I had a long breakfast with a friend and Company Director this morning. Over the bacon and eggs we talked about some senior and unexpected departures from one of his competitors. He was identifying the opportunities these senior departures presented for his own company.

In short he categorised these as:

• Available talent might be available and useful to his own comany (possibly on a consultancy basis)
• The competitor’s clients might speculate that they might need to shop around for alternative suppliers (Just in case!)
• Loss in staff morale and as a result loss of productivity
• Gap in leadership until new leader can be appointed and begin to succeed
• Possible further departures which could increase problems
• Cost to competitor of rehiring and lead-in time for newe job holder

Too often, when senior management departs staff look to the future wondering if the business is doomed. (Even if the leader had been unpopular) and wonder if they should consider finding another job before it’s too late. My friend and I speculated that the benefits for my friend’s company could last between six and nine months and be worth many clients and an increase in sales income.

Bernard Matthews as an example
One only has to look at Bernard Matthews, the turkey company, to see how the loss of top people can benefit competitors. Last week the Chairman, Davis McCall, stepped down. Then the Chief Executive, Noel Bartram left and follows Rob Mears the Managing Director’s ealier departure.
The company employs 2200 people with a further 1000 staff in Germany and Hungary. In recent years Trading conditions have been poor for the company with bird flu and increase in costs. In addition staff morale has been hit and sales have slumped. Profits on a turnover of £341m amounted to just £2m.
With the departure of senior people it could be expected that morale and productivity will further be affected unless the latest appointment of David Joll (former CE) can secure a rumoured investment of between £20 and £30million. In which case he could end up as a hero.

A Strategy
My friend and I worked on plans until lunchtime on ways to manage possible, though unlikely, senior departures in his own company.

Stephen Harvard Davis

A few days ago Mark Rogers, the UK General Manager for Apple Computers, told me that for a job at Apple and above Manager level there will be around eight interviews.

Actually this came as no surprise. The energy that Apple put into selecting the right individual for their senior appointments is indicative of the energy that they put into everything they do!

However, when mentioning this to some of my business friends, they thought this process too long and protracted and would take up too much valuable time. Yet my argument would be that it’s better to expend valuable time at the start of the process and to get it right than to have to waste it later in clearing up a mess!

This latest video may help you decide

…

Did you read that the CIPD (Chartered Institute for Personnel development) conference discussed how HR should become more business savvy to increase their impact.

Too little influence
For years the CIPD have been moaning that HR has too little influence at senior levels in so many businesses. One solution given to the conference was to “Discuss business challenges as opposed to HR Issues”.

Changing attitudes
The problem with this strategy is to persuade CEO’s, Directors and other Executives that HR is able to discuss “Business issues” when they have been used to discussing only HR and as a reaction to events as opposed to a developer of strategy.

In my experience such a change in emphasis would be easier for a “New Hire” HR Director or manager rather than a current incumbent!

As you know I spend much of my time advising companies on why their team restructure “just isn’t working as planned”.

Good people are always attractive to the competition
Too often it’s because good people leave. Their companies, however, are often unaware that some key staff are unhappy and end up screaming “What a disaster” when they do leave. Blindness to the impending situation is no excuse because there are always clues. The other thing to consider is that especially in poor economic conditions, good salespeople, good managers and well connected executives are ALWAYS attractive to competitors.

INfrequently asked questions
The questions I think more businesses should regularly ask themselves are:

• What is negative (financial, morale, targets) impact on the business if _____ left?
• What is the risk of ____ leaving? (1-10)
• Have we identified a successor?
• Is that successor able to do the job at 100% effectiveness NOW?
• If not at 100% what % could they achieve?
• If not NOW then how many months will it be before they will be ready?
• What would happen in the meantime?

I’m currently offering a video SKYPE conversation to discuss team restructure and if you would like to take advantage of this then email me at stephen@assimilating-talent.com to arrange a convenient time.  
 

Last week two people contacted me to discuss the “advantages of failed recruitment” that I mention in my business and conference talks. So I thought I would let my blog buddies benefit too.

