Bradford D. Smart

Manufacturing companies adopt Six Sigma to achieve better than 99% high performing products, while many of those same companies limp along with only 25% success hiring and promoting people. Every high performing company says it values talent, and they mean it, but those assessment processes are not just poor, but by any objective standard they are very poor.<br />
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Two hundred presidents and CEOs said that in their view, when people are hired externally, only 21% feel they get their money’s worth. Over the years thousands of Fortune 500 executives reported that in their companies only 25% of the time do people hired or promoted turn out to be high performers. Recently I asked the #1 HR executives in Global 100 companies the same questions, and their statistics were slightly worse; they reported 80% of external hires and 75% of promotions turn out to be disappointments.<br />
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Why? Simple - the common so-called "best practice" in assessing selection candidates are round-robin competency-based (behavioral) interviews, which typically take only an hour, and are easily manipulated by any candidate. For promotions, companies use the boss recommendation and sometimes 360s (including interviews with non-A players, whose perspectives are frequently wrong), and assessment centers (which have mediocre validity). In most high performing companies, operations excellence has produced measures of just about everything. But only 5% of 600 HR executives interviewed by Smart & Associates, Inc. measure success in hiring or promoting. If talent is so important, it's remarkable that success in assessment is so rarely measured, and that assessment processes used are so ineffective.<br />
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Fortunately, some companies routinely achieve 80% - 90% success in hiring and promoting people. General Electric for the past 15 years has supplemented boss ratings with four-hour assessments by two trained high performers, from a different part of the company, who parachute in to perform a structured chronological career interview. It covers every success, every accomplishment, every failure, every mistake, every key decision, and every key relationship. The process includes oral 360 interviews with high performers. GE rarely makes a mistake promoting people.<br />
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Companies like Lincoln Financial, Hayes Lemmerz, MarineMax, Hillenbrand, and American Heart Association are just a few who have used a process similar to GE's. The CEOs of these companies have attributed organizational success in part to the interview methods that have helped them pick the right candidates for selection and promotion. Tandem chronological interviews are conducted by high performers, and for external hires, reference checks are performed…in an unusual way. The candidate is asked to arrange telephone discussions with the people the interviewers (not the candidate) choose, and 90% of the time those references are willing to talk, candidly. As a former chairman of UBS, Mark Sutton, has said: "How can a 50-minute competency interview compete with a four-hour chronological interview?"<br />
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A revolution in HR is entirely feasible. It does not require spending $15 million on complicated software or buying $20 million machines. All it requires is for a CEO or head of HR to supplement the round-robin competency interviews with chronological interviews conducted by high performing people (in tandem, for upper level jobs).<br />
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The revolution in HR is coming. Icons like Jack Welch, Larry Bossidy, and Jim Collins give speeches imploring CEOs to raise the bar on assessment methods. American Productivity and Quality Center (APQC) is studying companies that have superior hiring and promoting methods. University of Chicago is studying corporate success of companies using the chronological interview assessment methods. When the addition of a longer, more thorough interview can improve success from 25% to… not 35% or 50%... but to 80% and 90%, there is a huge opportunity for innovative HR leaders to make a difference.<br />
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www.SmartTopgrading.com<br />
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