You already know that bringing on board A+ executive hires can be a game-changer for your business…
But what you might not realize is just how much damage a WRONG executive hire can cause.
It’s not just a matter of reduced productivity or team morale issues. The repercussions of a bad executive hire can be much more severe and costly.
But don’t worry – in this issue, we’re going to dive into the nitty-gritty of the true costs of a bad executive hire, and most importantly, how you can avoid making this costly mistake in the first place.
Here’s what we’re going to cover:
- Why Traditional Hiring Can Fail to Spot Wrong Executive Hires
- When a Bad Executive Hire Infects Company Culture & Morale
- The Financial Costs Of A Wrong Executive Hire
- How To Make Better Executive Hires In 5 Steps
By the end of this post, you’ll know exactly why making a bad executive hire can be so costly and how to ensure these hires are successful.
Why Traditional Hiring Can Fail to Spot Wrong Executive Hires
Traditional hiring methods are like playing roulette in Vegas. Once in a blue moon you might hit the jackpot, but most of the time you’re just flushing your resources down the drain. That’s because these methods rely on outdated techniques like resumes and ineffective interview questions that may not accurately assess a candidate’s fit for an executive role.
Traditional hiring methods can miss crucial factors like leadership style, decision-making, and cultural fit. They may also fail to assess a candidate’s ability to drive business growth, which is especially risky for executive hires who impact the company’s bottom line.
And even worse, most companies approach interviewing executive talent like playing darts blindfolded – they think they’ve got the aim, but really, they’re just throwing questions around and hoping for the best. And unfortunately, some smooth-talking candidates can hit the bullseye with all the right answers, even if they’re a bad fit for the company. It’s time to take off the blindfold and get serious about finding the right talent.
When a Bad Executive Hire Infects Company Culture & Morale
In his book “Hiring on Purpose,” Y Scouts’ CEO Max Hansen explains how a wrong executive hire can profoundly impact company culture and morale. When an executive is not a good fit for the company, it can lead to a lack of trust, respect, and engagement from employees. This can ultimately result in decreased productivity and difficulty attracting and retaining top talent in the future.
On top of that, a bad executive hire can lead to a toxic work environment, with negative behaviors and attitudes being modeled from the top-down. This can have far-reaching consequences, and it can affect the entire organization and its ability to achieve its goals. That’s why it’s so important to be intentional in your hiring process, and to prioritize finding candidates who are aligned with your company’s values and mission.
On the other hand, a good executive hire can have a tremendously positive impact on company culture and morale.
- An executive who embodies the company’s values and mission can inspire and motivate employees to do their best work.
- They can set a positive tone for the workplace and foster a sense of community and teamwork.
- As a result, employees are more likely to feel engaged, productive, and satisfied in their work.
That’s why we believe that hiring on purpose is so critical to the success of any organization.
The Financial Costs Of A Wrong Executive Hire
When it comes to bad executive hires, the financial costs can be staggering. Not only is there the direct cost of hiring and onboarding a new executive, but there are also indirect costs such as lost productivity, missed opportunities, and damage to the company’s reputation. These costs can add up quickly and have a significant impact on the bottom line.
In fact, it’s estimated that the cost of a bad executive hire can range from six to nine times the executive’s annual salary. This includes the cost of recruiting, hiring, and training a replacement, as well as the cost of lost productivity and revenue during the transition period. Additionally, a wrong executive hire can lead to increased turnover and difficulty attracting top talent in the future, which can further impact the company’s finances.
That’s why investing in a rigorous hiring process is important in order to prioritize the right executive candidate for your company. While it may take more time and resources upfront, it can ultimately save your company significant costs in the long run.
How To Make Better Executive Hires In 5 Steps
In our experience, making better executive hires starts with a well-defined hiring process. By following a structured approach, you can ensure that you’re evaluating candidates based on the criteria that matter most to your company. Here are five steps you can take to make better executive hires:
Start with your PURPOSE.
Truly define who your company is, what they stand for, and what type of people you want to attract. This is a critical step to building the foundation of attracting incredible talent that’s aligned with everything your company stands for and believes.
Complete Role Visioning
This includes defining your three success outcomes for the role. Don’t just copy and paste a job description from the internet or provide a laundry list of every little detail about the role. Get crystal clear on your three success outcomes through a multi-stakeholder approach that also defines “as evidenced by” proof points.
Begin A Covert Discovery Process
Source candidates that could be a good fit, and screen them first for alignment and fit with your purpose. When we do this, we don’t even tell the candidate who the company is. Because when candidates don’t get a “head start” and research the company, you don’t give away the answers to the test, and you get their true and authentic answers.
Use Deep Dive Interview Techniques To Really Learn About The Candidate
Candidates like to embellish their skills and talents. So focus your questions on identifying what they’ve ALREADY done to solve specific problems (and not asking hypothetical questions). Have them walk you through problems they’ve solved, and ask for specific and verifiable answers.
Utilize Reference Checks To Your Advantage
Don’t skip this step. Doing a reference check just for the sake of just doing it is pointless. However, you can learn a lot from a GREAT reference check. Collect names during the interview process, and ask the reference to go into detail on some of the candidate’s answers about their experience.
Executive Hires Can Make or Break a Company…Choose Wisely
It’s easier said than done to achieve, but It’s clear as day that the wrong executive hire can have a ripple effect on your company’s financial health, productivity, and culture. By investing in a well-defined and rigorous hiring process, you can mitigate the risks of making a bad executive hire and find the right candidate for your company.
Remember to evaluate candidates based on the criteria that matter most to your organization, and prioritize finding someone who aligns with your company’s values and mission. With the right executive hire, you can inspire and motivate your employees to do their best work and achieve your company’s goals…which is what every leadership team strives for.