Cornerstone Blog

 

When can you use an executive coach?

The sooner the better.

No, I’m not being flip.   There is a growing belief that the earlier an executive coach is inserted into the equation, the greater the value to both the executive and the company that hired him or her.

The underlying stats have been there for a long time.

It has been widely accepted in executive search that the failure rate can be as high as 40% in the first 18 months of the hire.   Now that seems low.  A study in the Harvard Business Review suggests the figure could be as high as 50%-60.

The HBR figure comes from one of the seemingly few studies that have wondered why.  The publication “Rising to Power” is subtitled “The journey of exceptional executives.” There are four sections, but the clue to the alarming failure rate is right there in the first four lines of the synopsis:

“Nearly two-thirds of all leaders entering into executive roles lack sufficient understanding of what is required of them and are underprepared for what they will face”

This is the opening conclusion by authors Ron Carucci and Eric Hansen after performing a 10-year, longitudinal study of organizations and their leaders.  They found that many of the issues faced by newly minted executives are a result of rising to leadership roles earlier than ever, despite a lack of experience and after minimal— if any—formal development.

They describe the initial shock and disorientation executives feel when entering their new roles at the top of the hierarchy as “altitude sickness”.  It takes time to acclimatize to the new perspective and responsibilities their job requires.

If you accept this – and it does make a lot of sense – it is immediately clear that the problem lies on both sides.  The newly hired executive, however skilled, lacks at the outset the required depth of knowledge in managing and executing a specific, competitive strategy.  In most cases, the organization has done little or nothing to prepare an on-ramp that will acclimatize the new exec at an appropriate rate.

And if you consider the vast range of issues and organizational rabbit warrens, there is unlikely to be a one-size solution.  So, let me ask the question again: when do you need an executive coach?

We’ll look at this up close in the next post.

 

(Following are excerpts from an interview with Chairman and CEO Simon Wan by People Matters magazine of India)

PM:  Is there a process that a global recruiter like Cornerstone uses to hire a new executive

SW: Over the years we have developed a tried and true process.  The process is not unique.  But our experience in the field makes us unique.

There are five steps.  They are Define – Research – Recruit – Select – Hire.  The process is universal and it is how you carry out each stage that builds a successful engagement.  Our researchers and trainers adopt this process wherever they are geographically and the strong business backgrounds of our members help us in determining accurately whether a candidate is fit for a firm.

We use questions that help us in finding what inspires the candidate, her/his level of motivation, and if that fits the requirement of the firm.  The competencies you are seeking have changed a lot in the last 30 years and so has the means of identifying them, but the basic process of discovery has not.

 

PM: What are some of the methodologies that have changed for a global recruiter

SW: Methodology has evolved over the years.  There was a time when our own databases were built on personal knowledge and awareness of who could do what.  Today, finding the right candidate leans heavily on external reference, such as social media and data analysis to determine whether a person is fit for the company

This still puts us in demand because the intelligent interpretation of external data is the critical issue and brings back into play the experience and wisdom of knowledgeable people.  Companies no longer just hire based on a person’s experience.  They want to understand the compatibility of the person and the firm.

 

PM: How do you find the right talent when building a leadership team

SW: The model we follow at Cornerstone is standard in that it starts with looking at what competencies the companies require and then interviewing the candidate based on our analysis of their internal capabilities. Apart from assessing the skills we also understand how this person would fit into the company.

But then we go a step further and interview the hiring manager.  Why? Because when a person leaves a company, he/she leaves usually because of the leader not because of the company. Getting to know the existing leaders right from the beginning is crucial for a comprehensive understanding of the potential fit.

This also gives us the required information about the reasons why someone chooses to leave a particular organization. This is of great importance in executive level recruiting and in hiring managers who should be a part of the firm for several years.

 

PM: When you talk about Cornerstone and global recruiting, how is your consultant strategy different from Asia to Europe?

SW: To us the process and the steps are similar, but the consultants and their requirements are different. For example, they have Artificial Intelligence tools in the United States, but the requirements are not yet as demanding as they are among technological industries in China and India.

The difference in the nature of markets plays a key role and makes the experience of consulting different.  This is why we established two headquarters for the organization – one in China and one in the USA. As a result, we have seen significant growth, especially in China and India.

