What does the BP oil spill have to do with executive recruiting?
June 21, 2010 by Harvey Wigder · 3 Comments
Every night on the evening news, we see oil soaked animals and witness interviews with unfortunate and hardworking people who can’t make their mortgage payments. Then we cut to the underwater camera which shows the continued rapid flow of oil and finally we switch to a map that shows us a bigger and bigger area of destruction. Recently, ABC Evening News superimposed a map of Nebraska over the Gulf. Maybe by now, they are showing Alaska. Last weekend, in acts of PR “genius” BP’s Chairman sympathized with the “little people” and its President attended a yacht race,
As this goes on we get angrier and feel more hopeless. We wonder how and why the parties could have done what they did, why we can’t fix it faster, and last, who exactly is responsible.
Assigning responsibility is tricky. Certainly BP underestimated risks and cut corners and deserves its current prominence for malfeasance. But, the responsibility is broader. The oil industry wasn’t prepared and this isn’t the first leaking rig. The government structure for regulation was in place, but the people who did the regulating didn’t act in the public interest. Despite the warning signs, our appetite for petroleum fuels remains unabated. The consequence seems to be riskier and riskier drilling. Should we hold successive administrations responsible for insufficiently dealing with this potential crisis?
Besides bail out, the solutions that are now being proposed address responsibility and punishment. The mechanisms are increased penalties and better regulation. Given the current malaise in Washington, the Congressional debate on how exactly what to enact will go on for years and will end with the public having little confidence in the final result.
Last week the news also brought the story of a Tylenol recall because bottles manufactured in Mexico gave off an offensive, and to some, sickening odor. Before BP took them off the top half of the page, Toyota also showed offensive irresponsibility. The problems caused by the Greek governments irresponsible stewardship of the country’s economy have also impacted us all. The sources of threat are everywhere! If you believe that global warming is in progress, that ups your level of concern about the fate of our earth.
Our ability to cope hasn’t kept up with our ability to manage global interdependency. National governments are now dealing with issues of international impact with agreement between nations almost impossible because of diverging interests.
Dealing with these issues will require systems thinking on an international scale with a corresponding recognition of the problems and a will to deal with them. The track record isn’t good so this is highly unlikely. I can only anticipate a long series of unanticipated disasters. These issues don’t have a single culprit or even a root cause. The problem is that we can’t manage a diverse system. Fortunately a company is a smaller entity than the world economy and some are managed very well.
Executive recruiting is more problematic than the search industry wants to publicize. Just to get you oriented, recent surveys have shown that 40% of newly hired CEOs don’t last 18 months. For more metrics that show how dismal executive retention rates are, click here.
When you are an owner who sees that a hiring mistake has been made, you are seeing an oil leak on a smaller scale as the business makes bad decisions, looses market credibility, experiences drops in profits and morale, and begins to lose its best people. The cause can be summarized by this phrase: people get hired based on their resumes and get fired because of their personalities and their failure to provide leadership in the right way in an organization with a specific culture.
A non-systems oriented search will list the skills and experience that the resume of the new executive should contain. On the other hand, a systems perspective would consider the culture of the organization, its strategic plan, the role a new executive can play in implementing it and the obstacles the new executive would have to overcome to be effective. The specification would go beyond the resume and consider personality, character and ability to fit into the culture while simultaneously being a change agent.
The systems view would then go broader still: It would consider that the organization and its current leadership need to collaborate for success and therefore will have as much or more responsibility for achieving the organizations goals as the new executive. That is follow up and integration is included as an important step for success. Both the organization and the new executive need feedback to ensure they stay on track to achieve the larger goals of the organization.
Conclusion
The time for limited, non-systems thinking has past. Those who are engaged in executive search can continue to make the mistake of seeing the responsibility for success as only being in the hands of the person hired (e.g. if that person doesn’t work out, we hired the wrong person) and begin to take a broader systems look at what the organization wants to achieve and the responsibility of the whole for achieving it.
Good to Great Advisors
May 6, 2010 by Harvey Wigder · 3 Comments
In my view there are two essential characteristics of Great Advisors. The first is broad experience coupled with analytic skills, an understanding of how operations impact results and the ability to identify trends, opportunities and issues. Progress results when the right problems are solved. The second is the skill to work within the frame of reference of the client to help the client identify a solution that he or she believes in and will implement. I will discuss each of these characteristics below.
Scope of Knowledge and Wisdom to Select the Right Problem
Most advisors have been well trained as specialists in their disciplines. The good ones are on top of their profession and supply the contracted product and service with precision and at the state of the art. However there is also parochialism that comes with their training. What if they provide an excellent solution to a problem their client asked them to solve that was really the wrong problem for the client to expend resources on? That wastes resources. Worse, what happens if the advisor knows that this isn’t an essential issue but provides a solution in any case? Is that ethical?
Like a well trained advisor, an entrepreneur who has developed his or her business has been trained by success and has habitual ways of responding to business situations.
Most of the time, the good advisor will be solving the right problem and most of the time the owner’s solution to a problem will be the right one. It is at the margins where interesting situations occur. These margins occur at those moments that call for “out of the box” thinking. In those cases, wisdom involves stepping back and identifying the right problem as a precursor to solving it. The Great Advisor can stand back and identify critical issues.
An owner should look for an advisor who challenges him or her to find the right problems to solve. Advisors who meet that criteria might be ones who have run businesses or who belong to multi-discipline groups such as I have mentioned previously, Exit Planning Exchange or The Family Firm Institute. This exposure to other disciplines and ways of thinking helps train them to step back from the problem a client presents and help identify a deeper or more fundamental problem. This directs resource to solving problems that will benefit the business.
As good as this broad knowledge is, it not enough for Greatness. I think a second characteristic is needed for a person to qualify as Great Advisors.
Respect for and Acceptance of the Client
Because of the broad experience in dozens or even hundreds of companies a good advisor brings to any one client, that person will often see opportunities for improvement. It is very common for advisors to be frustrated because their client doesn’t get it! Why is he or she resisting good recommendation?
I am going to make my point by asking you to drawn on your own experience. Let’s say you have a problem bothering you and you talk to a few people about it. The first person doesn’t have the patience to let you “get it all out” and gives advice on how to solve the problem. How annoyed and frustrated are you? The second listens and asks a lot of questions. After awhile you solve the problem yourself (eureka) or are more open to discussing alternative solutions. Does that feel better to you, and are you more likely to go with the decision made in that situation?
The Great Advisor takes the time to explore, understand, and respect the psychological and cultural context and then works within that framework to get done what the person or system is capable of doing. The Great Advisor has developed skills as an active listener and has learned to understand and explore before jumping to action.
Trust
You will notice that a Great Advisor doesn’t always get great results. However, the Great Advisor does build relationships and acts in a trustworthy manner. They understand that they can be influential but in the end, the decision is with the client and that the client has the right to do “the wrong thing”. At the end of the day, The Great Advisor has the satisfaction of knowing that he or she worked in the client’s best interest, has not been self serving, has done no harm and hopefully has helped the client make progress. The Great Advisor stands ready to provide greater value when the client is ready to take a broader view.
The books I recommend are Dirty Rotten Strategies: How We Trick Ourselves and Others into Solving the Wrong Problems, Precisely by Ian I. Mitroff and Abraham Silvers, and Helping: How to Offer, Give, and Receive Help, by Edgar H. Schien.