08/04/2010 09:05 am ET | Updated May 25, 2011

Hire Senior Executives That Last

Cross-posted from Harvard Business Online

Not long ago, a C-suite executive left a major corporation after being there for only a year. Although the official statement said that she left "for personal reasons," in truth she was not a good fit with the company and had alienated many of her colleagues and demoralized the function she was leading. Most disturbing, however, was that this same executive had a pattern of similar failures in previous positions -- but somehow that history was either missed or ignored when she was hired.

Unfortunately this is not an uncommon situation. Studies peg the failure rate of executives coming into new companies at anywhere from 30% to 40% after 18 months. The costs of this failure rate are enormous -- wasted and duplicated recruiting fees, missed business objectives, unproductive employees, and distracted colleagues. It's a significant but mostly invisible drain on corporate productivity.

So what can companies do to improve the odds of hiring successful senior managers? Let me suggest three relatively simple steps:

To start, ramp up the due diligence process. Most senior management candidates come through executive recruiters, and we assume that they've done their research. However, search firms have a vested interest in placing their candidates, and often rely on the candidates themselves for references. If you're involved in hiring, you should supplement these reviews with your own investigation. Identify people in the candidate's previous companies and give them a call; talk to people in the industry or function about the candidate's reputation; and find people in your own company who might have crossed paths with this person previously. The more data you can get the better -- which will hopefully uncover previous patterns that might have gone unnoticed.

Once you have a candidate that you want to consider, the second step is to go beyond the typical interviews. Most recruits are subjected to a series of one-on-one meetings with other senior executives, many of whom are not trained in effective interviewing techniques. So they end up having pleasant meetings, exchanging impressions, and in the end making a decision based on relatively little data. To make this process more robust and revealing, create other mechanisms for seeing the candidate "in action." Ask the recruit to make a presentation; give the candidate a problem situation and ask her to develop a range of solutions and a summary memo; conduct a role play on how to deal with a difficult employee; or ask the person to facilitate a meeting with several other managers on a particular topic. The range of possibilities is really unlimited once you liberate yourself from the constraints of traditional interviews. The key is to see how the person thinks on her feet and how adaptable she is to the culture of your company -- information that is difficult to uncover in a series of friendly peer interviews.

Finally, the third step that you can take to increase executive hiring success is to reduce the number of outside hires. While it is certainly important to continually enhance your company's gene pool with outside DNA, for most companies it should be the exception rather than the rule. If you have a strong and consistent succession and development process, you will have good candidates for top positions -- candidates who already know how to succeed in your company's culture. So when it is necessary to fill a senior opening, consider whether it makes sense to hire from within.

None of this is revolutionary or the equivalent of organizational rocket science. But if you can put these steps in play it can have a huge impact on your company's success.

What's your experience with outside senior hires?