First, Hire for Cultural Fit, then Hire for High Performance
“Shaping your culture is more than half done when you hire your team.” –Jessica Herrin, Founder, Stella & Dot
“Hire character. Train skill.” –Peter Schutz
The most important thing a leader does is to make the right hiring decisions. New hires will fit the culture, have emotional intelligence, be honest, have integrity, and show eagerness to learn and develop.
Hire for fit first, then for competencies. You can teach skills and competencies, but you cannot teach cultural fit. For example, if you have a coaching culture, hire leaders who know how to coach effectively. If you want high performance, hire people who have consistently performed at high levels. Leaders understand the DNA of top performers and hire like-minded, skilled employees who fit the organization’s culture.
Herb Kelleher, cofounder of Southwest Airlines, once said, “We will hire someone with less experience, less education, and less expertise, than someone who has more of those things and has a rotten attitude. Because we can train people. We can teach people how to lead. We can teach people how to provide customer service. But we can’t change their DNA.”
As I said, it is imperative that leaders hire for cultural fit, which includes promoting and hiring employees who have consistently performed in previous roles. Andy Ajello, former senior vice president of Diabetes and Obesity Sales at Novo Nordisk, implemented a hiring rule that leaders could only hire external employees who had performed in the top 20 percent of their organization. This rule allowed the company to hire the best available talent in the industry.
High-performing leaders start by promoting and hiring employees who have consistently performed at high levels in every position they have held. One of the greatest predictors of success is high performance in previous roles. If an employee has been an average performer in previous roles, they will be average in her new role. Average performers may perform satisfactorily for a while, but eventually they will regress to the mean; in other words, they will eventually be average again.
According to a McKinsey article, “A recent study of more than 600,000 researchers, entertainers, politicians, and athletes found that high performers are 400 percent more productive than average ones. Studies of businesses not only show similar results but also reveal that the gap rises with a job’s complexity. In highly complex occupations—the information- and interaction-intensive work of managers, software developers, and the like—high performers are an astounding 800 percent more productive.” (Source: “McKinsey Global Survey: War for Talent 2000,” refreshed in 2012; Scott Keller and Mary Meaney, Attracting and Retaining the Right Talent, McKinsey, November 2017, https://www.mckinsey.com/business-functions/organization/our-insights/attracting-and-retaining-the-right-talent)
Think of all the challenges that a CEO faces. Guess what their number one concern is?
“‘Failure to attract and retain top talent’ was the number-one issue in the Conference Board’s 2016 survey of global CEOs—before economic growth and competitive intensity.” (Scott Keller and Mary Meaney, Attracting and Retaining the Right Talent, McKinsey, Organization, November 2017, https://www.mckinsey.com/business-functions/organization/our-insights/attracting-and-retaining-the-right-talent)
Another McKinsey article states, “A whopping 82 percent of companies don’t believe they recruit highly talented people. For companies that do, only 7 percent think they can keep them.” (McKinsey Global Survey: “War for Talent 2000”; extensive research conducted 1997–2000; survey of more than 12,000 executives at 125 midsize and large companies)
The article goes on to say that “More alarmingly, only 23 percent of managers and senior executives active on talent-related topics believe their current acquisition and retention strategies work.” (The State of Human Capital 2012: False Summit, a joint report from McKinsey and the Conference Board, October 2012, McKinsey.com)
With the challenges that leaders face with the COVID-19 economy and hiring obstacles, it is more important than ever to make the right hiring decisions. If a candidate does not make you say to yourself, “I have to have her on my team!” don’t settle for her. Warm bodies do not drive performance. The right, high-performing candidates that fit the culture will!