Viewpoint July 2007
The Importance of People Decisions
Are the Wrong Individuals Making it into Executive Suites?
by Bob Gershberg
Managing Partner, Dick Wray Executive Search
Ever since I switched from the operating side of our fine industry to the executive recruiting arena, I have been baffled by the propensity to hire less than “A players” to fill positions in C-level suites. Once a person has reached an executive level in his or her career progression, past successful tenures are amongst the clearest predictors of future success. Entry requirements into the executive suite ought not include existing “C-club” membership but rather be a privilege of proven leadership.
The late Peter Drucker emphasized the critical importance of people decisions twenty years ago by stating, “Executives spend more time on managing people and making people decisions than on anything else – and they should. No other decisions are so long lasting in their consequences or so difficult to unmake.” Drucker suggested that 1/3 of all hiring and promotion decisions were outright failures. In today’s competitive corporate environment, we place an enormous premium on talent. The weighted valuation of intangible assets has increased multi-fold in the past few decades. The ability to attract, retain and develop talent will continue to prove a major challenge but conversely will be a tremendous opportunity for those who can effectively match them.
Research has proven that top performers are several times better than average players. It is a given that strong leadership has a substantive effect on company performance and subsequent profitability. Best practices are essential in sourcing and assessing talent to fill the corner offices. Cast your net wide as outstanding individuals are tough to find. The cost of relocation is insignificant when viewed against the value brought by a superstar during a viable tenure. Clearly define your needs prior to commencing an executive search. Establish a solid benchmarking process for candidate evaluation. Behavior-based interviews designed for the specific position coupled with thorough checking of references beyond those provided by the candidate are essential to the success of the process.
If the predicted talent scarcity makes you nervous – it should! Winning the battle for great talent will require being proactive, highly disciplined and exceedingly diligent. The right people decisions will spawn tremendous value and lead to measured competitive advantage.
All the best,