 

PM: While hiring talent for different companies of different markets, what are the methodologies you have observed and used to adapt to the needs of the market?

SW: As we value integrity, experience and set priorities of an individual in hiring, it may not be a perfect match with the principles of the hiring manager.  Depending upon where in the world we are working, the manager may have in mind a different set of attributes he would want from the selected candidate.

These leads to two outcomes.  First, to find a person who fits the profile of these managers, coaching the selected candidates is essential. Second, once the talent map is provided to these managers, it is our role to match the expectations of the managers to the talent map.  We do that by going outside the industry because the industry background does not affect the leadership level of an individual.

 

PM: What are the key features that characterize an effective leader?

SW: When it comes to finding the perfect leader, integrity plays a big role.  Warren Buffet, one of the world’s most successful businessmen has said “You should look for three things in a person – Intelligence, Energy and Integrity.  And if they don’t have the last, don’t bother with the first two.”

Integrity means be yourself and don’t fake anything.  An effective leader should be able to uphold the company’s values and display them to the employees who must understand the company is not just for making money. In markets like Asia, the leaders coach their employees on the values and objectives as the firm grows from a moderate one to a large corporation

Values becomes crucial in engaging the millennial workforce as most members of this generation seek a higher purpose from their work.

Full interview report is available at https://www.peoplemattersglobal.com/article/hiring/todays-organizations-are-not-just-looking-at-employee-retention-but-value-addition-too-simon-wan-21186

 

Historically, recruiting has been primarily dependent upon the instincts of the employer. Whether he or she felt a particular candidate was fit for a given position was based primarily on the resume, indicating the candidate’s previous experience, qualifications, and job history.

Today, it is widely accepted that organizations which base decisions on data consistently outperform organizations that don’t. Decisions that are based on data are usually more consistent, less risky, and often lead to more desirable outcomes.

A study conducted by the MIT Sloan School of Management indicated that companies that are mostly data-driven had four percent higher productivity rates and six percent higher profits

So why hasn’t this principle become widely accepted in the recruiting process?

The data your organization needs to make more informed decisions already exists. Businesses collect a ton of data on their past and present employees, along with their successes within the company. The trick is bringing it all together and finding the right analytical tools to transform the data into useful insights.

Predictive analytics, a technology backed by machine learning, allows organizations to use their own data, as well as data from outside and third-party sources, in their decision-making process. Recruiting professionals can now use the power of this data to make predictions about candidates and drive efficiencies throughout the entire talent-acquisition process.

What is Predictive Analytics?

Predictive analytics is a type of data analysis that uses data to find patterns and generates models to predict future performance. Predictive analytics can’t tell you exactly what will happen, but it shows what is likely to happen based on past trends. It’s as close as organizations can get to predicting the future.

What if you had access to forward-looking insight on your current workforce that could help you take early action to find top talent that also fits the needs of your organization? As Aditya Narayan Mishra from CIEL HR Services states:

“Organizations have a huge amount of data about their employees: their personal details, education, family background and so on. They also have data about employees’ performance and behaviors. Hence, they can correlate all these three dimensions to determine the typical profile of an employee who is likely to be successful with them. That’s the power of predictive analytics!”

Tech-savvy HR tools, like human capital management systems, have begun to incorporate predictive analytics into their offerings, enabling HR teams to utilize this data-fueled tactic in their talent recruiting strategies. Experts estimate that predictive analytics will be adopted among a majority of firms across the globe for hiring and managing of job applicants. According to the Deloitte Human Capital Trends report, 38 percent of companies use AI, and 62 percent expect to do so by the end of this year.

For employers, this results in decreased time to hire and increased quality of hire. For candidates, it builds a better hiring experience, leaving a positive impression that will factor into their offer acceptance decision.

Here are three ways predictive analytics can benefit your talent acquisition strategy:

1. Improve the talent quality

Using predictive analytics helps recruiters link employer behavior, activities, traits, and performance to desired business outcomes. Many organizations that utilize a predictive model customize their strategy by using attribute and performance data collected from the company’s top performers. From this, they can create a profile that represents an “ideal match.”

When candidates first enter the recruiting process, they create their own profile through assessments that create a psychological or emotional profile, score leadership and collaboration skills, and/or determine a degree of fit within the company culture. Predictive analytics can then compare the two to determine a best-fit candidate.

