Cost of Failed Executive Hires – Eliminate Poor Recruiting Techniques

Cost of Failed Executive Hires – Eliminate Poor Recruiting Techniques

The cost of failed executive hires is tremendous. This is NOT limited to just CXOs and SVPs – same goes with VP and Director levels. It is surprising how many mid-cap and large conglomerates retained big-named search firms without realizing that with the exception of a few principals that manage the business and no longer recruit, most of the recruiters for these big firms are a revolving door. They flow in and out according to economic times. Boards should look towards smaller well-established retained executive search firms who have experts that have been working there for a dozen years or more and have a solid history of recruiting in your niche industry.

The cost of failed executive hires is not only damaging – it can prove to be fatal. First are the costs related to the executive compensation, benefits, and severance package, as well as indirect cost such as travel, poor strategy and poor business plan execution, lost market share, lack of direction for the rest of the staff, and lack of trust in the Board of Directors. I see it all the time where I not only need to find a replacement CEO, CTO, CFO, or SVP, but also one that has turnaround experience and is willing to come into a situation that is not ideal for immediate success.

Several times over my career in Executive Search I find myself working with a candidate who believes they are an ideal fit for a retained search assignment I am conducting. My retained search work is “performance based” NOT contingency based, which means that when a client has paid a deposit for my time and effort, I am expected to get the job done.For an executive search consultant, getting the job done means nothing short of bringing forward high-impact “business changing” candidates to our clients. These are the “A Players“.  Not only must they have the required experience, expertise, and a proven track record of success, but he/she must prove to me that they can meet the challenges of the position, meet or exceed my client’s expectations, and make a “direct positive impact” on my client’s business.

Most fail to understand the impact on the cost of failed executive hires is. The truth is that by and large, about 55% of all employees at any given company are in fact “C” Players. They can do the job they were hired to do; they show up for work on time, do the job they were assigned, and are loyal to their managers.  However, they lack the entrepreneurship risk taking mentality, the “take charge” attitude, and the take no prisoners’ mindset required to make an impact on the marketplace.  In addition, they are easily replaced by outsourcing at a lower cost as well as artificial intelligence, software automation, and robotics.  And the latter three can run 24/7 without sick days, benefits, training, and their performance is most often anything but mediocrity.

Avoiding the Cost of Failed Executive Hires

While for many positions it is acceptable until technology advancements eliminate many “C” players, companies will continue to hire them for many roles.  At functional leadership and key engineering, sales, and operations the cost of failed executive hires can be fatal.  Many VPs and Directors will look to “B” players, which based on my 20 years experience in executive recruiting, are roughly up to 30% of all employees at any given company.  They outperform “C” players any day of the week and possess the intuitiveness and hunger to succeed that makes them valuable to their employer. They have a track record of success, albeit in their department but rarely make a definitive impact on the company’s overall performance in the marketplace or the business strategy.So what really is an “A” player? The misconception is that “A players” only exist at the executive level.  That is purely a myth.  Most “A players” were born that way or evolved into it in childhood, teenage, or young adult years.  These unique individuals comprise the Top 14% of the global workforce.  They are easily recognized early on.  In their youth, they were leaders and entrepreneurs – whether having the most lawns to cut, starting a community newspaper, excelling in Junior Achievement or inventing a product or service company that was acquired by a bigger fish.

These “A players” are not always leaders as their ideas, thought processing, and inventiveness make them excellent engineers. Same goes with RSMs and MAMs who can blow out the quotas as an individual, but if you try to move them into leadership levels they fail.  The strategic thinker and the ability to “sell their ideas” type of “A players with superb interpersonal communications and conflict resolution skills are in fact the type of functional leader or senior corporate executive that is a “game changers” not only within a client’s vertical market, but have had similar success in other vertical markets within that industry or in a different industry altogether. They have a responsibility to the owners (founders, investors, and stockholders).

