- Recruitment is said to be both an art and a science, and assessing executive talent can be considered to be one that requires a careful balance of both.
- Some think that predicting executive performance comes down to human judgment, while others depend more on the process.
- Nevertheless, it is a critical decision that cannot be brushed off lightly.
Experience tells us that no facet of a business is more important than its people.
A robust organization needs a dynamic and results-oriented workforce with requisite talents, multidisciplinary knowledge, and up-to-date skills to ensure that it is equipped to accomplish its mission and achieve its goals.
Executive leaders, to be exact, are the ones that take the lead to make the company’s vision come true. Every decision they make will have a direct impact on the organization. This is why executive leadership is critical for the organization’s success.
Organizations need to have a systematic approach to executive hiring and align their corporate strategy with the firm’s overall recruitment initiatives.
Peter Wright, former Human Resources VP at BP and partner at management consulting firm Leadership Forum said that “Success in executive hiring is about being adaptive, and your recruitment profile has to reflect that.”
“If you look at recruitment strategy, you should be able to see the link to corporate strategy. You should, by looking at the recruitment strategy, know instantly what the overall corporate strategy is,” he added.
Nurturing Top Executive Talent
As baby boomer executives continue to retire, organizations are now facing new pressures and challenges when it comes to recruiting, attracting, and retaining executive talent.
Global economic expansion is also increasing the demand for experienced executives around the globe, most notably in the Asia-Pacific region.
Peter Wright noted that organizations in the Asia-Pacific region should adopt a more systematic approach to their recruitment process since it can have “a profound effect on both the performance and profitability of your business.”
The continuing expansion of national economies across Asia, such as Hong Kong, Singapore, China, and Vietnam, has spawned emerging companies to snag top executive talent. This puts the Asia-Pacific region on the map as the new battleground in the global war for top executive talent.
From CEOs to executives and senior vice presidents, the “talent war” for top executives is alive and well. As such, organizations with poor hiring practices are scrambling to keep up in attracting executive talent.
Selection of top executives, especially that of the CEO, are often under deep scrutiny from the public eye. It is closely observed by shareholders, competitors, the media, and even business scholars in the academe.
In fact, research and anecdotal evidence have both shown that executive turnover and succession events have a significant impact on stock price. Thus, it cannot be denied that executive selection decisions impact all stakeholders.
Assessing Executive Performance
Recruitment is said to be both an art and a science, and assessing executive talent can be considered to be one that requires a careful balance of both. Predicting how someone will fare in a leadership role will always involve a certain degree of speculation.
Some think that predicting executive performance comes down to human judgment, while others depend more on the process. Nevertheless, it is a critical decision that cannot be brushed off lightly.
The Ivey Business Journal noted that there are numerous choices available to assess and predict executive performance. While each assessment may vary in some way, it will ultimately fall under each of these four categories:
- Interviews – Holding either one-on-one or group discussions with a candidate.
- Surveys – Speaking with trusted references about a candidate or gathering feedback from colleagues.
- Psychometrics – Making the candidate complete tests and exercises from which patterns and competencies can be inferred.
- Simulations – Observing the candidate as they participate in scenarios meant to replicate a work situation.
Organizations need to take recruitment seriously. They need to take a closer inspection at the hiring challenges they are facing. Companies should also stop treating executive recruitment practices as a temporary stop-gap solution to fill the organization’s structure.
To do that, companies should approach executive hiring from a strategic and objective point of view. They should be able to develop their own best practices, even if it means that the organization will have to change their hiring practices drastically.
A Harvard Business Review article listed several steps on how to avoid making poor hiring practices when it comes to executive selection:
STEP 1: Anticipate the Need
- Having an ad hoc succession plan.
- Overlooking the skills the organization needs in the future.
Organizations need to be prepared for future staffing needs. The first step in establishing a robust recruitment process is to understand that your company’s existing executive pool is inadequate.
Internal succession plans are needed to proactively maintain a group of candidates that can step up and take the helm when a vacancy comes along. Unfortunately, most organizations only search for promising senior managers when a vacancy opens up.
At the very least, organizations need to review their executive-level leadership requirements every two to three years to help develop a proactive staffing plan for executive-level jobs.
- Continuously evaluating the pool of potential executive talent.
- Developing proactive forecasts of the company’s talent needs for the future.
STEP 2: Specify the Job
- Relying on generic competency models.
- Looking primarily for just charisma, general ability, and track record.
Companies often rely on leadership competency models to define the characteristics they want in an executive. However, these models normally only emphasize generic leadership skills. If companies want an executive that fits right into the corporate culture, they should not just rely on arbitrary cookie-cutter characteristics.
