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From the city of the Bulls and the Bears…
some recruiting thoughts spun from the stock market.
A Caveat About A Caveat
How many times this past year did you read that familiar but
disconcerting mutual fund prospectus caveat: "past performance is no indicator of future returns."?
But does this philosophy hold true when people are involved? We're inclined to believe that past performance is the best possible benchmark when hiring. Yes, superstar executives have been known to burn out; yes, student government presidents do sometimes end up drawing comic books for a living. But in general, when a candidate demonstrates a past of spirited leadership, of tangible accomplishment, and of specific, positive, profit-enhancing results, we are much more confident that he or she will be a winner for our client.
Curbing Churn
Traders thrive on churn, while investors prefer considerably less chaos in their chosen portfolios.
When we read of executive turnover rates approaching 30% annually in some industries and for some functional responsibilities (such as CIOs) -- we call that churn. In the short run, moving people in and out may create some whiplashed momentum, but we can't believe executive churn ever has positive ramifications long-run. What's the cause? Greed? Glory? Unbalanced demand and supply? Sadly, we suspect our own industry has contributed to this frenzied trading of touted talent. We nevertheless continue to resist the trading mindset, and to envision every placement, in every search, as a long-term investment for the hiring organization.
Ability Volatility
Former Labor Secretary Richard Reich wrote in the Wall Street Journal's Manager's Journal column that the stock prices of future business entities "will rise or fall on the basis of how they manage their people." He went on to caution investors to "look behind the brand," and consider how companies value their only real assets -- human capital -- before investing. Easier said than done, Mr. Reich, although we agree with your conclusion about the importance of people in any organization. Identifying and retaining executives of genuine ability is a proven way to moderate organizational volatility, long-term.
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