Few roles could be more important in an organization with deteriorating performance than the roles responsible for crafting a new strategy and the roles responsible for securing the talent that will make that strategy successful.
Firms that have successfully overcome negative momentum and turned their performance around often select new leadership with a proven ability to operationalize a much narrower strategy. They also accept that the talent that was with the organization going into decline may not be the best talent to help pull the organization back up.
Turning around an organization is a tremendous feat, one that involves numerous cultural battles. It’s illogical to assume that any organization in a state of decline could transform itself into the next Apple, Google, or Facebook without dramatic changes to every aspect of its culture.
Corporate culture, often the subject of much debate, is quite simply the real operating environment of the organization. It has nothing to do mission, vision, and values, and everything to do with the unwritten rules that are inferred every day by management actions. Many CEOs who led less-than-successful turnarounds did so with the expectation that the answer was in product development, R&D, or sales, overlooking the role of talent management.
Talent Is Key in Any Turnaround
Despite CEOs acknowledging that developing “strategies for managing talent” (Growth Reimagined, PwC, 2011) is the most critical business problem they face in this difficult business environment, there are few leaders in talent management bold enough to accept the challenge of leading a business turnaround. Recruiting leaders often say that they want to have a strategic impact, but focusing on tactical issues and efficiency demonstrates that they don’t know what actions they need to take in order to be strategic.
“Being Strategic” Requires a Performance Culture
Being strategic requires actions that demonstrate a multi-year impact on the primary strategic goals of the organization (i.e. revenue, profit, productivity, market share, time to market, and innovation). In cases where a dramatic business turnaround is required, CEOs often articulate the need to build a performance culture (every employee, every manager, every process expected to increase performance and innovation). Unfortunately, many organizations attempting to transition fail to consider the insane impact a talent management activity like recruiting can have on corporate culture.
It’s no secret that firms notorious for delivering record-shattering performance invest significantly in both recruiting capability and capacity, while those that fail often institute cost-containment efforts without any consideration for functional effectiveness. Companies like Google, Southwest Airlines, and Zappos accept that the recruiting function can dramatically impact corporate culture by managing the caliber of talent that makes it through the front door. There are few more impactful ways to build a performance culture then to populate your firm exclusively with new hires who know how to build that culture rapidly.
The First Step – Accepting the Role of Gatekeeper
By accepting gatekeeper responsibility, recruiting leaders send a clear message to everyone inside the organization that they will ensure that all new hires will either be a top performer, an innovator, or a game-changer. This is necessary because despite the crisis, individual hiring managers will likely continue hiring in their own short-term interest if allowed to.
20 Additional Steps Recruiting Can Take To Help Turnaround a Business
The following 20 actions are the most impactful actions a recruiting leader interested in driving a turnaround effort should consider. They are broken into four categories.
Change Goals, Targets, and Branding
- Shift the goal to “hiring for the good of the firm” – traditionally the recruiting function has allowed most managers to hire for their short-term, self-serving needs. In a performance culture, that tendency must be changed so that all hiring decisions are made based on meeting the goals of what is best for the overall performance of the organization. Follow the example of Google and consider instituting a broad hiring team that will ensure that every hire fits the new culture.
- Change the targeted competencies – recruiting leaders need to change the definition of “corporate fit.” Organizations must target individuals with new competencies who would not “fit” the old culture. This is necessary because in a performance culture, every job description and selection criteria must emphasize performance, the ability to lead, and the ability to successfully innovate. You can’t produce significantly different results if you hire the same competencies that got you into your current situation.
- Change employer branding and recruiting communications – in order to attract the very best, recruiting and corporate communications must shift messaging radically. The new approach must clearly communicate that “things are changing” and articulate why the organization would be not only relevant, but also an exciting place for top performers, game-changers, and innovators to work. Those involved in hiring must be provided with a sell sheet that helps them to effectively communicate the changes that are occurring and how the new culture would be exciting to top candidates. Emphasize fast decision-making and a chance to try new things.
Change Who You Hire
- Begin with a few magnet hires — start by identifying and hiring a handful of “magnet” individuals. This will quickly send a message throughout the industry that the very best have recently decided to join your firm. By bringing in a few well-known people, you automatically attract others who admire them.
- Prioritize the hiring of managers and leaders – managers and leaders have the most influence over changing the culture and improving performance and innovation. As a result, recruiting must prioritize the hiring of great managers and leaders, so that they are filled with change agents and innovators.
- Prioritize high-impact jobs – in a performance culture, everyone acknowledges that all jobs do not have an equal impact on business results. Because at least initially there will be a limited number of hiring opportunities, with its remaining hires, recruiting must identify and prioritize the business units and the jobs that will have the most impact on performance, innovation, and the turnaround. Recruiting leaders must influence the CFO and COO to prioritize the authorization of requisitions in those high-impact areas.
