More than a year ago, I worked with a CEO who told me a very dramatic story about his business. He started out like this: “I feel like I’ve spent 25 years pushing the flywheel in this company, gaining momentum, growing and evolving … and with one bad hire, I’ve brought that momentum to a grinding halt. I now have to start over!”
He went on to explain how he needed to step away from his business for awhile, so he hired a very qualified COO to handle the daily operations of his US$100-million company. This person was well-known to the organization (a former consultant) with impeccable credentials and a great track record in the industry. However, just because candidates look good on paper, it doesn’t mean they’re a perfect fit for a company.
“It was a disaster,” the CEO said. “One day I came into the office to face a gauntlet of fifteen of my longest-tenured employees. They told me that if things didn’t change, they would all leave. This was not the place it used to be!”
The CEO was devastated. He couldn’t believe that in just nine months a new leader had so dramatically changed the environment and culture he had taken so long to build. He fired the COO and hired my firm to assist in the hiring of a new one; one who truly fits the culture of their organization.
For starters, I met with employees at this organization and asked them about the company and the culture. I also asked specific questions about the just-fired COO. I heard comments about how “the communication lines changed” and that “we were put in silos and not encouraged to work together.” People started to become afraid for their jobs, I was told, and the culture became one of “secrecy, turf wars and motivation by fear.”
Through my company’s cultural evaluation and ensuing recruitment process, we were able to identify a new COO who was a great fit. Today, one year later, the company is doing well and the new COO is getting rave reviews from employees, management, ownership and the CEO. The company is growing again despite the tough economy.
What’s intriguing about this story is that the COO we placed has a very similar background and track record to the first COO. In fact, on paper the “disaster COO” may have even been considered a better fit. The difference between the two individuals, however, was how they fit the company’s culture and values. The new COO shared the values of the company and the prior one did not. Now, this was not a case of one bad COO and one good one; it was simply that the two individuals approached their work very differently— different styles, behaviors and values.
In his new book, The Right Leader, author Nat Stoddard states that the traditional hiring process is “broken.” He believes that in the recruitment process companies spend too much time on the “peg” and not enough time “defining the hole.” What he means is that most organizations do not spend enough time evaluating their cultures, visions and strategic directions. Or, if they’ve defined these areas well, they haven’t made them relevant in the company by relating them directly to the hiring process.
Stoddard refers to this evaluation/assimilation as getting the “Corporate Lay of the Land.” Because most companies do not have an adequate lay of the land, they are left trying to hire without a measurable set of objectives for comparing candidates. Naturally, they fall back to the only thing that is measurable; namely, the skills and abilities of the candidate, or the “peg.”
For a long time organizational culture has been thought of as the “soft stuff.” My CEO client from a year ago will tell you that it no longer feels “soft” to him. He didn’t really have to “start over,” as he described. He was lucky to have a set of loyal employees who confronted him to make a change. Unfortunately, most organizations I encounter do not get this kind of wake-up call from senior staff. Bad situations slowly get worse until it is too late to recover.
There’s no doubt evaluating and assimilating your values/culture into your key processes (especially hiring) takes time and effort. It’s tempting to keep pushing it off for more urgent needs, like making the next sale or getting more products out the door. Yet, what could possibly be more important or strategic than who is on your team? I tell my clients that if they take the time to assess their culture now, they can save the thousands—or even millions—of dollars it might cost them later.