2. Create a more efficient recruitment funnel

In addition to improving the quality of hires, predictive analytics can be used to improve efficiencies in the recruitment funnel. The recruitment funnel is all of the steps between when a candidate applies for a position and when the candidate is hired. Predictive analytics can analyze resumes and applications to help sift through a large pool of candidates, or as Sarah Brennan, owner of Accelir, an HR technology consulting firm, calls it, “candidate shortlisting.” She says:

“This technology will take a look at your applicants and narrow down or prioritize them based on your past candidates that have made it onto your shortlist. It utilizes your previous decisions to determine a more favorable outcome in future decisions.”

3. Facilitate a better candidate experience

According to Talent Board’s Candidate Experience Research Report, many recruiters are still failing to provide a friendly and straightforward candidate experience. Candidates included in the report cited some of their largest reasons for withdrawing themselves from a recruiting process as: the process took too long, job description difference at interview, company culture not a fit, and poor communication with the hiring manager.

Using predictive analytics can help identify stages of the recruitment funnel that can be streamlined to improve the candidate experience. Determining how many applicants are at each stage of the recruiting pipeline and how long each stage is taking helps discover where applicants are stagnating in the recruiting pipeline.

Keeping things moving prevents good candidates from exiting the recruiting funnel prematurely and can leave a good impression with your top choice.

 

 

The struggle for gender equity in business – especially for women leaders – makes progress in little steps.  A year ago, a McKinsey survey revealed that among the G20 countries, the world’s most advanced, only three have women in at least 30% of corporate board or executive committee positions.

Last month, Odgers Berndtson zeroed in closer to look at commercial leadership roles in the technology sector with more gratifying results: in 2018, women on average earned higher salaries in tech than men.

The Odgers Berndtson survey is interesting because it was made by analyzing 1,000 global executive placements in recent years.  This brings attention to the role played by the recruiting industry.

The merits of diversity in business now being unequivocal, it can be argued that a management consultancy has an obligation to recommend women for leadership positions.

That’s an argument that resonates at Heidrick & Struggles, one of the largest global recruiting firms, which has pledged that 50% of its candidates for Board positions would be women.

It also resonates here at Cornerstone International Group where our 56 global offices include acclaimed international leaders in gender diversity.

One of them is Alejandra Aranda, founder of Humanitas Executive Search, Cornerstone’s member in Santiago, Chile.  Two years ago, she was approached by the Gender Parity Initiative of the World Economic Forum to take part in a Code of Good Practice.  She went one step further and persuaded all eight of her top competitors in Chile to sign a 10-point Code of Good Practice on Gender Diversity Management for executive search firms.

Just recently, the Ministry of Women and Gender Equity of Chile convened the most prominent headhunters to increase the number of female Board Directors and chose Aranda as spokesperson.

“Appointing more women leaders is a global trend because it works,” she says. “They bring a different viewpoint and add value.

“According to the Interamerican Development Bank, companies with at least one woman on their executive committee had a return on equity 44% higher and operating profitability 47% higher than those with exclusively male committees.”

With stats like that, you have to wonder why gender equity has to come in these little steps.  Maybe some people still don’t get it?  Nah, guys wouldn’t be that dumb.

Leave a comment and tell me what you think.

You can also read about how Elena Terol of Cornerstone Madrid presented four female candidates for a position on the Board of a global telecom company. The CEO was so impressed he appointed one to the Board and hired the other three.

Ed: In recent blogs we have examined what differentiates retained executive search.  Recently, Pharma Boardroom magazine published an article by our Practice Group experts Eric Bouteiller and Simon Wan on what would be involved in looking for the best pharma executives for a country manager in China.

To be country manager, it is vital that candidates are the best pharma executives — sharp professionals and masters of commercial excellence, as competition has intensified in recent years. It is about leading the design and implementation of effective strategy in all distribution channels throughout the country’s various regions and provinces. China affiliates are often very large organizations with a headcount of several thousand and recognized leadership by the team is of utmost importance to generating value to patients and shareholders.

 

Political Savvy

All of the major global pharma companies are now well-established in China and some local companies are developing very quickly. At the same time, growth is slowing and building market share has become more complex and difficult. Political savviness relates to the ability to interact with Chinese authorities and build good relationships. The best pharma executives will also have the ability to leverage headquarters’ resources, explain the reasons for ambiguity, and emphasise the need for agility as China attempts to define its new rules of the game.

