Over and over again, organizations are unable to appoint the right leaders. According to academic estimates, the baseline for effective corporate leadership is merely 30%, while in politics, approval ratings oscillate between 25% and 40%. In America, 75% of employees report that their direct line manager is the worst part of their job, and 65% would happily take a pay cut if they could replace their boss with someone better. A recent McKinsey report suggests that fewer than 30% of organizations are able to find the right C-suite leaders, and that newly appointed executives take too long to adapt.
Although there are many reasons for this bleak state of affairs – including over-reliance on intuition at the expense of scientifically valid selection tools – a common problem is organizations’ inability to predict whether leaders will fit in with their culture. Even when organizations are good at assessing leaders’ talents (e.g., their skills, expertise, and generic leadership capabilities), they forget that an essential element of effective leadership is the congruence between leaders’ values and those of the organization, including the leaders’ team. As a result, too many leaders are (correctly) hired on talent but subsequently fired due to poor culture fit.
In our view, there are three critical errors organizations must fix in order to upgrade their selection efforts, namely: