What does repeatedly making a “bad hire” mean?

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Chatting with a friend yesterday, the subject came up of a position at his company which has been a revolving door of seemingly “bad hires”.  The question driving our discussion was: why?

I worked at drugstore.com for 9 years.  When I joined in 1998 there were about 50 people on the team, and we grew to 700 in about 15 months.  Then, the dotcom bust happened, and about half those people, unfortunately, lost their jobs.  By the time I left, in 2007 there were only two people who had worked there longer than I had, and both of them are still there today.

In my time there, there was continual turnover in the position of VP of Marketing.  By my recollection, there were 9 VPs of Marketing in the 9 years that I worked there.  As I recall, some lasted for as short as four months, and others for upwards of a year, but few had much success.  It was practically like being the drummer in Spinal Tap—a virtual guarantee of an untimely demise!

Again, why?

All of these people were executive level hires with a track record of success and, I would imagine, excellent references.  By and large, all of them were good, earnest, hard-working people.  It doesn’t make any sense that all of them were incompetent.  (I recall that one was, in fact, a genuinely incompetent a-hole.  He happened to be a cousin of the CEO.)

More likely, the problem was actually something about the company which created an environment where any person in this role, no matter how experienced or outstanding, was unlikely to succeed.

Over the years I’ve spent a lot of time reflecting upon what happened with the VP of Marketing position at drugstore.com and have made these observations.

Let’s start by considering the challenges of joining any existing team and any given company.  It’s hard out to fit in at first, and for any position, it takes a while to get into a groove and make progress.

Getting into a rhythm is harder when the role has a track record of failure.  As each new person comes in, the employees have their doubts due to the failure of the last person.  Out of the gate, it’s an uphill battle for the new person to build confidence in their plan, to stop the bleeding, fix problems and turn the ship around.

And, finally, I think it’s made even worse in a position like marketing.  In my view, successful marketing doesn’t happen overnight.  It’s a result of months and years of flawless execution on many, many initiatives.  Over time, each of these small successes builds into a mountain of wins, but it doesn’t happen quickly (in most cases, there are always exceptions).  It takes recruiting the right talent, doing the right research and planning, implementing the right processes and, most importantly, discipline and patience.

That scenario—new person, cleaning up a mess, in marketing—was compounded by a company culture that was incredibly short-term focused.  Weekly, monthly, quarterly, what have you done for me lately?  In this situation, the VP of Marketing was unlikely to ever succeed because if they didn’t show results in…oh, I’d say the first 8-12 weeks…then they were on “the hot seat” and it was all downhill from there.

So, the first problem was that each new person in the role was virtually setup to fail due to circumstances beyond their control.  The second problem had to do with understanding what the company actually needed.

There are lots of types of marketing: brand marketing, direct response, advertising, event, acquisition marketing vs. retention marketing, etc….not to mention, all the new forms of marketing that the online world brings: SEO, SEM, affiliate, etc.  It seemed like each marketer that came into the position had a different take on where the company should focus.  (And, per my previous point, few actually got the time to see if their approach worked.)

This was a signal of a bigger problem: the company didn’t actually know what type of marketing it needed in order to succeed.  So, it took a shotgun approach and flip-flopped around through all sorts of strategies, never making traction with any of them.

To me, the signal of not knowing how to approach marketing was, in fact, the signal for a much deeper problem: identity.

For years, there was an internal battle: was drugstore.com sexy consumer brand (like Sephora) or a low-margin operator (like Walmart)?  The types of approaches one takes to marketing, and thus, the type of person you would hire as the VP of Marketing, is a direct reflection of your company’s identity.

I think where drugstore.com got in trouble—the source of the problems in which a never-ending rotation of Marketing VPs was just a symptom—ultimately boiled down to the difference between perceived identity and actual identity.

Perceived identity is, as I said before, how the company views itself.  A company’s actual identity is a function of the marketplace and the underlying economics of the business.  Concepts like ratio of fixed to variable costs, lifetime value of a customer, etc. combined with the team of people operating the business shape the real, intrinsic nature of the company.

Troubles arise when perceived and actual identity are not aligned.  A company which is actually a tortoise, but sees itself has a hare, will have a really hard time succeeding because it will be using the wrong tactics.  I see this all the time with companies that think of themselves as technology companies when they’re really service or product businesses.  It’s like putting a square peg in a round hole…it just doesn’t fit.

Ultimately, getting back to the topic of this post, when I see a position where a company makes repeatedly “bad hires” I think that’s a signal that there’s a poor understanding of needs.  And, when I see a poor understanding of needs, typically the source of that problem is dissonance between perceived and actual identity.

P.S. There’s another case which I didn’t mention above.  Sometimes the problem isn’t dissonance between perceived and actual identity, but complete lack of self-awareness about one’s identity.  I recall consulting for a company that wanted a well-designed product, and was frustrated by their poorly-designed product, yet didn’t have any designers on their staff.  My guidance to them was very simple: you perceive yourself as a company that makes well-designed products, yet in actuality you don’t have designers on your team…to me the problem of your poorly-designed products was easy to fix: hire some designers!

Written by scottporad

February 13th, 2013 at 11:04 pm