Executive selection… the weak link in the talent management chain

1. Executiveselection…the weak link in thetalent management chain George P. Hollenbeck Thought Leaders Retreat October 10, 2007

4. Executive Selection • Some assumptions • State of the art • Why’s & wherefore’s • What we can do • Barn swallows & black swans

5. Assumptions • Executive performance matters—a lot! • Executive success is predictable • People don’t change—much! • Past performance predicts future performance—sometimes! • The people make the place

6. State of the Art • Better interviews • Better tests • 360 Feedback • Fit • Session C’s • Broader range of candidates • Hiring Strategies • Board Involvement • Behavioral Competency Models

7. State of the Art (Cont.) • Consider More Factors • Personality • Leadership • Relationships • Derailers • Global

8. Executive Selection—State of the Art We are doing a much better job of selecting executives.

9. Executive Selection—State of the Art • On the other hand…. • Results are dismal • We get no respect

10. State of the Art--Results are dismal “By and large, executives make poor promotion and staffing decisions. By all accounts, their batting average is no better than .333. At most one-third of such decisions turn out right; one third are minimally effective; and one-third are outright failures. In no other area of management would we put up with such miserable performance.” Drucker, P. 1985, Harvard Business Review, pp. 22-26.

11. State of the Art • “In their most introspective moments, most executives readily acknowledge that selecting the right people for the right jobs constitutes one of their most important responsibilities. Few decisions they make will have as direct an impact on every facet of the organization. Yet, few other decisions are made in such an illogical, slipshod manner..” Nadler D.A. and Nadler, M.B. 1998. Champions of Change.

12. State of the Art • “So what do we know...about leadership? ..we know for a fact... that perhaps two-thirds of the people currently in leadership positions in the Western world will fail; they will be fired, demoted, or kicked upstairs.” Robert Hogan: p.xv. Dotlich and Cairo, Why CEOs Fail (2003)

13. State of the Art • “Look, hiring great people is brutally hard. New managers are lucky to get it right half the time. And even executives with decades of experience will tell you that they make the right calls 75% of the time at best.” Jack and Suzy, Business Week, January 29, 2007

14. State of the Art • And, we get no respect • We are ignored • Little research and writing and thinking • Few resources go into studying • No studies of selection failure • Not much new • We don’t use what is available • Our task has been outsourced • Our experts are recruiters • A disconnect with the clients

15. State of the Art in Executive Selection • Great performance but dismal results and no respect = FLAT EARNINGS

16. Executive Selection—Why’s and Wherefore’s WHY?

17. Executive Selection—Why’s & Wherefore’s SHRM reported today that earnings for it’s Executive Selection subsidiary have essentially been flat for the last 50 years. Analyst George Hollenbeck comments: “One obvious reason for the flat earnings is that as selection processes have gotten better, the executive job has become more difficult.” (see continuation)

18. Executive Selection—Why’s & Wherefore’s • Hollenbeck continued, “But, that’s too simple. There must be other factors that account for the dismal results and lack of respect.”

19. Executive Selection—Why’s & Wherefore’s • “First Who...Then What. Good-to-great leaders … first got the right people on the bus, the wrong people off the bus, and the right people in the right seats—and then they figured out where to drive it. The old adage, ‘People are your most important asset” turns out to be wrong. People are not your most important asset. The right people are.’

20. Executive Selection—Why’s & Wherefore’s • “…placed greater weight on character attributes than on specific educational background, practical skills, specialized knowledge, or work experience.

21. Executive Selection—Why’s & Wherefore’s (cont.) Not that that specific knowledge or skills are unimportant…like character, work ethic, basic intelligence, dedication to fulfilling commitments, and values are more ingrained.” (Good to Great, p.51)

22. Executive Selection—Why’s & Wherefore’s • EUREKA—THAT’S IT!! 1st Character 2nd Competence 3rd Competencies

23. Executive Selection—Why’s & Wherefore’s • But, this is our model…. 1st Competencies 2nd Competence 3rd Character

24. Executive Selection—Why’s & Wherefore’s • Closed System—behavior is closely linked to result. • Open System—many different behaviors can produce the same result.

25. Executive Selection—Why’s & Wherefore’s “…strength and weaknesses in performance rarely make the difference between successful and unsuccessful executives. Surprisingly,.. performance indicators, did not differentiate successful from unsuccessful executives.” Executive Selection. Sessa, V. and Taylor, J.

26. Executive Selection—Why’s & Wherefore’s “Successful executives need to demonstrate both good organizational results and good relationships, particularly with subordinates.

27. Executive Selection—Why’s & Wherefore’s • Q: “Why do these typical performance measures no longer help us to differentiate between successful and unsuccessful executives?”

28. Executive Selection—Why’s & Wherefore’s • Answer: “Because there is no one “right way” to perform, two different executives may do the job entirely differently yet both be considered successful.”

29. Executive Selection—Why’s & Wherefore’s • As executives climb the corporate ladder, what they are evaluated on shifts—from performance indicators to the results they get and the relationships they develop and maintain.

30. Executive Selection—Why’s & Wherefore’s • What does this mean for Executive Selection? We’re doing it wrong!!!

31. Executive Selection—Why’s & Wherefore’s This is what we are doing… Competencies Competence Character

32. Executive Selection—Why’s & Wherefore’s This is what we should be doing… Character Competence Competencies

33. Executive Selection—Why’s & Wherefore’s • Results & Implications -we lose credibility -we waste $$$$$ -spend our time wrong -fail to develop the tools -we select the wrong people!! -we get no respect!!

34. What we can do • Change our view of the executive job • Change our focus • Apply what we know • Audit our practices • View as a business problem

35. Executive Selection Barn Swallows & Black Swans

36. Barn Swallows -globalization -faster, simpler, easier, cheaper -use of technology -more outsourcing -differentiated selection -more concern with Fit -more people involved -greater accountability

37. Black Swans • ????? • ????? • ?????