Strategic Leadership : Hire for Team Fit, Not Just For Role and Culture Fit

How many times have organizations hired that supposedly perfect fit candidate, selected after a great deal of effort, much time and cost, including that of management, maybe involving professional search firms. A candidate who came in with great promise, and expectations, only to crash and burn within a few months, either leaving of their own volition, or being asked to leave? Or worse, staying on but unable to contribute to the levels expected. Maybe managing in a mediocre way, making teams sub-optimal in their functioning and causing attrition either de facto, or through disengaged employees?

There are dozens of stories like this across organizations of all sizes and in all industry segments. Too often, a costly new strategic resource is unable, for various reasons, to make the headway or fulfil the promise exhibited before hiring. Candidates with pedigree and background, substantial experience, and perhaps having a great track record in their previous companies can and often do fail to meet expectations, or take much too long to start becoming productive.

In my post “Accelerating the Breakeven” I spoke about ways to reduce the transition time taken by a new leader in becoming a ‘net contributor of value’. The focus was on ways to speed up the process of bringing the new leader to the ‘breakeven point’, from which he/she starts contributing a net positive value to the organization. However, whatever you may do, if the new strategic hire is not a good “fit” for the role, the path to breakeven becomes even more rocky, may indeed become too long drawn, leading to significant disappointment and costs, both monetary and opportunity, and other collateral losses.

Since senior hires, expensive resources, usually go through fairly exhaustive search and selection processes, it’s usually not the lack of competency, or specialist functional or general management skills, or experience, that is at fault when there is a performance problem.  Often such failures are attributed to the fact they don’t “fit” into the culture of the company. While that’s a reasonable, though debatable, premise, I’d like to take a look at another aspect, which I believe is important and needs to be considered. One that is most often than not, neglected. This aspect is especially true when hiring a senior executive.

A senior, strategic hire, maybe at the CEO/CxO level, or at a business or geography head level, for example, would need to manage a number of senior managers, who themselves manage teams with other managers reporting to them. Isn’t it essential, then, to ensure that the new leader is not just a good “cultural” fit, but also fits the specific leadership requirements of the teams that they are to manage? After all, the organization already exists as a running concern, with efforts already having been put into developing its existing people and teams. Time, effort and money have already been spent in hiring and developing the people that make up these teams, unless, of course, the new hire is required to manage a greenfield project. Isn’t it, then, incumbent upon those tasked with hiring, to assess not just the prospective candidate, but also the existing team that the new leader will have to work with, understand what that team needs in its leader, and hire accordingly? I believe it is essential to assess the team’s strengths and weaknesses and understand the gaps. It is important, too, to understand the team composition and its leadership needs. Once these are understood, the organization would do well to select and hire a leader who not only has the technical, functional and general management skills, the experience and track record, but also brings such leadership style and management skills that both supplement and complement the team’ s strengths. Equally, or possibly even more importantly, select and hire someone who has the leadership traits and attributes and the management skills to understand the weaknesses inherent in the team and who can find ways to bridge such gaps, as opposed to an otherwise good candidate who does not have the leadership, personality and management styles inventories to do so.

Amongst the various other hiring methodologies, organizations use psychometric assessments of shortlisted candidates being considered for strategic leadership positions. These tests are meant to measure the desired personality and leadership traits and management skills that are considered essential to being a good fit for the role, in keeping with the organization’s culture, value and the defined needs for the role. They do at times assess the individual’s capacity to manage teams, in general, alongside the inter-personal skills essential to manage at senior levels with peers and superiors, if any. Using different types of assessment tools, recruiters and search professionals would normally seek to assess the core personality profiles, and traits, measure occupational and management or leadership inventory etc. I agree that using an assessment tool to understand the prospective hire, and his/her overall fit, in general, with the organization and peers is a good idea, if administered and assessed correctly. However, considering what I have said earlier in this article, I strongly believe that its bit uni-dimensional and sub-optimal to conduct an assessment of a potential leader of a business without understanding the team that will work directly with him/her. There are equally good assessment tools that provide a deep understanding of teams. However, in India at least, the practice of assessing teams and then looking for the best-fit leader for the team, doesn’t seem to be in vogue at all. I am not suggesting that anyone should be hired purely because he/ she is the best fit for a specific team, but that, along with all the other selection criteria, this should be another, important one. How much weightage should be accorded to this criterion is for the organization to decide, and that would depend on the role for which the new strategic hire is being considered. The importance of ‘fitting in with the team’s leadership needs’ may need greater weightage in, say, sales, than in a more regulated and rule-bound function such as Accounts and Finance.

