The cost of the wrong hire..

A general estimate for the cost of a wrong hire is typically proportional to the earnings of the individual being hired. But in reality, the costs may be higher in collateral damage such as company moral, lost opportunity, personnel lost due to the wrong hire, and bad decisions that were made, lost customers etc.

The cost of hiring the wrong candidate includes the time for the second candidate to get up to speed, any relocation and severance, the cost of poor productivity by the wrong candidate, etc.  apart from the cost of HR, Placement Consultant, Advertisements and other support activities. Overall we could put these costs into tangible costs bucket and the issues mentioned in the first paragraph to the intangible costs bucket.

From Indian IT perspective the damage is more intangible than tangible. Two main areas to consider will be “employees lost due to this person as well as customers who were lost”. The cost of both of them is difficult to measure objectively but the impact to the firm is huge. Generally the impact will vary depending upon how many people are reporting to the person mentioned here. If he/she is a senior leader then we might very well be talking about loosing few good leaders and few customers!

The most shocking behavior here is the people who have hired these bad apples will try and justify their selection. Lots of freedom and a fairly long rope will be given to these hires to make sure they don’t fail. Even after there is clear evidence that they have done a wrong hire they ll prolong the eventual decision just to make sure they don’t get the blame.

Another funny thing about these kind of recruitments is just to make sure they don’t directly get accused, several senior executives will try and do a “group selection” strategy. Call everyone possible to interview the candidate and make sure they don’t reject the candidate! If the candidate is successful the executive who mooted the hire will get the credit. If there is a failure, the response will be “well everyone was involved what to do! sometimes it happens..”

In India, firing is not as easy as in US and companies go through a lengthy strategy to get rid of the wrong hire. They ll start with moving him around, bring a person between his boss and him, waiting patiently for the person to leave on his own (firing will send a bad signal to the recruitment market) etc.,. I had one experience where a great talker who had completed TOGAF certification (he didn’t know how to write a simple app – talk about certifications in India! – that’s for another day) and impressed during the interview hired in a hurry by a smart-ass manager.

When they found him useless they cleverly moved him to my team and I was willing to give it a try (what to do.. I was desperate for resources). That guy turned out to be a disaster and we went through hell before he left on his own (there was a huge celebration on that day) and I felt pity for the company that hired him.

Another incident I recall is, a great technical guy was hired as manager and a well performing team was put under him, due to his exceptional micro-management skills the whole team was gone in one year. Management never realized what had happened and happily rewarded the manager, moved him up and gave him more teams to destroy!

What steps could be taken for these?

HR Policy – Clear HR Policy to let go the wrong hires or rotate them to a position where he might do a better job. Doing a better background check might give some clues. Look for release date forwarded (I mean the current employer is happily releasing him) etc.  If the hiring manager has a better peer network he might able to find out an opportunity for the wrong hire with in his peers.

Whatever the methodology cost of the bad hire is real and all we can do is minimize it!

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Innovation and Fear of Failure

I came across this post on HBR recently  by Doug Sundheim and its a compelling article on how the word innovation is grossly abused and how failures are the most important foundation on innovation.

He says “Everyone in your organization knows what succes is. It’s the things you put on a resume: increased revenues, decreased costs, delivered a product, etc. Far fewer know what a smart failure is–i.e., the type of failures that should be congratulated,” he writes. “These are the thoughtful and well-planned projects that for some reason didn’t work. Define them so people know the acceptable boundaries within which to fail. If you don’t define them, all failure looks risky and it will kill creativity and innovation.”

Yes, failure is a big bad word in Indian IT and no wants to see failure any where..  Even in movies, we would like to see happy endings, we don’t care how much suffering hero goes through but at the end of the film we would like to see a happy ending!! We do fail many times but we try to find a reason beyond us every time isn’t it?  I know people blame the failure on some superstitious items.

From our childhood, we are actually groomed for not to fail. Parents go mad for small mistakes and criticize children instead of giving them encouraging words.  Fear of failure starts right there at home for us and we strive very hard not to fail from then on.  Right from childhood we are discouraged to do anything different and unusual and if the action ends in failure, consequences will be very disturbing.

I have come across many executives who would like to play safe at any time. They are very careful to follow CYA strategy and make sure that even if there is a failure they are safe from the impact of it. How creativity & innovation is going to thrive in this environment where managers wants to play safe and team members fear for the consequence of failure?  No wonder why India is poor in invention / innovation even though it has the highest number of  Ph.Ds next to US.

I remember we used to study about 3M and the canon in front of their office.  Every time there is a failure the cannon will blast it seems and senior executives will be worried if there is no blast for a long time. We know very well how successful 3M in terms of innovation and products.

Another reason for fear of failure is the extraordinary self-conscious nature of some people. They always imagine that the whole world is watching them and they can’t afford to slip up at any time and they try to act as if they are greatly successful. This behavior makes them not to try anything new even if they are pushed to do.

We know that fear of failure is in our DNA and it is not easy to create a workaround with something like that. Organizations could help employees to overcome these problems at least at the professional level. They should train their management how not to discourage pro-active people who are interested in taking a calculated risk. Managers should encourage risk averse people to try and do something different.

Imbibing something like this into the entire set of managers is not easy to do and it requires some commitment from top management. They should introduce rewards & recognition programs for both mangers and employees who take calculated risks and fail(!). It sounds funny but trust is not something which could be developed overnight and people will change and try taking calculated risks after seeing some of those failures are taken positively.

So what all I have written so far..

1. Continuous Learning

2. Calculated risk taking

Have a great day!