How to Hire Your Next All-Star

C-suite executives like J.C. Penney’s COO Catherine West and Wal-Mart’s marketing chief Julie Roehm made news by their short tenures. Ron Zera, Korn/Ferry’s Dallas managing partner, says we’re in the midst of a “war for talent.” Such high-level turnover in such a competitive environment and it’s easy to see why a CEO’s ability to hire effectively is more in the spotlight than ever. A recent study found that employees averaged 20 years with an employer in the 1950s and less than five years by the end of the 1990s. (If so, they’re just emulating their bosses. Outplacement firm Challenger, Gray & Christmas lists more than 1,100 CEO changes between January and October last year alone.)

Interestingly, North Texas CEOs say they don’t look at a potential hire’s obvious past successes in a job. Indeed, there was agreement that hiring someone who’d done the same job at a previous company was the wrong way to hire. (Although privately, many people said that was actually how many companies did hire.) Zera says, “As people increasingly become an organization’s most important asset, cultural fit grows in importance.” News reports about West’s departure attributed her short tenure to an inability to adapt to Penney’s unique culture. “Candidates with a good cultural fit often contribute more, perform better, stay longer, and have more growth opportunities,” says Zera, who is internationally recognized for his ability to recruit executives to organizations in the midst of rapid change.

Doug Levy, CEO of imc2, a Dallas-based company founded 15 years ago and recognized as one of the nation’s leading digital marketing agencies, says that culture is the most important thing, and that means “being clear about your values.”

Michael O’Donnell, one of the founding managing directors of Protiviti, the risk-management consultancy, agrees. “The number one issue is culture. It’s responsible for our successes and our failures. It’s motherhood and apple pie. It’s ethics and values.”

Before tackling subjects like culture and values, there is a huge body of literature and willing body of experts to advise a CEO about how to hire. Many businesses use companies like Korn/Ferry and other executive recruiting firms like Spencer Stuart for their experience, contacts, and, sometimes, as a safety net to share the blame when things go wrong. There are standard lists of how to proceed: have a job description, do extensive interviews (and there are scores of articles and books about how to structure interviews), include a variety of people, and don’t “fall in love”—that is, don’t allow yourself to be overwhelmed by the star personality of an individual. All of which is sound advice seconded by O’Donnell, Levy, and Zera.

Many companies also do psychological testing or profiling but not Protiviti or imc2. Consultants make big bucks by assuring clients they can predict who will do well and who won’t. Author and consultant Dr. Pierre Mornell preaches “zero-defect hiring.” Mornell says his “new system for hiring shows you how to predict winners and losers in the incredibly expensive people-reading game.” (Our experts scoffed at such a bold claim.)

Effective hiring takes time. Levy says, “Decisions about senior people are made collegially,” and that means the process can be lengthy. “We want people who are welcomed, so we want to involve lots of people in the hiring process,” he says.

If you can get in the door for a senior slot at Protiviti—something that requires past work experience with several existing managing directors (partners)—you go through interviews with three others and may end up playing golf with O’Donnell. “I learn a lot about honesty, about integrity, about reaction to failure, and the ability to personally interact on the golf course,” he says.

At imc2, an office tour is one of the first steps, says Glenna Hecht, the company’s vice president of people. Their offices on Park Central send a clear message that this isn’t your usual corporate environment. A number of people have put canopies over their work spaces. A golden retriever lounges under someone’s desk while one of Levy’s key executives conducts a strategy session and an energetic Yorkie looks on. Levy himself is likely to grab a marker and use the windows as white boards. An area is designated the “greenhouse” (because talent grows there); people get around on scooters; there’s a meditation room and another with video games. One conference room has a Ping-Pong table as a conference table.
 
Levy says that their ability to provide the cutting edge ideas and programs to global clients requires them to “put a tremendous amount of effort into working as teams,” so that’s how they go about bringing new senior people on board. 

imc2 doesn’t do much traditional, “surface-level” interviewing. “This just tests, ‘Is this person like me?’” Levy says. “You don’t learn very much.” They have a different but clear strategy. Because their work is creating new frontiers for companies like GlaxoSmithKline and Coca-Cola, which seek new ways to communicate with and build communities for people (they stopped calling them “customers” years ago) where they can share experiences rather than just buy things, imc2 does a great deal to educate its clients about what can be accomplished with new technologies and marketing approaches. In turn, the client has to do a lot of internal selling. So that imperative is built into the hiring process. “It’s important to us that we make our clients heroes to their companies, so we invite our applicants to do a 15-minute presentation on how they’ve made someone a hero in the past.”
Protiviti demands a 15-20 page business case for the candidate, setting forth goals, background, metrics, experience, and future plans, and the prospective managing director puts it together with his internal sponsor.

Whatever the approach to interviews or demonstrations, the issue is always, “Will this person fit in?” And that involves understanding a company’s culture, which isn’t always easy to describe. Despite a track record of good “people skills,” West couldn’t size up J.C. Penney’s egalitarian and collegial culture, just as Roehm couldn’t get a handle on the strength of the traditional folks who ran merchandising at Wal-Mart and who weren’t on board with the strategy of appealing to an upscale customer.

Levy says culture isn’t just about having animals in the office and the freedom to ride scooters from meeting to meeting, but it’s more about being able to articulate a company’s values. He says imc2 has a “triple bottom line” approach to running a business. First, there’s the traditional financial bottom line. Second, as knowledge and knowledge management become even more important, there’s a “people bottom line,” and third, because “We measure ourselves in providing opportunity for our people and part of that is having a positive impact on the world around us,” they have a “society bottom line.” 

O’Donnell reports that Protiviti has approximately 140 managing directors and has grown from 550 people to 2,900 in five years. Of the senior people, only two hires didn’t work out. “Couldn’t fit in,” he says. With such a stellar track record, he reports a final test. “I look at their shoes,” he says. “I see people with a snappy shirt and expensive tie, but if their shoes are scuffed and not cared for, that’s not a good sign.”

Zera has a final caution for companies looking at how they hire senior executives. It’s not just about getting the person on board. The post-hiring period is a critical part of integrating a new C-suite person. Before the person sits down at the new desk, he says that during the hiring process, the company and candidate need to clarify expectations and establish meaningful priorities, as well as provide the opportunity for the individual to build key relationships quickly and—here’s that word again—adapt to the culture. “Don’t hire for a position,” Zera says. “Hire for a career with your company.”

Merrie Spaeth is one of the pre-eminent crisis management strategists in the world. After serving as President Reagan’s director of media relations, she founded Dallas-based Spaeth Communications in 1987. She is also a lecturer at Southern Methodist University’s Cox School of Business.