​​​​Cost of Failed Executive Hires is due to a poor Talent Acquisition Process

A Forbes article by a Silicon Valley CEO reveals that the cost of failed executive hires is estimated to be more than $500,000 or 2.5 times salary. And that does NOT include organizational, opportunity, productivity, and transitional costs for the new executive. As an Officer or Board member, you must ask yourself, why would you risk letting mediocre executives hires to occur?The same can be said of a VP of Engineering who needs principal level systems software engineer for that matter. You may save yourself a few dollars in the short run recruiting someone with your existing recruiting process, but the long term effects in the cost of failed executive hires may cost YOU and YOUR STOCKHOLDERS much more than 2.5 times salary or a recruitment search fee.

How to Alleviate the Cost of Failed Executive Hires

NextGen Global Executive Search not only reduces the cost of failed executive hires, we virtually eliminate them.  The award-winning Leadership Vault search method, developed over 30 years, is a the recruitment platform utilized by our executive search consultants that properly measures the potential candidates we identify by psychometrics to determine a strong match to role fit and team fit, document KPIs and the depth of candidates’ industry relationships, and provide a custom onboarding program that includes new hire self-development planning and a mentoring / coaching program that is easy to realize with little investment of time.  Backed by an industry leading 12 to 36 months replacement guarantee, the common feedback is the hire we placed met or exceeded their objectives.  Looking to fill a key  functional leadership or senior executive role in your company?  Reach out and see the difference engaging an Executive Retained Search will make to the quality of candidates you will interview. We don’t get paid in full until you are 100% satisfied.

 

Education Bubble Shortage of US born Engineers for High Tech

Education Bubble Shortage of US born Engineers for High Tech

It’s a very tough market in electrical and computer engineers for companies that provide security applications, Ai, IoT, and aerospace products.  Under rules from FAA and ITAR to FCC to ITAR to DoD, the education bubble shortage of US born engineers is evident.  Requiring US citizenship or green card (permanent residence status), real unemployment nationwide across all industries is still high.

First we need to understand the reality of the education bubble.  In the USA, the primary reason we have a decline in economic power is that since the 80s we have moved from real education in science, history, english, writing, and mathematics to “social awareness” and social justice teaching.

As such, we produce a declining number of electrical and computer engineers for four decades – especially USA natives. Want proof the education bubble is worsening?  Graduates numbered 14,584 in 2004-05, but declined to 14,209 in 2005-06 and 13,783 in 2006-07. Master’s degrees also dropped in the same time period, recording a significant decrease from 41,087 in 2004-05 to 38,451 in 2005-06, followed by a smaller decrease to 37,320 in 2006-07.

 

Education Bubble Creates Shortage of US born Engineers

 

Enrollment of U.S. citizens in graduate science and engineering programs has not kept pace with that of foreign students in those programs as new foreign student enrollment for 2008-2009 increased by approximately 16.0% from the previous academic year.  Since the federal government took over education with the Department of Education in 1979, our elementary schools and high schools have declined and at the university level the education bubble is worse.

The Education Bubble shortage of US born engineers exists due to this social engineering. The education bubble has come about doe to the federal government’s free-spending ways.  We re broke as a nation and cannot continue to give student loans to those whose GPA is not deserving.  And like my family did for me and my siblings, it is a parent’s sacrifice and savings to put a kid through college.  Or going to school at night while working full time like my father did.

Or going via the GI Bill by serving in the military.  Or busting your butt in 2 years of community college like my own son did (who then received full scholarships for bachelor and master based upon his grades) who then achieved a PhD in Space Physics.  He soundly defeats the issues in the education bubble.

Reasons for the Education Bubble Shortage of US born Engineers

 

Education should be about Learning and Competition

The education bubble shortage of US born engineers exist due to a failure to deal with real life in educating our children.  Just as in life there are winners and losers –  and no one should receive a trophy just because they tried.  And if you did not win, so what?  I was taught to keep trying.   And I spent 2-3 hours a day in homework from elementary all the way through high school.   In elementary and high school  we were encouraged to join clubs and be involved.  Me –  I chose football and Key Club.

