Here Are Our Most Important Lessons from a Failed Hire

A failed executive hire is a painful experience—and an important learning opportunity.
By: | February 1, 2019 • 4 min read

As you know, making the wrong executive hire can be costly on multiple levels: company morale, resources to replace the hire, productivity, time and money. There’s hiring based on charisma, in which a candidate’s personality charms interviewers into hiring them–only to find out later that their abilities are more stylistic than substantive. Even experienced executives can overlook asking tough interview questions, leading to a bad fit for all involved.

The other extreme is hiring based only on one’s resume, which—on the surface—would appear to be a sound strategy. Hire a person based on qualifications, right? Yet, while credentials show evidence of qualification, it’s too easy to overlook other things—such as lack of leadership skills.

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Finally, there’s the crony hire. We’ve all seen it: executives hiring their friends. Though most do this, some successfully, the practice of hiring familiar, like-minded people often leads to groupthink, which can cause company leadership to repeat mistakes.

According to a study by the Society for Human Resource Management, the cost of a single bad hire can range up to five times the hire’s annual salary. The majority of our recent search requests have come from clients asking us to backfill a recently departed executive, or to replace an incumbent who’s not working out. To avoid this unfavorable situation, let’s look at the measures that can be taken to reduce the number of replacement hires at the executive level, and understand the key lessons learned.

First, why does this happen? From our perspective, most of the breakdowns happen on both sides, and these are the most common reasons:

(Note: lack of competency is not one of the most common reasons cited)

  1. Lack of a clear shared mission/up-front goals
  2. Personality conflicts
  3. Poor communication
  4. Broken promises, and
  5. Unmet deliverables.

Hiring is a lot like dating or marriage; after a first failed marriage, statistics have shown, a second marriage has a higher possibility for divorce (based on research by the Forest Institute of Professional Psychology). So, what preventative measures can a company instill to ensure the success of their next executive hire? Here are measures we have compiled from our experience:

Empowerment: Did you strive to empower the executive?
Obviously both sides need to pull their weight, but many times we find the company did not do everything in its power to provide the executive with all the tools necessary for success.

Misaligned Values: Did too many shared personal interests influence the hiring decision?
Although it’s great to have shared personal interests and hobbies, rarely is this sufficient to sustain a long-term relationship. We’ve found that shared values and a common company mission are much more sustainable.

Clear Mission: Were the mission and deliverables defined and agreed upon?
The company needs to clearly communicate the mission of the organization, and both parties should agree upon defined and reasonable deliverables for the first 90/180/365 days. Once it’s clearly stated, care should be taken to ensure the mission is shared and understood by any candidate who becomes a hired executive of the company.

Interview Process: Were there any warning signs that were ignored during the executive’s interview?
Often, the urgency to fill the position can override the process, which often results in failure to recognize red flags in a candidate. We find that feedback from interviewers can be ignored for no other reason than haste. Always take time to conduct references thoroughly—ask the tough questions. It is, in fact, better to wait for the perfect fit tomorrow than to hire mediocrity today.

Onboarding: Was there a consistent and thorough on-boarding process?
This is such a critical component to an efficient and productive start. We continue to be surprised by the number of employers that have inconsistent onboarding procedures. (How to make an employee’s first 90 days successful)

Environment and Expectations: Has morale been low, and, if so, why?
Companies want to change the world, at pace, but expectations are often not reasonable and measurable from the outset, which can lead to low morale among employees. Measuring results against expected outcomes helps ongoing alignment.

Exit Interviews: Do you know why previous executives left?
We find it surprising that many companies do not perform exit interviews upon receiving a letter of resignation. This tactic can help an organization determine blind spots, and make adjustments prior to hiring a new executive. It is important to have more than one person conduct an exit interview in order to discover any discrepancies in the outgoing executive’s rationale for leaving.

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Failed executive hires do happen, and they’re part of the learning and growth process for any company. Identify the alignment of values and mission as early as possible in the interview process, be thorough in your process, and then support and empower new hires to your fullest ability. Take a mirror to your culture, onboarding process and communication to ensure you’re setting new executives up for success.

Dan Grosh is managing partner at Calibre One, a global executive search firm specializing in building diverse leadership teams.