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Are Executives Worth the Effort?
Ron Bates
Why
is it companies will spend more time and effort on defining
the decision criteria and the evaluation process associated
with spending +$1 million of bottom line profit on a capital
acquisition than they will in the acquisition of an executive
responsible for driving +$1 million in bottom line profit
(let alone the corresponding top line revenue)?
Sound
paradoxical? So why does this happen?
Is
it because companies believe executives aren't worth the
effort? Hardly; you'd be hard pressed to find a CEO that
doesn't think people are the key to their company's success.
Unfortunately,
some hiring executives trivialize the importance of defining
the decision criteria and the evaluation process associated
with the acquisition/promotion of an executive. The response
is simply, "I know what I want, and I'll recognize
it when I see it" with respect to hiring criteria and
the associated evaluation process.
Others
don't want to admit they know it's important but don't have
the time to invest in defining the decision criteria and
the evaluation process associated with the acquisition of
an executive. So they just pass the responsibility off to
an underling or the HR department who attempts to define
all this in a vacuum.
There
are even hiring executives who simply don't want to admit
they really don't know how to go about defining solid objective
based decision criteria and evaluation process associated
with the acquisition of an executive.
Actually,
it typically isn't just one reason this paradox raises its
ugly head; it's a combination of reasons ranging from trivializing
the importance, to knowing it's important but not making
the time, to not knowing how.
Regardless,
every CEO knows a bad hiring decision can cripple a company
or worse. As an example, propagate this down through the
Sales organization's hierarchy all the way down to individual
contributor quota carrying sales people, and you have a
recipe for disaster.
You
can have the best strategy, a bulletproof process, and know
exactly what tactics you need to implement to achieve success.
It all falls apart if you are deploying the wrong people;
because a company's ability to execute is effectively limited
by the people doing the executing - full stop.
As
an example, companies spend millions of dollars on strategic
sales process training every year, but never ask themselves
if they are training the right people, let alone take the
time to define what "right" looks like. They don't
invest in defining hiring criteria and an objective evaluation
process consistent with the objectives they are asking sales
people to achieve. "Hire someone who excelled at one
of our competitors" is the typical hiring criteria,
combined with an "I'll know it when I see it"
evaluation process. This unfortunately is what precipitates
a "sink or swim" situation for sales people. Do
this consistently, and your company's revenue stream is
in a "sink or swim" situation.
So,
are executives worth the effort? Absolutely! Simply put,
this is about good risk management. In fact, investing time
and effort into defining the decision criteria and the evaluation
process associated with acquiring an executive responsible
for driving +$1 million of bottom line profit (let alone
the corresponding top line revenue) will result in acquiring
an executive who will yield far greater ROI for your company
than any +$1 million capital acquisition a company could
ever hope to produce.
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