Don’t Hire a Liar

WHY IT MATTERS

Very few decisions will have a greater impact on corporate performance than the hiring of a new executive.

Hire a "Super Star" and you win. 

Make the wrong decision, and the impact could be devastating.

In Steven Spielberg's film, “Catch Me if You Can”, Leonardo di Caprio portrays, Frank W. Abagnale a master impostor and forger. Abagnale worked all over the world under a guise of false identities; a doctor, a lawyer, a college professor, and as a co-pilot for a major airline company—all before reaching his 21st birthday.

This is a very funny and entertaining movie which begs the question, “how did this guy ever get hired?”

SHOCKING STATISTICSSHOCKING STATISTICS

According to the American Management Association and the US Department of Justice:

•Employee theft and dishonesty costs U.S. businesses between $60 and $120 billion per year.1 (Not including the billions spent on protecting against theft: guards, security systems, etc.),

•$36 billion in annual workplace violence 2, and

•The "average" employee embezzles $125,000 over the course of their career1

1 Bureau of Justice Statistics Special Report:  National Crime Victimization Survey2 Workplace Violence Research Institute

2 TYPES OF LIARS2 TYPES OF LIARS

Enthusiastic/ Enthusiastic/ Opportunistic Opportunistic Get caught up in the pursuit of the Get caught up in the pursuit of the

opportunity and sculpt the truth opportunity and sculpt the truth to fit the circumstancesto fit the circumstances

WillfulWillful Seeking financial gain Seeking financial gain

Internal theft Internal theft Paid to go away.Paid to go away.

OUR JOB AS HR OR OUR JOB AS HR OR RECRUITERSRECRUITERS

How you craft and How you craft and execute a recruitment execute a recruitment process which guards process which guards against liars and against liars and delivers the best delivers the best candidate is what we’re candidate is what we’re talking about today?talking about today?

Why Listen to Me?

25 years experience25 years experience 1000 search projects 1000 search projects

completedcompleted 99.7% success rate99.7% success rate 1 Year Guarantee 1 Year Guarantee

200,000 people interviewed 200,000 people interviewed $184,000,000.00 in salaries $184,000,000.00 in salaries

negotiatednegotiated We understand both the art We understand both the art

and science of hiring… that it and science of hiring… that it is simultaneously an is simultaneously an assessment and sales assessment and sales exercise.exercise.

AGENDA

1.1. S.M.A.R.T. Search SystemS.M.A.R.T. Search System2.2. Case StudyCase Study3.3. How to Select a Firm: Best How to Select a Firm: Best

PracticesPractices

S.M.A.R.T.

Search System

S.M.A.R.T. SEARCHIn the executive search industry, as is the case in other professions, methodology is important. Most firms have developed detailed, logically constructed approaches for specifying a position and attracting top candidates.

Needs Analysis

Research

Short List

Recruit

Interview

Reference Checking

Offer Negotiation

On-boarding

New Hire

Business Plan

S.M.A.R.T.Search

Continuous cycle

NEEDS ANALYSIS

NEEDS ANALYSIS

One of the most important components of the search is the initial search strategy because it often determines the search’s success. Spend dedicated time with your search committee early in the process to clearly define your requirements, agree on a successful search strategy, craft a Candidate Road Map, and write a compelling position profile.

The Search committeeThe Search committee Choosing a ChairChoosing a Chair Initial Requirements Session.Initial Requirements Session.

SELECTING A SEARCH SELECTING A SEARCH COMMITTEECOMMITTEE

When selecting a Search Committee, the Board should carefully weigh the answers to these four questions: 1.Which outside Board members have been successful CEOs in their respective careers?2.Who is best positioned to invest the appropriate time into the process?3.Who is in the best position to evaluate and persuade candidates?4.Who has successfully conducted CEO or executive level searches in the recent past? This is a key issue. If no one has the experience, consider bringing someone in who has.

[Success should have a heavy weighting toward exit and share holder value and not just who got a bargain on entry compensation.]

 It’s important to recognize both the public and private reasons behind the search, discuss the overall parameters of the strategy, and agree on the charter and deliverables of the Search Committee.

NOTE: Depending on the circumstances, the current CEO may or may not be a part of this committee.