I have assisted a few well-known organizations in the final selection process for senior hires. None of them gave any weightage to this criterion. After analyzing the financial and other benefits that might accrue using this approach, changes were made in a couple of them. Although such senior hires are not frequent, and empirical analysis will need some more time to establish causality, the early results have been encouraging. Further, during discussions with some HR Heads and CEOs, whenever I have discussed the approach detailed in this article, I realised that none used any such team assessment while hiring a new leader, nor were they aware of any who did so in any structured manner. However, all of them agreed that it was an idea worth exploring.

How extensive the assessment of the team under consideration should be (how many people and to what level in the hierarchy the team assessment should reach) is a matter best left to each organization to decide. A highly de-centralized organization may decide to assess only the immediate team that reports to the new leader. However, team assessments are normally valid only if the team is large enough to allow for a good play of team dynamics. If the immediate team is under, say 4 or 5 in size, it may be better to conduct individual assessments of the team members or, alternatively, go beyond the first level of reporting relationships. However, if the organization is structured in such a way that there is a blurring of the hierarchical boundaries, either by design or by default, the assessment may require to cover a wider audience than the immediate team reporting to the new leader. While not seeking to generalise in any way, I find that, often, in a large organization, a function head will not reach too far down the hierarchy directly, but a sales head will often directly interact with not just his own Direct Reports, but often one, maybe even two levels below. The assessments in such cases may have to be tailored accordingly. Similarly, in a hitherto entrepreneurial organization, now looking to become professional, the culture and existing structure may be such that a newly hired business leader may not just have to, but even may be expected to, deal directly with team members 2-3 levels removed. The extent of coverage, would therefore be a function of the organization’s structure and also of the role sought to be filled. Similarly, the depth of assessment and analysis would need to be customized for not just each organization, but also for different roles and functions. And this would be dynamic, dependant on the stage of the lifecycle that the organization is at, and the way its management style and culture has evolved over time.

Accelerating the Breakeven : Helping New Strategic Hires Create Positive Value Faster Through Transition Coaching

Expectations are high when new leaders come on board. However, since they most often do not have the necessary understanding of the organization’s social networks, its cultural idiosyncrasies, the reality underlying the quantitative and qualitative data and information that they are provided with, or indeed, access to unbiased information, they are often forced to go forward or make plans based on whatever limited understanding and interactions they have been able to manage in their first few weeks on the job. This in itself can delay the point at which they start contributing positive value to the organization. The greater the time taken to reach the breakeven point, the greater the effect on the organization. The collateral effect of the delay in the new leader getting firmly on his or her feet can be immense, with any anticipated productivity gains taking a much longer time than planned for. Not to mention the disappointment that at times follows the honeymoon period, the doubts about whether the right decision was taken (and such doubts can be 2-way),  leading to all-round stress and productivity losses.If organizations use the right strategies to assist transitioning leaders, early failures can be prevented and the net value contribution would happen much sooner than otherwise.

In his book, “The First 90 Days”, Dr. Michael D. Watkins describes the breakeven point for new leaders as the point at which new leaders have contributed as much value to their new organizations as they have consumed from it. New leaders are net consumers of value early on, and as they learn about the organization and how it works, its business focus alignments and misalignments, the various social networks that exist in the organization, its processes and business models, methods and idiosyncrasies, they begin to create value. From the breakeven point onwards, they are, hopefully, net contributors of value to the organization. Dr. Watkins’ research based on best estimates across 210 company CEOs and presidents showed that the average breakeven point was 6.2  months. (The First 90 Days : Critical Success Strategies for New Leaders at All Levels; Dr. Michael D. Watkins, Harvard Business Press).

