At M&A Executive Search, we have often been in situations where we are approached by clients to re-hire for a senior executive role where the previous hire “didn’t work out.” A large number of these failed hires were not the result of a comprehensive search but, occasions where the company and hiring executive relied on their business network and trusted recommendations of individuals who recommended the hired candidate. How could this happen when the professional was recommended by a trusted colleague who had worked with this individual for years, knew the quality of their work, and promised that this would be the best hire they ever made?
Making hiring decisions and choosing the best individual for a job is very complex and difficult and given these complexities, it’s human nature to try to simplify the decision. Relying on the recommendation of a trusted colleague in one’s network is the easiest way to make a decision. The thought process goes as follows: “If a trusted individual says they are good, then they must be good. – Let’s find one other candidate to compare them to and make a decision. We need someone in the role quickly, and it’s incredible that this perfect candidate is available. We need to move quickly, and it’s a bonus that we can make this hire with limited effort or resources.”
There are four conjoining influences that make this type of hiring a mistake:
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Your Network Doesn’t Know Your Organization
Every organization and role is different. What makes someone successful in one environment doesn’t necessarily translate to another. People in your network generally have little perspective of what your organization is like and what competencies are needed to be successful in your organization.
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Network “Agency” Issue
– People in your network who recommend candidates are not totally discerning and certainly not objective. They often introduce and make recommendations to support their own networking efforts and to help out a human in need. There is no need for them to truly vet the individual as they gain “networking equity” from both the company and the individual for making the connection. At times this leads to people introducing and recommending professionals in a positive light that they may have met only once.
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Avoid The “Halo Effect”
It’s human nature that hiring managers are less rigorous and objective when evaluating a recommended candidate from a trusted source than they are in evaluating a candidate that comes directly. In essence, there is a “halo effect” where hiring managers associate the recommended candidate with the person that recommends them and typically are more forgiving of flaws and potential issues. When a trusted resource recommends an individual, whatever hiring criteria that was established can often be discarded, and the recommendation outweighs all other factors.
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Limited Numbers
The goal of any search is to identify 2-3 final candidates for the hire. The process to get to the top two or three candidates should go from 50-100 potentials that are interested in the role and then filtered to the top 10-12 viable candidates. Then the top two or three should be chosen from that pool. However, when a candidate is introduced from your network early in the search process, there is the temptation to jump to the end. Since one good candidate was recommended, all that’s needed is one or two other reasonable final candidates, and the search can be completed. Obviously, the problem with this approach is that by short-cutting the candidate sourcing process many, likely better, candidates are never considered. Companies often end up comparing two candidates that are not even in the top 10 of potential candidates. The lack of alternative candidates also enables the candidates under consideration to put pressure on the organization to make a hasty decision.
To avoid falling into this extremely common trap, it’s important to never shortcut the search process, regardless of the situation and the initial candidates. Additionally, don’t overvalue leads that come from your network and objectively evaluate those candidates like all others, avoiding the “halo effect.”
Stay the course with the same search process in all cases:
- Spend time before the search to build an objective organizational perspective of the ideal fit for the role that includes necessary competencies, related experiences, and the characteristics of the individual that will make them a cultural fit.
- Establish and commit to rigorous and objective sourcing, and evaluation process regardless of the quality of the candidates found early in the process sourcing 50-100 potential candidates, vetting to 8-10 qualified candidates based on the fit criteria and ending with the 2-4 best candidates for consideration.
- If internal resources are limited for this effort, leverage 3rd party search resources that can provide an objective perspective, provide tools for evaluating fit, and help overcome organizational biases as well.
The cost associated with making a bad hire in terms of organizational disruption and sub-optimal performance far outweighs the additional resources required to search comprehensively, even when the seemingly perfect recommended candidate finds their way to you on day one of your search.
