Hiring Risk
Each year the four major sports in America have their annual draft. Teams spend hundreds of thousands, if not millions, of dollars trying to figure out who to draft. Why? Because teams understand that in order to win you must have “difference makers” or “great” players on your team. In spite of this investment, teams are wrong more than they are right about players.
A business is no different than professional teams; they need difference makers. Who are the difference makers in a business? Leaders, the people who like great players, make those around them better.
So, given this, you would think that hiring managers would become experts at hiring leaders. Unfortunately, most are not. I go so far as to say that most hiring managers stink at hiring. I believe there are several reasons why.
Hiring managers became managers because they demonstrated expertise in their area of specialty, be it engineering, procurement, sales, accounting or marketing, not because they understand how to hire.
Hiring managers generally don’t understand that being an expert at hiring is one of the most essential roles of a manager. They don’t study and become experts at hiring.
Hiring managers too frequently rely on human resources people for hiring. Human resources provide a great value and service to hiring managers; however, they are business advisors, just like an accountant or a lawyer. Hiring managers must still drive the process as ultimately, they are accountable for the results that the people and team they hire and lead produce.
Managers hire too quickly because they have a job to be done, and with an open slot, it’s not getting done. Then they fire too slowly once they see the person is not a good fit for the job. Why do they do this? Firing an employee that you hired is an admission that you got it wrong, and most managers are unwilling to admit that they made a mistake. So, they hang onto underperformers, which inevitably magnifies the mistake, and in turn, negatively affects the rest of the team, which knows the manager should fire that employee.
So, what have hiring managers done to reduce hiring risk? They look for a been-there-done-that person. They believe that by hiring a been-there-done-that person, it reduces their hiring risk. Nothing could be further from the truth.
In business, the leaders who are willing to take calculated risks are frequently rewarded for their willingness to take that risk.
Jeffrey Lurie purchased the Philadelphia Eagles in 1994 for $195M. The team is now worth approximately $2.65B. That’s over a 13.5x return on his investment, in 25 years. Jeffrey risked part of the family fortune as collateral to get a loan to buy the team, and he has been richly rewarded.
Jeffrey Lurie has hired four coaches in 25 years. First, he hired a Ray Rhodes, a very successful defensive coordinator. That was, and is, frequently the NFL model for hiring coaches—hire a successful coordinator. That didn’t work out, and Ray was fired after four years. Then he took a hiring risk and hired a quarterback’s coach in Andy Reid. Jeffrey was richly rewarded by Andy Reid. During his tenure, Andy Reid developed a winning culture for the Eagles, led them to five NFC championship games and one Super Bowl in 14 years.
Then Jeffery took another risk and hired Chip Kelly, a college head coach with a very different approach to running an offense and a team. It worked in the beginning but eventually failed. So, Jeffrey Lurie didn’t hesitate and fired Chip one game before he completed his third full season.
Then Jeffrey took another calculated risk and hired Doug Pederson. Doug had only been an offensive coordinator for two years and didn’t do play calling. His only head coaching experience was for a high school team. No other team even interviewed Doug Pederson. But Jeffrey was looking for something else from his coach.
None of the so-called experts thought Doug Pederson was a good choice. A year later, one former General Manager claimed Doug Pederson as the least qualified head coach in the NFL. Five months later, the Eagles and Doug Pederson won the Super Bowl. And just three years after he was hired, he was the only head coach still employed who was hired the same year he was.
The greatest hiring risk? Being a typical hiring manager and doing what everyone else does. If you want your organization to shine, master hiring, buck conventional hiring wisdom, be a courageous and creative hiring manager, and you will be richly rewarded.