CHOOSING A CHAIRCHOOSING A CHAIR

A successful search is dependent on a myriad of variables. The Chair needs to insure the following basic components are in place before the search begins:  

A detailed process A detailed process Realistic expectations clearly defined; Realistic expectations clearly defined; A concise and descriptive timeline; A concise and descriptive timeline; A competency based profile of the ideal candidate; A competency based profile of the ideal candidate; A disciplined recruiting strategy; A disciplined recruiting strategy; Talent acquisition sources; and Talent acquisition sources; and An organized and coordinated interview and final selection An organized and coordinated interview and final selection

process. process.

NOTE: Managing an executive search project is a fulltime job. Generally speaking, Boards of Directors as an entity rarely have the requisite experience, detailed operational knowledge and more importantly the time, to commit 100% of their effort to recruiting a high level executive. Most executives are not aware of the amount of dedicated time that is required to locate, court and win over candidates. This is not an activity that can be undertaken “part time”.

YOUR INITIAL REQUIREMENTS YOUR INITIAL REQUIREMENTS SESSIONSESSION

ConsensusRequirements documentStrategy

Consensus

The correct Search Committee Chairman is vital to the ultimate success of the search; they keep everyone and everything moving forward by leading the process and guiding decisions.

The Chair must make certain everyone on the committee is heard without letting the dissenters and detractors run away with the group.

NOTE: Their major challenge is to gain consensus from the group, remembering that you can’t always please everyone all the time.

ASSESS AND DOCUMENT THE ASSESS AND DOCUMENT THE FOLLOWING:FOLLOWING:

Responsibility - Start with your end goal in mind. What results are you looking for? Build the business? Turn it around? Flip it? Talk through the job at length with your goal in mind. Lay out the specific activities involved. Is it a new job or an existing one? Where are the contact points with other positions? Does the role require a person to carry on with the established foundation, or start from scratch? Are you REALLY looking for a change agent?

Authority - Draw out the org chart. Spell out the informal networks which keep the organization humming as well. Who’s on side? Which departments are strong and which are week? Where do you need bolstering? This is absolutely critical in a family run business.

Performance Requirements - Define successful performance. Hard skills. Soft skills. Industry knowledge versus industry contacts. Establish and agree upon observable and measurable performance requirements. Start your relationship with all new hires with observable and measurable requirements in place. Once they are established not only will you know where the new hire stands but so will they when it comes time for the yearly review without prejudice. List experience requirements in detail. Must candidates possess experience in your industry? To what degree must they have already been in a comparable role elsewhere? What specific experiences are an absolute must, versus nice to have? Make sure you spell them out so it’s clear to everyone. Also list execution parameters which are flexible and those that are not.

Personal Qualities - Define the essential personal qualities. Think through the environment and the various personal styles which work in your organization. Decide the degree to which a compatible style is of importance. Are you looking for a change agent? Do you want a person who will be counter to the established company culture or who will promote it?

Fit – Reflect on who succeeds and who doesn’t. Why do people leave? What is the management style of this person’s boss? What styles don’t work with their future boss? If the job requires a high degree of contact with customers and outsiders, think through the image and approach which works best in your market space.

Compensation - Specify all of the elements of the compensation package. Gather objective competitive market data. Think about the upper limits of compensation if the absolutely perfect candidate came along, how far are you prepared to stretch - if at all? What, besides base salary, do people in your company receive and value? Will you pay relocation costs?

Requirements Documents

Position Profile Confidential Candidate Brief

The questions on the CCB align with your requirements on the Position Profile to build a biographical résumé of the individual’s career as it applies to that exact job. MORE ON THIS LATERMORE ON THIS LATER

Sizzle Steak

Sourcing Strategy

Agree on a prioritized sourcing strategyThe Search Committee should agree on a well-defined, yet diverse source environment to create an adequate pool of potential candidates.

Search Committees with the willingness to accept a broad, yet prioritized source environment strategy experience the most success at revealing the best talent.

[Picture the concentric circles of a dartboard where the bull’s-eye represents your sweet-spot and the concentric circles are closely aligned industries.]

NOTE: A quick search of your SIC Code is an easy way to identify “adjacent” markets or feeder markets where skill sets/knowledge may be similar. 