Those two things taught me competition, being a team player, and giving of my time to my community.  With fierce competition and high education standards, we had no education bubble.   And the focus on high academic standards prepared me for college.  Today our schools focus on “feel-good” social engineering and teaching children political and social correctness rather than the 3 Rs and molding children for a bright future. We need to address the fundamentals about the education bubble.

We as citizens and responsible voters can CHANGE the education bubble. Scientists and engineers today make up only 4% of US employment; even doubling their number would in itself have a modest overall impact on the economy.  It seems odd to me that for the sake of so-called global diversity, we fail to provide encouragement and programs to elevate our own minority citizens and break the bons of failing inner-city schools to allow these kids to learn STEM.  I think you’d be surprised how well inner city children in Chicago can become engineers and scientists if only provided the will and means by our academic elitists.

Rather, the point is that scientists and engineers contribute disproportionately to the creation of jobs for the other 96% of the nation’s workforce by generating knowledge, by innovating, and by establishing new companies based on that knowledge and innovation.  We can overcome the education bubble shortage of US born engineers.

First, the outlook for 2018 and beyond is worse unless we dramatically increase H1B visas.  It amazes me how often I hear “we can recruit on our own as so many people looking for work” and Hiring Managers who tell me “HR sends them garbage resumes, but the corporate decision makers have their hands tied.”

If you are in artificial intelligence,aerospace or defense systems, cyber security, industrial manufacturing or robotics, mobile digital media, broadband or mobile network operations, wireless infrastructure or IoT data  / devices / networks, you often are required by federal regulations and laws to hire US citizens or green cards due to the security clearance needed.  More so, when you need vendor-facing, or customer-facing engineers where the candidates in USA must be able to speak plain understandable English, the education bubble shortage of US born engineers is even greater.  Oddly we lead in philosophy, history, sports nutrition, social services, marketing, and law degrees.  Some of those are needed but we are woefully declining in science and mathematics (ranked 27 in the world and dropping) as the education bubble shortage of US born engineers increases.

Choosing the Type of Search Firm Retained, Contingency, or RPO?

Choosing the Type of Search Firm Retained, Contingency, or RPO?

According to Leadership IQ, 46% of new hires will fail within 18 months. The statistics only get worse.  Take a hard look at the expanded facts as presented by Dr. John Sullivan on ERE. About the 6 Ugly Numbers Revealing Recruiting’s Dirty Little Secret.  Choosing the type of search firm to work with is not an easy choice.  It is astonishing but not surprising.  When the agenda is how cheap can recruiting be done, the results are obvious.

Instead of looking deeply at the process a recruitment firm uses to identify, assess, and deliver potential candidates. When filling a key role, the cost of the fees is the first mindset.  What you should be thinking about is the end game – the services offering differentiation and the results.

 

Does the search firm accept verbatim the job spec verbatim?

 

    1. brief overview of the company culture, benefits, and market position. Rather than on the opportunity (USPs) of what this role will do to elevate one’s career. As well as the challenge being offered to entice interest
    2. Job specs focus on responsibilities when the focus should be on short- and long-term objectives with timelines.
    3. Too much emphasis on boiler plate requirements including skills and experience. The focus should be on prior directly related accomplishments & key performance indicators. What the new hire has done and will do with those skills and experiences. Not simply the number of years he/she has had them.

Simple economics is that the supply of good candidates is low while the demand to fill key roles is high.  As such, using job boards or career websites means that only active job seekers. Sadly in today’s market that is most often the underemployed and unemployable.  Because with low unemployment rates, good candidates are very passive.

They don’t look at job postings and they rarely respond to recruiter type emails. Those who are happy with their role, current employer, compensation; as such they are rarely ever looking for a job.  They are open to a challenge, the opportunity (unique selling points), possibly location, product or service, and company size.

 

Does the search firm have a verifiable track record of new hire retention?