Time-Line
Picture a business wanting to recruit a new team leader…3 Months
Time taken to induct and allow new leader to in-bed……..3 months
Time taken to identify failure and dismiss…………………..3 Months
Time taken to recruit new leader …………………………….3 Months

“That’s a whole year of lost opportunities that allows the competition to take advantage” and the competition can make huge strides if they know how!

If you’d like to have a consultation with me on SKYPE on the topic of
“Don’t risk another expensive recruitment failure…when you don’t have to” or
“How to take advantage of the competitions misfortune”
then email me at stephen@assimilating-talent.com to arrange a convenient time.

For further information:
HERE

Yesterday I blogged on Simon Swan’s article in the latest edition of Management Today and got quite a reaction. A whole load of people, shocked at the costs to their business, contacted me with questions and to discuss team restructures. They ranged from large businesses with a number of teams to a small company of four considering expanding to a team of just five people.

Not so boring stats
All of them were shocked to hear the answers to the “INfrequently asked questions”.
that business never asks*:

• What percentage of new hires fail within two years of appointment?
  A: 40%
• What % or restructured teams fail to meet objectives?
  A: 42%
• What % of projects are completed to time, budget and specification?
  A: 28%

But it doesn’t have to be like this and I talked through my callers an eighteen minute SKYPE call when I explained how to reduce the risks of new hire and team failure…easily.
They’ve urged me to offer the same eighteen minutes to my SKYPE contacts (stephenharvarddavis) and I thought I would offer this to my blog readers and at no charge.

If you want to take me up on this then email me at Stephen@assimilating-talent.com so that we can arrange a mutually convenient time for a SKYPE call.
For the moment I’m restricting this to the first ten respondents and during the next seven days so don’t let time pass if you want to take me up on the offer

* Stats from various sources including Fortune Magazine and HBR

Did you see Simon Swans article in the latest edition of Management Today*? Simon talks about the importance of interviewing and quotes Harvard University research that says that new hire failure costs can amount to five times salary. I thought the costs understated and suspect that Simon’s probably taken a fixed cost of salary and direct expenses but not included the lost opportunity costs that result from a new hire failure.

At this point you probably might discount my own research as being inflated, if I included it here, so let me point to Brad Smart’s book “Topgrading” ,as evidence, where he wrote that his research into new hire failure could amount to 24 times the salary. Much of these come from lost opportunities which, depending upon position, include lost sales, projects not met and so on

I thought it interesting that Simon’s solutions to the problem was to ensure that the Resume (CV) was accurate and that the interview process robust. All good stuff. However, a crucial part of the process is the six months that a company spends integrating the individual into the new job. 

* 5th August 2011

I’ve recently heard suggestions that the
more interviews and hoops candidates are expected to jump through…the
better the final quality of hire. Then a similar question was asked on LinkedIn and I thought I would repeat the answer in my blog.

The proposition is WRONG 

Very sorry, but it’s wrong. Let me clarify: I have spent the last ten years talking to CEO’s about
hiring and integrating people into their firm faster and more
profitably. Asking a candidate to do more and more tests and interviews simply clouds the process. Two interviews, one assessment and a follow up meeting to negotiate terms is enough. In my experience having a new hire failure or poor hires has more to do
with the lack of interview experience by the interviewer, an inability of interviewer to assess candidates correctly and
poor integration by the business.

Interviewers training
Directors that interview people for a job do so about two or three times
a year. Hardly enough time to gain great expertise or to maintain that
ability. This may be a reason why businesses rely on more and more interviews and tests. However, again in
my experience, tests are only as good as the ability to understand the
results. (Too many people will fix on one statistic from a test and base their
choice on that as opposed to a rounded assessment).

One solution is to encourage interviewers to undergo some training
before undertaking important interviews. Then to have some experts on
the interview panel that can provide focussed views.

Cost of failed hire can be shedloads of money off the bottom line
Interestingly the COSTS of NEW HIRE FAILURE can be huge and my research
confirms Brad Smart’s research that the cost of failure can range from
10 – 24 times salary.

So if you’re hiring at a salary of $45,000, choose a multiple and see how much a new hire failure could cost your business!

Links:

• 
  http://www.youtube.com/user/stephenharvarddavis?feature=mhee