 

A Hands-On and A Strategic Mindset

Often, we look for candidates that are either strategic or hands-on. In China, we need candidates that are both! We need people that are able to interact with everybody in the organization, from top to bottom. Chinese affiliates get the most visitors of any global affiliate; from top management but also from a company’s investors. At the same time, country managers need to be able to connect with their frontline sales team.

 

Resilience and Good Communication

What matters in China is success over time. The traditional three-year country manager tenure is not long enough to really have an impact on the organization and the market. It is relatively easy to get short-term results by playing with stock, but long-term results are the only KPI that matters. The best pharma executives are top achievers who tend to be excellent communicators within the affiliate, with peers and authorities and especially with headquarters.

 

What are the Challenges They Will Need to Address?

 

Building a Talent Pool and Pipeline

In 2018 many Big Pharma companies were caught by surprise with the departure of key talents to local firms. There is therefore a clear need to mentor leaders and potential successors in-house. This is something that is feasible for large international companies; it is a matter of anticipation and professional support.

 

Learning the New Rules of the Game

Frontline teams are facing changes at all levels, both internally in terms of raised expectations and matrix working and externally with pilot schemes, new paradigms and often contradictory rules. Organizations in China need real leaders who have the capacity to envision what is coming and communicate well and learn from their teams. Motivating in a period of volatility, uncertainty, complexity, and ambiguity is key.

 

Shaping Policies

A good China country manager needs to join industry bodies in order to try to shape policies. Many companies see industry bodies and communication with authorities as a one-way channel. They miss the point. China is inventing a new system, the market needs country managers that are ready to commit. A good country manager needs to go beyond day-to-day business and embrace the full picture, which includes contributing to the wider environment.

 

Communicating Well with Headquarters

Many affiliates can manage challenges on the ground, but HQ does not always support this because they just do not understand what is happening in China. There is a strong trend towards the localization of country managers, which is positive as they are able to manage business better.

However, at the same time, teams often complain that HQ does not provide enough support and that “everything is slow” in a multinational company. This is a direct consequence of leadership often being perceived as “too local” and not always being trusted by HQ. From HQ’s perspective this is understandable as China is now a significant contributor to global results and one of the only growing markets worldwide.

For information on pharma resources in China, contact Eric Bouteiller at eric-bouteiller@cornerstone-group.com or Simon Wan at simon-wan@cornerstone-group.com . Simon and Eric are Practice Group leaders of our Life Sciences & Health specialization.

 

 

 

 

Much is done today to reduce the risk latent in the hiring of a top-quality senior executive.

And there is risk.  After 18 months you could find that the superstar you were thrilled to engage has leadership characteristics that are not fitting comfortably with the rest of your C -team.  Correcting that can lead to costs running into hundreds of thousands of dollars – and more.

(See also Getting it Right the First Time)

So much of the executive recruiting process revolves around the hiring company resolving whether the candidate can continue to meet expectations in the long term.

What about the reverse?

A top talent is equally concerned about making the right move. The wrong decision can be ruinous to a career and as damaging to the talent as to the organization.  An incoming leader will need to be satisfied not only that the existing opportunity is a fit, but that the organization is one that can continue to keep him challenged – and rewarded – going forward.

Not everyone gets that. One person who does is a long-time client of mine who recently, while discussing an executive search project, asked me: “This is a new position and we are going to hire the individual that best fits.  Will she be challenged moving forward once the role has been established?”

How much responsibility does the organization have?

Recruiting someone involves convincing them the role you have is better for their career than the one they are currently in, or one they are considering.  Like you, they are making a decision that has a long-term impact.  What happens after the initial success?  That is where the organization steps up and defines itself.

Organizations which are not concerned about the individual’s career are perceiving the new hire more as a consultant.  These organizations are focused on getting the job done right, but not much beyond. Organizations with “heart” (and enlightened leadership) want what is best for the individual as well as for the organization.  Outstanding leaders will understand the individual’s career vision and consider the employee for meaningful future opportunities within the organization.

