CEO’S RISKY HIRES

Fri, Jan 20, 2017

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BACKGROUND

 Finding the right candidate for the C-suite is a risky business. People who look good on paper and show well can mask factors that ultimately lead to failure. What do the most successful CEOs-as-recruiters do?

KEY FACTORS

Our Vistage CEO Peer Advisory Board in New York City has adopted these approaches, among others:

  • Make sure the job description has the people interactions as well as the technical challenges
  • Direct search professionals to conduct behavioral interviewing
  • Get a pre-employment background check by a top firm
  • Make sure the job description addresses scope differences among C-suite members, e.g., CIO vs. CTO
  • Do not rely on recruiters for reference checks
  • Have final candidates sign an NDA and present their go-forward strategy and plan
  • Have them deliver the plan to the senior management team (if a ceo candidate, present to the board)
  • Don’t miss a social opportunity: dinner(with spouse/partner?) or golf

 ONE FACTOR STANDS OUT: REFERENCE CHECKING

 When references given by the candidate are called, it is hard to penetrate today’s legal guidance to respondents to be very cautious about what they disclose.

After finding a “terrific candidate” CTO, one of our CEOs realized that the given references did not include a prior boss (CEO).

As Professor Furnham indicated at a lunch at Haklyut (see my earlier post: Narcissist Psychopaths and Other CEOs):

  • Someone’s boss knows his value added
  • Peers know someone’s values
  • Subordinates know the person under stress

Therefore, inform the candidate that there will be “non-given reference checks:” people called who are not on the candidate’s list. The respondents may be drawn from the candidate’s resume, LinkedIn and other social media or firms which specialize in human intelligence such as Haklyut.

That’s just my view. What’s yours?

 

 

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Boss Ready: CEO as Trainer

Fri, Jan 13, 2017

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BACKGROUND

A client has evolved in communications over a few years from a fountain of words at each opportunity to “speaking in packets,” then gauging the listeners; evolved from mostly a “do-er” to much more of a leader, heads in with fingers out. In the process, his team has stopped watching which way the wind blows, looking for him to go first with solutions and become more accountable for their own diagnoses and solutions.

That said, two of his direct reports cannot seem to focus on and communicate concisely what the boss needs to hear. So, in a recent coaching session, I asked how the client starts conversations with these people and how the back and forth goes. He described his patient but painful direction from initial details to “neon signs:” big picture, major points of what needs to be done and with or to whom.

A PRACTICAL TACTIC

I suggested an experiment: ask the direct report what the boss needs to know about a particular project and, before the other person can respond, hand them a marker and ask them to step to the whiteboard.

The result should be a quicker focus on what really matters and far fewer words than either oral response or a power-point makes possible. It is not easy to write a paragraph on the whiteboard.

CONFIRMATION (from Brendan Browne, LinkedIn vice president of global talent acquisition)

A few days after the conversation with my client, an article appeared in Business Insider describing how the chief recruiter for LinkedIn uses the same idea to with candidates to explore whatever they are passionate about. The finding is that it tests the quality of thinking about something important to the candidate but also the ability to improvise, think in real time, communicate clearly and concisely, and understand the process central to their passion whether it is learning to cook or making music or being good at a sport.

It is an effective tactic.

And it is worth reading the full notes about “Five Lessons:”

A Practical Tactic

That’s just my view. What’s yours?

 

 

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Key to Leadership Failure

Tue, Dec 6, 2016

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SUMMARY

One person can make a difference in the well-being of a company if they “get it” when others don’t. If you fail to hire such people, if you do not include them in the discussion during a crisis, you are more likely to see a problem worsen or repeat. What makes them different? They are “principles first thinkers.”

BACKGROUND: FIRST PRINCIPLES THINKING

Time and again I have seen clients analyze a situation, take action only to see the problem worsen or repeat. As Prof. Neustadt advised in his book, Thinking in Time, people often ask “what should I do about this?” before they ask “How should I think about this?” and are trapped in wrong assumptions, wrong beliefs and flawed analogies.

