Are Our Business Leaders Fit For Purpose?

Middle East employers do not have a robust and rigorous selection process, says Richard Ingram, owner and managing director at Ingram & Partners.

Despite all the phenomenal advances in infrastructure, logistics, public sector and services witnessed throughout the GCC and especially the UAE, there still appears to be a disconnect in the relationship between the success story that is the region and how people are recruited.

It is true that money can achieve a great deal. Huge oil revenues have allowed for substantial asset investment, but can the same be said about the investment made in the people that now work in this visually world-class commercial community?

Around the globe companies have finally woken up to the crucial strategic imperative of a robust and rigorous selection process, recognising the impact this has on engagement and business performance.

Google’s market success is attributed to extraordinary people management practices that result from its use of people analytics. Their drill down on data is cutting edge. It applies not only to how they manage Human Capital within their business, but to how they attract, qualify and appoint people.

The basic premise of the “people analytics” approach is that accurate people management decisions are the most important and impactful decisions that a firm can make.

You simply can’t produce superior business results unless your managers are making accurate people management decisions. Many do argue that product, R&D, marketing, or resource allocation decisions are instead the most impactful decisions.

However, each one of those business decisions is made by an employee. If you hire and retain mostly mediocre people and you provide them with little data, you can only assume that they will make mediocre decisions in each of these important business areas, as well as in people management decisions.

No one in finance, supply chain, marketing, etc. would ever propose a solution in their area without a plethora of charts, graphs, and data to support it, but HR is known to all too frequently rely instead on trust and relationships.

People costs often approach 60 per cent of corporate variable costs, so it makes sense to manage such a large cost item analytically.

But we are not all Google I hear you cry; and we are not in America. I understand that, but we are all sitting at the same table of information access.

The war of data management is well and truly underway, and the business winners of this war will be the ones that can most effectively filter data, especially when it comes to Human Capital.

The region must find a way of applying the tools of ‘people analytics’. There needs to be much more development in a company’s attention to the performance of Human Capital throughout the entire life cycle of employment.

Like all things, this must start at the beginning of the life cycle. It has to start at the effectiveness of hiring.

Business change needs to be management led or at the very least management sponsored. Business leaders need to be able to recognise the inextricable relationship between people and performance. They have to be able to apply the mantra that good people means good business.

Google believe in the ‘wisdom of crowds’. They want multiple opinions of each applicant.

For that change to happen we must first be sure that we have the right leaders of business. So how can companies in the region be sure that they have been able to capture the best possible business leader in this world class community?

Google’s perspective of what they consider the appropriate number of interviews when hiring is four interviews minimum. They believe in the ‘wisdom of crowds’. They want multiple opinions of each applicant.

This applies across their entire workforce but interestingly with their senior hires, they determined that little value was added beyond four interviews, dramatically shortening time to hire.

Google is also unique in its strategic approach to hiring because its hiring decisions are made by a group in order to prevent individual hiring managers from hiring people for their own short-term needs.

Would you like to estimate how many interviews senior business executives were subjected to prior to being appointed to their leadership roles in the Middle East?

We obtained the data from a survey my firm conducted recently. The information was collected directly from executives responding to a multiple-choice series of questions.

Our survey showed that 48 per cent of executives in businesses turning over a revenue stream of over $50m (six respondents ran businesses of over $1 billion) in the Middle East were subjected to one OR LESS interview.

Almost half of the respondents to our survey, that is around 75 C-suite or equivalent executives that currently run some of the region’s largest businesses were subjected to one or less interview prior to their appointment.

That cannot in anyway be described as a robust and rigorous selection process. Quite obviously, if that rigor is not considered necessary for the top jobs, why would it be applied for the lower ones?

If I add this to other data from our survey such as, 68 per cent of respondents were not subjected to any form of Psychometric Assessment, a terrifying 21 per cent had absolutely no reference checks undertaken on previous employment and/or educational qualifications when appointed to their role, then you start to see what are some fairly disturbing signals about the fragility of how executives are being appointed.