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Articles on Recruitment

Street art in Buenos Aires, Argentina (More)
If one takes the findings of Jim Collins’ “Good to Great” seriously, then recruitment is about the most important activity an executive does. From these articles, written before Collins’ work was published, it is clear that not enough attention is paid to this and the difficulties inherent in human judgement. This last has been seen on myriad occasions from the near failure to apoint J.S. Bach as Cantor at Leipzig to the assertion by Einstein’s teacher that he would never amount to anything. Unfortunately, most executives and board members proceed as if none of this ever happened. Just look at some of the appointments to museum director positions int he last five years. And the “departures”.

Claudio Fernandez-Araoz, Hiring without firing, Harvard Business Review 77 (4), 108-120, Jul/Aug 1999

Hiring executives has always been a daunting task, and today’s economy makes it tougher than ever. The global scope and breakneck pace of business, the shrinking supply of candidates and the constant shift of organizational structures have increased the stakes exponentially. One wrong hire can quickly derail a company. The 10 common hiring traps, and many real-world examples of how those traps have scuttled business plans, are discussed and ways to sidestep them examined.

Warren Bennis; James O’Toole, Don’t hire the wrong CEO, Harvard Business Review May/Jun 2000, 78 (3), 170-176

A disturbing trend is going on in corporate America – CEO churning. Top executives are rapidly coming and going, keeping their jobs for increasingly shorter periods of time. The reason? Most boards are so unclear about the definition of leadership, they are picking the wrong people. Boards can reverse the trend by following several guidelines. First, boards must come to a shared, accurate definition of leadership.

“The Performance Impact of New CEO’s” (Sloan Management Review Winter 2000, p 14) deals with an issue of great importance for museums. There have been previous studies of this sort of thing. But the article asserts that previous studies provided few definitive answers on the relationships between CEO turnover and subsequent company performance.

This study by Harvard Professors Rakesh Khurana and Nitin Nohria shows that the extent to which CEO replacement is an effective mechanism for improving organizational performance depends on the circumstances. Two events have been confused in the past according to Khurana: the departure event and the succession event. When a natural departure is followed by promotion of an insider, no significant change in performance occurred: it represents support for the status quo. Replacing a CEO whose departure was forced by promotion of an insider also led to no significant change.

“Firing a CEO signals a mandate for change”. However, a CEO whose departure has been forced is replaced by an outsider, performance does change significantly over the next three years. A recipe for failure is to replace a retiring CEO with an outsider, greater change – negative – occurs in this scenario. Outsiders often face opposition from the incumbent senior management team”. The article concludes, “CEO turnover is not a simple solution to a company’s problems” Boards of directors and shareholders need to create conditions in which their CEO can succeed…”