Agree on how people will be brought in to the process

RESEARCH

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ZoomInfo.com LinkedIn.com Trade Associations

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INTERVIEW

INTERVIEWS

ScreeningScreeningCreating A Robust InterviewCreating A Robust InterviewQuestionsQuestionsEvaluating FinalistsEvaluating Finalists

SCREENINGSCREENING

“William J. Strawman, a candidate for Chief Executive Officer, has a career record and resume that is ideal for the role in your company. Once on the job, however, he’s a complete failure. His performance in no way matches the accomplishments detailed on his resume. He is terminated at great expense to the company in terms of time, cost and impact to others both in and outside the organization.” There are many reasons people do not perform up to expectations after they’re hired. A tighter "front end" screening process will solve this problem.  Ask yourself these questions: What has the candidate accomplished that is What has the candidate accomplished that is relevantrelevant to your goals? to your goals? Does their experience meet your needs? Does their experience meet your needs?

Prior to beginning the search, you brought together all the people who have a direct stake in this individual’s success and worked to build consensus on all of the parameters of the role – now you need to follow through and screen against those parameters.

THE ROBUST INTERVIEW

Setting the StageSetting the StageAssuming that attracting the very best executive onboard truly is critical, it is essential that you also have in place a robust interview process. One designed to produce the executive hire you want AND provide a positive experience to the candidate.  Conceptually this is simple: it should be treated much like a first date. This is a business meeting, of course – of equals. Both parties need to make a positive first impression.

Unfortunately many companies fail miserably at this stage no matter how compelling their brand. You can avoid this potentially fatal gaffe simply by treating the candidate much as you would a senior executive from your largest client.

After all, you need this person as much as they in all probability need you. Now is not the time to play Mohammed and Mountain as so many companies do. The company (of course) views itself as the mountain.

INTERVIEW

Act 1 Act 1 Find out why each career move was made. Ask yourself – did it make sense?

Has there been steady career progression?Has there been steady career progression? Was the candidate’s decision reasonable? Was the candidate’s decision reasonable? How clearly did they see the situation? How clearly did they see the situation?

What are the driving forces in this person’s career and life? Look for personal situations, which may influence performance. Look for personal situations, which may influence performance.

Determine areas of job satisfaction and dissatisfaction. Do the same things that were negatives in earlier situations exist in your Do the same things that were negatives in earlier situations exist in your

company?company? Push /Pull questionsPush /Pull questions

What does the length of tenure at each company tell you? What does the length of tenure at each company tell you?

Are there holes in their story? Dig until your satisfied you understand. Dig until your satisfied you understand.

INTERVIEW

QuestionsQuestionsDrill down on CCB

Look for inconsistenciesLook for inconsistencies Check out dates. Check out dates.

Look for subtle clues – i.e., vague answers to direct questions. Get specific answers; if they are not specific, keep digging. Get specific answers; if they are not specific, keep digging.

Get ready to line-up your Reference Questions against their accomplishments [take copious notes]

INTERVIEW

EvaluatingEvaluatingAll successful techniques for evaluating candidates focus on the critical elements of the job, the corporate environment, and the degree to which a candidate can respond to those elements.

Executive evaluation needs to assess the candidate’s:   Set of demonstrated skills in relation to the tasks to be undertaken; Set of demonstrated skills in relation to the tasks to be undertaken; Fit within the relationship structure of the organization; andFit within the relationship structure of the organization; and Interest in undertaking the role they are being recruited for. Interest in undertaking the role they are being recruited for.

Final Assessment Is this an individual who stands out from others you have met? What Is this an individual who stands out from others you have met? What

is it about them that makes them stand out? is it about them that makes them stand out? How insightful are the candidate’s questions about your company? How insightful are the candidate’s questions about your company? Did they do their homework?Did they do their homework? Can you discuss industry specific issues in depth?Can you discuss industry specific issues in depth? Does their method of presentation make a positive impression? Does their method of presentation make a positive impression? Do you sense they are sincere? Do you sense they are sincere?

REFERENCE CHECKING

CREDENTIAL-CREEP CREDENTIAL-CREEP

Credential- creep can range from a candidate claiming they had greater responsibilities than they actually did, to claiming they worked for a company when in fact they didn’t.