Abe Ankumah, CEO of a network software company, interviewed by Adam Bryant for his Corner Office column in the New York Times, said: “I look for “first principles thinkers” when I hire.” And when he assembles a group in his company to solve a problem. What is a “first principles thinker?” Simply:

Someone who pursues the essence of a problem and instead of jumping to solutions examines big picture patterns and root causes of the problem (or opportunity). Then and only the do they jump to solutions.

http://www.nytimes.com/2016/12/02/business/abe-ankumah-of-nyansa-are-you-a-first-principle-thinker.html?rref=collection%2Fcolumn%2Fcorner-office&action=click&contentCollection=business&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=collection&_r=0

EXTENDING THIS THINKING TO THE HIRING PROCESS

Our last post was about a real life situation which focused on an observation by someone with fresh eyes and principles-first thinking: it is a mistake to view a new hire as added cost if it is really an investment with a return; and vice versa. That is why Google sometimes buys a small company to “acq-hire” talent and may even dissolve the business.

How do you find, attract and retain such people?

ADVANCED RECRUITING

Why do so many hires fail, especially at senior levels? The top reason is not capability. It is fit with the company culture:

  • Moving too slow in a fast culture
  • Playing as a start in a team culture
  • Demanding more responsibilities before earning trust and respect
  • Applying success factors in product sales to a service company

If you view recruiting as a cost, you are probably struggling to find “best athletes” in key positions who stay with the company for years. And you have had new hires fail. Or are about to .If you view recruiting as an investment in the future of the company, you will spend on:

  • The process of engaging the candidates as people
  • Behavioral interviewing: asking questions which reveal ethics, assumptions about successful behaviors
  • Reference checking by your own senior people, not just by search professionals

One CEO client searching for his own replacement (and move to Chairman) did all of the above and more:

  • Had candidates sign a non-disclosure agreement, sent them financials and required them to create and present ad defend their own short (2 or 3 page) bullet point strategic plan
  • Organized dinners with candidate and spouse (in one case, with a board member)
  • Required an essay on the pros and cons of working directly for the founder
  • Asking questions in interviews focused on situations involving moral choices, ethics, beliefs about unwritten rules for success
  • Reference checks done by the most senior company executives, not just the search firm

As a result, they eliminated finalists who might have failed and uncovered a candidate better than the others. Still no guarantee, but a long way toward making a wise choice. This is kindred in spirit to what Disney has done for years in the way of “realistic job previews” for theme park employees.

LESSONS FOR LEADERSHIP

What is more important than getting the right leaders into a company? Those who skimp on recruiting get what they pay for — if they are lucky. The smart leaders view this as an investment.

There is a terrific source of this kind of learning in an internet radio show and website with tools and ideas:

Jim Blasingame’s brain trust radio show

That’s just my view. What’s yours?

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Blinding Glimpse of the Obvious (Mouths of Babes Division)

Sat, Dec 3, 2016

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BACKGROUND

A large non-U.S. investment house has brought to life a new internal entity that deals with higher risk and higher reward than anything the firm has experienced.  Further, it is imagined as an imminent global powerhouse in New York, Europe and Asia.

Questions:

  1. Why might this laudable internal intrapreneurial effort work?
  • Because they have hired new people with great experience, expertise and networks of relationships
  • Because there is a pool of analysts in the system who can be tapped to support those hired in the new entity
  • Because the senior people in the parent have worked hard to win approval of the first deals proposed (precedent-setting)

2. Why might this effort fail?

  • Because the parent views compensation demands by the new people as beyond the pale and politically explosive when known by their traditional investment people
  • Because there is already market-based evidence that top prospects have rejected the most recent compensation offers
  • Because there are few (no people?) people on the decision-making committee with relevant risk/reward experience

BLINDING GLIMPSE OF THE OBVIOUS

It is always a thrill when people in my client organization express an insightful observation concisely. The parent organization hired a relatively junior person for the local analyst pool who has lived all over the world and has experience in the higher risk/higher reward activities.  Consider the brilliance and brevity of his remark:

“An additional employee in the parent is seen as a cost increase to be minimized, an additional employee in the new unit is seen as an investment requiring a return.” The first leads to either underpaid or under-qualified managers. The second allows for “best athlete” or at least “major league player” to be considered.

