Tuesday, September 4, 2007

Avoiding Behavioral Bottlenecks

What Goes Wrong? (By Bill Wagner)

Great employees are almost impossible to identify during the traditional selection and screening process. It’s a sobering fact that most terminated Fortune 500 CEOs lasted less than five years in their jobs. Yet these same corporate failures were once touted as the best fit for the firm. What went wrong? This is not an academic question, but a matter of real dollars and cents to growing companies.

According to the Saratoga Institute, the costs associated with executive/employee turnover are significant, sometimes double or even quadruple an executive’s annual salary. The soft costs – lost productivity, additional recruiting, interviewing, training, and acclimating new hires to the corporate culture – are bad enough. The hard costs of lost sales, poor customer relations, expensive relocation bills, and missed opportunities can negatively affect the company’s bottom line. It gets worse. Without behavioral expectations in place, hidden costs mount, especially when new employees may not become fully productive for six or more months.

How can companies reduce or eliminate the mistakes of selecting or promoting the wrong people for the job? The response is deceptively simple. It is to identify, recognize, and measure the behavioral requirements of the position and then compare those requirements with the behavioral attributes of the applicant or incumbent.

Once companies buy into this straightforward, simple, proven process, they are armed with valuable information that affects future productivity. They’ll learn that leaders are often born, not made, and that each position has specific behavioral requirements that are equally (if not more) important than certain skills, education, and experience. This discovery leads to stronger behavioral alignment inside the company, and incorporating behavioral assessments in the recruiting process significantly improves the bottom line.

(2003 Handbook of Business Strategy)

Bill Wagner is CEO of Accord Management Systems, located in Thousand Oaks, CA. The firm assists companies with the implementation of behavioral assessment techniques. www.AccordSyst.com / www.TheEntrepreneurNextDoor.com

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