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A Discussion with Jay Gaines

The business crisis, organizational change, and a view of executive search

Q1. What are the lasting effects of the recent crisis on the financial industry at the executive level?

The psychological impact on leadership is profound and could be the catalyst for organizational change going forward.

Leaders in the financial sector stood by helplessly, watching market devastation destroy value and topple much of the sector’s institutional and individual leadership. Few anticipated the magnitude of what occurred, and most did not believe it would happen on their watch, or in their lifetimes.

In subsequent discussions, we found arrogance and stridency were gone. Instead, we heard fear, remorse, and uncharacteristic introspection about what might have been done differently.

The strongest lament was around the lack of honest and challenging two-way communication, a failure that permeated up to the top of these organizations.

The second regret was the emphasis placed on short-term gains and the accompanying reward and compensation systems that institutionalized this behavior.

Our take is that many saw themselves as too acquiescent in organizations that were flawed. Too many opted to play it safe, staying safely within the good graces of the power structure that was about to fail them utterly.

Q2. What are the career and organizational implications going forward?

We know that CEOs who sweated details and led “one-firm” organizations with active, cohesive teams survived.

Teamwork, communication, work ethic, and meritocracy outperformed traditional, top-down, and siloed organizations.

More critically, some institutions operating under the “imperial CEO model,” along with the cultural sycophancy that accompanies it, failed dramatically.

Why are there so few proven leaders?

Why were so many ineffective leaders tolerated for so long?

In my experience, there aren’t enough constructive challenges to leadership voiced in Corporate America.

Too many talented individuals capable of high performance have undermanaged their careers and their potential:

  • By not recognizing or undervaluing their implicit empowerment and by failing to use it to influence or challenge their management.
  • So often, when these individuals finally go to resign, they are shocked by the intensity of the counteroffer and attention they are given. What a waste of opportunity and influence!
  • By making career choices based on outmoded, linear criteria (e.g., “bigger” job, title, and more money) versus organization and leadership quality and values, and in selecting an environment in which one will thrive, influence, and have impact.
Perhaps it’s time.

With the experiences and emotions generated by this crisis, management and individual executives will constructively demand more engagement from each other. They will take an active stand in their organizations and careers.

Q3. How can executive search make a difference?

By delivering outstanding performance, which we define as delivering someone who at the two- to three-year mark is well-integrated, well-respected, and outperforming expectations. At that point, a successful candidate becomes part of the leadership bedrock and fiber of the organization.

Often, a new hire’s honeymoon lasts two years. It is at the end of that two-year period that the individual’s initial results can be appraised and measured. The people who work with this person now have a good sense of the individual – his or her capabilities and achievements.

Getting hiring decisions right delivers real and multiple benefits over the mid to long term. It drives performance, builds morale, and maintains the overall momentum of the organization. Good people attract and inspire more good people. The bars for leadership and achievement are raised, and that spurs superior performance over competition and benefits clients.

When we accomplish this kind of hiring success our work makes a cumulative, even defining difference. That is how we have built our practice and reputation, and it represents our own set of core values.

Getting this right – where the match works over the test of time – is deceptively difficult, and it does not happen every time. Achieving this in two out of every three hires is very good performance and can create a sustainable advantage for our clients.

It may be hard to see the long term versus dealing with the immediate issues of today when choosing the finalist candidate. Yet hiring for the short term, and the churn that it creates within the organization, is most often detrimental.

Q4. What is the one most critical element in creating a successful match?

The most critical element is the client.

There is nothing more exciting to us than a client with organizational vision and drive, willing to engage in an open and mutually-challenging dialogue, and to work this hard.

The clients with whom we work best have a set of goals and a well-defined vision to which they are committed. They are imbued with purpose and passion.

As individuals, they have a direct stake in getting this right, are willing to invest their time, and take personal responsibility for the outcome. They set high standards and are thoughtful and demanding in the process. They listen carefully and understand the risks, yet at the end are able to make a decision, often by dismissing overly-compromising or unrealistic criteria.

Those who achieve the best results are confident and secure in their own skin. They look for the best people they can find to accomplish a set of goals. They do not self-aggrandize themselves or their position through the hire, nor do they fear being outshined by the person they hire.

Q5. How does Jay Gaines achieve outstanding success in a search?

First, with smart and thorough coverage.

