One costly hiring mistake that I have observed with leaders is the unconscious avoidance, denial and/or toleration of under-performing employees.

Shocking costs of hiring mistakes

More commonly known as the cost of a mis-hire.

According to Tony Hsieh, CEO, Zappos, hiring mistakes have cost his company as much as $100 million!  That’s alot of dollars immediately subtracted from the bottomline.

For many companies, that one mistake can make the difference between surviving and thriving, between mediocrity and high performance.  Mis-hires and under-performing employees are the #1 profit leak in companies today.

Why Does This Issue Perpetuate Unknowingly in Many Companies?

For one, few companies actually take the time to calculate the hard and soft costs of even a single mis-hire.  Ignorance is not bliss in this case.  The higher the level of the position, the quicker the cost of a mis-hire increases exponentially.

To understand why such a large number, let’s look closely at the long list of direct, indirect and long-term opportunity costs of a mis-hire:

• costs associated with your time, your team’s time and any outside recruiting help in finding, screening and interviewing the pool of possible candidates
• costs associated with reference checking
• hard and soft costs associated with training a new employee
• costs associated with manager’s time to get a new employee up to speed
• costs associated with the lost productivity of a new employee for at least first 3-6 months
• long-term opportunity costs – seldom considered – with a mis-hire

-   substandard service

-   lowered employee morale and the resulting substandard performance in other employees

-   missed deadlines

-   customer dissatisfaction with product quality, customer service and/or lost trust/faith in the company

-   missed sales opportunities

-   and so much more

According to Guy Kawasaki, best selling author and former Chief Evangelist at Apple, there is another hidden high cost of mis-hires. “’A’ players tend to hire ‘A’ players; ‘B’ players tend to hire ‘C’ players and so forth.”   How does that translate to you and your organization?

If you are hiring anything less than “A” performing leaders, your leaders will hire mediocre employees that are not as good as they are, due to their own insecurities.  Perpetuating that under-performing cycle throughout the organization, your “B” and “C” leaders will cost you many times more than the $6 million we quoted above.

Can your bottomline afford that?

Why Is the High Cost of Mis-Hires Rampant?

Below are the 4 most common reason for hiring mistakes I have found in working with companies for over 30 years:

• Hiring decisions are at least 80% made as “gut feeling” or “based on appearances”  — such as, “I liked the person,” “they seemed honest and hard working,” etc.

• Scarcity and/or urgency mindset — a belief that few candidates have the skills you need or you are driven by outside pressures to fill the spot immediately and settle for mediocre candidates.
• As a hiring manager, you are dazzled by first impressions, how good the person looks on paper, credentials, advanced degrees, well-prepared interview responses, etc. In addition, the highly competitive job market has triggered an increase in exaggerated claims, embellished resumes and “half truths” often missed in the hiring process.
• Not understanding the difference between and/or having the needed tools to discern top talent vs. best fit talent.  With all the buzz about hiring top talent, many companies seek the most impressive backgrounds, past successes and prestigious credentials in their pursuit of top talent without any regard to best fit talent.

Past success and experience are often an unreliable predictor of future performance.  Why?  Because different people are motivated by and excel in different work environments, organizational cultures, job opportunities, etc.  Competencies and skills only account for 20% of future performance.  The right attitudes, motivations, values and goals for a given role and company predict 80% of performance.

What are the 5 Best Secrets to Avoiding Costly Hiring Mistakes and Finding Best Fit Employees?

Secret #1:  Shift your mindset from hiring employees to hiring partners.

Your employees are your most important partners and stakeholders.  Hiring employees is like finding the best marriage partner or close circle of friends.

You seek those who have similar values, will make you a better person and provide synergies for both of you to create something bigger than you can individually.  While you may value their past accomplishments and expertise, it’s what’s on the inside and the synergies between you that will make that partnership fly.

Secret #2:  Hire those with the capacity to excel and exceed you.

I emphasize finding those with the best capacity to excel and outperform others, including yourself.  Capacity not only includes current capabilities.

