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Are Executives Worth the Effort?

Aug 18, 2007
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 bullet proof 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.
About the Author
Ron Bates is an expert in mission critical retained executive search. As recognized expert in building an on-line personal Internet presence, Ron has been referred to as "the most connected man on Earth" with +27,000 direct contacts on on-line professional networking platforms. Find Internet Presence: Case Study - Recipe for Success at http://www.search-advantage.com
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