Much has been written on hiring a new CCO. As with the hiring of other senior executives, such as a CEO or CFO, there can be specific questions about challenges the candidate has faced in prior engagements. For the CCO position having one who has literally been through the wars, usually in the form of an extensive Foreign Corrupt Practices Act (FCPA) investigation or enforcement action, is a critical inquiry. In most instances, Boards will want a candidate who can lead the company through the situation currently faced.
But what about hiring at a level below the CCO? Most companies take the best athlete approach, hiring the most well rounded candidate with a varied background. However an article in the Harvard Business Review (HBR) Idea Watch column, entitled “When Hiring Execs, Context Matters Most”, reported on a new CEB study which “suggests that companies will be more successful if they consider the particular leadership context when hiring for every level. Instead of taking on generalists trained to meet any management test, the researchers say, firms should use an assessment system that identifies candidates whose personality attributes and experience are custom-tailored to the contextual challenges of the position.”
Basically, CEB came up with a quantitative approach, looking at 27 different contexts around projects, challenges and issues. From this list they, “assessed leaders’ personality attributes, tracked relevant experience, and solicited opinions about behavior, performance, and effectiveness from supervisors and direct reports.” The research team “also coded 60 variables that inform context, such as whether the job involves a high degree of uncertainty, requires managing a geographically dispersed team, or calls for cost cutting.” From this they ran data analytics and “worked to understand why some leaders succeeded while others underperformed, the biggest factor that emerged was how well a leader’s personality, skills, and experience meshed with the specific challenges of the job.”
Some of the challenges which included the following areas are well familiar to the compliance practitioner: leading global or cross-cultural teams; transforming a high-conflict culture; leading an organization through a merger or acquisition, operating a corporate function with high resource constraints; growing through innovation; growing the function through cost competitiveness; and managing a broad portfolio of products and services.
The bottom line is that the more challenges a leader will face, the more difficult their job will become and the success rate will inevitably drop. Yet the article suggests that the context of experience may well be a key indicator. But it moves beyond simply hiring, noting “For example, if success in a leadership role is context-specific, and if the context is apt to change quickly in a fast-moving business environment, firms might need to move leaders in and out of roles quickly. Awareness of contextual challenges can also change the way a company approaches development.” Jean Martin of CEB was quoted “Once you recognize how well-suited leaders are to the context in which they’re about to be placed, you can use that information to drive much more specific investments in development and find ways to coach people to account for the greatest areas of mismatch.”
This approach also allows you to get to the granular level of team projects. The article said that companies could use such techniques to “revise responsibilities, streamline goals and objectives or try and solve a particular problem”. A company could also use this method to consider its internal bench strength, focusing on who could assist the compliance function in rolling out a new initiative or even a new compliance innovation. The piece ended with a few thoughts on the best athlete approach. It suggested a term called ““spiky,” meaning that they excelled at a few specific capabilities but were not above average in all. “Chasing managerial agility instead of allowing for specialization is ineffective,” the researchers concluded.”
HBR also included an interview with a company which had utilized this analytical approach, Adecco Group, a Zurich based workforce solutions entity. The company’s global head of talent strategy and development, Courtney Abraham, was interviewed. As much as they tried the company inevitably fell back on a non-analytical approach; i.e. using intuition in the hiring process. Mostly, Abraham felt such an approach did not deliver consistent results.
While Adecco did not use the full 27 context approach suggested in the CEB study, they did develop its own 6 “most important challenges some will face in a new role and compare them to candidate’s skills, competencies, motivations and runaways.” This allowed the decision to move away from the gut level to one of a “shared language” among those evaluating the talent.
An interesting side effect and one not expected by Adecco was that the data often led to an internal candidate who was not “next in line” for a promotion. It allowed internal promotion with “eyes wide open” to a candidate’s strengths and areas where they needed additional development. It also has implications for development as employees have a better understanding of their weaknesses and what gaps they may need to fill. Abraham stated, “we can use onboarding and development to actively coach and support them.” Internal hires bring the benefit of having already bought into and have been a part of the company culture and “they understand our business, the people and the competitive landscape.”
The use of data can help a compliance professional identify internal candidates to move a corporate compliance program forward. This can also give a company a boost by bringing non-compliance professionals into the compliance realm which will allow them to more fully operationalize compliance if they return to a more traditional business unit role.
Three Key Takeaways
This month’s podcast series is sponsored by Oversight Systems, Inc. Oversight’s automated transaction monitoring solution, Insights on Demand for FCPA, operationalizes your compliance program. For more information, go to OversightSystems.com.