in front of a central board. Indeed, it is noteworthy and indicative that their eventual downfall was accelerated, at least in part, by a departure from this disciplined approach, leading to a less than clear succession policy and a subsequent weakening of the Inca Empire (see Chapter 5, “Tackling the Real Opponent”). But it is not only family businesses that make mistakes when recruiting their senior managers. Christine Wolff, an experienced business manager and non-executive member of a number of boards, considers “wrong personnel decisions” to be the most serious mistakes she has made in her career to date and identifies the most common pitfalls.
From Christine Wolff, multiple board member:
There are four typical mistakes made in the area of personnel management, all of which I have made myself:
1. Hanging on to average or bad managers for too long
2. Promoting the wrong people, either because you are under time pressure or because you are not focusing on their actual qualifications
3. Giving the job to the person who screams loudest, just to reduce the pressure at that moment
4. Promoting or transferring someone to another department to get them out of the way
And what have I learned from this? If possible, try to avoid time pressure, because under stress everyone makes mistakes. You should be well-structured in your approach, take time to look closely at the qualifications of each candidate, and it is never too soon to start actively developing talented people, something that is often overlooked.
We wonder if you have ever made one (or more) of these mistakes. We certainly have. One thing is certain: If the real cost (in dollars and cents) of poor personnel decisions were included in budgets in the same way as investment in technology or marketing, then recruitment and selection methods would look very different. Let’s do the mental arithmetic for a moment and add together annual salary, bonus, and employer’s Social Security contributions, costs for advertising the position, headhunter and search fees, and the salaries and time of internal people involved in the selection process, not to mention the time required to ensure a professional onboarding for the new recruit once they’ve agreed to start. Even for relatively junior positions, you will quickly be up to a six-figure sum and can triple that in the case of making a poor appointment, not only because the whole process has to start again from scratch, but also because the wrong person in the wrong place can have serious financial impact due to, among other things, lost orders, lost revenue, compliance issues, and resignations from frustrated colleagues. The latter effect refers to the situation when the inappropriate new recruit has people reporting to them, as it is well-known that people join companies but leave incompetent bosses. We have no doubt that, if there were more widespread and robust financial scrutiny of HR processes such as these, the temptation to make off-the-cuff decisions or follow the path of least resistance in matters of recruitment or career development would virtually disappear.
A successful business that wants to stay that way is well advised to take great care in the way it goes about recruitment and selection. However, the reality is often very different. In his talks, Andreas Krebs particularly enjoys the moment when he invites his listeners to take part in a short exercise. “Think of your ten most important key people. Imagine you could recruit them again from scratch. Who would you keep?” Immediately, you can see on the faces of the assembled managers the mental screening process, as they think through the names in their departments. “Her? Yes, immediately! And him? Not in a million years!” Within just a couple of minutes, at least in their heads, most departments have shrunk dramatically. On one occasion, a clearly frustrated manager answered the question by loudly shouting out “None of them!” Most would retain no more than half of their colleagues, and the remainder would not be rehired. So, what does this actually mean? Are we working with people, in our team, in whom we don’t really have any confidence? And we are not talking about serious weaknesses which could justify sacking people, but just the everyday frustration of team members delivering average, ordinary, unexciting work. But whose fault is this ultimately? The employees themselves? Or perhaps those who recruit carelessly and surround themselves with the mediocre, only to then complain about their lack of inspiration and good ideas?
And, just in case you are thinking, “Well, I had no choice” because you inherited your team, ask yourself this: What’s your plan to shift these colleagues from a “perhaps keep” to a “solid yes”? And then from a “solid yes” to an “absolutely must retain”?
Dilettantism, Disinterest, and Delegation
This apparently simple exercise (“Which of my colleagues would I hire again?”) is an acid test for any leader. Anyone who would prefer to see most of their team move on should ask themselves why they were hired in the first place or why they have allowed them to carry on working without doing something about it. How did it come to this? Where were mistakes made? Managers who have been in their companies or roles or business sectors for a long time frequently swear by their intuition, their “gut feeling,” when it comes to candidate assessment. Now, we don’t want to dismiss or devalue the importance of life experience or the insight into human nature gained through many years in the workplace. The question is whether you can consistently rely on this intuition in the heat of the moment, whether this intuition is equally relevant for different business functions and age groups, or whether our intuitive insight and gut feeling really are as good as we would like to believe. One of our interviewees, a highly experienced leader and human resources expert, gave us food for thought.
From Dr. Alexander von Preen, CEO of Intersport eG:
I don’t think that this sense [a reliable first impression of candidates] stays with you forever. The longer you are in a position of authority (let’s say ten years), the more time this intuition has to decay and wither. You start making poor decisions. Your antennae get rusty and stuck in time. Society changes a lot, different age groups tick differently, life conditions change, education changes, values change, etc. I see this over and over again, also among top managers. Your instinct for people can deteriorate over time and you have to be aware of this.
Wise words, indeed. And let’s be very frank: Can you ever really “know” another person? If the answer is yes, then it certainly is a process that normally takes a number of years. And a colleague who excels in his current job can just as easily fail in the next. We all know the classic example of the good performer who’s been moved into the wrong job for the wrong reasons—the best salesman who is rewarded with a promotion to a management position and fails abysmally. The change is detrimental to the company and very tough for the individual, yet it happens over and over again.
From Christine Wolff, multiple board member:
I come from the engineering sector, mainly working with engineers, scientists, etc., technically top-notch people. And I have made the basic error of not being careful enough about moving very good technicians into management roles. It’s a mistake to assume that a good technician is also automatically a good manager. Some are, but some aren’t and don’t even want to be—and it’s a mistake that can potentially do damage to the business.
In my case, it was different. I am an average scientist, but I have better leadership skills. Hardly a week had gone by in my job and I had pulled together my first team and worked with groups to achieve good results. It wouldn’t have helped the company much if I’d carried on working on the technical side. Others can do that better.
This is a straight-to-the-point and very succinct example of putting the principle of “talent before seniority” into practice. Unfortunately, the idea is frequently turned on its head when proven specialists are rewarded with management positions. Company loyalty and good performance over an extended period of time in a specific position is rewarded, rather than considering what a person can do best