 

It seems odd to me that one would not ask for proof of this.  Case in point is I have a direct competitor who is larger than my firm with more offices.  We both have done retained search for the same client.  We have each placed 3 at the C suite and VP levels.  All three of my competitor’s placements departed within 2 years while the three we placed are not only still there at 3.5 years but have been promoted and are meeting or exceeding the objectives for their respective roles.

What makes the difference?  The search process, assessments methodology, using psychometrics and the type of relationship.  My competitor interfaces with and is managed by the client’s HR group while we work directly with Executive Hiring Managers.    One more thing – look at the firm’s replacement guarantee clause.  If it is ranges from 90 days to one year, that tells you they don’t stand behind their work.  At NextGen Global, we stand behind our work with a 24 to 36 months replacement guarantee.

 

Does the search firm use science based methods and AI to identify team dynamics?

 

Let’s go back to that Leadership IQ study where it found that not only do 46% of new hires will fail within 18 months, but at the executive level it is for lack of interpersonal communications skills.  The truth is EACH team is unique.  By creating a composite of the team profile measuring values, motivations, decision-making traits, conflict resolution skills, relational communications traits, leadership and people skills, the recruiter can then compare the potential candidates’ capabilities to make sure they are either a strong or potential match. Choosing the type of search firm as you can see is part science, part experienced based skill set.

 

Choosing the type of search firm based on niche specialty

 

 

Choosing the type of search firm - Retained Search has a Lower Cost

We pride ourselves on being startup experts.  While we do perform retained and succession bench search for one role at a time, over the years we have partnered with an outsourced HR and payroll services firm to offer Team Building talent acquisition management services for startups with less than 25 employees in the initial startup phase.

We save clients hundreds of thousands of dollars while filling key roles they need to meet customer or product/service design and roll-outs. Our work is primarily with startups, mid-cap, and spin-offs.  We rarely recruit for publicly traded companies or companies large than 5k employees.  The reason is simple.

As entrepreneurs ourselves, we understand how VC and PE forms work, we work often with board members in recruiting entrepreneurs, risk-takers, movers and shakers who focus more on the value proposition of equity and generous stock options based on meeting performance objectives. For large companies the latter are generally limited to a select few senior executives.

The larger the company, the less effective we can be as they tend to want their HR or TA group “manage the recruiter” demanding we adapt our search process to conform to theirs. This is what we call “tying one hand behind my back” syndrome.  We turn down companies asking us to do that.  If you are a large conglomerate or have more than 5k employees, it is best to go with a very large firm for most positions.  However, if you are looking for a senior executive or functional leader who is a change agent, a turnaround expert, a solid risk-taking decision maker or motivator, for those roles your best bet is the smaller boutique search firm.

 

Two neat tricks to help you choose

 

  1. Look at the Linkedin connections of the recruiters you are considering. If you need to recruit a senior executive, does the recruiter have those connections with both your industry and with C-levels?  If the need is to recruit a VP of Sales of a Director of Engineering, do they have those relevant connections”?  You’ll be surprised to find most recruiters’ connections are with Human Resources and other recruiters which means they have few relationships with the type of people you seek.
  2. Does the recruiter have intimate knowledge and experience in your industry? Look at articles and posts they’ve written.  If they are all about just recruiting or job seekers instead of Artificial Intelligence, Wireless, or whatever your industry is, how well do you suppose they understand your products, services, marketplace, or customers>

When you consider the cost of retained search look past the initial fee.  Look at the results of the person hired via the firm.  If the new hire assimilates quickly, is immediately productive, and meets or exceeds the objectives of the role, the cost of the search fee is irrelevant.  And remember, good search firm ONLY recruit “A players” who by definition produce 8 to 10 times more than “B players”.  It’s really a no-brainer in the value.

IoT Medical Devices Cyber Security – Diagnosis and Dispensing

IoT Medical Devices Cyber Security – Diagnosis and Dispensing

Now that we are fully engrossed in the cyber age, there are rapid advances across the board for all things connected to the Internet and IoT medical devices cyber security is no exception.  These devices, often called “The Internet of Things,” or IoT, has certainly made much of life much easier. For the medical profession, it has certainly become a simple, safe and easy way to monitor patients away from a clinical setting.