Harvard Business Review suggested these three tenets that will help identify an executive’s competencies:
- Job-based Competencies – Identifying the specific capabilities that the role requires over the next few years.
- Team-based Competencies – Analyzing whether the candidate has the right skills to lead a specific team or department in the organization.
- Firm-based Competencies – Recognizing whether the candidate can fit right into the organizational culture and if they can make a difference in the role.
- Specifying the kind of skills and experience relevant to the job.
- Considering how company culture can affect the role.
STEP 3: Develop the Talent Pool
- Taking an ad hoc approach to finding executive candidates.
- Limiting the pool.
An effective executive sourcing strategy involves not thinking only about the candidate themselves but also about looking for other people who may know the best ones that can fill the role.
Develop a larger candidate pool by contacting people in your network who can recommend high-quality candidates. However, do not just stop and look at the usual suspects. Cast a wider net and consider other people like internal candidates from a different branch who can give an objective view of the firm, trusted former employees, customers, or firm consultants.
- Considering people on the periphery of the organization.
- Tapping into your network and involving external partners.
STEP 4: Assess the Candidates
- Settling on an adequate choice or looking endlessly for the perfect choice.
- Using too many unreliable and unstructured bureaucratic steps.
Getting the wrong people involved in the hiring process will most likely increase the chances of getting a bad hire. This is why the hiring team needs to know how to conduct probing candidate assessments.
A good interviewer is someone who is deeply familiar with the range of skills and experience needed for a specific role. They are also confident enough to assess the capabilities of the best possible executive candidate, even those that are more talented than themselves.
- Utilizing several well-trained interviewers for the hiring team.
- Conducting detailed reference checks.
- Including top stakeholders in candidate assessment.
STEP 5: Close the Deal
- Showing too little commitment to the candidate’s future.
- Assuming that money is everything.
It is one thing to find the perfect executive for the company; however, it’s another thing altogether to be able to close the deal and make them accept the job offer. Here are several factors that will determine whether or not the candidate will accept your offer:
- The Organization’s Commitment – Closing the deal is not just about the money. It’s also about showing to the candidate that the company is committed to their success. Top executives do not want to waste their time in a job that will put them at risk of being demoted, downsized, or left to pick up the pieces of a failing firm.
- The Job – Sometimes, the company will only present the positive aspects of the job and fail to show a realistic representation of the challenges of the prospective position. Candidates need to decide for themselves whether they can cope up with the challenges of the job.
- Compensation – It’s essential to structure an executive’s compensation with an eye not only for immediate benefits but also for sustained performance. The goal is to create the right balance between salary, bonus, and long-term incentives for the executive.
- Demonstrating active support for the candidate’s interests.
- Describing the job realistically.
STEP 6: Integrate the Newcomer
- Assuming that the executive will hit the ground running.
- Providing inadequate support and mentoring.
Contrary to popular opinion, the recruitment process does not end the moment the executive has finally signed the job offer. Make sure that the new hires are properly integrated into the company culture. Some companies expect that top executives have a plug and play button that will make them hit the ground running.
Companies with a strategic hiring process in place usually assign a mentor to the new executive. This veteran will serve as a valuable comrade to the newcomer until they become acclimated to the company culture. It will also make the new executive feel more at home with their new job.
- Using veteran top performers as mentors.
- Checking in regularly with the new hire to monitor performance.
STEP 7: Audit and Review
- Hanging on to bad hires.
- Failing to review hiring processes and institutionalize the best ones.
Having a strategic recruitment process will help minimize the likelihood of getting a bad hire. However, hiring mistakes can never be entirely eradicated. This is why it is crucial to regularly audit and review your company’s recruitment practices. Periodic reviews can help the organization assess top executive performers in their new roles. Rewarding those excellent performers will motivate them to improve even further.
- Reviewing recruiting practices regularly.
- Identifying and rewarding excellent performers.
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Fernández-Aráoz, C., Groysberg, B., & Nohria, N. (2009). THE DEFINITIVE GUIDE TO RECRUITING in Good Times and Bad. Harvard Business Review, 87(5), 74–84. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=heh&AN=37840254&site=ehost-live
McCool, J. D. (2007). Asia’s Hungry for Management Talent. BusinessWeek Online, 29. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=27580964&site=ehost-live
Robertson, R. (2010). Who Will Lead? Twelve Canadian Organizations Discuss How to Assess Executive Talent. Ivey Business Journal, 74(4), 30. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=f5h&AN=54857281&site=ehost-live
Swiercz, P. M., & Ezzedeen, S. R. (2001). From Sorcery to Science: AHP, a Powerful New Tool for Executive Selection. Human Resource Planning, 24(3), 15–26. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=8989762&site=ehost-live