CHOOSING THE CHIEF ●●: Improving Selection Decisions For Key Executive Positions And Assignments

A. Lad Burgin, Ph.D.

Selecting people to fill key executive positions and assignments is one of the most critical decisions facing senior executives and board members.  Key positions and assignments are “high leverage” roles.  The performance of the person selected affects many people inside and outside the organization.

Effective leadership performance maintains and improves the organization’s ability to perform.  Ineffective performance leads to impairment of the organization’s ability to achieve results. Critical customers and employees may be lost and the organization’s competitive position may be severely damaged.

The case of Andy F. illustrates how a person can appear to be a good candidate when, in fact, he is a poor match to the assignment.[1]  Andy F. interviewed well.  On paper he was the ideal candidate for Chief Executive Officer of Special Technology, Inc.  He had served as the President of his previous employer’s largest division for five years.  His financial results were the best in the company.  He was liked and respected by customers, suppliers and employees.  He was well regarded for his contributions as a member of the firm’s senior management committee.

The selection process used by Special Technology was thorough.  The Selection Committee of the Board interviewed candidates.  The remaining Board members and key executives who would report to the new CEO then interviewed three finalists.  The Selection Committee gathered feedback form the executives and the full Board devoted a day to reviewing the candidates and coming to a decision.  The Board selected Andy.

After eighteen months as the CEO of Special Technology, Inc., Andy was failing. The Company was in trouble.  It lacked direction. There was discord on Andy’s management team. Key customers were shifting to competitors’ products. Financial performance was beginning to trend down and investors were getting nervous.

What happened?

When Past Performance Fails To Predict Future Success

Andy’s case is a prototypical example of how, on paper and in interviews, an executive can meet carefully thought-out selection criteria and yet fail to produce the successful performance anticipated by his new employers and him/herself.  Executive selection errors occur when senior executives or board members fail to understand the:

  • Behavioral requirements of the job.
  • Personal attributes of the chosen executive.
  • Conditions under which past performance was achieved.

Behavioral Requirements of the Job

Executive jobs and assignments may appear to be highly similar.  They require knowledge of the business and industry, competence in finance, marketing and operations, the ability to lead people, and the capacity to engage and relate effectively to employees, customers, suppliers, investors and in some situations the community in which a company is located.  But here the similarity ends.

The specific assignment and the conditions surrounding it frequently require unique combinations of competence for success to be achieved.

Andy’s CEO position at Special Technology provides an example of the uniqueness of executive jobs.  Special Technology was a freestanding company.  Andy reported to a board of directors who were not fully aware of the Company’s current condition.

Special Technology had been coasting for several years while its previous president was preparing to move to a new company.  The primary focus of the previous CEO had been on good financial performance.  Expenditure on new product development, automation, hiring and training had been systematically trimmed to keep the bottom line growing despite nearly flat revenues.  Several key members of the management team had left to be replaced by less experienced (i.e. less expensive) people.  Customers had become concerned about declining service, while competitors were pressing with new products that were challenging Special Technology’s product line.

Special Technology required a revitalization to regain its customer focus and some bold programs to restore its competitive leadership.  The key behavioral requirements of the CEO’s job were to:

  • Quickly size up the condition of the business.
  • Evaluate the competence of key staff and quickly replace those who did not have the capability to move the company forward.
  • Repair strained customer relationships and hold them until new products could be brought to market.
  • Develop a strategy to focus the Company and greatly improve its operations, products and quality in order to regain its competitive position.
  • Clearly communicate the strategy to customers, employees and investors.
  • Execute the strategy and produce visible results.

Attributes of the Candidate

Lacking a capable internal candidate, the Board had turned to external sources.  Andy was one of several candidates.  On paper he was strong.  The division he was leading had a good record of both growth and financial performance.  He was well regarded by everyone who knew him.

He impressed the Board with his practical approach, visible ease with people, and orientation toward action.  In the absence of a detailed knowledge of the condition of Special Technology and a behavioral profile of the CEO’s job, the Board was unanimous in its endorsement of Andy.

Andy joined the firm and began a flurry of activity.  He met with his staff, employees and customers.  He traveled extensively, held meetings, and tried to build consensus on problems and potential solutions.  For the first six to nine months, things seemed to go well.  He got key customers to commit to staying with the company until he could implement changes.  He established relationships with people at all levels.  He focused enthusiastically on problems and solved them quickly, although many of his initial decisions had to be revisited and changed down stream.

As Andy entered his second year as CEO, things were beginning to turn down.  Each major change that he tried to implement met with resistance from one or more factions on his management team.  Without consensus, he found it hard to move forward.  As he got to know his key people, he found several of them to be less competent than their jobs required.  He found it very difficult to confront them with the shortcomings in their performance. His response was to dig deeply into the details of their operations, to which they reacted with strong but well hidden resentment.

The Company had no direction.  Andy seemed to jump from one short-term problem to another.  Some of the customers he had retained now became disenchanted with the lack of tangible results and switched to competitors’ products.  Andy responded by launching a cost cutting program to save the bottom line.

Andy’s behavior was consistent with his personality.  His key personal attributes included:

  • A strong, outward focus on people.
  • A concrete, practical, present time orientation and the need to focus on the facts and details of any situation or problem.
  • A subjective and personal decision-making style that was highly sensitive to the needs of others.
  • A need for harmony and consensus.
  • A preference for keeping things open and flexible and for responding to problems and opportunities spontaneously as they arose.
  • Pronounced needs to personally perform at a high standard of excellence and to take personal responsibility for problems and their solutions.
  • A need to be liked and accepted by others and to form close relationships.
  • A need to influence but not control others.

