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Leadership in Recruiting: Hiring for the Long Term

CEOs and “One-Firm”* Leadership

In firms that perform well, leadership acts as a team and voices are heard, particularly regarding risk management.

There is alignment around objectives, values, risk, and accountability; “fiefdoms” do not exist.

Culture is a dominant factor within these firms. Leadership takes the view that it is “their firm.” Clients come first, the firm second, and individuals third.

They tend – and have the ability – to take a long-term view. In hiring and virtually everything they do, opportunists or short-termers need not apply.

Conversely, many public entities are compelled to manage to Street and analyst expectations, focusing on quarter-to-quarter results. Hiring decisions geared to the short-term, sound bites, and the need for managers to “look good” are all too prevalent.

CEOs navigating with relatively new teams, or who are new themselves, operate at a distinct disadvantage. Freddie and Fannie’s experience during the 2008 crisis serves as an example: Their leadership structures were decimated in a prior earnings crisis. Hence, relatively new CEOs and their leadership teams were in a formative stage and untested as the crisis hit.

Leadership Selection: Can We Do This Better?

Successful, resilient firms live and breathe their organizational values and culture and, over time, these are woven into the fabric of the organization. The recruitment of new leaders into the organization must follow this pattern.

Effective hiring requires an organizational vision, the ability to meaningfully convey it, and the willingness to commit the time and effort to do this right. These attributes are too easily sacrificed in the face of short-term considerations and competing demands.

Assessment and selection are difficult under the best of circumstances. Interviewing is a flawed process. There is no such thing as a perfect candidate, nor is there a perfect boss or perfect organization. Yet, interviewers and candidates often forget this and set the discussion on an unrealistic path.

Face skills and personal charisma are almost always overweighted and do not correlate with substance or proven performance.

Experience fit, culture match, and leadership abilities must be assessed and calibrated consistently with the realities of the organization.

Prior success and survival is not enough. Existing talent needs to be embraced and developed and leadership must be prepared to acknowledge and act on hiring mistakes.

No hiring executive is going to pick right every time. But, with the correct recruitment framework in place, organizations can learn from experience and ensure that their talent and strength consistently deepen and accrue.

*Maister, David H., “The One-Firm Firm: What Makes it Successful,” Massachusetts Institute of Technology Sloan Management Review, Fall 1985, Vol. 27, No. 1.