Due diligence ... and mining the elephant in the boardroom
Due diligence ... and mining the elephant in the boardroom
Taking on this subject is potentially exposing an elephant in the board room when making senior executive appointments. Having worked directly within the mining industry for 17 years and more recently 20 years recruitment in the mining industry, I’ve heard many recruitment related conversations begin with; “Who do we know”? This is a valid question. If you have succeeded in the industry for any length of time, you will likely have strong networks and know many high performers. However, are you making senior appointments without appropriate due diligence? Here are a few things to think about when considering someone you know for your job:
Are they right for THIS job?
Sure they might be a great person and performed well for you in the past but you must also consider the parameters of the current role. Are they right for your current team or project?
Will they FIT?
Every team has a culture. Will they lead and develop the one you wish to promote now?
TIMING is often everything. Do they fit THESE times?
Top of market, bottom of market, capitally constrained or capitally free. Some people swing freely under certain types of game pressure while others freeze.
You don’t know who you don’t know.
The mining industry is fluid with new people stepping into executive roles daily. What ‘A’ graders are you not assessing?
The devil you know!
We all tend to stay near a zone of comfort resulting in recruiting people we know and managing their deficiencies, however – how much time does that cost you?
Nepotism – be it real or perceived, is a threat to be considered.
Is there a sense of “The Purple Circle”? What does this cost your culture and real or perceived development restrictions placed in the way of junior people?
The knock-on costs of a mis-fire (and hire) are often exponential.
The direct costs of replacing a bad hire can be significant but the time and money costs while they are in the job can be immeasurable. Things like culture damage, loss of other key staff, diminished market perception, decision errors with expensive projects and reduced share price/capital value – all take a hit when it goes wrong and cost many multiples more than the ‘cost’ of doing it properly in the 1st place.
The process is critical.
A great recruiting/search process may very well include the people we are referring to above and in some cases they may ultimately be successful, but the process is critical. It should create clarity and transparency and enable genuine comparison and reflection as to who is the best candidate for your business.
Some of the best processes we have seen, began with looking for a certain type of person but morphed over time to something slightly (or in some cases totally) different. The end results are not just the best placement, but also create true engagement and buy-in from all on the hiring committee and the broader business staff.
In our experience, the companies that create the best executive teams are those that apply a professional recruitment/due diligence process, but also, include people they know into the process.
Ultimately it delivers confidence to your team in the person hired and finally, peace of mind that the market has been canvassed comprehensively through your due diligence.
Now of course we are going to say; “Use MPi to do this..” and we know we’ll do a terrific job. However, our bigger message here is make sure you do something to ensure due diligence is executed properly.
Good luck addressing the elephant in the room when you next hear – “Who do we know?”