Capacity also includes the right mindset, motivational drivers and thinking necessary to ignite future potential.  It takes extraordinary self-confidence, soul searching and inner security for leaders to recognize when they hire those that exceed them, everyone wins.

Secret #3:  Hire “A+” players based on attitude, motivation and culture fit.

How you assess best talent fit for your company and for each role is the single most important ingredient to successful hiring and maximizing employee performance.

The best tool I have found to help clients assess attitude and motivation fit is an online assessment tool (IWAM), uncovering 48 unique attitude and motivation drivers that best predict future performance.  Although all patterns are important in varying degrees, there are usually 6-8 drivers most critical for company/culture fit and a handful of other drivers important to A performance in a given role/function.  For more info about how IWAM can help you hire best fit talent, go HERE!

In addition, to further assess culture fit, it is important that leaders learn scenario building interviewing skills, or hypothetical “what if” questions for assessing values and traits, without the candidate’s awareness or ability to prepare for such questions.

Secret #4:  Develop a mission statement, results-oriented job description and list of non-negotiable traits before you start the hiring process.

You can’t know how to assess a best fit candidate unless you know why you are hiring someone, how will their contributions impact company goals and be measured and what traits are needed to excel in that specific role. 

Most job descriptions are long laundry list of tasks and responsibilities without justification why the position exists or a scorecard how to evaluate success and performance.  Without this information, the probability of finding those with greatest chance to succeed and raise the game is very low.

Secret #5:  Stop relying on intuition; start relying on unbiased, objective due diligence.

I’ve have heard too many leaders’ hiring regret stories.  Examples of when they were convinced a candidate would work based on feelings and impressions, only to find after a year of frustration, procrastination and endless coaching, that they made a mistake.  A million dollar (or more) mistake, at that.

To avoid this pitfall, develop a rigorous hiring process.  Develop screening criteria and use objective data to eliminate candidates right away.

Examples could include driving history check, credit check, drug tests if necessary, etc.  What you are seeking are personal records that reflect a candidate’s character.  Also check character references, asking truth-telling questions, like … on a scale 1-10, how well did the candidate get along with co-workers?  And, why that #? 

After 1-2 stages of screening, have a team of individuals from a variety of positions interview candidates with list of prepared questions and hands-on problem solving scenarios of common role/company issues.  To ensure a candidate is aligned with company purpose, you should also ask “purpose based” questions such as, “what do you want to be remembered for?  Or “when in your life have you been so passionately focused on an activity that you lost track of time and what were you doing?”

Hiring, by no means, is a science.  Even with the best hiring systems, mistakes will be made.  The key is to hire slowly, fire quickly.  Your credibility and reputation as a leader, inside and outside, depend on it.  Be rigorously honest about your past hiring mistakes, your own hiring blindspots and the changes you will make to start hiring your best employees.

Let’s keep the conversation going.   Visit our blog to share your comments, biggest hiring mistakes, stories of regret, burning questions and valuable resources for finding and hiring best fit employees.  We want to hear from you!

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Accountable Leader

Today’s most successful companies all have one trait in common.  Their high performance organizations are driven by a strong accountability culture.  Yet despite many companies’ well-intentioned efforts to create strong accountability, leaders still struggle to make it a reality.  Mediocrity, lack of execution and operational breakdowns are hallmarks of poor accountability and an out of control, under-performing organization.