This bit of concentrated wisdom is so obvious that it was not fully understood by decision-makers.

LESSONS IN LEADERSHIP

When conceiving a departure from the status quo, fresh eyes and people with conceptual and analytical skills can alter the plan from the get-go. Whether they are existing staff, new hires, new senior advisors or consultants, there is a high return on investment for their participation.

For a terrific example of a young start-up CEO in network software, read Adam Bryant’s interview (First Principle Thinker) in the Sunday NY Times (December 4, 2016):

First Principle Thinker (Adam Bryant Corner Office interview)

*                      *                    *               *               *

That’s just my view. What’s yours?

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Active Listening: A Dire Need in a Polarized America

Tue, Nov 15, 2016

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EXPERIENCE IN THE PRIVATE SECTOR, ACADEMIA AND NOT FOR PROFIT WORLD

In decades of experience with leaders in companies, universities and hospitals, nothing beats active listening for great problem-solving, consensus building and choices which deserve and get buy-in by the most people.

What is active listening? Asking questions and really listening so well that you can make the case with which you disagree as well as or better than the person believing it. It takes a lot of patience and persistence. And it takes two to tango.

POST-ELECTION AMERICA: POLARIZED

Before this election, I have never blogged about anything political – only sharing insights about leadership gleaned from decades of working intimately with leaders.

Now, whether you voted for Trump, Hillary or someone else, the election is over and civics classes teach us it is final. You may disagree with the new administration’s policies and directions, you have many avenues with which to work for what you believe (and against what you abhor). But you do not have the right to abuse people for what they believe. And you have an obligation to promote tolerance of citizens with different views regardless of skin color (including white), religion, heritage, region or any other characteristic.

STRONGLY HELD PERCEPTIONS ARE THE PROBLEM

If you get your news from a wide variety of sources, you may believe that incidents of hateful speech, hateful vandalism and hateful intimidation as well as physical attack are growing in number and perpetrated by citizens on both sides of the electorate. The new president has said into the camera: “stop it,” but once you let the dogs out, it is not easy to contain them.

If you get your news from only the most conservative sources, you may believe that the frequency of such acts is low, that they are perpetrated by paid agitators and that the offenders are “the other.” That is the view expressed to me by several Trump voters in the past two days.

If you get your news from only the most liberal sources, you may believe that the offenders are Trump supporters who feel they now have license to attack non-whites of all stripes as well as Jews. That is what several Hillary voters have expressed to me recently.

And professors tell me of a colleague who told minorities in his class that they “are not safe here anymore and should withdraw.”

MAKING AMERICA TOLERANT AGAIN

How do we have civil public discourse before the number of injuries and deaths persuades us it is an American problem? Before thousands of citizens  who contribute to our society, but are living in fear stop contributing or worse?

I am making a personal crusade to engage as many thinking people on both sides of the electorate to stand up against intolerance. It is not clear where to take these conversations or how but it is a civic obligation.

I wish I could name at least one powerful organization that promotes tolerance and open dialogue that would not be classified by one side or the other as biased. If you have suggestions, tell me. I wish I could think of a handful of famous citizens who could be missionaries for civil public discourse and tolerant and not be viewed by one side or the other as tainted. If you have suggestions, please name them.

That’s just my view. What’s yours?

 

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HOBSON’S CHOICE: CHANGE FOR CHANGE SAKE

Sat, Nov 5, 2016

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Background

In our last post (Narcissists, Psychopaths and Other CEOs), we reviewed lessons from Professor Adrian Furnham on CEOs on the under-weighting of knowable negative factors to desired strengths in vetting CEOs. These negative traits often lead leaders to de-rail.

Lessons from My Own World

One of my clients is U.S. leader for a parent company in Europe. He has had 6 CEOs in 8 years All were seen as having desirable strengths, each de-railed for personal flaws or personal reasons which might have been discovered in better vetting.

Another client was the fourth CEO in 6 years at a major, public company operating around the globe. Again, each prior CEO de-railed for personal flaws, almost all related to ego, selfishness, low emotional intelligence, inability to listen.

