral tendencies that would make them naturally inclined to succeed at a specific job.  Personal characteristics, leadership and communication style, decision-making ability, degree of comfort with structure and even energy level are all traits that important considerations and that can be accurately measured by this simple and cost tool.

     The other way is to simply make sure interviewers are well-trained, thoroughly analyzing resumes and integrating tough behavioral based questions into the interviewing process that will bring out personality, business philosophies and style traits in the answer.  Start off with questions like: “Paint a picture of the corporate culture you’ll help create if we hire you.”  Then, follow-up with a discussion that will provide examples of behaviors in key areas that drive corporate culture including:

• Accountability
• Belief and Commitment to Core Values
  
• Competitiveness
  
• Dealing with Conflict
  
• Creativity & Innovation
  
• Customer Focus and Orientation
  
• Decision making Process
  
• Risk-Taking
  
• Supporting Employee Growth
  
• Teamwork
  
• Trust

     Also, try to better understand the types of companies, positions and supervisors that the candidate has excelled with.  Questions like, “Which past company did you enjoy working for the most? The least? Why?” or “Describe your best manager, worst manager, why?”   All this information will provide clues to how your candidate will be able to maximize his or her skills and experience within your company culture.

     As the economy continues to improve, all of us (hopefully) will be doing more hiring, investing significant resources that will either produce profits or wreak havoc in our organizations.  Going beyond skills and experience in evaluating candidates will be critical.  If you believe the old adage that “you are what you eat”, then you’ll surely agree that “your organization is what you hire.” 

     In summary here’s a few suggested actions steps to make sure that what you hire is the best:

1.     Be honest with the assessment of your company culture.  Don’t be accused of being the proverbial “emperor with no clothes”.

2.     If you are not absolutely sure, consider using an outside resource to give you an objective view of the company culture and possible gaps.

3.     Make sure the people in your organization who are responsible for hiring understand the importance of cultural match, the criteria for determination and interviewing techniques that will assist them in the evaluation process.

4.     Develop a list of interview questions that focus on personality, style, management philosophy and on-the-job behaviors.  Go beyond what they accomplished to understand how they accomplished what they did and the role that personality and style played.

5.     Analyze the candidate’s employment history relative to the types of companies and cultures they worked in.  Is there a correlation between success and a particular size or type of company?

6.     Make sure professional reference checks on potential hires include questions about personality, style and on-the-job behaviors.

7.     Consider using independent, 3rd party assessment tools to minimize “gut feel” hiring.

8.     If you use a 3rd party recruiter, make sure they understand your company culture and are willing to incorporate that criteria into their search and candidate screening process for your company.

ETA member Steven Wade is President of Group W Partners Inc. in Chicago, an executive search company focused on the transaction services industry.  Mr. Wade was a former Vice President and hiring manager at American Express.