Happy Fourth of July weekend! As we celebrate the independence of America, we have to reflect on the leaders that made it possible. This reminds us of how critically important the leaders within our organization are to the success and evolution of our business. How would you rate the leaders at your organization?
Given today’s economy and hyper-competitive global markets, executive selection and development is more important than ever before. The cost of leadership failure can often mean the success or failure of the entire organization. Every executive or leadership personnel choice is a high-stakes decision for organizations, their shareholders, and associates, so it’s extremely important to have accurate information available when making these decisions. Here are four points to keep in mind when you are assessing your leaders:
1. Selecting the Wrong Leader Can Cost Your Organization More Than You Think
These costs not only include lost business, but also turnover costs. Estimates of executive turnover costs range from $300,000-$1,000,000 depending on the size of the company, and can increase dramatically the longer they stay with the organization. Accurate information on a candidate’s assets and limitations, as well as promotion potential, can help to make a more informed hiring decision.
2. All Employees Lose When a New Leader Fails
Goals aren’t met, opportunities are missed, and relationships may be irreparably damaged. Employee morale can also be negatively affected. The “soft” costs of derailment can be immeasurable. The negative consequences of a bad hire or placement can continue long after the individual has been terminated.
3. Find the Right People for the Right Job
Getting a clear picture of the strengths and liabilities of your entire leadership team can help ensure the right people are placed in the right roles. This can also help to defray the direct and indirect costs of derailment.
4. Plan for Future Leaders
Grooming internal candidates for the most senior positions is often the best succession plan. An individual who understands the organization’s culture and business goals can accomplish more in a shorter time than an outsider.
Even small, incremental improvements in selecting and developing your leadership talent now can result in big gains over time. Bottom line, investing in a good executive assessment process will increase an organization’s competitive advantage.