The challenge is today’s flatter organizations 

Good leaders do not assume that everyone should continue his or her career in their current functional area. As one told me, “you end up with a very talented specialist who is only prepared to contribute in a narrow manner.”

Diversity in experience provides professional growth.   An individual moving into another functional area brings a new perspective—a different way of looking at things.   He or she will challenge what has been accepted.  Since future growth is based upon asking new questions, not simply improving one process, the organization will change for the better.

Which brings us back to Day One.   Organizations with a commitment to their people, a long term view of their path to success and a genuine pursuit of greatness, do not hire top talent for today.  They are looking far, far down the road.

 

A couple of posts back under the title “Get it Right the First time”, we looked at the advantages offered by a Retained Executive Search firm versus a Contingent Search firm in hiring senior executives.  (You can revisit that post here and/or download our E-Book “Retained or Contingency.”)

That discussion came down heavily in favor of “retained,” but left you at the starting post. Great, you’ve got the right horse for the track but you are a long way from home.  There is more, much more, to be learned before you can feel comfortable that what you are doing will get you where you want to be.

Here are three basic understandings that govern the success of any retained executive hiring initiative.

1.  Understand the game

The selection of retained search as your model gets you off to a good start, but there is a lot to learn.  You are likely acting on a referral but if not, there is an initial selection or short-list to make.

There are thousands of executive search firms and the best in the world are members of the Association of Executive Search and Leadership Consultants (as are we). So, start here.  The AESC logo is a respected and reliable indication that you are choosing to do business with an expert and trustworthy organization.

Your due diligence process should cover major issues.  Does your talent pool need to be global? Does the firm have a track record in your business?  Is this a domestic hire or cross-border? If the latter, who is managing it?  What is the average time to engagement? What is the stick rate at 24 months?

Then there is the part of the iceberg under the surface.  Do these people really understand your business?  Do they understand you? Are they people you are willing to spend time with?  Do you admire or at least respect the way they run their own business?

2.  Understand the partnership

This is not just another client-customer contract.  To achieve the best result, you must become partners with your retained executive search firm.

Recognize that in addition to far-ranging access to top talent, the recruiting team is bringing to the table specialist skills, knowledge and intuition that you don’t have.

They look at things differently.  Don’t get hung up on your description of who you want. The search pros are more interested in hearing what it is you need to accomplish.

The best recruiters think like engineers.  They look at the desired end-state and then look at how they can get you there.

That includes looking way down the road.  We can quickly become attracted to great talent with the subject matter expertise and resume that fits perfectly.  After reviewing a dynamite resume, a successful phone screen and a great in-person interview, your reaction is “wow, this lady is off the chart.”

Your partners will help you see 18 months down the line.  Studies point to a breakdown in the culture fit as one of the five main reasons for 40% of executives failing inside the first 18 months.

To minimize this risk, successful executive search firms spend a lot of time assessing the fit.  They get to know the candidates and they need to get to know you.    It’s important that you contribute “environmental information” that will help your partner to understand where you are coming from, your priorities.

And walk the talk. There’s no point in claiming to be a nimble, fast-moving organization if you take two weeks to respond to your emails.

 

3.  Understand your candidate

Finally, you have to understand what is motivating the candidate.  Once you have arrived at a provisional choice, you need to know why she or he would choose you.

The more senior the position, the more personal the selection exercise becomes. The person you engage will be your peer, will have to fit in with the leadership team. He or she must be someone able to understand and share sometimes intimate aspects of management and leadership.

Which brings us to trust. Today, trust at work is fundamental to a company’s corporate strategy because the employer-employee relationship is one of the most tangible trust-points in our lives.

To take the culture fit issue one step further, you and your colleagues must be satisfied that this is someone you can work with, someone you feel you can trust.

Your candidate is no less concerned.  He or she is about to make a major commitment, and a huge life choice comes with risk.  A wrong placement can have devastating effects on the reputation and career of the person being hired.  Professionals with an otherwise illustrious career have suffered major setbacks as a result of having been hired into a leadership positions for which they were not prepared.

 

Next Steps

Finding or replacing a talented leader has probably never been easy.  Today, technology, innovation, globalization and heightened life awareness make it more complicated every day.

Building a top-notch leadership team is rated by many organizational gurus as the most important task of a business enterprise.  A fundamental element is anticipation.