Now this may be an extreme case but people do fudge – embellish – augment, and incorrectly describe their credentials. Take for example the former president of Lotus Mr. Jeff Papows who got in trouble several years back for misunderstandings surrounding his education and military service record. According to the Wall Street Journal..

“Papows is “not an orphan, his parents are alive and well. He wasn't a Marine Corps captain, he was a lieutenant. He didn't save a buddy by throwing a live grenade out of a trench. He didn't burst an eardrum when ejecting from a Phantom F4, which didn't crash, not killing his co-pilot. He's not a tae kwon do black belt, and he doesn't have a PhD from Pepperdine University.”

 Granted these are unusual cases, which you aren’t likely to run into, but resume creep happens at all levels with great frequency.  

Patricia Gillette a San Francisco lawyer who defends companies against Patricia Gillette a San Francisco lawyer who defends companies against former employees says, "Probably 90 percent of the time, people lie on former employees says, "Probably 90 percent of the time, people lie on their résumé,” (their résumé,” (http://www.maximonline.com/grit/articles/article_2753.html))

References

Who is NOT a good reference

Who is a good reference Typical Problems Best Questions

References

Who’s NOT goodWho’s NOT good

Relatives and other Useless ReferencesRelatives and other Useless References Don’t use personal references. Relatives and friends are of very limited if any value to you as a Don’t use personal references. Relatives and friends are of very limited if any value to you as a

reference. Their opinions can’t possibly add any insight into the candidate’s work habits on the reference. Their opinions can’t possibly add any insight into the candidate’s work habits on the job. His “buddies” don’t know what he’s like to work with. Character references have their job. His “buddies” don’t know what he’s like to work with. Character references have their place but it’s not here.place but it’s not here.

The Human Resources Department The most frustrating and I would contend irrelevant references are those from the Human The most frustrating and I would contend irrelevant references are those from the Human

Resources Department of the company where the candidate last worked or currently works. Resources Department of the company where the candidate last worked or currently works. Why? Because they don’t work with Candidate on a daily basis so they can only comment with Why? Because they don’t work with Candidate on a daily basis so they can only comment with second-hand knowledge or anecdotal information. second-hand knowledge or anecdotal information. They won’t be familiar with the candidate's They won’t be familiar with the candidate's day-to-day performance unless he’s a super-star or a complete “dud”. day-to-day performance unless he’s a super-star or a complete “dud”. Also, most HR Also, most HR departments are hesitant to reveal anything, no matter how true, which might lead to legal departments are hesitant to reveal anything, no matter how true, which might lead to legal action. action.

References

Who’s good

360-Degree Feedback 360-Degree Feedback

Bear in mind, no one person will be able to give you all the information you’ll need to Bear in mind, no one person will be able to give you all the information you’ll need to make an informed decision. You need to check Candidate’s references slightly make an informed decision. You need to check Candidate’s references slightly differently with his boss, than his peers and subordinates to get a complete picture differently with his boss, than his peers and subordinates to get a complete picture of his competencies. Each reference offers another perspective – another piece of of his competencies. Each reference offers another perspective – another piece of the puzzle. the puzzle.

   Candidate’s direct boss assigns his responsibilities. Candidate’s direct boss assigns his responsibilities. Candidate’s peers know what an overachiever he is. Candidate’s peers know what an overachiever he is. And most importantly, the people who work directly for him -- Candidate’s subordinates – know everything And most importantly, the people who work directly for him -- Candidate’s subordinates – know everything

Candidate’s boss and peers don’t. Candidate’s boss and peers don’t.

   This type of 360-degree feedback is enlightening to say the least. And frankly, next This type of 360-degree feedback is enlightening to say the least. And frankly, next

to his boss, Candidate’s subordinates will provide the most insight into his character. to his boss, Candidate’s subordinates will provide the most insight into his character.

   Here is what do you do you do when the candidate hands you his list of references. Here is what do you do you do when the candidate hands you his list of references.

