Even the Great Make Hiring Mistakes

Audio Transcript

One other question on the issue of getting the right people on the bus, what happens in the hiring process, and do they have a perfect hit rate with getting the right people upfront. Very key point: they do not. Not even the best executives we studied have a perfect hit rate at getting the right people upfront. They make mistakes in the hiring.

A fellow named Eric Hagen on my research team did an analysis in which he looked at the pattern of executive churn, which was basically the amount of time that you’re on the executive-management team. He found a very interesting thing: that in the comparison mediocre companies, it’s a bell curve. There’s an average amount of time on the team and there are tails, some there for a long time, some there for a short time.

What he found in the good-to-great companies was a double hump. It’s the exact same average, but almost nobody’s at the average. It’s either you’re there for a very short time or you’re there for a very long time. It’s a double hump.

What we learned from that is not that they necessarily got their hiring decisions right. They corrected their mistakes quickly and they perpetuated their good decisions for a long time.