Wrong Process = Wrong Results

I had an opportunity to read a literature review from last year that drew some pretty interesting conclusions not only for the U.S., but worldwide.
Steven Zaccaro, in his piece, Executive Talent Assessment and Selection: A Literature Review described a five step process.

• Defining executive candidate position requirements (technical skills)
• Delineating appropriate candidate attributes (cultural fit)
• Recruiting the candidate pool
• Assessing the candidate pool
• Making the final decision and "onboarding" the successful candidate

He goes on to say that the failure rate for executives is extraordinarily high and that failure to spend appropriate time on all of these elements is a probable cause.

He has some pretty good data to back him up. He cites the facts that CEO's hired after 1985 were 3 times more likely to be fired than those hired prior to that date and that the overall turnover rate for CEO's has from 6% in 1995 to 14% in 2002. In case your conclusion is so what, there is a direct correlation between CEO performance and organizational performance that has been documented by everyone from Jim Collins in Good to Great to the Department of Labor.

Another source describes the failure rate of new managers as exceeding 40% in the first 18 months. The costs of turnover is estimated at between two and five times annual salary in "hard" costs, so we aren't talking about a tempest in a teapot.

He shares some pretty interesting insights as to the causes of these failures as well. Succession planning in most organizations is frankly reactive. People don't like to consider and plan for their own departure. Another reason is that while many C level people are gifted business leaders and strategists; selection and placement are not core competencies for them. A study by Drucker shows them to have about a 33% success rate at choosing their own successor.

The literature indicates that when it comes down to it executive search committees tend to rely on their own "gut" instincts, select candidates who "mirror" their own attributes, and other human tendencies in making their selections. The least reliable indicator of success is an interview without other validating information. Similarly "track records" aren't always reliable unless the organization is facing similar challenges and an operating environment to the one the candidate faced. The skills sets at each level of management and leadership also become increasing complex- success as a middle manager or operational executive is not necessarily indicative of success at the higher level.

Last week I talked about the "leadership crisis" with something approaching 50% of middle managers rejecting providing "clarity", direction, and attending to morale issues as being their responsibility. When does the recognition that these responsibilities are part of their job occur if not built into the process? Correspondingly we know that highly engaged employees outperform their colleagues by a rate of 21% and that the "engagement" factor is synergistic to total organizational performance. The number one criteria for engagement is clarity.

Since many of our CEOs and other key executives come from "within" I don't think we can discount our investment in the process of their recruitment, selection, and development either.

So I guess it might be time to ask ourselves when we are ready to accept the idea that using the same process over and over and expecting a different result is a bit silly. Given the state of our economy, the costs of "presenteeism", and turnover shouldn't we consider making some changes?

Why Aren't We Teaching This?

As an avid blog reader, writer, and teacher I see comments and questions about employee engagement, reducing turnover, keeping critical staff and reams about leadership. Whether leadership is born or taught, trying to define it, etc.
When you look at the syllabus of the typical MBA program that is very little in it about how to build and lead teams. There is plenty about finance, accounting, marketing, and even a little economics for texture, but very little about people.
Do we think the transition from doer to leader occurs by osmosis? Do we believe that it is "embedded" in the right candidates and it will emerge?
I read an article a while back that indicated that 40% of new managers fail within the first 18 months and the biggest reason they fail is that they don't know how to build and maintain effective relationships.
When I work with entrepreneurs one of the biggest obstacles they experience is moving from doer to leader and building successful transition and succession strategies.
Executive and personal coaching as businesses are booming. It has become the therapy of the new millennium. Why are companies and educational institutions not addressing this earlier on in peoples careers?
I know that there are books out there like Good to Great and the One Minute Manager, but as a recent B school grad asked- "So what is this bus that Jim Collins keeps talking about?"
At the end of the day everything boils down to effective relationships. Isn't about time we recognize and embrace that?