For our book, the CEO Next Door, we analyzed 2,600 executive assessments conducted by our leadership advisory firm ghSMART to discover the essential behaviors strong CEOs share, and the unexpected lessons senior executives learn during their first year. We assumed their biggest challenges emanated from the myriad expectations of the Board, Wall Street analysts, investors, or employees. However, we learned that their primary regret was making seemingly safe people decisions that turned out to be anything but.
The Fearsome Five
Here are the most common safety traps executives fall into when selecting their team.
Overcoming the Trap of False Safety in Hiring Decisions
We do not suggest taking on excessive risk or making callous hiring decisions. In fact, the human brain’s desire for safety (and instinct to fight, freeze, or flee) exists for good reason – to avoid rash decisions in high stress situations.
“You wouldn’t acquire a new company without the essential due diligence; acquiring talent requires the same rigor.”
Here are a few ways we have seen executives keep the fear in check and make hiring decisions that fuel high performance:
Start with an objective role scorecard. Job descriptions tend to be flowery and exhaustive lists of activities and competencies. Instead, focus on creating a scorecard of what the executive and organization must achieve over the next 3 years. Ask yourself, What are the 5-7 lynchpin outcomes this person must achieve? Make them as tangible and measurable as possible: “Raise EBITDA by 20% over the next two years while expanding market share by 10% in Eastern Europe.” A second key question is: What are the needed pivots? Noted CEO succession scholar Ram Charan describes a pivot as two or three critical capabilities required for the new leader to be an indisputable success. In other words, the pivot is what separates an average or good performer from an exceptional one. For example, when considering an executive candidate for a consumer retail company, they should be well versed on digital innovations, end-to-end customer experience, and streamlined logistics to compete in a landscape dominated by Amazon.
Creating the role scorecard should be an inclusive process, comprised of interviews with board members and trusted team members. It is a tool for alignment and objective assessment before specific candidates are discussed and helps you influence the board’s opinions on a candidate. More importantly, you are role-modeling and telegraphing the importance of talent decisions to the company.
Prioritize human capital due diligence. You wouldn’t acquire a new company without the essential due diligence; acquiring talent requires the same rigor. Take advantage of the advances in executive assessment built on decades of behavioral economics and psychology, which coupled with data analytics, can significantly raise the rate of hiring success. Also, check references beyond the “approved friends and family list.” Ideally, contact seven people for every key hiring decision: Two bosses, two peers, two subordinates, one outsider (e.g. customer or business partner).
Consult a friend or colleague who’s been in your situation before. When we work with CEOs who say they are putting hiring on pause for one of the reasons above, we typically introduce them to CEOs who have been through similar dilemmas. They soon conclude that growth is all about hiring the people who can give you momentum and leverage, leaving you with more time and energy to pursue your bold vision for the company.
While it may be time consuming to establish a high caliber team upfront, it will result in a big payoff once right. Avoid safety traps and use a rigorous, data-driven process to select A player talent who will have outsized impact on your team.
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