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Last week I was a guest on a business radio program. The focus of this hour long broadcast was “Resume Fraud.” Resume fraud may sound a bit harsh so feel free to replace fraud with any of the following: embellishment, exaggeration, deception, distortion, fabrication, misrepresentation etc. You get the picture!
Any way you refer to it, this behavior is far more common than anyone would like to believe. In fact, some of the research indicates that 30-50% of people lie on their resumes. These numbers tend to increase during tough economic times when a combination of job scarcity and angst may make people more willing to engage in behaviors they might not otherwise.
Resume “fiction” can also take a variety of forms not all of which will engender the same response. Stretching the dates of employment or even changing them to cover gaps or the appearance of job-hopping is prevalent. As can be enhancing one’s responsibilities. For example, did “candidate A” have 100 people reporting into him/her or 500? Were the savings he/she created valued at $30 million or $100 million? These details may be challenging to confirm.
Altering a job title may be a bit more difficult to carry out but certainly occurs as does the modification of degrees and other professional designations. The recent big story in this arena surrounded Scott Thompson who was very briefly the CEO of Yahoo. Thompson came to Yahoo from PayPal and claimed that he had a degree in Computer Science AND Accounting from Stonehill College. While Thompson did in fact graduate from Stonehill, the college did not offer a computer science major until well after he claimed to have received his. Aside from the trouble this caused it serves to illustrate that distortion can take place at even the most senior levels.
When it comes to education, some indentify mere attendance at college as a degree. There are also the many professional designations and actual degrees that can be obtained from uncredentialed institutions. These so-called “diploma mills” are a thriving business facilitated by the Internet as well as the pressure to compete for jobs that are oftentimes scarce.
And the possibilities go on and on…unfortunately. So what can a potential employer do about all of this?
As Ronald Reagan once said: “Trust, but verify.”
Degree verifications are the baseline and so easy to conduct that their omission in the hiring process is simply negligence. In addition to this, comparing a potential candidate’s resume to their LinkedIn profile while not foolproof, is another step in mitigating risk. Hopefully because a LinkedIn profile is exposed and accessible to almost anyone, the temptation to misrepresent is reined in.
Whenever possible, it is helpful to measure a candidate’s skills objectively. This is not always possible but creativity can go along way here. Ask a marketing or sales candidate to prepare a presentation as to how they would promote your product or service. Have a programmer write some code or an Executive Assistant prepare a document or answer the phone. I always switch to speaking French when a candidate claims this language facility!
References while helpful, are not enough. Speak to those provided by the candidate and if possible a few that have not been proffered. LinkedIn can be very helpful in this regard as well. This step in the hiring process can be laborious but definitely worth the effort.
While no amount of skepticism and verification will completely eliminate these problems, as a potential employer it is wise to proceed with caution and avail yourself of the tools and techniques that work. Cutting corners leads to less than optimal hires and ultimately less than optimal results, or worse!
Several conditions make a company attractive to an activist investor. Per the Milken Institute, these include an undervalued business, poor share price performance, failure to meet communicated goals and the company being a conglomerate or mini-conglomerate.
Bill Ackman’s Pershing Square Capital Management recently announced a $2 billion investment for a 1% stake in Proctor & Gamble (P&G). P&G, with 2011 sales of $82.5 billion represents a significant target for Pershing Square and is in fact the firm’s largest investment ever. It will be interesting to watch these powerful forces collide.
At the center of much of the criticism of P&G is CEO Robert MacDonald who took the helm of the company in 2009 after a well-planned and executed succession planning process. In fact, P&G is an oft-cited case for succession planning best practices. They have a succession planning program that has been consistently studied and replicated. As a big believer…
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“Bigger Jobs and Lower Standards” is a sub-heading from a 2002 article published by the National Association of Corporation Directors in their monthly newsletter. The article was written by Dee Soder and discusses the importance of “selection and evaluation of top management in order to avoid leadership lapses and future scandals.” The operative word here is “future” scandals. This article was written in 2002 and 10 years later we are clearly still grappling with lapses and scandals on what some would argue is a too regular basis.
This article points out that “typically CEOs receive far less rigorous screening and evaluation than other senior executives. Ironically, the ‘bigger job’ comes with lower standards of scrutiny.” Three reasons are given for this:
* “directors often hesitate to ask the tough questions or probe as deeply, since the CEO is often a peer.
*there is also a justifiable belief that if someone has led a company for years, he or she has already been ‘checked out.’
