Yesterday I commented that good hiring was the flip side of good retention, but is retention so very important? Is it really that expensive to replace someone? You bet it is! Is there actually ROI associated with retention? Absolutely!

Let’s start with the overt (obvious) costs. Ads and/or headhunters; value of time of the hiring team (hiring manager, peers, other managers, support people); everybody’s time preparing for the interview, interviewing, debriefing, discussing (possibly agonizing), and negotiating. Considering the hourly pay of a few managers and staff and we’re already talking substantial money.

Of course, where there’s overt, there’s usually convert (hidden). Covert costs really start running things up. Think: lost productivity—a lot of work didn’t get done because the time was being used to hire; lowered moral—the person who left had friends and colleagues who are sad the person is gone and concerned about who they’ll be working with next. The dynamics are worse if the person was laid off, in that event, besides sad and concerned add scared (Am I next?) to the mental mix. Finally, there’s the de facto truth that it takes anyplace from six months to one year for a person to become fully productive in any organization. The cost just climbed significantly (gee, this makes the overt costs look cheap)!

The cost to replace someone that I’ve heard bandied about over the years is two to six times the annual salary. But the real kicker is that that’s the good news!

Come back tomorrow for the really bad news along with proof of the ROI and an overview of what to do about it.

Why does a blog that says it’s about “company culture, employee motivation, communications, and retention” keep nattering on about hiring? Because my goal is to make you a better manager, so even if you think that all this motivation and related stuff is bull, remember that it translates to better pay and more opportunities for you.

Managers are not reviewed based on what they do, rather, their reviews are based on the success of their group. From project leader up through all levels of management, including the board of directors, it is the accomplishments—of the team, the group, the department, the company—that garner higher salaries, bigger bonuses, and larger stock options.

Managers need to see hiring as a critical, core skill. It’s imperative these days to hire the right person, at the right time and for the right reasons. Hiring the “wrong” people this year will mean major retention (AKA cost) problems next year, because good hiring is the flip side of good retention

I read an interesting post in CSO online called Don’t Ignore the Warning Signs detailing what happened to a security chief who says he ignored his gut when he hired. (Not unusual, most managers have been there at one time or another) But with all the red flags showing, not just in the interview, but also in the performance from the beginning, was it really a case of “not trusting his gut” or was something else going on?

I think the problem was summed up in the comment, “Typical of one ex-cop interviewing another ex-cop, we exchanged war stories and forged a common bond.” As explained in The number one reason for “bad hires and People like me, it wasn’t that he didn’t trust his gut, it’s more that he couldn’t hear it and wouldn’t have listened anyway.

Moreover, it’s sure not because it was “a couple of ex-cops”. It’s any two people who find shared experiences/beliefs/ attitudes/whatever—whether at work or at home—while interviewing.

Once that connection is made it takes conscious effort to hear past it.

As for the best leaders,

the people do not notice their existence.

The next best,

the people honor and praise.

The next, the people fear;

and the next, the people hate—

When the best leader’s work is done,

the people say, “We did it ourselves!”

To lead the people, walk behind them.
Lao Tzu

A CEO (who wants to stay anonymous) called me today and said, “If charm causes bad hires, what causes “wrong hires?” He defined a wrong hire as one where a good person with good skills that seemed to fit the req was hired, but didn’t add the expected strength to the team. So I explained comfort zones and he said, “You should put that in the blog,” so I am.

I first wrote about comfort zones back around 1999 (Hiring in Your Comfort Zone) for msdn (where I used to have a column) and the idea hasn’t changed a lot.

Our comfort zone is where we all prefer to do things. People want to spend their time with people like themselves. This isn’t about simple labels, such as race, religion or gender, which are more society’s labels. Our own subjective labels have more to do with schools (Harvard, Stanford, Wharton, etc.), specific professions (not fields), and especially companies (think McKinsey). It’s how we choose a way to connect, because, true or not, MIT grads believe they have more in common with MIT alums than with Cal or Columbia. Doctors hang out with doctors, usually those with the same, or similar, specialty or employer, but rarely with nurses or radiology techs. We like enough knowledge commonality so we don’t feel ignorant, but can still learn. It all boils down to, “people like me (PLM).”

And that maybe fine in our personal life—but not so fine in our professional life, especially not for managers responsible for hiring. The broader the PLM definition the longer it takes to become noticeable, but it’s there if you look for it.

I’ve known the following (often more than one who fits the profile):

• Director of system development who came from a software background, hired hardware engineers with extremely strong software experience, although it wasn’t needed.
• VP of marketing with a Harvard MBA whose team were all “Ivy.”

Think of the articles you are constantly seeing of new CEOs who hire the majority or their team from their previous employer with the express purpose of getting the same mindset. Bob Nardelli, the new CEO of Home Depot is a great example of PLM hiring. And sometimes it works, at least for awhile.

But the long-term cost to companies can be high.

• When the choice is between the best applicant and PLM, PLM usually wins out, slowly lowering the quality of talent.
• PLM homogenizes the staff, reducing diversity of both thinking and thought (methodology and result) and it’s that diversity that supplies strength and creativity.
• PLM can wreak havoc on retention efforts and drive out legacy knowledge.
• PLM hiring can involve just one part of a company or create a ripple effect, e.g. slow product development, which delays delivery, crimping sales and keeping the company from achieving its revenue goals.