So, before the need arises, research the optimum path to attracting and securing the best talent in the world.  A good starting point, IMHO, is our website at www.cornerstone-group.com, where you will find good information, links to learn more, and access to people worth listening to..

Enjoy!

 

2019 is now really starting in China, with the beginning of the Year of the Pig. Everybody in the China pharma market is focusing on how the new central purchasing pilot will be deployed in the coming months.

At first glance it looks familiar, with convergence with known international practices: strengthening of bidding rules, phasing out of off-patent products, shortening of supply chain etc. Some see the changes as an “extension” of the older bidding system which is aggregating a number of regions (the name of the campaign is misleading: “7 provinces plus 4 cities”). The key is not here. In fact, deep price cuts are expected for a committed volume of products. It is a change of paradigm.

Reshaping Admin

In a typical way, the Authorities have started by reshaping the administrative structure in 2018 with a new leadership and reaching higher in the political hierarchy. Decision-making goes up to the Prime Minister.

At operational level, a new organization is also in place in order to integrate the whole “drug policy”. The new administration integrates medical insurance and pricing under one roof and is managed by a former vice minister of Finance. Even more important, they have decided a new approach (silu): “combination of market and plan”. The products delivered at hospital and reimbursed are considered now as under the direct management of the State and its plan. They have started with oncology which has imported products and the most expensive.

Volume Commitments

There will be commitment of volume purchased by the hospitals. It is the first time that this would be done at the level of province and above. The question will be the quality of the forecast and its consequences.

What will happen when numbers are not met? How to ensure supply if forecast is too low? How to compensate companies if price has been slashed but volume is not reached? How will the Authorities ensure that hospitals strictly implement the policy? There is currently a lot of contradictory news, such as whether the hospitals would keep the right to have a second round of negotiation procurement when they are grouped together.

More than a tendering system

The vision behind this scheme is far more than a new tendering system. It is in fact an integrated way to manage the use and supply of drugs in hospitals. The State is increasing control within the hospitals.

The new system is not limited to purchasing, but also includes prescription and operations in general. Directors of hospitals are no longer the highest authority in the hospitals and final decision-making is done by the Party Secretary.  Often, he or she is a former Director and knows his business, but the nature of the decision making within hospitals is changing and reverting to the past.

The behavior of doctors is also more controlled with guidelines that dictate the prescription of purchased products for at least 70% of their activity. The implementation will be strongly facilitated by the remarkable IT infrastructure developed in China in recent years.

Bottom line. We can foresee three major consequences if the current policies are fully implemented.

1. Impact on Patient Choice

First and most important, patient choice is at stake. Recently, the Authorities have very rightfully standardized procedures, bringing much needed rationalization. This work is not yet finished. But at same time the clinical reality should prevail, and Patients and Doctors need alternative therapeutic solutions. They should be given the choice to adapt their clinical strategy.

2. New Business Models

All companies will need to adjust their business model and P&L to a lower margin. Will international manufacturers still be able to promote innovation in big way? Will local manufacturers be able to raise quality if they have no incentive to do so? The slow-down of the Generic Quality Consistency Evaluation program has disappointed numerous local companies. Distributors too will have to make choices and focus on short-string supply or promote on behalf of the manufacturer.

Maybe most worrying, local start-ups are seeing their business plan and assumptions collapsing. Recent IPOs are almost all trading below their introductory price, in part because there was a bubble but also because investors now understand that pricing assumptions for new products are being slashed. Innovation – both local and international — requires reward.

One consequence of the impact on business models will be a reduction in the number of Medical Representatives employed for primary care products. This will limit the valuable education work that takes place on how to use primary care drugs to maximize healthcare outcomes and improve Chinese Patient Health.

Medical Representatives are major actors in organizing medical education events to share best practices among the healthcare community, creating educational bridges between tier 2/1 hospitals and tier 3 or even county hospital. Reducing their presence might go against one of the goals of the government to improve healthcare across all the hospitals.

3. Access to Talent

Finally, from the talent angle, we see that Market Access has now become the core requirement critical to navigating the policies at both the national level but also at the hospital level to follow detailed deployment. Demand is huge for talent in quality (address the challenges of the new policies and more sophisticated requirements) and at same time in quantity as access is needed at each province/city/hospital level. It is another hot recruitment and development area!

