Tag Archives: staffing

The Very Real Costs of Bad Hires

It is one of the great “known unknowns”, to borrow one of the infamous Donald Rumsfeld lines, what does a bad hire really cost?  Hiring is an art and a science.  It is a unique combination of relationship building, a leap of faith, part quantitative and part gut feel, but it is also a process of vetting both the person and the role you want and need filled.  It requires a level of discipline and focus, commitment and patience that is difficult to maintain when there is a pressing gap in staffing and leadership.  However, succumbing to a false sense of urgency and allowing emotion to trump logic is the slippery slope that leads to bad hires, or at least hiring the wrong person for the wrong role.  In the end there is a cost to every mistake, and hiring brings real cost.

Fortunately the case of Charlie Weis is a shinning example of what one bad hire can cost an organization, or in his case several organizations.  Roughly $30 million in very real dollars.  That does not even begin to consider the opportunity costs, additional revenue streams, lost potential dollars, turnover, morale, the impact on other coaches, players, staff, programs and the myriad of other factors that one bad hire can have on an overall organization.  Charlie Weis, through no fault of his own, parlayed a brief period of success into not one, but two bad hiring decisions, bad contract negotiations, and above all illustrates the classic pitfall of “falling in love” with the hot candidate.

Notre Dame has been paying Charlie Weis since 2009 to not coach, and will continue to do so through 2016.  Kansas made the same mistake and is also paying him not to coach.  Incredible, yet not uncommon.  Guaranteed contracts are amazing things.  Most of us will not find ourselves in a position to be granting guaranteed contracts to public figures, but anyone who makes hiring decisions does find themselves responsible to organizations, coworkers, families and individuals where a bad hire does incur real costs.

Hiring is both an emotional and quantitative process.  Allowing emotion to trump data is a dangerous proposition, and when one finds themselves chasing what was, of feeling the pressure to make a splash, wanting to hire “the hot candidate”, or “really liking someone” owes it to everyone involved to take a moment and really reflect.  What is it the job demands, what are the day-to-day behaviors, the skills required, the outcomes desired and matrix of success, and only then decide if the person truly fits those needs.  Hiring managers should always heed the lesson of Charlie Weis.

In defense of Charlie Weis, while he might not be the best head coach, he just might be the greatest salesman…ever.  Convincing multiple organizations to pay you almost $30 million NOT to do something takes an incredible skill set, or at the very least one very savvy agent.

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Filed under Business, Hiring and Interviewing, leadership

Linsanity, the Marshmallow Test and Hiring

From the Wall Street Journal today came a column by Arthur C. Brooks entitled “Obama’s Budget Flunks the Marshmallow Test“. Not to worry, we are not going to take a turn down the path of political commentary. However, what we will borrow is the Marshmallow Test:

In one famous study from 1972, Stanford psychologist Walter Mischel concocted an ingenious experiment involving young children and a bag of marshmallows. He put a marshmallow on the table and told each child that if he (or she) could wait 15 minutes to eat it, he would get a second one as a reward.

About two-thirds of the kids failed the experiment. Some gave in immediately and gobbled up the marshmallow; videotape shows others in agony, trying to discipline themselves—some even banging their little heads on the table.

But the most interesting results from that study came years later. Researchers followed up on the children to see how their lives were turning out. The kids who didn’t take the marshmallow had average SAT scores 210 points higher than the kids who ate it immediately. They were less likely to drop out of college, made far more money, were less likely to go to jail, and suffered from fewer drug and alcohol problems.

So what does all of this have to do with identifying, hiring and retaining talent?  Actually everything.  Think about Jeremy Lin and the New York Knicks.  As an organization the Knicks had a choice – bring Lin up from the Developmental League and give him a chance, or shop around and trade for some point guard from another team.  They chose to go with Lin and two weeks later it is Linsanity.

Clearly, it is not always going to turnout that well when it comes to hiring, but there is a lesson to be learned.  It is safe to say that as a child if Lin was given the Marshmallow Test, he would have sat and waited for the reward.  His history indicates he is not an instant gratification person.  He “gets” sacrifice, hard work and patience.  Those are the traits, along with a ton of natural athletic gifts, that have made him successful.

The other side to this scenario is that there were options for the Knicks – there are other guards out there with the physical skills and size.  In this one case the Knicks avoided that classic pitfall of hiring…going with the “qualified” or “experienced” candidate; the safe hire.  The recycling of candidates, the shuffling of people from job to job, company to company, is the single greatest mistake made in hiring.  The philosophy that if someone is in the role currently,  they can naturally fill that role at our company.  Yes, they probably will do okay, but they will probably never be great.

Going with recycled talent in hiring is the path to immediate gratification – it is the “easy and safe hire”.  And based on the Marshmallow Test, immediate gratification is not an indicator of long-term success.  Apply the test to the candidates and yourself next time you have to add someone to the team – you just might find that great hire.

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Filed under Business, Interviewing