Maybe that new executive you just hired, the one everyone thought was so great – isn’t.
But, to be fair, you want to give him the benefit of the doubt, so you let him keep working on the critical new product initiative for which he was hired. Maybe he just needs a little more time. Maybe she is just misunderstood. So, you wait. Things will improve. Maybe.
Here’s the thing. Even if that executive does improve, perhaps you should consider how much their poor performance is really costing your business in the meantime.
Let’s delve deeper.
If your team is not functioning well, you are probably experiencing product or project delays. Product and project delays typically delay revenue, earnings and market share growth. The result is that where your company finds itself, is nowhere near where it would have been had you hired the right person.
Let’s look at the graphic below to illustrate the negative impact of a bad hire over a Product’s Life-Cycle:
Lost Economics:
Economic Impact of Product Delays
The green line is ideal. It depicts a product that is developed smoothly – without major delays. The product is introduced and grows to maturity quickly – capturing the good margins and market share it deserves for its innovative value.
Now let’s look at the impact of poor executive talent on that same product – the red line.
Slow development delays growth and creates frustration. Perhaps, forcing termination of the executive working on it.
That termination then delays growth further as development and product improvements are delayed during the re-recruiting and on-boarding process. During that time competitors grab market share that should have been yours if the product had been completed and released earlier.
That lost share is nearly impossible to recapture. The lost profits are gone forever. While you were dealing with your bad hire, your competitor wasn’t. They are now, for this product, permanently ahead of you and your reputation has been harmed.
There may be organizational damage as well. Employees, some of them talented, may experience frustration and burn out – resigning from the added stress of playing “catch-up”.
Lost Time:
In addition to the economic impact, critical time is lost.
Initially, it takes 3 to 4 months to hire a person, another 3 to 6 months to admit this person is a bad hire and then at least a month of discussions to finally decide to let them go. Then it takes another 3 to 4 months to rehire, with another 3 to 6 months to determine if this person is a good hire. Overall, you are looking at 12-18-month delay to effectiveness.
A bad hire is something that your company may never recover from. Nobody wants that.
Preventing a Bad Hire:
Most important approach to improving the probability of success in finding, vetting and recruiting excellent executive candidates is to use a proven process.
By proven we mean, the process delivers candidates with:
- A proven and vetted track record
- A high probability of early integration
- A high probability of long term retention
- A close cultural fit
- A strong complementary personality to the rest of the team
Partnering with an executive search firm that has demonstrated repeated success mitigates greatly the risks associated with the consequences of a bad hire.