I define Leadership Capacity as the ability to lead more effectively and more efficiently at higher levels of organizational complexity.

That definition assumes that a team member already is leading effectively and efficiently at their current level. The ongoing research in leadership development documents that a leader can continue to enrich, enhance, and expand leadership capacity.

Delegation is one critical pathway to maximize capacity

Delegation is a learned competency answering the who, what, when, and how interrogatives. Leaders have three options: (1) Not delegating, (2) Delegating prematurely, or (3) Delegating developmentally

There are three myths surrounding the first option.  Leaders do not delegate because they tell themselves:

“I need control.”

“I can do it faster.”

“It takes too long to train someone else.”

 

In reality, none are valid.  Leaders who maintain full control of the details in operational work processes make three long-term mistakes:

1. They become the bottleneck to productivity.

Leaders who assume they can do it faster (or better) miss the perspective of the “Future Productivity Potential” (FPP) from other team members who learn the skills needed for new assignments. The result is more people who can produce more work.

2. They hinder the development of emerging leaders.

Not delegating leads to confusion and frustration when team members are given full responsibility but not full authority. The application of new learning in stretch assignments is what contributes to new competencies and greater capacity. Organizations that value development and delegation are solving the attraction, retention, and engagement issues faced by others.

3. They keep themselves busy in operations.

They shy away from the lonely journey to the 30,000-foot perspective needed for strategic leadership.   When they do, no-one else has the assignment

 

The Delegation Matrix

Delegation is not only learned but it is a process of moving a team member from low responsibility and low authority to high responsibility and high authority.

Leadership Debrief

What operational tasks are you hanging onto that someone else could do? Why?

What operational tasks keep you from the strategic leadership needed for greater effectiveness and efficiency at higher levels of organizational complexity?

Identify one task you could delegate and identify the team member you will invest in to the point of full responsibility and full authority. How about now?

 

There is a statistic that sees a lot of use in the executive search business: “40% of executives hired outside fail in the first 18 months.” The number varies. I’ve seen it as high as 64%. Whatever it ends up at, the message is that installing a new leader – we’re talking C-level here – is a very fraught business.

Replacing a leader is a costly process. Not getting it right – watching all that time and money walk out of the door prematurely – is brutally expensive. Estimates vary between multiples of thousands and millions. When CEO John Walter left AT&T after less than a year, he took with him $25M. It took $100M and a shareholder lawsuit for Disney to get rid of Michael Ovitz after 454 days.

Most of the time, this “fail ratio” is cited in defense of “onboarding”, the practice of assigning a coaching program to help the newcomer adapt and begin contributing to the bottom line as quickly as possible.

Makes sense. Most of the members of Cornerstone International Group around the world offer onboarding with a high-level executive search program.

Discounting the token onboarding – “here’s your computer and the coffee’s down the hall” – job-specific coaching is shown to slash the risk of failure. Our colleagues at PrimeGenesis, an onboarding specialist firm, claim reductions from 40% failure at 18 months to 5% or less. So, as an insurance policy, it’s a good buy.

Do it right, not over

But there is another way. As a wise old carpenter once told me, do it right, not over. In other words, take extra care and effort to get the right person to start with. And this is where the headhunting business sharply divides between the drive-by “contingent searchers” and the “retained executive search” community.

If you are unsure of the difference, download our e-book “Retained or Contingency?” Reader’s Digest version: Contingency works for lower-level hires; Retained is essential for executive hires.

This an effect of process. The contingency searcher seeks out anyone who is qualified. The retained searcher only wants the one person who is the best qualified. The time spent by each on your behalf is proportionately different.

Pareto’s rule reversed

Larry Shoemaker, the President of Cornerstone International Group, made the key point in a previous comment on the Pareto Principle, or the 80/20 rule.

The old recruiting model, he wrote, depended 80% on finding the right candidates, and 20% on everything else.

Today, it takes only 20% of the time to find well qualified people. It takes the other 80% to determine which one will be successful in the future in the specific organization relative to its culture, strategy and purpose.

Qualifying an incoming leader is an intricate process unique to the hiring organization. Education, skill sets and experience are reduced to table stakes. Cultural fit has been shown to be biggest single factor in determining the contribution of a new executive

In the next post, we’ll look at ways of making this critical assessment.