One of the biggest challenges most companies face today is hiring transformational leadership talent. The cost of a wrong hire is significant, and several studies have evaluated it to be 150% of the original cost of the hire. If you consider leadership hiring the cost of a wrong hire in tangible and intangible terms is significantly more. In this digitally, economically and socially disrupted era, leadership competencies needed to succeed has also changed. Leaders who are predicted to succeed are those who have the ability to transform business operating models and create disruption themselves, who understand market forces and can demonstrate personal resilience in the face of disruption, and those who demonstrate ability to continuously learn and upskill themselves. As such, traditional hiring approaches may prove to be inhibitors.

Additionally, it is rare to find any formal approach of holding hiring managers accountable for a wrong hire; mostly because it is fairly difficult to apportion the accountability among all the decision makers involved. In this era of disruption, the big question is how do our current hiring managers hire for skills that they themselves might not possess ?

“If each of us hires people smaller than we are, we will become a company of dwarfs. But if each of us hires people bigger than we are, we shall become a company of giants.”

- David Ogilvy

The Russian Doll theory that David Ogilvy referred to suggests that every hiring manager should attempt to bring in someone who has capabilities better than himself or herself – that will help us hire for posterity and help grow the organization’s leadership capabilities. Furthermore, every candidate also interprets and refines a role as per their own perspectives, and either enhances or devalues the impact of the role. It is therefore critical that we hire for 70-80% job fit and 20-30% job renewal capabilities of the candidate, so they can refresh the role and grow its impact.

Since the ultimate decision-making rests with an Organization’s Leaders hiring other transformational leaders, there is a strong need to focus on the hiring leader’s ability and approach to these assessments. This focus has less to do with the traits and competencies of the candidate, and more to do with the traits and competencies of the hiring manager himself or herself. The challenge also is that it is rare to get hiring managers to evaluate a candidate against the backdrop of their own capabilities and hire talent perceived to be better than themselves.

While there is no foolproof method to creating this accountability with hiring managers, there are some critical aspects that can be surfaced and addressed as part of the interview evaluation itself. The key lies in anticipating the risks and issues of a particular leadership hiring decision and addressing hiring biases related to that.

3 fairly common issues arise these days, after external leadership talent has been hired:

1. Role obsolescence – Leadership roles are usually specific to a function and have a defined place in a structure and there is usually only one person doing that job. However, in the dynamic environment today, the role for which one is being hired could morph into a new role or be removed altogether - this happens especially when organizations have to create new roles to address sudden changes in strategic direction or are undergoing structural changes and have to create merged or split roles or when unprofitable units need to be shut down. The critical need is to ensure that a candidate hired for one such role is also capable enough for other roles in the organization.

2. Role Vitality – one of the primary reason’s companies go for external hires as against promoting internal talent is to bring in fresh thinking and external focus. The incumbent is expected to bring new competencies that help elevate the profile of the role. On an average 70-80% job responsibilities remain same as that of previous incumbent, but 20-30% job responsibilities would be aligned to new expectations from role and therefore likely that 20-30% skills and competencies required would be those that the previous incumbent may not have had. The critical need is to ensure we hire for vitality of competencies and assess according to that.

3. Wrong fitment due to hiring biases of Managers- Aside from unconscious biases related to gender, race or sexual orientation, Gartner has published a list of 10 cognitive biases that hiring managers face and that in itself would lead to wrong hires. The hiring managers’ profile, preferences and perspectives are critical to surface early on to ensure biases are minimized, and there is an informed judgement and awareness before final decisions are made.

So how do we hold the leaders’ accountable for ensuring that they address these 3 common concerns, but which have a high impact on whether we are hiring a future ready Talent?

A few important approaches can be explored, and while these would not be silver bullets in itself, can certainly help to minimize hiring errors.:

1. Ask Hiring managers to articulate clearly why they are hiring from external market instead of promoting from within.The normal answer (we do not have an internal ready candidate) is not good enough! They should be able to articulate what business issues they are seeking to resolve through this hire and what specific skills and competencies they find lacking in internal candidates. This further helps to ensure that Recruiters have clearer expectations for searching prospects and some of the hiring biases surface early.

2. Have the current incumbent, unit peers and cross unit peers be part of the panel or initial interview process.Ask them to assess role fitment from a tactical and job specific roles and responsibilities. This will free up time of final interviewers to focus on future readiness of skills in final interviews.

3. Ensure that the final interviews have an HR leader as part of the hiring process. They would help to keep the hiring managers honest on some of the critical queries related to addressing hiring biases. Final Selection decision of the hiring managers should be tempered by the HR leader asking the Hiring managers these 3 critical questions, which can also be shared in advance so that the interviewers ask relevant questions.

a. What other roles, aside from the one we are currently selecting for, can this individual do in our organization, immediately? How soon can this individual do your job ? This can help with assessing role adjacency and future fungibility.

b. What new skills and competencies did this candidate bring to the table which are and not perceived in the previous incumbent in role? What new perspectives does he/she bring to the role as compared to an internal candidate. What new job responsibilities are aligned to this role as compared to the previous incumbent. This can help assess role vitality and renewability capabilities of the new hire.

c. What in your opinion are 2-3 strengths or competencies that this candidate brings and which you as the hiring manager do not possess or have as a strength yourself? Bringing the Russian Doll theory to life – hire bigger than yourself. This immediately helps to surface some of the common hiring biases (Refer Gartner’s report available to subscribers)

The good news is that companies in this digital era have become smarter in their approaches to hiring and leverage the latest analytical and cognitive technologies that can match success profiles of candidates, can create job matches and map an individual to multiple job openings. IBM’s Watson is one such AI platform that helps to create multiple job matches for candidates through the Watson Candidate Assist. Most large companies have further invested in creating robust interview tools, trained their hiring managers for behavior-based interviews, situational interviews and technical interviews and one can find a slew of online resources about probing questions to ask to assess a particular personality trait. Today one can also scour the internet to assess the personal and industry eminence of a candidate as an added advantage.

However, data analytics is an art as well as science. Asking the right questions of a cognitive system will become equally critical for enhancing accuracy and future fungibility of hiring decisions. And where HR can play a significant role is by helping design the right decision support algorithms around hiring biases.