Andy’s personal attributes were poorly matched with the behavioral demands of the job.  Key behavioral demands were beyond his personal capabilities.  These demands included developing a strategic plan, objectively evaluating key people, taking action to confront performance problems, replacing people, holding people accountable, balancing strategic and operational needs of the business, and tightly organizing his personal priorities and time.

How could Andy have been so successful in his previous position and where did the Board go wrong?

Conditions Under Which Past Performance Was Achieved

Unquestionably, Andy had achieved great success with his former company.  But a close look at the environment in which he had flourished reveals a set of conditions, which differed significantly from his position as CEO of Special Technology, Inc.:

  • Corporate Culture and Management Processes. In his previous company, Andy reported to a strong group executive who was primarily responsible for the long-term, strategic direction of the businesses that reported to him.  There was a formal planning process at the corporate level that was designed to achieve an appropriate balance between short-term operating decisions and long-term strategic direction.  Andy’s major contribution was to execute in a highly structured environment on a strategy, which was largely developed by the Group Executive with Andy’s input.
  • Executive Team Capabilities and Teamwork. Andy’s management team, composed of highly competent executives, had worked together for several years.  The capabilities of the individuals on the team complemented Andy’s personal capabilities and highly participative style.  They left Andy free to do what he did best, which was to relate to employees, customers, suppliers, and corporate senior management.
  • State of the Business. The business had been very healthy when Andy became its president.  The Division’s financial performance was sound.  It had a reservoir of new products ready to be brought to market.  It also had a well-established history of investing in people, products and technology to continuously improve its market position.
  • The Complexity of the Job. The division president’s job that Andy came from was significantly less complex than The CEO’s job at Special Technology. The Special Technology job required the ability to recognize and handle a much more challenging set of behavioral requirements in a less structured and significantly more challenging environment.

In summary, Andy’s previous company provided an environment that allowed Andy to make the most of his personal assets.  The level of complexity matched Andy’s capability. It also had people and processes that effectively neutralized, or offset Andy’s personal weaknesses as an executive.

How could this selection error have been avoided?

Improving Selection Decisions for Key Executive Roles

The recruitment, selection and hiring of key executives is time-consuming and costly.  It can take from one to three years to know if the hired executive will be effective.

If the executive proves to be ineffective, the process of confronting the problem and completing an outplacement is also time-consuming and costly.  The damage to the organization in cost, diminished performance capability, missed market opportunities and losses in competitive position can be catastrophic.  Although the full impact of a key executive selection error is rarely calculated, it is clear that these decisions are among the most critical made by senior executives and board members.

The selection error made by the Board in Andy’s case could have been prevented by using a systematic, job/person matching process.  Such a process would have helped the Board to understand the behavioral requirements of the CEO’s job, Andy’s personal attributes and the conditions under which he was likely to perform well or poorly.

Job/Person Matching

Job/Person Matching is a systematic process used to assess the behavioral requirements of jobs and assignments, the personal attributes of candidates, and the conditions under which they are likely to perform well or poorly.  It makes use of behavioral job analysis and behavioral interviewing to profile people and jobs and to determine the degree of match between them.  It requires a practitioner who is knowledgeable about high-level executive jobs and has well developed capabilities in this process.

Behavioral Job Analysis

Information is obtained about the conditions surrounding the job and the key tasks and challenges that must be effectively handled to achieve high performance on the job.  This information is gathered through interviews and questionnaire surveys of people who are close to the target job or assignment.  These are analyzed to produce a profile of critical behavioral demands that must be met for successful job performance.  The profile serves as template for the assessment of all candidates.

A critical aspect of this process is to ask the “Wayne Gretzky Question”.  What is that you ask? When Wayne Gretzky was asked to explain his prowess as a goal scorer in the National Hockey League, he simply replied “I skate to where the puck is going to be”.

“Where is the business going to be?” is a critical question for a company selecting a key executive.  Far too often the Job Profile is developed by looking at where the business is today and not where it is going to be and the challenges it will face over the next several years.

Behavioral Interviews

Behavioral interviews focus on the actual experience of candidates in meeting the behavioral demands and performance conditions of previous jobs and assignments.  Candidates are asked to give descriptions of specific situations and their actual behavior in handling them.  The interviews are recorded and transcribed for analysis.

Interview Analysis

Interview transcripts are content analyzed to determine the types of situations with which candidates have experience and their characteristic patterns of behavior in responding to job situations and performance conditions.  A profile of personal behavioral attributes is prepared for comparison with the behavioral demands of the job/assignment.

Job/Person Match

The candidates’ behavioral profiles are compared with the behavioral profiles of the job/assignment.  The degree of fit between person and job is a direct measure of the risk of placing a given candidate in the job.

  • Candidates who fit the job/assignment well have a high probability of success and are a low risk.
  • Candidates who fail to meet one or more critical demands of the job have a lower probability of success and represent moderate risk.
  • Candidates whose profiles do not match the job with regard to several critical factors have a low probability of success and are considered to be high risk for the job.

A perfect match is rarely achieved.  However, the job/person matching process is very helpful in clarifying the trade-offs made when choosing among two or more candidates for a job.  Through job/person matching, decision-makers become explicitly aware of the trade-offs they are making by choosing one candidate over another.  They are also able to identify areas in which the selected person may require additional support to succeed in the assignment.

Using an executive job/person matching process is a highly effective approach for enhancing the success of selection decisions for key positions and assignments.  In the case of Andy F., an executive job/person match assessment would have revealed the discrepancies between Andy’s personal attributes and the job demands of the CEO of Special Technology Inc. described above.  Despite looking exceptionally good on paper and interviewing very well, Andy would have been identified as a high-risk candidate for the job.

[1] The names have been changed to protect the identities of the people and organization described herein.

© Copyright 2016, A. Lad Burgin, Ph.D. All rights reserved.