Yes, all of this and much more are a product of a PLM mindset.

Business has heated up, so people availability is tightening up and most of the managers I know are burning up their Blackberries looking for talent.

For over 25 years, first as a headhunter and then as a retention consultant and coach, the question I hear most when it comes to hiring is, “What’s the number one cause of a bad hire?”

I love easy questions, and the answer to this one can be summed up in one word: charm (the candidate’s), which leads to selective hearing (in the hiring manager, et al). Charm (AKA, bonding, connecting, empathizing, etc.).

How many times have you interviewed a candidate and thought, “What a great person.” Or “The team loves her.” Or “Having him around every day would make this a more enjoyable place to work.” So where’s the harm? Most folks prefer to work with a congenial group of people.

The harm comes from the effect charm has on our ability to really hear what’s being said—and what isn’t. Charm is the basis for good chemistry and very few of us can hear past that.

Worse still, charm acts as a filter so that we only hear what we want to hear, i.e., those things that support our desire to hire the person.

Candidates, too, are susceptible to charm. Over the years I’ve heard many of them say, “I have no idea why I accepted the offer, it’s not really what I wanted to do.”

Overcoming the charm factor doesn’t mean you need to hire incompatible people you, and your organization, don’t want to have around, it just requires some good prep work to be done before you start interviewing.

Beating charm starts with a good req. It requires thinking, so you really know what you’re looking for, or, as I love to say, a req, not a wreck. But the true secret found when the req is almost done and you define the final item: the absolute, bare minimum requirements needed to do the job, without which you will not hire.

Now all you need to do is stick to them!

KG Charles-Harris, CEO of Emanio, shared a great resource when he turned me on to Harvard Business School’s Working Knowledge, (I told you the best stuff was sent to me!)—specifically an article entitled Corporate Values and Employee Cynicism—that played directly to our effort of developing an unambiguous description of KG’s cultural vision. The article is a “must read.”

Articulating the values they want in the culture is a relatively simple matter for a CEO or company owner—after all, they know what they believe! But as Sandra Cha and Amy Edmondson point out, the same words mean different things to different people, so what the CEO says, and what the people hear may, have little in common, creating tensions and negative reactions.

Simply stated, the way to avoid misunderstandings is through the clarity of communication. But it’s not enough to “spell it out” if you’re spelling it in Latin and your people hear in Russian, Finnish, Kligon, whatever.

One of the unspoken joys of management is that understandable communications are your responsibility.

To give you a bit more background (along with my philosophy:), mapping company success means detailed planning for each of the different functions the company needs to perform.

However, MAPping Company Success is a detailed delineation of managers’ MAP (mindset, attitude, philosophy™) and what to do with/about it.

So much for an intro (three posts is ample!) to me and RampUp, now on to the good stuff…

I’m a why…

I’m a why person, what are you?

I find that most people are who/what/where/when with maybe a bit of how mixed in.

But you probably know (and have been driven crazy by) a why person—whatever is under discussion, in one way or another, they keep trying to figure out/understand why.

I mostly love being a why person, but I have to admit it can be a real pain—especially to other people.

Beyond why being my kind of fun, it was the basis for over 20 years of headhunting (AKA recruiting) success. Why is hardwired in my brain and headhunting offered a broad opportunity to covertly explore and understand why managers did what they did and why people responded as they did. yielding valuable insights that became an integral part of the company I started in 1997.

Since then, I’ve been looking for a cool way to describe what’s at the bottom of managers’ actions—the why and how, if they choose to, they can change it.

Marketing dictated the need for something cool (as opposed to several paragraphs that nobody would read) which got me thinking. There’s a song in the show Gypsy that says, “Ya gotta have a gimmick” to succeed as a stripper. Well, that’s true for all businesses, always has been and I doubt it’s going to change anytime soon!

Finally (and happily in time for the newest incarnation of our website) the light went on and I found the cool term (yeah, the gimmick): MAP (mindset, attitude, philosophy™).

Which just goes to show how blind we can be, since I’ve been talking about mindset, attitude and philosophy my whole life—even using those terms!

OK, world, here I come, kicking and screaming (encouraged and pushed by Scott Allen, a terrific, online buddy) into the world of blogs, trying to figure out why I’m so resistant.

It’s not the writing, I love to write (and am told I’m very good at it:); it’s not the content, I know I want to write about my business passion (more about that later:) and other odds and ends; maybe it’s that I rarely get involved in trendy stuff—in fact I mostly avoid it.

But likely that’s because I, myself, am not a surfer, preferring books (the paper kind) as entertainment and my newspaper, favorite magazine (Business Week), and conversation for my news and commentary, to digital media (including TV and the Net).

Ummm, maybe I’m a dinosaur and didn’t notice, but my clients and friends consider my products/ideas both current and (argh) trendy.

Those who’ve known me longer think they were ahead of their time, whereas I consider them timeless.

But I have to admit that my friends and clients frequently send along interesting stuff that they’ve been reading, so maybe this won’t be so bad.