I had a theory that "previous experience was not a predictor of future performance". I had no knowledge of telecoms, so I assumed the position of a guinea pig. Also I was responsible for all sales hiring in EMEA and I wanted to see how the brilliant hires my team were making were performing.
The good news, I outperformed experienced sales people in next to no time. The bad news, by my reckoning, 75% of hires were not performing against company expectations. Poor hiring was costing the company millions - and it was our fault.
In the next two years, we reversed this figure; we created a model of accurate hiring. Accurate hiring is not rocket science, it's like any other decision in life - the more data you have and the more relevant it is to the decision - the more accurate and confident your decision will be.
So consider this: Your IT department wants to upgrade your email servers; email is a strategic asset within every corporate business today. The CIO sits on the board and most likely has the biggest spend in the business outside of the salaries (note that, it's important). In doing a robust Return on Investment document, the CIO has calculated that it will cost £150,000 to do this upgrade and will return the business efficiency savings of £300,000 over two years and productivity gains in the millions. The acquisition of this strategic asset might look like this:
ROI business case completed to secure investment; budget agreed up front; measurements of success documented and agreed; working party to build scoping document; requirements fully documented and agreed; full request for proposal process with rigorous supplier selection & vetting; internal selection team appointed; clearly documented criteria for decision; robust references taken. Then following appointment, an implementation team would be appointed to ensure new product delivers day 1, as well as ongoing optimisation and maintenance to secure return over the next 3-5 years.
So the CIO has the biggest budget outside of salaries, he or she is also responsible for most of all the depreciable assets, including the new email servers.
You, the HR Director, look after the biggest cost in the business, salaries - and outside of your brand, the only appreciable asset - your people. Think about that, outside of your brand, HR oversee the only appreciable asset in business today. If you invest in people, their value to your business increases with time, brilliant. Correction, if you invest in the right people their value appreciates.
On this note, let's go back to what I found at a telecoms giant and almost every corporate entity since; the fact that 75% of your people are simply not the right ones, it's not that they are not good people, just not the right ones for your business.
So let's look at how an organisation acquires a £150,000 Head of Sales. The process probably goes something like this...
No robust business case with ROI is built; it's just a replacement Head of Sales; scoping is a five-minute conversation with HR ("I want someone who looks like this...be handy if they are from a competitor..."), no documentation or clear definition of "What Good Looks Like" (a job description does not count and an executive search profile counts less); selection process will involve a subjective report from a search consultant followed by CV interviews with a selection of stakeholders; due diligence will be a couple of safe references; none of the interviews or references will be documented or documentation will be sparse; on-boarding is non-existent; ongoing development is hit or miss.
For those of you reading this thinking, "our process is not that bad", I am pleased to say that there is probably worse out there than your process. The question is, is it as good as it could be? Does it genuinely hire the right person every time? Would you know? Do you know what the right person looks like? Do all your stakeholders have a singular view of what the RIGHT person looks like? Do your interviews, psychometrics and other selection tools measure the attributes that mean the individual is right? Are the references you take adding any new data? Do you onboard every hire the right way every time? Does the individual's ongoing development ensure they succeed for 3-5 years? Do you measure their success/failure over this time period?
If the answer to any of these questions is "No", then you hire what you deserve and experience says it's not as good as you could get. Multiply that consequence by the number of your employees you have and now tell me that hiring is not the most important job you have.
Roger Philby, CEO and Founder of The Chemistry Group