* the demand for good candidates often turns the interviewer into a recruiter.”
While the selection and evaluation of CEO’s has certainly evolved and continues to do so, the tendencies above hold as true today as they did 10 or even more years ago. As much as we can mandate and prescribe the process of CEO selection, the ultimate decision boils down to subjective impressions and reactions. And, as such care must be taken to be aware of our human tendencies and employ outside experts and objectivity as much as possible.
All of this holds even truer for the selection and evaluation of board directors (but that is a whole other conversation!)
The full article is attached: NACD_Feature_CEO_Selection_&_Evaluation
I really don’t want to revisit this in another ten years without significant progress!
There has been so much discussion lately about the merits (or lack thereof) of term limits for board directors. The argument goes as follows; boards become stagnant, colloquial and non-independent after too much time together. On the other hand there is a great value at having experienced directors who understand the company they are involved with and are familiar with the other members they serve with. Thus, the perfect amount of time to serve is a fine balance between familiarity and exposure as compared to being a neophyte.
The same underlying tendencies and dynamics can certainly hold true for CEOs and in fact, leadership of a variety of sorts. How long can any leader be expected to innovate and make astonishing new contributions? I began asking this question in response to the unfolding CEO predicament at Research In Motion (RIM) that finally resulted in the announcement of the resignation of co-CEO’s Jim Balsillie and Mike Lazaridis yesterday. Lazaridis founded the company in 1984 and Balsillie joined him in leading it in 1992. That is a long-time steering a ship trough the turbulent and ever-transforming world of communications and technology.
In the preeminent work on the topic of leadership tenure Donald Hambrick and Gregory Fukotomi of Columbia University described discernable phases, or seasons as they called it, of an executive’s tenure in the job. They describe the following 5 seasons: (a) response to mandate, (b) experimentation, (c) selection of an enduring theme, (d) convergence, and (e) dysfunction.
The convergence phase is characterized by an ingrained strategy largely because what has worked in the past is still assumed to be the way forward. Convergence will lead to dysfunction if drastic changes are not made and this is what is currently transacting at RIM. While the board has replaced the Co-CEO’s the big question in the markets today is whether the replacement, Thorstein Heins, has the breadth of experience to take the company back to the season of experimentation in order to test new ideas and strategies. In general I am a huge proponent of promoting from within but in the case of RIM it might have been wise to inject some new blood into this scenario.
2. Having women in the boardroom sends the message that the company is accessible, inclusive and open to innovation. This is very positive in the marketplace and motivating for employees.
3. Women represent half the population.
4. Goldman Sachs concluded that women’s purchasing power will drive global economic recovery. If your company wants to be included in women’s purchasing behavior then best to understand it.
5. The World Bank has predicted that women’s earning power will reach $18 trillion by 2014. See number 4 above!
6. The driving force behind the social web is women. Scores of studies have shown that women are the majority of users of social networking sites and spend 30% more time on these sites. According to Nielsen mobile social network usage is 55% female. So, to best comprehend and master this pervasive and growing phenomenon ask a woman.
7. According to the American Psychological Association, a woman’s leadership style is more like mentoring and coaching, while a man’s style is centered around command and control. Each of these styles has their advantages and may be appropriate at certain times and not at others. The most astute companies will seek to benefit from a variety of approaches.
8. Women tend to be more inclusive and collaborative than men and they ask different types of questions than men. Ram Charan, in his best-selling book “Boards that Deliver” concludes that progressive boards have lively debates and challenge each other directly without breaking the harmony or the group.
9. Women tend to be more comfortable with ambiguity than men, are more holistic in their thinking and tend to be more process oriented than men. Per a 2010 Harvard Business Review blog by Scott Anthony: “It’s pretty clear that tomorrow’s leaders are going to face the “new normal” of constant change. It is no longer enough to be an operator that can master today’s complexity. You have to be prepared to deal with tomorrow’s complexity, “black swan” events, sudden shifts in the basis of competition in your industry, competitors springing up around the globe, and more.” Never has the ability to deal with uncertainty been more important.
10. Numerous studies have shown that companies that smash the “glass ceiling” increase their profits as a result. Companies with more than three women on their board have a higher return on investment. Simple?!
Last week over 1800 from the hedge fund and related industries gathered in Las Vegas for the 3rd annual SkyBridge Alternatives (SALT) Conference. A tad Davos, mixed with Wall Street outlooks, politics and even leadership insight from the world of professional sports, SALT was a whirlwind of daytime presentations followed by evening parties and even occasionally some downtime!
