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Should You Replace the Incumbent?

by
Lou Adler
Oct 19, 2012, 3:13 am ET

I was talking to an old client of mine the other day. He was the CEO of a fast-growing manufacturing company in the 1990s, and now he’s on the board of seven mid-sized companies in southern California. My firm placed about 10 people on his management team in the company’s heyday. While I don’t do much real executive search anymore, he asked me if I had the script we used then to convert traditional skills-based job descriptions into performance profiles — aka performance-based job descriptions.

Many of his companies now need to replace some of their senior executives and he wanted to make sure their CEOs totally understood where the incumbents were falling short, and why they need to hire a new person. He believed this type of weak vs. strong performance comparison would get the hiring executives to move more quickly.

Following is roughly how the discussion went for a CFO position. You can use the same approach to better understand how work should be defined for any type of job, and if the current office holder is performing adequately. 

Start by ignoring the job description. Instead write down 3-4 short action-oriented statements representing what the person actually does on the job. For salespeople these are things like “sell industrial components to buyers at OEM manufacturers” and “make 20 onsite presentations per month.” For a software engineer it could be write code in HTML5 and Ruby to develop new user interface. For the CFO is was:

  • Upgrade the internal financial reporting focusing on product line profitability
  • Lead the installation of the new SAP ERP system
  • Conduct the investment analysis for two acquisition opportunities

Next review the job description and highlight the essential skills and experience requirements. For the CFO job, these were having a CPA and multiple years of financial reporting and budgeting experience. For the highlighted items, describe how these skills are actually used on the job starting with an action verb and a description of the task. For the CFO a CPA was needed to coordinate closely with their outside CPA firm from a tax-planning standpoint. The budgeting experience was needed to develop real-time financial performance reporting systems. Now add these to the master list of performance objectives developed in the previous step.

Add any sub-tasks, specific problems, or challenges, and anything that needs improvement to the master list. You want to make sure all of the critical performance objectives are covered, short and long term. Sometimes these are things that need to be done right away, and sometimes they’re long-term changes that escape initial notice. For the CFO they were completing the year-end reports, rebuilding the accounting team, and putting together a long-term capital expansion plan.

Take all of the tasks developed above, put them priority order, and make them more understandable and measurable. Select the most important 5-6 of the performance objectives from the master list. Clarify these key tasks so that they are more specific and measurable. You’ll use these to see how well the incumbent has performed, and if replaced, to see if any potential new hire has the right stuff. In this step you want to capture how long it should take to complete the task, some measure of quality, and attached to a specific deliverable if possible. For the financial reporting task the performance objective became: within six months prepare in-depth monthly reports highlighting the company’s performance to forecast and plan with a specific emphasis on margin problems by product line.

Describe the environment. As part of putting together a performance profile, you’ll want to include some overriding statement describing the company culture, critical business challenges or pressures, resource limitations, and potential managerial or team interface problems. The big ones for the CFO spot were the CEO’s lack of financial insight, the rapid growth of the company, a less than stellar team, and weak systems.

A performance profile prepared this way provides the hiring manager a view of what on-the-job success looks like. With it, it’s a simple matter to rank any incumbent’s current performance against the objectives listed. If an incumbent is found wanting on this comparison, the same performance profile can be used to assess a possible replacement. The key is to ask the candidates to provide specific examples of their accomplishments most comparable to each of those listed. Hire With Your Head, and my new book, The Essential Guide for Hiring & Getting Hired, provide all of the details on how to do this.

It’s pretty obvious you’d never use a skills and experience-based job description to measure an incumbent’s performance, so why would you use it for a new hire? The idea behind a performance profile is pretty simple — clarify performance expectations upfront and measure a person’s past performance against this same standard. When you do, don’t be surprised that the new people you hire are both competent and motivated to do the actual work required. Even better, they’ll ace their first performance review.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Merlynn Bertini

    While in theory performance based job descriptions have merit. The disclaimer at the end of your article points to why they (performance based job descriptions) should not be used. There are already enough “land-mines” for Talent Organizations(i.e, insuring ADA requirements and accomodation, diversity, discrimination issues, etc.,) Unbiased, non-discriminatory hiring practices are supposed to be based on the requirements of the position–and if the candidate has the necessary skills to do the job.

    These are legal issues and employment attorneys–depending upon whom they represent (employee or company) would either be drooling or going ballastic if a company were to use performance based job descriptions. The exposure and risk for companies would be too great.

    Merlynn

  2. Lou Adler

    @merlynn – in my new book The Essential Guide for Hiring and Getting Hired (Jan 2013) the largest labor law firm in U.S. will advocate that performance profiles are far superior than traditional job descriptions! So you’re contention is totally without merit. The third largest law firm – Fisher and Philips wrote a white paper in 1997 asking their clients to use performance profiles to prevent compliance and wrongful hiring claims. They even won a number cases when they were used, and lost many when they weren’t. If you go to our site – louadlergroup.com – you’ll be able to formally request a copy of the the F&P report. If you buy Hire With Your Head you’ll see of a copy of the same white paper in the Appendix. To make legal claims without due diligence or to suggest that what I recommend is totally inappropriate. However, many people in HR do make major decisions without understanding the law.

  3. Richard Araujo

    Honestly, Merlynn, I’ve never found anything as useful as performance profiles as described above. Getting HMs to focus on what actually needs to be done instead of a laundry list of skills which in a perfect world would lead to those things getting done is key to a good hire. Skils =/= performance in the end, they are a part of it, not the whole thing. Whether or not you put it in your official job description is one thing and a decision you have to make based on what you assess your risk as, but you should always have the profiles available and use them in your process. My company unfortunately still uses stale job descriptions, force of habit among most people is what it comes down to, and one I haven’t been able to break. But I’ve managed to get performance profiles in use informally and they have made a difference. There’s no easier or better way to keep your eye on the ball, keep all parties accountable, and keep all candidates in context and judge them appropriately.

  4. Keith Halperin

    Thanks, Lou. If we recruiters could *act as providers of needed work resources (where that would be provided as FT, PT, contract, no-sourced [eliminated], through-sourced [automated], or out-sourced work) instead of just sellers or renters of walking/talking widgets, we could provide much higher value-add to our customers and clients.

    Cheers,

    Keith keithsrj@sbcglobal.net

    *Unfortunately, I haven’t had employers beating down my door lately for me to do that for them…

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