56% of executives reported that their company was not ready to meet leadership needs in 2016.
Even after growing their leadership development programs or redesigning their organizational structure, and despite high investments in executive hiring, companies simply can’t find enough candidates to fill leadership roles.
Talent teams sink a disproportionate amount of time and resources in finding the right people for these leadership positions, partly because they don’t always know where to look for leadership in executive hires. They can look at track records and years of experience, and ask questions about a list of “leadership qualities” when they get to the interview stage, but it’s harder to know what to search for to source great leaders in the first place.
When you think about it that way, putting together some internal guidelines or playbook for finding leaders and filling your executive pipeline can have a lot of impact on the overall performance of your team team.
The challenge of executive hiring
Getting executive hires right is a challenge, and not just because these candidates will be placed in strategic roles with a high impact on the organization. Yes, making a bad executive hires can cost significantly more money. The real issue, however, is that it’s usually much harder to spot a bad executive hire early.
Interviewing executives is obviously tricky, because they’ve had much more time to refine their story, hone their pitch, and generally promote themselves in all kinds of settings. Those are necessary skills to get promoted to executive roles in the first place, so of course they’ll come in play during interviews.
After they’ve signed the offer, however, you’re still not done. A senior executive’s role usually involves a lot of strategic planning and implementing; that means that their work takes time to have an impact on the organization, and is harder to evaluate in a “trial” period. To make it even more ambiguous, it’s likely than even a bad hire will do at least some things well - they wouldn’t have made it up the corporate rungs otherwise.
Of course, there isn’t one template, cookie-cutter type of business “leader” out there. When hiring for leadership, context matters a lot: where you are on the business cycle as a company, what departments you’re hiring for and what challenges they’re facing in the near future… This makes the search for those leadership qualities even more challenging.
What leadership in executive hires looks like
Leadership in executive hires comes in many forms. It’s very common to see former athletes, veterans, or entertainment professionals give talks at company retreats because you can often find great examples of leadership qualities outside of traditional business paths.
However, every talent team out there is already trying to get an edge by looking for candidates with a background in the military or in professional sports. You have to go even further out.
MBA programs are a good place to get ideas for what to look for to identify outstanding leadership abilities, as they tend to get applications from a diverse set of candidates trying to convert into a business career. The Poets and Quants’ MBAs to Watch list is a good source of inspiration: you can find the stories of all sorts of individuals who reconverted into management, from olympic coaches to professional poker players to improv artists.
These nontraditional career paths can help your team structure the search differently, and zone in on specific leadership qualities that are harder to identify otherwise, like risk appetite, passion, or resilience. It also gives you the advantage of finding hidden gems that other teams might not necessarily be competing for. Who else would be searching for senior executives with a background in comedy or bungee-jumping?
Executive leaders need the right culture
Finding the right leaders for executive positions is hard, but the challenge is compounded when you’re hiring from outside your organization. Research by CEB shows that outside hires need twice the ramp up time that internal hires require, and that 40% of leaders who are hired from outside fail within the first 18 months. The reason why? They just don’t fit in well with their teams.
The insights from this survey of 320 executives shows that there are multiple types of cultural fit for a leadership hire: Some people conform to the existing culture, and others add to it. Some of the culture fit is related to general organizational values, and some to the specific network of people linked to the role you’re hiring for.
In this Financial Times interview, Informa CEO Stephen Carter makes a similar point. One of the things he makes clear to potential hires for senior positions, for example, is that they need to be “really comfortable working for a company that most people won’t have heard of and don’t know what it does”.
Josh Hannah, GP at VC firm Matrix Partners, suggest putting a lot of effort into following up on as many references as needed to feel like you’re getting a complete and consistent picture of the person you’re hiring, even before you put an offer in front of them.
It is a time consuming process, but given the high cost of making the wrong choice, as well as the benefits from finding the right people, the return on that time investment is always positive, many times over.
Effective executive hiring teams take the time to figure out a method to identify the leadership qualities they’re looking for. It’s not enough to simply have a discriminating job prerequisites list, or to look for longer years of experience. The leadership qualities required for senior executive roles can sometimes be found in unexpected places.
You don’t have to start with a full-out playbook; your first step can be a list of qualities and examples of how they can manifest for some of the most common executive roles you hire for. As your team gets more comfortable, you can build out a more comprehensive picture of what leadership in executive hires looks like in your company.
State of Talent Engagement 2019 report
The results of the State of Talent Engagement 2019 survey are in! You can download the full report here for statistics and data on how companies plan to engage with talent in 2019.