In this edition of Overture, Fidelio explores the challenge of hiring for growth. Specifically what is the right leadership team for times of economic uncertainty? We argue that failure to define critical roles is clearly an impediment to growth.
Mark Cumberlege
Growth is around the corner. According to a number of leading indicators the UK economy is on the brink of growth, and the US is further along the curve. Germany continues to steam ahead with the German Federal Statistics Office reporting €65 billion of exports to China in 2011.
After the lean years, companies looking to capitalise on this uplift recognise that they lack critical talent to drive growth.
While 2012 will still remain challenging and difficult in some respects, we are going to see during the course of this year some easing of the conditions we have seen over the last 12-18 months.
– Charlie Mayfield, Chairman, John Lewis Partnership, FT, 7th March 2012
But equally major macro-economic risks remain. Arguably we are not out of the woods yet with a fragile Euro, the Iranian nuclear threat and a potential slowdown in China representing very tangible risks to the global economy. Against this backdrop systematic hiring to fill the gaps appears to be imprudent. Instead many companies adopt a reactive stance and we frequently hear the mantra, “we’ll know what we want when we see it.”
The corollary of “we’ll know what we want when we see it” is “and we’ll think about what we want at that point”. Herein lies the fallacy.
The reactive approach to building the management team in preparation for growth seldom succeeds. Fidelio is clearly an advocate of hiring the right person for the role. In this context the only definition of “right” is the ability to deliver corporate goals. Thus each and every role description needs to be aligned with the corporate goals. There is no other framework for role definition.
Indeed, we consider hiring at every level to be an investment. Few companies adopt the sloppy thinking of “we’ll recognise what we want when we see it” when investing in a new market or development of a new product. Surely investment in talent, particularly at a senior level, should be predicated upon at least the same analytical rigour as other forms of corporate investment.
Opportunistic hiring apparently obviates the need for rigorous analysis. However, if the analysis has not been done we argue that there is slim likelihood of recognising “good” when he or she walks through the door. Moreover, growth is almost certainly not going to be delivered by more of the same.
It is clear that different skills are needed in the current low growth environment facing many corporates than was the case with the cost cutting of the past three years and the bull market prior to that. Growth requires transformation and transformation seldom succeeds without fresh thinking and very often fresh blood. By definition strategic leadership gaps require different profiles. A reactive approach is likely to perpetuate existing hiring patterns, thereby failing to address the central issue of growth.
At best failure to properly analyse and identify the skills needed to drive transformation means the company misses the growth opportunity. At worst, poor hires are made that prove costly to unwind and damage morale.
Therefore, we advocate bringing the discipline of investment to the hiring process. We argue that a structured approach to investing in talent will result in a substantially higher return. Proper analysis will at times accelerate the search process and reduce the cost to hire; at other times the search might be postponed or even pulled.
But it will be for the right reasons and the findings will inform future hiring and also business development.
Recruitment is the process of having the right person, in the right place, at the right time. It is crucial to organisational performance.
– CIPD, Recruitment: An Overview, March 2012
Why is it that many companies shy clear of identifying and clearly articulating the roles that they need to hire? We suggest one reason for the seeming sloppiness of thinking is that many of the issues associated with senior hires are political and contentious. An effective hiring process will identify a hiring community which comprises the major internal stakeholders of the role. And therein lies the rub. Issues such as reporting lines and budgets cannot be danced round. But arguably it is better to have these debates beforehand and not in front of bewildered candidates.
A common reason why Executive Search can produce poor outcomes is because internal differences regarding the role are not attended to before the hiring process is underway. And like unresolved childhood traumas, these differences will come back to haunt.
Much better surely to set up Search to succeed.
Recommended Further Reading
Harvard Business Review – The Definitive Guide to Recruiting in Good Times and Bad, May 2009
Coming Up…
Overture explores how talent is critical to delivering value and driving valuation. Future editions of Overture will deal with
• Career Change – Private to Public Sector
• What do SWFs look for in Management Teams?
• The Strategist and the Communicator
• The New Challenge of Reward
• The Art of Building Shareholder Buy-in
Please email us with comments at info@fideliopartners.com or for more information visit fidelio.fuse-clients.co.uk.