First, determine if the people on the list are the ones who you need to speak to. First, determine if the people on the list are the ones who you need to speak to. Here are the questions you ask Candidate to assess the suitability of each Here are the questions you ask Candidate to assess the suitability of each reference: reference:

REFEERENCES REFEERENCES

Best questionsBest questions

For Supervisors: 1. “Did/does the candidate report directly to you? For what length of time?” (Less than 1 year is too short a period to form a valid impression. Find someone else). 2. “Did you complete or contribute to their performance appraisals? How many did you do?” Cross-Referenced Interview QuestionsAsk them about specific projects the candidate discussed, and compare the reference’s answers with those the candidate gave during the interview for consistency. For example:  

What was their biggest accomplishment at ABC Corp. in your opinion? What was their biggest accomplishment at ABC Corp. in your opinion? [does it line-up?] What do you anticipate I will find to be this person's real strengths, and what areas would What do you anticipate I will find to be this person's real strengths, and what areas would

benefit from constructive coaching or mentoring? benefit from constructive coaching or mentoring? [is this consistent with your notes?] This position interacts with XXX types of co-workers or customers in YYY types of This position interacts with XXX types of co-workers or customers in YYY types of

situations. How does that compare to what they did for you, and how well do you think situations. How does that compare to what they did for you, and how well do you think they will handle these interactions for me? they will handle these interactions for me? [personalizing this question will cause their voice to crack or quiver if they’re lying to you!]

OFFER NEGOTIATIONS

Negotiations

Reasons to move Psychic Cash

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Psychic Cash

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Reasons to movePush me Pull me

ONBOARDING

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Industry new hire failure rate is too high [more than 50%]

Here’s how you stop it:Detailed hard target deliverablesSearch Chair contact with New Hire

Weeks 1, 2, 4 Months 2, 3 Quarters 1,2,3, 30 days before the 1st annual review

CASE STUDY

Requirements Documents

Position Profile Confidential Candidate Brief

The questions on the CCB align with your requirements on the Position Profile to build a biographical résumé of the individual’s career as it applies to that exact job. MORE ON THIS LATERMORE ON THIS LATER

Sizzle Steak

CASE STUDY

Position Profile

Candidate Brief

1 to 1 mapping of our requirements to their experience.The Brief becomes a “check list” for skills and experience so in the interview we can validate that and focus on “fit”.

CASE STUDYCandidate Brief

Note the clear crisp answers. • No B.S. • No razzle-dazzle

REAL Life Example

7 STEPS THAT MAKE A SEARCH

SUCCESSFUL

7 Steps7 Steps

1.1.Create a clear, consistent Create a clear, consistent agenda for the boardagenda for the board

All focused on the same goalAll focused on the same goal

2.2.Establish Realistic Establish Realistic ExpectationsExpectations

3.3.Explain why people will Explain why people will move here.move here.

Power - sizePower - size Control – equity/influenceControl – equity/influence Prestige – psychic cashPrestige – psychic cash

7 Steps

3.3.Agree on a sourcing Agree on a sourcing strategystrategy

Well defined yet diverse source Well defined yet diverse source environmentenvironment

4.4.Agree on the positioning of Agree on the positioning of the companythe company

Consistent, well supported and Consistent, well supported and logically attractivelogically attractive

5.5.Conduct a complete Conduct a complete candidate analysiscandidate analysis

Employ best practices to assess Employ best practices to assess leadership/fit/etc.leadership/fit/etc.

7 Steps

6.6.Negotiate the offerNegotiate the offer Be the lead in negotiating Be the lead in negotiating

compensation expectations compensation expectations internally and externallyinternally and externally

7.7.Create an emotional linkCreate an emotional link Make the chosen candidate feel Make the chosen candidate feel

“connected” “connected”

How to Select a Firm: Best Practices

How to Select How to Select When selecting a search firm here are the clues to look for: 1.Low Volume Market Strategy: a situation where your business is important to the search firm and won’t get lost among other bigger searches. 2.The best evidence is how much repeat business they do.3.Do they just want the big ones or will they help you as much as they can at all levels. Will they refer you to another firm for areas of search they aren’t interested in.

How to Select How to Select

4. A 100% completion mentality, and track record.

5. A high level of participation in each search by the firm’s principals.

6. A "we are all in this together" attitude.

7. A guarantee that the search consultant will be dedicated to the project until successful completion.

8. Fiscal stability ensures that a high volume of new business is not an absolute must.

How to SelectHow to Select

Ask for a written marketing Ask for a written marketing planplan

Review previous casesReview previous cases Multiple PartnersMultiple Partners Ask about one that failed Ask about one that failed

and why?and why?

Thank you, that concludes our presentation