This is all fine and good, but there is a fundamental question of IoT that needs answering: Are these safe and secure when away from a closed environment?This article is going to address the issues home devices face and possible ways to prevent cyber attacks and/or hacking.

Dispensing for IoT Medical Devices Cyber Security

The number one concern of healthcare professionals looking at and addressing potential problems is the HIPAA. This protection act of 1996 means patients under the care of physicians have a reasonable expectation of privacy and are protected under a patient/medical professional relationship. IoT’s are free from human intervention by and large.

This means the patient carrying the device is completely removed from interacting with it on any level. Most of the IoT medical devices are used strictly for monitoring, data collection and medical dispensing. They are passive because the medical professionals are looking for a true a baseline as possible and is only effective when the patient is at ease with or completely unaware of the device. This lack of concern in cyber security for medical devices is the problem.

ISSUES AT STAKE

The information transmitted, no matter how insignificant at the time, could be used to gain identity information. The IoT’s are often coded to the patient with a name, number and medical coding information. All that would be needed is access to the information on the device, and personal, private information is available. This includes social security numbers, medical information and possible fiscal information to boot. This compromised information is enough to wreak havoc on a medical practice, hospital or medical equipment distributor – if not all of them in conjunction – all because of a HIPAA violation.

​Solutions for IoT Medical Devices Cyber Security

While computers have software to keep them from attacks, these medical devices do not. There is scant little that can be done if malfeasance is intended. A skilled and determined computer hacking specialist with the understanding of IoT’s can quickly and easily undermine its basics. Doing so would cause serious issue with the medical professional monitoring the patient and for the patient, who could, as a result, receive incorrect treatments and/or medications. Unable to track the information back to a source, this could potentially open a flood of medical malpractice suits, and there would be little the medical professional could provide as a substantial defense.

POTENTIAL SOLUTIONS

Medical administration in conjunction with information teams and network security specialists should realize there needs to be a move from the “Internet of Things” to “Security of Things” to protect themselves, their practices and patients from hacking. There are a few things that could be considered.

DATA ENCRYPTION

Safe and secure encryption should be on the forefront. As more and more medical practices move from paper to online and cloud patient records, the same can be said for IoT’s. Signed contracts with network encryption professionals about software and the devices themselves should be a first step. Each contract to include audits, verifications and regular testing to ensure the validity and security of the data on the IoT.

​​​​AUTHORIZED DEVICES

A Holter monitor is one of these IoT’s. Its purpose is to collect a 24 hour EKG for cardiac patients in various settings for the best possible heart function in normal settings. The contract should provide for each device to collect only the necessary information and nothing more. Systems that download, read or output the information is additionally a part of the contract.

To address needed IoT medical devices cyber security, the device should be built in a such a way that any tampering of any sort is quickly noticed and/or built in such a way that the device immediately informs the medical professionals. Patient contracts protecting the device is also a sound idea.

The physical security of the device itself also should not be overlooked. The device should be configured to prevent data storage media from being accessed or removed, and the device itself should not be easily disassembled. In short, building a strong security to protect data during transmission is undercut if the data can be removed from the device itself. 

CREDENTIALS

No one but a medical professional can dispense medical advice, so only those who will be reading the results need access to the data contained thereon. All information should only be retrieved under a secure server under select passwords. Focusing on cyber security for IoT medical devices, only the absolutely necessary individuals outside of those interpreting the data need access to any element of the entire procedure.

PERSONNEL

dispensing IoT medical devices cyber security

Proper training for every step only makes sense. All medical professionals are bound under an ethics code with severe penalties for infringement.There have not yet been any serious attacks on medical IoT’s.

When will it happen is the question. Ideally, every possible step should be covered; however, there is no guarantee of anything until an attack.

What are your thoughts and opinions on the issue of IoT medical devices cyber security, and what steps in addition to those mentioned would be a necessary part?

