As an executive search firm, we have a duty to validate candidates that we introduce to our clients. Without conviction as to whether someone will perform in a role, we are being negligent. By endorsing someone, we aren’t just putting our reputation on the line, we risk the success of the client.
The price of a bad hire at executive level can be huge. But it’s often not the cost of the search, nor the remuneration paid. The true cost is far greater but harder to calculate: loss of first mover advantage, rapid reduction in (financial) runway, damage caused to culture, as well as the loss of key talent. The consequences of getting it wrong can be felt across the entire business.
It’s therefore essential we do our due diligence. And so should you. Remember nobody’s perfect. In fact, a ‘rockstar’ for one company, may very well be a disaster in another. Understand that most executives are better suited to certain stages of a business life-cycle. Similarly, some execs will perform best in a US operating culture, whilst others will be better suited to the type of consensus-driven environments that you find in Northern Europe.
It’s important to consider that even the best candidates won’t be without a few flaws. Therefore, obtaining the fullest picture of them, their capabilities and any blind spots is the responsibility of any hiring manager.
The secret to formal references is being prepared and setting aside enough time to follow the conversation, wherever it goes. It’s essential to listen very carefully to the responses you receive.
Minimise risk, take references
References, taken from multiple sources, are essential to any hiring process. But they can’t be a box ticking exercise. Contrary to what many people think, formal references are valuable. Yes, they can be skewed in a positive light. But as much can be learnt from what isn’t said, as from what is. Or by the way specific questions are answered, sidestepped, or even avoided entirely. The secret to formal references is being prepared and setting aside enough time to follow the conversation, wherever it goes. It’s essential to listen very carefully to the responses you receive.
It is also very important to understand that whilst UK employment law states only that references must be ‘a fair reflection and accurate’, in a more litigious environment, say… the US, referees do have to be very careful with what they say.
Whilst a formal referee might try to focus on all the positives, they will generally provide an accurate view. It’s on record after all. Therefore, this is an opportunity to confirm key facts and figures, to ascertain if numbers have been embellished. The opportunity should be taken to establish leadership skills, personality, work ethic and temperament, as well as their performance. What you want, and must ask for, is a balanced view of the individual’s strengths, weaknesses and any vulnerabilities, including the areas they felt the individual required further development.
Of course, psychometric testing, conducted in parallel, would provide insights into their cognitive ability and behavioural patterns but coupling this with the first-hand accounts from previous managers, peers and subordinates are invaluable.
One step beyond: back-channel referencing
It’s impossible to get a true picture of a candidate if you don’t have all the facts. If you can, you should prioritise getting hold of back-channel references; from people who aren’t on the formal list.
Back-channel references are a critical part of my role. Yet I’m always surprised by some people’s reaction to it. Some view this as an unethical means of digging up dirt on a candidate. It’s not. It’s essential and should be viewed as an integral part of any successful talent acquisition strategy.
Whilst back-channel referencing can be instrumental in gaining valuable insights on an individual, or context of what was happening in a business at certain times, they must be conducted sensitively.
That said, it really does matter how it’s done; there’s a right way and a wrong way to go about the process.
360Leaders is open with candidates about our intention, and most importantly, our responsibility to perform due diligence via back-channel referencing wherever we can. Whilst back-channel referencing can be instrumental in gaining valuable insights on an individual, or context of what was happening in a business at certain times, they must be conducted sensitively. Jobs, careers and reputations are at stake.
It’s extremely reckless to conduct back-channel references without due care. As a search firm we maintain a deep, trusted network that we can call upon. Still, all back-channel references need to be approached with the utmost sensitivity. If a candidate is employed, you run a real risk of breaching trust and confidentiality if it becomes known they are interviewing elsewhere. It should be obvious but calling someone you don’t know at the same business as your prospective candidate is crazy.
Here are a few things we consider when taking up back-channel references:
- Plan the call. Take time to outline what you want to learn. Be specific and targeted in your questions. Determine the key areas you want to explore but be prepared to follow the conversation flow.
- Don’t waste people’s time.
- Never take references as gospel – always give the candidate the benefit of doubt. At an executive level, candidates will have run companies, divisions or big teams; they’re bound to have ruffled feathers along the way. It’s impossible to know whether the person you’re talking to came out on the wrong side of a strategy change – it could have been the right decision for the business but difficult for employees. Or even if they had been personally disciplined by the individual for poor performance. Or maybe they simply didn’t like one another. You need a balanced view. You can only get this from multiple conversations, at different levels of different organisations throughout their career. Look for patterns.
- References outside of direct relationships (managers, peers, direct reports) are rarely as useful insofar they are too speculative.
- In the absence of existing relationships, always avoid current colleagues.
- If in doubt, don’t do it.
No matter how you feel about back-channel references, there’s no denying that they can offer invaluable insights. And when that candidate could be the next CEO of your company, it’s better to be safe than sorry.