The Right Stuff

The Importance of Cultural Fit

The importance of "cultural fit" cannot be underestimated when making hiring decisions. Yet, time and again, managers neglect to take into account the environment in to which people are being hired. Traditionally, positions are filled on a few key criteria, which focus mainly on the technical aspects of the position. Once it has been determined that there is an experiential or technical fit, managers generally move on to whether or not they "like" the candidate. Unfortunately, as any experienced manager knows, "liking" an individual does not necessarily translate in to that person becoming "effective" on the job.

Why is selecting the candidate with "the right stuff" such a challenge? Often because hiring managers do not take a hard and objective look at the culture, or environment in to which they are hiring. It has been my experience that the more realistic an organization is about "who" it really is and "what" it truly stands for, the better the results when it comes to hiring people who will succeed in that organization.

When recruiting candidates for my clients, I always start with "what are the critical characteristics for this position?" Regardless of the type of company, the industry, its relative market share, or even the level of the position, the responses I receive are only mildly varied, the basic corporate equivalent of a "romantic ideal". The descriptors generally include: "self-starter", "strategic", "visionary", "willing to challenge the status quo", "change agent", "high-energy", "leader". All leaders, no followers. All self-starters, no order takers. All visionaries, no pragmatists. Sound familiar? Probably good criteria for the President of a rapidly growing organization in an evolving industry. Probably dangerous criteria for middle management in a very stable and predictable environment.

Once I have been able to clearly establish that a "high energy change agent who is willing to challenge the status quo", is probably not what my client is looking for in a corporate controller, we can then move towards the substantive issues of the business environment or "culture".

What are the elements of culture? They include a variety of things but most importantly:

• The CEO personality and priorities-this drives the environment of any organization far more than is generally recognized.
• The financial health of the organization-"rich" companies have different concerns than "poor" companies. Those concerns affect the focus of the business, the people in the business and hence the environment in which employees operate.
• The ownership of the business-publicly held companies have similar yet different drivers than privately held companies. The challenge of meeting quarterly earnings expectations sets a different pace and order of priorities than may be found in a company without those pressures.
• The markets/customers served by the company-slow and steady customers in stable environments don't require suppliers that are evolving at the speed of light, in fact, just the opposite. On the other hand, if the customer's world is rapidly changing due to economic, technological, legislative or other drivers, then the suppliers who can adapt to those changes will win in the marketplace.

Once you understand the drivers of your environment... those things that influence your culture, how do you identify those individuals who will "fit"?

• Identify the key traits for success in your culture as it is, not as you wish it were.

A company that I've recently started to work with has learned to do this particularly well after a few false starts. The organization is a very traditional, old-line supplier of commodity products to manufacturers of foodstuffs. Many of the "old guard" are retiring, and while the business needs "new blood", the "change agents" that had been hired chaffed under the slow pace and "not invented here" culture of the broader organization. A new hiring profile was developed and included some of these key characteristics for success:

• Patience
• Quiet persistence
• "Type A" intellectually/ "Type B" emotionally
• Understated determination
• Disarmingly friendly

Turnover of new hires has been dramatically reduced. These new folks have been able to initiate incremental change where needed, and "live and let live", when necessary.

• Translate interview behaviors to determine cultural fit.

One of my favorite examples of this occurs routinely when recruiting for a rapidly growing and evolving Fortune 1000 company. One of the "must have" traits for success in this company is the ability to essentially create and develop one's own position. The ability to "think on one's feet" has been proven time and again, to be a critical trait for success in this particular culture.

Most of the executive positions are newly created, and while there are fundamental expectations on "what" needs to be delivered, there is little definition regarding the "how". When interviewing candidates one of the questions we routinely ask is: " if offered this position, how would you address its challenges?" Some candidates respond quickly off the top of their head with answers backed by evidence of good judgment. Others ask for time to think about it, or answer somewhat tentatively. Others keep asking for the details of "how" they are supposed to get the job done. Those in the last category don't get a second interview. Those in the first category always make it to the second round. Those in the middle require further exploration to determine if they have the ability to think on their feet and exercise good judgment in the face of tactical ambiguity.

• Check references to validate fit.

The most valuable references can clearly describe the environment in which the candidate worked, and how the candidate responded to the environment. If your company, for example is a stable with steady growth, privately held and perhaps family owned, you would want to have validation through references that the hire you are considering has:

• Worked in a similar environment successfully or
• Has worked in a variety of environments (private/public/family owned/VC owned) successfully

You would also want to know whether the environments in which they worked required them to have the ability to:

• Span from "hands on" to "strategic" depending on the circumstances
• Their ability to work through others when they have no reporting relationship authority
• Their "tolerance" for people working outside the "chain of command" (a key cultural trait in most family owned or private enterprises).
• Their ability to work and lead collaboratively
• Their comfort level with informal decision making and communication processes

Companies that hire "the best", hire the best fit for who they are and what they need. They leave the "romantic ideal" for the novelists.

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