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Get the right people on the bus!

June 13, 2012
Reason-C++

Reason-C++ (Photo credit: Wikipedia)

I am not a believer in the “Let’s get it right the FIRST TIME” philosophy. I find it too constricting. I believe it forces us to dumb down and not take risks. It makes us operate from too much fear and concern. And on the whole it’s a very boring way to live right. How can you get things right the first time everytime? What fun would life be if we could REALLY do that!

And yet, here I am, advocating the principle! One I hate!

There’s a reason. And, in this case, it’s vital.

As Professor Ranjan Das of IIM Calcutta, so assertively taught me, great companies are great not because they have great infrastructure or great processes or great machines. They are great because they have great people working for them!

Our usual comments are “That company had a lousy strategy so it failed.” Not true. THAT company had a leadership team which was unable to out-strategize it’s competitors. THAT’s the fact.

When a company has better products or brands than the others, its because the people who work there are better or more empowered than the ones who work for the others. THAT’s the truth!

So fundamentally, the key to market-leadership is to ensure your CEO is better than their’s. That your CMO is better than their’s. That your Manufacturing Head is better than their’s.

And that’s why, one of THE MOST IMPORTANT roles a board or CEO needs to play is to ensure they get the RIGHT PEOPLE on the bus. And this is a significant responsibility, since the potential losses of wrong selection could be huge.

Given that a senior C-level professional takes about 90 days’ notice to join, another 90-120 to fully settle down, that’s 6 months’ waiting minimum. And then if this individual were to make a mistake or influence a course deviation that was not in the interests of the organization, the potential losses would be significant. Let’s not take such a jaundiced view. Let’s say this executive is unable to settle and quits after 6 months, well you’ve just lost about 12 months’ output from the role. And in that much time, these days, a competitor can race ahead.

 

             

 

So how do you DERISK this concern?

Evolved companies all over the world are now ensuring that they put senior candidates through a more formal assessment than just the interviews they conduct. Let’s face it, interviews will assess experience, past success and ability. They do not provide any assessment of whether or not this individual will succeed in your unique context.

They use consulting firms that specialize in deeper assessment in order to assess cultural fit. The consultants are able to provide a deeper perspective on whether or not the candidate will succeed in the specific context of this organization, irrespective of past experience, domain knowledge and competencies. This kind of information is invaluable to an organization and can improve the percentage of successful leadership transitions. It also derisks the organization from a potential losses.

For more on this subject, read Great People Decisions: Why They Matter So Much, Why They are So Hard, and How You Can Master Them by Claudio Fernández-Aráoz

PE/VC firms are waking up to this too. They have realized that Human Capital is as important as Financial Capital. They now realize that they need to focus on the following:

1. Prepare the organizational fabric so that value contribution continues even after the founding team exit

Organization Triangle

Organization Triangle (Photo credit: Wikipedia)

2. Develop a talent pipeline below the founding team, so that there is a firm line of succession in place

3. Ensure that the powerful facets of the founding culture are retained, while at the same time introducing longer term survival facets of cost-consciousness, innovation, process orientation, and managing scale and complexity

There is however a long way to go for them, since PE/VC firms continue to be impatient, and organization building is like preparing a child for adulthood – it takes time!

How does you organization ensure that key leadership candidates are not viewed with just one lens? How does your organization ensure that you prepare Arrival Leaders i.e. leaders who are consciously developed for the future job they will inherit? How does your organization ensure that you prepare for an Arrival Culture?

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3 Comments leave one →
  1. July 1, 2012 2:03 pm

    People do business. Thanks. Very well written.

  2. June 20, 2012 4:12 pm

    Way to go, Joy! Don’t get too frustrated. By this posting, I believe you are on the right track:).

  3. June 14, 2012 7:09 pm

    Very well written. Thanks for sharing the thoughts.

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