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3 Types Of Bad Hires CEOs Make (And How To Avoid Them)

Here’s how to guard against the biases that typically lead CEOs to opt for candidates they’ll live to regret.

3 Types Of Bad Hires CEOs Make (And How To Avoid Them)
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Not long ago, I heard a CEO lament a big hiring mistake he’d made: “He dazzled me and I got sucked in.”

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Hiring an employee is like buying a new car. It’s a big-ticket item and the purchasing decision is both rational and emotional, drawing as much on rational thought as on feelings. Needless to say, emotions, urgency, and unconscious bias can hijack what should be a pretty analytical process.

That’s a liability across the board, but it can be particularly tricky for CEOs, many of whom pride themselves on combining strategic thinking with gut instinct. Here are some of the most common ways that can go awry, and what it takes to prevent it.


Related: Five Red Flags That You Made A Bad Hire


1. The Charisma Hire

You have a need, and in walks somebody with personal magnetism and panache. You’re charmed by his can-do personality, Churchillian powers of expression, and capacity to make heroic assumptions about growth and a bold vision of the future. Where do I sign?!

Charisma is an ineffable quality that inspires devotion. It can be good, but charismatic people can often prove to be more dangerous because the attribute is more stylistic than substantive. It can blind even experienced CEOs from asking tough questions about a person’s background, experience, and qualifications, turning due diligence into negligence.

I know a CEO who hired a sales VP because the candidate had such a commanding presence and was so utterly convincing in her claim that she could double sales in two years. The CEO spent the next 18 months regretting it. As it turns out, the new hire had been a superstar business developer, but had absolutely no ability to lead a sales team.

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The lesson. Some of the most successful people are fairly humorless, boring, and don’t have attention-getting personalities. They may not possess charismatic gifts, but they know how to perform.

Bias red flags. Many of us are deeply socialized to look for candidates with charisma and see it favorably. But the picture you may have in your head of a charismatic hire is just that–an image of superficial qualities, likely laden with biases toward that person’s appearance, age, race, or other psychographic elements that have nothing to do with their likely job performance. After interviewing a charismatic candidate, ask yourself: “Is charisma really a decision-making criterion for this position?” Chances are it’s not. In fact, it could blur your vision and steer you toward the wrong person.


Related: The Upside Of Being Boring


2. The Resume Hire

Credentials are proxy indicators–a category of evidence that implies someone is qualified to do a particular job. It’s easy for CEOs to over-rely on a candidate’s credentials and minimize other things.

A large manufacturing company was looking for a new VP of operations, and the search firm it had retained offered up the perfect candidate–an engineer with 20 years’ experience and an MBA from a top institution. His resume was dripping with the impressive credentials. It was only after hiring him that the company realized he couldn’t hold people accountable. He was out in six months.

The lesson. In almost any job, there are certain threshold skill requirements. If a person meets those, put the resume down and focus on the real differentiating factor: Does the candidate have a deep psychological need to create value, and a deep ethical need to do the right thing?

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Bias red flags. Unsurprisingly, CEOs tend to value credentials that mirror their own, prizing the pedigrees society has deemed important. Strip all of the name-brand companies and schools off your top candidate’s resume and look at it again: Does their experience alone–not where they picked it up–leave you confident that they can do the job? If you focus more on actual skills and experience as predictors of success, you can limit some of the bias toward fancy degrees earned or positioned held. When I was a plant manager early in my career, I promoted an individual to be my assistant manager who had no formal credentials of any kind. He was incredible! Unusual talent often hides in unusual places.


Related: Stop Confusing Your Job Skills With Your Credentials


3. The Buddy Hire

This is the most embarrassing one, but don’t expect anyone to admit it. I’m talking about corporate cronyism–you know, hiring your friend. This hiring mistake perpetuates a time-worn system of patronage, spoils, and trading of favors that leads companies to gravitate toward groupthink and repeat the same old mistakes.

The buddy hire is a particular risk to CEOs who are susceptible to flattery. In spite of the obvious danger, plenty of leaders still assemble galleries of pandering, fawning, doting, gushing, servile courtiers to stroke their egos. As a former Division I football player, I like to observe new head coaches bring their new teams together. Every year there are at least one or two that go into free fall because the new general made a bunch of buddy hires. Getting the right people on the bus usually means getting your buddies off the bus.

The lesson. When it comes to the prospect of hiring friends, many leaders tend to relax or suspend their own hiring criteria. Don’t do that. Remember, you’re trying to hire the best person for the job. If you have a friend in the running, treat it like a potential conflict of interest. Make sure you panel interview that candidate and recuse yourself from the final decision.

Bias red flags. The risk for bias here is in plain sight: People tend to hire people like them. The result is like-mindedness, which becomes its own limiting factor in a highly dynamic environment. Homogeneous teams become prisoners of the status quo in short order. Remember, the inherent advantage of diversity is diverse thinking. A buddy hire is usually a comfort-zone hire. Break that impulse: Deliberately hire someone who will challenge the status quo–and help you change before you have to.

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Timothy R. Clark is founder and CEO of LeaderFactor.com, a leadership consulting, training, and assessment firm. He is a global expert in executive development, emotional intelligence, and transformational change, and works primarily with executive teams. As an Oxford-trained researcher, Clark is also the author, most recently, of Leading with Character and Competence (Berrett-Koehler).

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