Most critically, we strive to match a motivated client with a bracketed slate of viable individuals, evaluated in an open, penetrating dialogue among the client, candidate, and us.

A thorough discovery process that tests everyone’s assumptions must be created and nurtured. Assessment points and questions from one conversation serve as the catalyst for future dialogue.

Candid, penetrating dialogues in interviews, accompanied by open, two-way disclosure of information, are the best ways for getting to truth. There are no perfect candidates and no perfect clients. Regrettably, clients and candidates too often feel bound by politeness, fear of offending, and/or the need to speak only in positives instead of saying what is really on their minds.

We consistently find that candidates and clients find candor refreshing and respond well, and in kind, to a perceptive, hard-hitting, 360-degree discussion.

This type of dynamic and encounter is revealing, allowing both parties to have the best chance of making a well-informed, better decision.

Q6. Where does assessment fit into the process?

Assessment is the foundation of our process, and the determining factor behind whether a candidate is introduced to the client.

However, once a candidate is in play, multiple views of the same individual are operative and the process gets more dynamic, more complex.

Leadership now becomes critical to reconcile varying assessments of the individual and to guide stakeholders to what is critical towards making a decision and achieving closure.

We view assessment as fitting into three logical elements: experience, culture fit, and leadership.

  • Experience: This tends to be the most straightforward. The key is finding the individual with the requisite skills, quality, and range of experience. The right person should have the ability to perform above and beyond the immediate role.
  • Culture Fit: Culture fit is a critical determining factor over time. One has to understand the actual behaviors and values of the organization, not just what is stated. Matching on this level requires real understanding of the actual behavior and values of the candidate and organization to determine the match.
  • Leadership: Leadership and the ability to keep growing as a leader are the hardest qualities to assess, the most subjective, and difficult to predict. Determining experience fit and culture fit are easy by comparison.

An Eye-Opening Experience

Bill Clinton’s presidency was an “eye opener” for me. Politics and his controversial nature aside, I would have rejected him as a search candidate, convinced that being Governor of Arkansas, he lacked the requisite complexity and scale of experience to qualify for president.

While he stumbled repeatedly throughout his presidency, he confronted and turned around almost every difficult situation he got himself into. Like him or not, no one would argue that he emerged as a long-standing force in national politics.

We turned to academia to see how we could have recognized the traits in Clinton that enabled him to adapt to the challenges of the role. We were introduced to a set of theories, developed by Stephen Zaccaro, on “conceptual complexity.” They demonstrate that those who possess a wide range of intellectual, behavioral, and social behaviors are more likely to progress and be most effective at the top.

Looking back, Clinton’s intelligence, drive, charisma, and social skills were early indicators of his adaptability and ability to prevail.

We are executive search consultants, not assessment psychologists, and we understand the distinction. However by continually applying hard-learned experience, fine-tuning the assessment process, and dissecting both our successes and disappointments, we find we continuously make better calls over time.

Q7. How can companies organize their search process to maximize return on investment?

While there is no silver bullet for success, companies can develop and mobilize processes to optimize selection.

With discipline and insight, we are convinced hiring performance can be improved over time.

Some of the key values and processes to improving hiring include:

  • Make hiring, selection, and succession a real priority for the enterprise.
  • Educate and impassion leadership on best practices in the discipline. Establish an approach that blends individualism and personal preference with shared goals and values, and measures outcomes over time. Steer clear of a highly-personalized, often-idiosyncratic individual approach.
  • Understand and communicate the real values, culture, behaviors, and competencies of the organization. Measure and reward them and then integrate them into the hiring and selection process.
  • Understand the profiles of individuals who truly work well within the organization.
  • Monitor and determine the key attributes that make individuals successful in the organization, and integrate that into the hiring and selection process.
  • Break out of the limitations and subjectivity of a traditional interviewing process. Make interviewing an engaging and dynamic process that encourages openness and challenge.
  • Incorporate these elements into an end-to-end hiring and selection process that achieves competitive advantage. Benchmark hiring and selection assumptions against the short-, medium- and long-term performance of the individuals chosen.
  • Beware the change agent. New ideas and thinking are healthy, and some level of tension with a new hire can be energizing. However, unless the organization is in crisis, we believe “the change agent” is highly overrated.
  • Clients who accept the risks inherent in recruiting and selection acknowledge their responsibility in integrating the individual into the organization and provide them with good guidance. They also are strong enough to acknowledge when mistakes have been made.