It appears evident, then, that organizations should invest time and money in helping new leaders to reduce the transition time and accelerate the breakeven point.  A robust onboarding programme that helps such new leaders quickly become net contributors of value appears to be self-evident. However, a random survey that I conducted of HR practitioners at different levels working across 14 organizations in India showed that, typically,  organizations that do have an onboarding program in place, focus on getting junior hires up to speed in their new position, learning responsibilities and expectations as well as the company’s culture. Such structured programmes seem to be minimal as the seniority of the new hires increases. Of those 14 that I spoke with, only 6 indicated that they actually conducted on-boarding programmes for some levels of middle management, whatever might exist on paper. Few really had a structured programme for more senior managers, other than some inputs regarding essential HR and related processes. A few, MNCs with reporting relationships outside India, did have orientation and ‘getting to know each other’ programmes typically at the Asia-Pacific HQ level.  However, these do not address the issues around actually managing their roles on the ground.

I am not suggesting that on-boarding senior executives and leaders should be in the same format as for people relatively less senior in the hierarchy. One of the difficulties expressed by a number of the people I spoke to is that people in senior executive positions neither want to spend days on an in-depth onboarding programme, nor do they see value in going through such a programme that cannot give them the insights they need to do their jobs. Senior executives and new leaders at this level need to gather insights and understanding that the HR departments will never be able to provide. So, onboarding needs to take a new meaning here.

The first step to managing an effective transition is to provide newly appointed leaders with guidance on how to take charge in their new roles through the development of a transition plan. This plan can make a major difference in the way a new leader performs in the new assignment. However, very few senior executives will be comfortable with a plan, which they have to follow, that is made and set for them by someone else.  Unless the plan is made by the individual himself or herself, they will not really own it. Also, the programme has to be one that does not disrupt the normal working schedule of the new leader, allows him or her to get on with their new roles – but helps them in doing so.

Transition coaching can be of immense use in situations like these. A transition coach will help the new leader plan and build a roadmap that offers him or the ability to navigate challenges inherent in the transition. The coach helps the new executive in diagnosing and understanding the new environment and then understanding where he or she needs to fill the gaps. A transition coach works with a new leader, to understand the organizational structure, strategy and culture of the company and how his or her own leadership and management styles, personality attributes and professional skills are best suited or adapted to work within the existing the environment in the short run. The coach also helps plan the manner in which necessary changes to the environment can be induced over the medium and longer term. Thus ensuring that work continues with little disruption in the early stages, and any substantive and required change happens when the leader is accepted and can influence such change in a positive manner. The coach helps the leader to put together an action plan that will define critical actions which must take place during the first 30, 60, 90 and maybe 120 days.  The purpose being to establish respect, induce trust, establish credibility and secure early wins. All of which will position the leader and the team for greater and consistent success. The coach continues to work with the leader to ensure the plan is followed, or modified on-the-fly if required, but that committed actions and tasks are carried out. The transition coach may also seeks inputs from some of the key players, such as the leader’s boss, peers, direct reports and other key stakeholders, once early impressions of the new leader have been formed, to plan for any mid-course corrections that may be required. By this process, the new leader is enabled to take charge of the new situation, meet expectations, ensure alignment, and accelerate the breakeven point.

What could the ROI be, of accelerating the breakeven? Let’s take the example of a Head of Sales with a “cost to company” of Rs 7.5 million, with 4 Zonal Heads reporting to him or her and these Zonal Heads each have 4 State Heads reporting to them. Let us again assume that this team has a total sales target of Rs 12,000 million. Its evident that, bringing forward the breakeven from 6 months to 4 months would have a substantial benefit in terms of the cost to company of the Head of Sales. If we again assume that productivity in his or her immediate team of Zonal Managers and State Heads is reduced by 30% during that six month period, the effect on sales also can be seem to be substantial. Substantial downsides if the breakeven of the new leader is delayed, substantial upside if it is brought forward. And here, we have not even factored in the collateral resource costs and such other factors, which would all contribute greatly to the financial impact, negative or positive, as the case may be.  This is obviously a simplistic linear calculation and an appropriate ROI model would produce more meaningful figures.

To conclude, by incorporating Transition Coaching as an essential component of a leadership development framework, organizations would only putting into place what should have been in place long ago. Making an investment in critical and significant resources that are not likely to attrite soon, investing in the strengthening and successful alignment of senior teams, all these should not really require debate. By putting in place a structure to accelerate the breakeven, organizations will not just reduce the, often significant, costs that can accompany delayed integration and alignment of new leaders, they can enhance the rate of productivity, improve the rate of success of new leaders, drive improved business results.  In effect, enhance the top line and enable the bottom line, faster and more efficiently.