In each case the Board who appointed these CEOs was dissatisfied with the then-current CEO and was so biased in favor of change, that they were in a hurry to achieve change even at a high cost.   The consequences were poorer than projected results, departures of superior talent, defection of customers and more.

The Choice on Tuesday

We have two flawed candidates for President of the United States. We have thirty years of data on the significant flaws of one of them and can reasonably predict how those will affect our own well-being and the circumstances under which de-railing may occur. The other’s flaws are  far less known, but we have a year of observing behavior and a year of research into his potential for de-railing. This could be viewed as a Hobson’s Choice (between lesser evils). However, the consequences for a poor choice are far greater for the nation than those for a single company.

I was a moderate Republican before I became an independent. My experience with leaders will dictate my vote. What will dictate yours?

That’s just my view. What’s yours?

 

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Narcicists, Psychopaths and Other CEOs

Wed, Oct 26, 2016

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BACKGROUND: MANY NEW LEADERS DE-RAIL

There is ample evidence that recruiting and vetting a new leader is, at best, a 50/50 proposition (fewer than 1 in 2 perform to expectations), even when an intense effort is carried out. Why is that?

My Vistage CEO Peer Advisory Board has years of top-grading their leadership teams with new C-suite executives and two have recruited successors and moved to Chairman. They confirm the 50/50 nature after taking unique steps (e.g., after signing an NDA, candidates were asked to prepare and present to the board their stratplan for the company; dinners were help with spouses and board members; screening included behavioral interviewing about moral choices, stress, and conflict; essays were written about pros and cons of working for the founder and more). Why is the record so fraught?

Some of my private equity deal partner clients report a similar belief that selecting a new CEO, sometimes a first-time CEO but even a serial CEO is chancy. Why?

REMARKS AT A BUSINESS LUNCH: THE AMAZING PROF. ADRIAN FURNHAM

Prof. Furnham has authored 60 books! Most are on subjects of psychology and leadership; over decades he has amassed considerable insight and wisdom by consulting and coaching to major league companies and leaders. After an initial discussion of narcissists and psychopaths and the number of CEOs in prison (really!!), after a conversation about what traits can and cannot be coached and improved, we turned to the subject of vetting. 

Here are a few notes from our exchange at a small gathering sponsored by my friends at Halkyut (a research and advisory firm) who themselves have developed and are continuing to develop a body of work in leadership behavior and behavior modification (see below).

  1. Over-focus on desired abilities and traits vs. “de-railers:” traits and experiences that can lead to catastrophic impacts on people as well as decisions
  2. Over-focus on self-reporting by the candidate in interviews and documents vs. vetting “every which way.” There are all sorts of sources of data and more than one type of practitioner to do the exploration. By way of illustration:
    1. Personality profiles (e.g., Berkman, Enneagram, Imprint) that identify strengths that can be de-railers
    2. Background check companies who can identify “signals” worth follow up in public records
    3. Reference checks by more than one type of questioner and with more than one type of reference with different perspectives (e.g., people lower down in the candidate’s company)
    4. Interview questions more likely to lead to useful disclosures (questions about long term relationships – successes and failures, failures at work, conflict at work, worries, complements they most want to hear, criticism with which they have the most problem, even traffic violations). Professor Furnham was subjected to a 30 minute interview by an intelligence agency – the experience confirmed how much ground can be covered in 30 minutes with the right questions.
  3. Not enough people (from the company seeking the leader) engaged in the process who possess elevated emotional intelligence, intuition and an understanding of company culture

 

My friends at Halkyut have developed a global practice in “human intelligence (finding out what people are thinking)” but in a broader field of leadership behavior and HR. Here is what Wikipedia has on them(the Haklyut website has contact information):

Re Haklyut

That’s just my view. What’s yours?

 

 

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What Made jack welch JACK WELCH

How Ordinary People Become
Extraordinary Leaders

by Stephen H. Baum (Random House)

Most leaders of American companies started out as ordinary people. What prepared them for the top job?

Countless more ordinary people of equal talent never developed the leadership core required to run the show. Why not?

"Lessons for life about the core leadership traits of character, risk taking decisiveness and the ability to engage and inspire followers."
--Jim Clifton, CEO, The Gallup Organization

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