 

Future Cell Site Towers IoT Data, Broadband, Leasing

Future Cell Site Towers IoT Data, Broadband, Leasing

As demands on the Internet continue to grow, an in-depth look at the future cell site towers needs to be addressed, especially with IoT that sees homes become increasingly “smart” with the demand for transmission equipment continuing to grow. How will this growth happen? Where will transmission towers be located? What are the cost factors and are any innovations likely to come online soon? Are cell towers even going to be needed?

The base for everything on the Internet is power. Something must generate the electricity for transmission, whether through fiber optic lines or radio waves. How much power is not even a question as engineers know exactly how much it takes to send any signal any distance through any medium.

The power needs for individual devices, think smartphone, smart thermostat and such, is tiny. However, the power demands for several of these devices increase. Bump that number to the hundreds and thousands and power demands jump a lot. The future cell site towers is that they are going to need a LOT of power to handle that volume of data traffic.

Simply put, a pocket-sized battery will not deliver the volts and amperage needed to receive and transmit signals from more than 1,000 devices. “Cell towers will become obsolete only when Chevy Suburban’s and Ford F-150’s can drive down the Interstate at 70 MPH fully powered by solar panels made in the USA.  The demand for bandwidth is growing faster than the carriers can sell smart phones. Even if they came up with some amazing technology that could replace cell towers, it would easily take 10 years or more to implement.”   Some may point to signal boosters to handle the need for more and stronger transmissions.

More Power

 

Signal boosters require more power. That must come from somewhere. The demand on the already-stressed power grid will just get worse. Individually, the power draw may be minuscule. Added together, it becomes a real issue. A straw broke the camel’s back.   Battery advances over the past 30 years are huge, but battery output is still directly tied to the size of the battery. You can’t run a golf cart on a dozen D-cell flashlight batteries.

FCC Regulation

 

The Federal Communications Commission controls radio wave broadcasts including that done by wireless devices. It regulates signal boosters now. “Malfunctioning, poorly designed, or improperly installed signal boosters can interfere with wireless networks and result in dropped or blocked calls, including emergency and 911 calls,” says an FCC Consumer Guide to signal boosters.  As more and more devices go wireless, the chances for interference are going to grow.

Future Cell Site Towers in Aesthetic Landscapes

 

The demand for towers is not going away. Vertical Consultants tracks cell tower agreements and reports the industry is growing. “So again, if cell towers were about to become obsolete, why would the industry leaders be investing billions of dollars to acquire the rights to your cell tower?  The answer to this situation is that technology is nowhere near close to finding an economic and reliable replacement for the future cell site towers, and your individual site lease has value to the acquiring company!” .

future of cell site towers in the cityHowever, the look and location of these towers is changing. So, a better description for a cell tower is “transmission hub,” or hub for short. Increasingly municipalities are rejecting the look of giant antenna arrays.

The industry is responding. “Cell tower companies like Crown Castle are installing small cells for carriers’ use on light poles, on top of shopping centers and other places where they fit in with the urban scenery. In 2010, Crown Castle acquired New Path Networks, which built the nine-antenna medical center system. Where and what these smaller hubs are might surprise you. Twisted Sifter has a list of these different types of antenna hubs.

These hubs still require space, which means buying or leasing that space. A smaller footprint likely will translate into smaller lease payments, but more hubs also mean more leases. Savvy negotiators are going to win this one.

Future Cell Site Towers gets Creative

 

 

The demands on the wireless networks and high-speed broadband Internet are only going to grow. Consumers have already shown they are willing to pay for the service. Creative thinking will dominate the industry as it moves forward.  ISPs must step up their transmission capabilities. The tower manufacturers are already headed in the right direction with smaller hubs that are not eyesores. With the increase in transmission/reception sites, the demand for real estate to plant these hubs is also going to grow.

Future cell site towers are small hubs, more hubs and hidden hubs are the demands. Companies that make these hubs are in the driver’s seat. They determine the power needs and appearance. Location is going to be set by ISPs or cell companies and real estate owners.

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