Hiring for Cultural Fit.
Too often, executives are brought in on account of their experience and then dismissed after a short time due to a lack of a cultural fit, or they leave the company of their own accord. The end result is collateral damage consisting of a missed corporate transformation, disillusioned employees, tarnished market reputation and a career setback for the executive in question.
Although CVs are meticulously analysed, soft factors are usually given too little prominence during the evaluation. For what is at play is nothing less than the strategic direction of the company and the perfect complement to the management team for this purpose. Whereas a restructuring requires the highest possible homogeneity in the management team, a growth strategy calls for a certain degree of cognitive diversity. Crucial too is the pace at which the company transforms and, based on this, the willingness to take risks.
Be honest, what search for a C-level position or a member of the board of directors starts with a strategic review and an analysis of the existing management team? How much time does the nomination committee spend with the candidates to find out about their personalities and values? How strongly does the personal sympathy factor count in the evaluation and how strong is the fit with the management team, the corporate culture and the upcoming corporate transformation?
Every process to recruit for a C-level position or a board member is an opportunity to take the company significantly further. It is crucial not to focus on replacing a departing executive. Instead, it should be about complementing the existing management team to increase competitiveness. It is not about the replacement profile, but the value-adding one. As a benchmark, we can refer to the targeted purchasing of football players.
A cultural fit is a balancing act between what needs to be the same as a basis for an effective working relationship – such as values, moral compass, leadership style and work ethos – and what exactly should be different. If the common denominator is missing, the numerator will not come into play. Prominent examples of Swiss companies show that efforts to reflect internationality in corporate management can also have their limits. This is because the value system, the way people deal with each other and, no less importantly, the language they use are decisively shaped by their cultural background (see Erin Meyer, The Culture Map – Decoding how people think, lead and get things done across cultures).
But there is great potential in a heterogeneous management team to depart from well-trodden paths, rethink the business, implement new business models, drive forward a corporate transformation and further develop corporate culture. However, this requires a willingness on the part of the management team to engage with other perspectives, lines of argument, logic and methods.
How much passion is needed to create something new – how much resilience to accept what already exists?
Some companies are aware of the fundamental importance of a cultural fit and therefore bring in peers and direct reports into the evaluation process. This is also extremely valuable as the candidates can complete their picture of the company and check the cultural fit from their perspective, as every recruitment process is not just about selecting the right executives, but also about attracting them. When it comes to feedback from direct reports, however, it must be borne in mind that conflicts of interest can arise. While the board of directors will want to develop the company as quickly as possible, direct reports may prefer managers who leave them alone. The assessment of cultural fit must be carried out from an overall perspective and cannot be replaced by a democratic vote. On the other hand, having a nomination committee or recruitment team that is as heterogeneous as possible will make it easier to assess the cultural fit from an overall perspective. Complementing this overall view with a customised, external assessment is well worth doing. However, for this to work the assessors need to obtain a sound briefing.
Here are some positive examples from our experience of executive searches:
- Search for a chairman for the board of directors of an industrial company. Conducting a workshop of several hours with the HR consultant to explain the owner and company strategy and using it to build the profile for this position. Several interviews involving the candidates with the owners and the CEO. Joint discussion of a business case to test each other’s discussion culture.
- Search for a CEO for a service company. Expanding the nomination committee to include the coach for the ongoing cultural transformation of the company and another board member to assess the cultural fit. Meeting of the HR consultant with all members of the executive board. Discussing the analysis of corporate culture and strategic directions and using this as a basis to construct a profile for the position in a joint management workshop.
- Evaluating a head of marketing & sales for an international industrial company with a significant growth strategy. Conducting a full-day “marathon meeting” involving the two final candidates with peers and direct reports from around the world. Holding an evaluation meeting with all involved parties. Decision by the CEO in favour of the candidate with a faster tempo.
- Evaluating a manager for a business unit of a financial institution. Dinner involving the CEO with the two final candidates including the spouses to assess mutual values.
What these examples have in common is that everyone involved took a lot of time to get to know each other, including on a personal level. However, due to the scale of this recruitment process, everyone – including the ultimately unsuccessful candidates – found the tailored process extremely valuable: “After all, you don’t propose after the first date.”
“Hiring for cultural fit”, “Business transformation” and the related “Diversity” are our core topics. As an agile, dynamic Swiss executive search boutique with integrated leadership consulting, we want to take joint responsibility for the successful further development of companies in the digital age. An enthusiastic and expert partner, Witena will be at your side to support you in the further development of your company.