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Opinion: Cultural fitness and commercial health

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Reflections
Norrie Johnston, Managing Director of Executives Online, explores whether in the bid to find candidates who ‘fit’, companies are making themselves unhealthy.


HR Managers have to perform a difficult balancing act between employing people who will fit into their company culture but who will also bring fresh and innovative ideas. Yet it seems many do not have the balance right and, despite the current talk of diversity and the drive to attract more women and people with a greater mix of backgrounds and experience, many UK companies are playing it safe when it comes to recruiting senior managers.

In Executive Talent 2006, a new in depth analysis of the trends and issues driving the UK executive recruitment market*, finding people with the right cultural fit is shown to dominate the recruitment process. Half of the board directors and senior HR professionals questioned said it was the main issue driving their recruitment decisions.

While it is understandable that companies will want to recruit someone they can work with, this box-filling, play-safe approach – where the priority is finding a ‘face that fits’ – means many organisations are not exploring the full breadth of senior management talent available to them and are suffering as a result.

For instance 60% worry that they can’t find people with the right experience, a third said the scarcity of good executive talent is an issue, while over a quarter can’t find the people managers they need.

Understandably, given the proportionately large influence that a new senior executive has on the composition and culture of the top cadre in a small company, the study shows that small companies are more likely to rate the importance of cultural fit (it was cited by 66% of them). However, even in large companies, where the effect on the corporate culture of one new person joining is much more diluted, cultural fit is still a huge issue with 39% of respondents mentioning it.

The focus on keeping the cultural status quo is reflected by the very slow pace of change in British boardrooms. For instance, although a study by Race for Opportunity found that major companies were spending an average of £33 per employee on race and diversity issues in 2004, further research just completed (November 2005) by the Cranfield School of Management highlighted that 25 of the FTSE 100 companies still have no women on the Board. Furthermore just 11 of those that do have female board members have them in executive positions.

A key reason for this cautious, culture driven recruitment policy could be the lack of innovation and general stagnation within the recruitment sector. For instance, 81% of the 102 organisations studied in Executive Talent 2006 said they have long-established recruitment agency/headhunter relationships, which haven’t changed for many years.

In the largest companies this rose to 85%. These relationships are typically managed by the HR function. Furthermore, success is often not measured; one in ten do not formally measure their recruitment function, and among those who do, few look at what matters. For instance just 27% measure success in terms of the quality of the candidate hired.

In such a situation, in time, the head-hunter will inevitably start supplying what they think the client will be comfortable with – approaching the same, usual suspects each time there’s a role to fill. The end result is what many refer to as ‘pale, male and stale’ recruits – safe decisions where the brief is all about meeting the needs of the corporate culture rather than actually addressing the corporate challenge.

So how do organisations get out of this vicious cycle? Well the cynics amongst you may be surprised to hear that I’m not necessarily recommending a ditching of long-established recruitment company relationships. Many of these will be of great value.

But what I do think is needed is a fresh, frank and full discussion about what the priorities are and what recruitment success should look and feel like.

Organisations need to be honest with themselves and with their recruitment partners about what their priorities really are. In today’s incredibly competitive environment, companies that once may have wanted a ‘face that fits’ and may have looked to their nearest competitor to find it, may be willing to sacrifice some of that comfort for a senior executive who will first and foremost deliver.

If this becomes the case the whole recruitment paradigm shifts.

If the priority is the ability to deliver rather than fit in, the job description needs to change too. The focus has to be on the real commercial challenge rather than just the commercial culture. Forget the four-page job description; instead specify key tasks and deliverables.

Measurement of recruitment success then becomes a different animal. Forget number of applications, or the ease with which the candidate fits in. The candidate’s delivery becomes a key measurable – and one that can only be assessed six months into the job.

So what will happen if companies don’t make this shift? Well I suggest we look to nature for the answer. Going to the same old senior director gene pool may feel like an easy decision, but such ‘in-breeding’ doesn’t make for a strong species in nature, and it doesn’t work in today’s increasingly global corporate world either.

*Executive Talent 2006 was commissioned by Executives Online. The independent study involved interviews with 102 HR managers and senior managers all of whom recruit senior personnel. They work for UK organisations across a range of industries and with turnover in excess of £25 million. To request a copy of Executive Talent 2006 or to find out more about Executives Online’s services contact T: 01962 829 705 or visit www.ExecutivesOnline.co.uk

One Response

  1. Cultural fitness and commercial health
    I am very wary of organisations that use situation scenarious for you to solve on the assumption that this reflects your true abilities. I have experienced this type of interview technique often, and I have now concluded that it is used inapropriately.
    Too many organisations are looking for someone to be their administrative panacea, this is only because these type of organisations are not ready to embrace change, and adpat to demand (‘people living in ivory towers’ is still pervading the workplace, in some cases more than ever before.

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