- Hire change agents – whenever you hire regular employees, emphasize the identification and hiring of “change agents” with a track record for implementing change. Also target individuals who have a history of intolerance for the status quo and those who overly defend it. Look for “fist raisers” and individuals who will instantly speak up when they see a performance weaknesses or a lack of innovation.
- Shift the focus to external hires – a successful turnaround will require employees with a completely different skill-set and a mentality. Although organizations normally have a preference for promoting and transferring current employees, changing long-held employee values and behaviors may require more time than the turnaround allows. You need to shift the ratio of internal versus external hires to emphasize external hires not overly tied to the current culture.
- Target your competitors — if you’re going to beat your competitors in the marketplace, you also have to beat them in the talent market. Winning the battle for top talent must start with a competitive analysis that includes the strengths and weaknesses of each of your major talent competitors. Because a large percentage of the top performers in your industry are likely working at one of your competitors, target your competition’s best talent. Hiring from competitors not only helps your firm but it also simultaneously degrades the capability of your competitors.
- Speed requires team lift-outs — in order to minimize the time it takes for your turnaround, you may have to target and successfully recruit entire intact teams from other firms. This is because intact teams are already used to working together, and as a result, they often can produce results much faster than a newly organized team of “strangers.”
Change Your Processes
- Change the assessment process to identify performers and innovators – at least for the first year of the turnaround, recruiting must change its resume screening, interviewing, and candidate assessment processes, so that they effectively screen out anyone who is not a top performer or an innovator. Instead of simply relying on candidate statements, require each candidate to demonstrate their ability to perform and innovate on real problems that the company is currently facing.
- Emphasize proactive referrals — in order to ensure success with limited recruiting resources, every employee must become a talent scout. Start by approaching current employees who are known for performance and innovation and specifically ask them to use their social networks to identify and make employee referrals of those who fit the new culture.
- Focus on direct sourcing — you cannot assume that broad advertising will successfully reach and convince the people that you really need to apply (especially if you are targeting individuals who are not actively looking). Instead, your sourcing effort must proactively identify and sell the specific individuals who you need to build your culture of performance and innovation.
- Improve coordination and sharing – effective recruiting relies heavily on other HR and talent management functions. In order to maximize speed and results, interrelated functions need to be more closely coordinated and integrated. A process must also be put in place that ensures rapid and widespread best practice sharing. You may also need to develop a SWAT team to rapidly address the most difficult recruiting problems that come up.
- Develop metrics to identify problems – in a performance culture, metrics improve accountability and spur continuous improvement. As a leader of the turnaround, recruiting must lead by example by developing quarterly performance metrics that quickly allow everyone to identify hiring successes and failures.
Additional Actions to Consider
- Show the business impacts of recruiting – recruiting leaders cannot assume that executives and hiring managers will automatically see the tremendous economic impact that recruiting can have on the business turnaround. In order to get executives and managers to own recruiting, both groups must be shown the direct dollar impact on revenue that results from hiring top performers, game-changers, and innovators. In fact, all recruiting results must be converted into their dollar impact on corporate revenue and sales.
- Negotiate control over other types of labor — because as much as 50% of an organization’s “labor” may come through contingency or outsourcing channels, the head of recruiting must ensure that they have some degree of influence or visibility into contingent hiring as well. This is necessary so that everyone (regular or contingent) is on the same page when it comes to performance and innovation.
- Re-train your recruiters – in order to hire the best, you will need to retrain your recruiters so that they have the mindset and the capability of bringing in top performers, game-changers, and innovators. The tools and technologies that you provide to recruiters and managers must also improve if you are to successfully recruit top talent into a firm with a lagging reputation. Focus on referral and social media tools because they are effective and inexpensive.
- Reward great hiring – in order to get managers to focus on great hiring, work with those in compensation and performance appraisal to add the hiring of top performers, game-changers, and innovators to the bonus criteria of every manager and executive.
- Improve internal movement – because resource limitations will restrict the amount of external hiring, it is a good idea to use your corporate recruiters internally to identify and move innovators and top-performing employees quickly into areas within the firm where they can have a larger impact. Influence the promotion criteria so that they promote based on a recent record of performance and innovation, rather than on experience and loyalty.
In my former role as a chief talent officer, I can tell you that I learned quickly that the prime differentiator between great and average recruiting leaders was their ability to see the tremendous business impact of great recruiting. Once a recruiting leader realizes that recruiting alone can have a tremendous impact on building a performance culture and on turning around a struggling business, they are simply unstoppable.