Organisations Fail Because of Poor Leadership. Failed Leaders are the Result of Poor Recruitment

I think you’ll agree there is greater awareness these days of management incompetence. Not a week goes by without the business press reporting another large local or overseas company in trouble.

Right now we are seeing a lot of business commentary on the failure of finance companies, along with scathing accusations on the competence of their leaders. In most cases, this is highly justified. I can say this with confidence as I have personally been burnt by four of them!

I don’t think managers today are any more incompetent than they were when I entered the workforce. There is a consensus (Hogan 2007) that the increased use of climate surveys by organisations has given a greater voice for workers to highlight poor management processes.

The old saying, “The buck stops at the top” is so true. Organisations that are struggling usually have an incompetent leader. An article in a recent edition of the Harvard Business Review places the blame fairly and squarely on the shoulder of the people involved in the hiring process - usually the board of directors.

This led renowned business writer Ram Charan to quip, “It’s interesting to observe the length company directors go to doing due diligent on impending company buy-outs or mergers, yet they usually place the fate of these acquisitions in the hands of people who were appointed on a handshake.” 

Fernandez and Araoz (1999) attribute executive failure, and indeed organisational collapse, on the initial recruitment process of its leader. They outline “Ten Deadly Traps” company boards (or the chairperson) fall into during the executive selection process:

1. Trying to replicate the person who just left.
2. Not being clear what the job to be filled actually is.
3. Choosing the candidate based on his or her response to your favourite questions.
4. Taking interview answers at face value.
5. Believing the reports of referees and not doing a thorough background check.
6. Hiring someone who is just like you.
7. Allowing junior personnel, or a recruitment agent to run the hiring process.
8. Hiring the person using an unstructured interview.
9. Ignoring or failing to check “under the waterline” – a psychometric profile to check personality attributes and mental ability.
10. Members of the selection committee hiring in a weaker candidate to enhance their own chances of getting ahead.

The above seems to make common sense given the criticism of the interview process. Serious flaws of personality and character coexist quite nicely with excellent social skills. About the only thing an unstructured selection interview can evaluate is social skill (Hogan 2007).

The literature is very clear that personality and leadership are closely connected – who you are determines how you lead – and the standard measures of normal personality characteristics are robust predictors of leadership performance (Hogan 2007).

So the next time you read, hear or view a commentary on an organisation in trouble take a close look at the leadership. Do you think the leader is falling short on any of Elmer’s (2003) key themes of leadership success?

- The ability to maintain self control
- They treat others with respect irrespective of the person’s level in the organisation. 
- The ability to build, motivate and maintain a team(s) to a common goal.
- The ability to assert control of others to the right degree, in the right amount, at the right time.
- Integrity
 
It is a very easy task to translate the above themes into a language of personality and link these to specific job competencies – that is exactly what the ASSESS psychometric platform does.

In summary, failing companies are usually driven by incompetent leaders who are hired by boards of directors who fail to adhere to a structured selection process and don’t check “below the waterline”. They place all their selection weight on the candidate’s knowledge, experience and skill to lead their organisation – can they do the job?

But the bigger burning question is, “How will they do the job?” A validated psychometric assessment will answer this question. Hiring directors usually defer to gut feel in this department. First impressions can be dangerous. Just because the person is outward going, exudes self-confidence, is articulate and well presented doesn’t mean they will be exceptional leaders. It does however tell you that they are very good at interviews, and let’s face it, this is the very best you are going to see in this person.

If the candidate doesn’t have the personality, mental ability, values and motives of a leader the directors will be placing their company in the hands of another failing executive.