The REAL Truth Why Your Leaders are Struggling with Accountability and Under-performing Teams:

• As a leader, you can’t develop strong results-driven accountability with your team unless you have strong personal accountability with YOURSELF.  This capability is part of self leadership.  You can’t hold others accountable if you don’t take responsibility for your own actions, behaviors, attitudes, beliefs, choices and results.  Because employees model what leaders do, a leader’s weak personal accountability perpetuates a cycle of poor  organizational performance.
• As a leader, you lack critical “soft,” people skills — such as addressing interpersonal conflict, and engaging and motivating employees — that drive organizational accountability and performance.
 Employees follow you and are motivated to perform for their reasons, not yours.  For this reason, weak leadership “soft” skills cripple employee engagement and performance and is a costly epidemic in today’s business world.
• Most leaders lack the necessary mindset, capabilities and practices to drive strong accountability – a “must” for high achieving organizations.  Strong accountability starts first with the right mindset.  No performance system, set of metrics or people practices by themselves can make up for a lack of understanding what healthy accountability is and is not.  Lacking the right mindset perpetuates accountability breakdowns and a low performing organization.

The Accountability Mindset Your Leaders and Employees Need Instead to Drive Growth and Profitability

Your mindset is your mental map, cognitive filters and internal glasses that color your view of yourself and the world.   These mental filters drive your thoughts, feelings, motivations, behaviors, communications and, ultimately, results …  without your conscious awareness.

From a leadership standpoint, I call these mental filters your inner leadership game.   As a leader, the most important game you will ever play is the game within your mind. 

Let’s look at the components of your inner leadership game for building strong accountability and a high performance organization.

Grand Purpose/Vision

Often organizations treat accountability as an end in itself, rather than as a means to an end. Such organizations narrowly focus on the how of accountability and forget the why. 

Grand Mission

Accountability means more than achieving performance goals.  To motivate your employees to deliver results, accountability requires a profoundly deep understanding why and for whom your employees perform.

Zappos credits its multi-billion dollar success and organizational passion because every employee knows his/her significant role in keeping the Zappos vision alive.

• As a leader, for what grand purpose does your organization exist?  
• To what extent do your employees know that purpose?  
• To what extent are you reinforcing  each employee’s vital role to that purpose?

Values

Values are the qualities and principles you most value.  Your top 3 values drive 90% of our focus, decision-making, time usage, behaviors and outcomes.  If accountability is not amongst those, your attempts will be undermined and lack sustainability.

Important values considerations as a leader for cultivating a strong accountability culture  include:

•  Is accountability an explicit core or operational value for your organization?  is it a top personal value for you?
•  Do you have an agreed upon definition as to what healthy accountability is and what critical behaviors will drive it?
• Are there other values that are perceived by you or your employees as conflicting or competing with accountability in your organization?  If so, how will you resolve that conflict?

If any of the above are not addressed, accountability efforts will suffer.

Beliefs

Beliefs are thought patterns, convictions or judgments about yourself, others and the world around you.  They make up the boundary conditions of your thinking and the parameters of your inner game rule book. 

Most organizations struggle with accountability because of the unconscious negative beliefs their leaders and employees hold about accountability. Those beliefs are often the byproduct  of past negative experiences with accountability during upbringing, with a former employer, etc.  To assess the impact of these beliefs on accountability, ask yourself:

• When you think of  accountability, what associations, emotional reactions or thoughs come up?  Are these associations positive, negative or neutral? 
•  If any negative associations about accountability, how can you redefine it so there is emotional buy-in, organizational alignment and it motivates employees to drive their own results?

This article covered 3 out of the 6 factors of your inner game and its relationship to accountability.  Part 2 will cover the remaining 3 factors: your leadership identity, motivational patterns and emotional state.  Part 3 will cover leadership practices and culture changes critical for a strong accountability organization.

The single most important takeaway is to understand that your inner leadership games drives 90% of your performance and results, including accountability.

If you would like more details about your inner leadership game, I invite you to download a complimentary report:  Wired to Win Big;  7 Inner Game Leadership Strategies for Rising to the Top and Staying There.

Denise Corcoran – CEO, The Empowered Business^TM – helps growth-seeking companies develop game-changing leadership teams and organizations that drive and sustain profitable growth by design.   Denise can be reached at denise@empoweredbusiness.com orwww.empoweredbusiness.com.

The post The Accountable Leader: Developing the Right Mindset That Ignite Performance (Part 1) appeared first on The Empowered Business.