Several themes wove their way through this two and half day event. The first concerned the outlook for our economy and business prospects for the near future. An early panel discussion on the global macro economic forecast was an ardent exchange between the bulls and the bears. Nouriel Roubini, the distinguished economist spoke about the housing market still being a disaster and firms not yet spending. On the other hand Jeremy Siegel, Professor of Finance at The Wharton School was far more optimistic and predicted that the Standard & Poor’s 500 Index may rise 12-15% by this time next year. Jon Corzine, speaking on a panel entitled: “A Leader’s Perspective: Understanding the Great Recession and the Road to Recovery” claimed optimism and noted that the global economy is, in fact, growing very substantially. The take-away on this topic is that the return to economic prosperity at this point is still very ambiguous.
Another important and prevailing theme at the conference should come as no surprise. The rise of the East and for the most part China is the biggest story of the past 500 years according to Niall Ferguson, Tisch Professor of History at Harvard University. Ferguson gave a riveting talk on Geopolitics and Global Markets and provided a fascinating historical perspective on the evolving power shift from West to East. Ferguson believes this shift is unstoppable and we are in the midst of the end of the Western dominated world. The one snag in this transformation however is that that the Chinese are adopting all of our inventions (he referred to them as “killers apps”) save for personal rights and freedoms.
Michael Milken mentioned this theme as well in his presentation on the promise of the 21st century. Milken noted that while Americans are supersizing their homes and cars the Chinese are focused on educating their children. He also pointed out that the 21st century will be about human capital. Overlay these two ideas and an important consideration quickly emerges.
The SALT conference does an excellent job of interspersing very commercially focused discussions with those from a variety of charities that SkyBridge Capital supports. This serves to remind this for the most part, very affluent audience that they have a responsibility to focus not only on their investments but on the greater good of the precarious world we live in.
In this flurry of enlightenment I could not help but notice what was missing from this event. Given the previously mentioned tremendous focus on China and the increasingly important interdependence we have with the Chinese it would have been appropriate to have at the very least one speaker from this country. In fact, wouldn’t it have been interesting to hear from someone from the hedge fund industry from anywhere in the Far East (or even another emerging economy for that matter). Also, there was the quintessential lack of women presenters and panelists at SALT yet again this year. Those that were on stage were primarily moderators although the very last event of the conference was about “Wall Street’s Leading Ladies” and was hosted by 100 Women in Hedge Funds.
One of the highlights of the SALT conference both this year and last was the opportunity to get “up close and personal” with some of the world’s most impactful leaders from a variety of arenas. In particular, listening to George W. Bush, Colin Powell and Gordon Brown speak with candor and genuineness was awe-inspiring no matter what one’s political leanings might be!
All in all the event was a great success. It was oversubscribed and provided content that was both thought provoking and significant. SALT, once again very aptly accomplished its goal of providing a forum for the hedge fund industry to reflect, debate and perhaps even befriend.
In an age when social media is increasingly becoming the favored way of connecting people all around the world, the recruiting industry is also looking at different ways to utilize the medium for their own benefit. Indeed, gone were the days when businesses had to stick with the old, time consuming and rather expensive methods of posting ads in newspapers followed by more time spent short-listing, selecting and interviewing people face-to-face. With social media technologies, it is now possible to target a wide population and post job opportunities almost instantaneously without a huge investment of money or time.
It is estimated that around 35% of companies are using social media to promote themselves. Of these, approximately 21 percent are using it to research and recruit employees. Considering the convenience, efficiency and the fact that these tools are really in their infancy in terms of development, it appears that social media will be used more extensively in the future for recruitment purposes. But what will be the repercussions of this on the recruitment industry? Can social media serve as a credible medium to do all types of hiring?
The short answer is that it all depends on the type and level of recruiting that is being done. LinkedIn and to a lesser degree Facebook are useful ways of finding candidates for intermediate and more junior level roles. This is in large part because these people are online and for the most part more social media savvy than senior executives (sorry to say). The generation that holds the most senior business roles these days are oftentimes referred to as immigrants in this online world whereas the younger generation are the natives!
For the more senior level positions such strategies, in their current form, don’t yet work well. Firstly, senior level executive’s representation on social media sites is sporadic and still very much in the early adoption phase. Also, there is a heightened level of privacy that is required both by senior level executives who don’t want to expose themselves too much and for the searches that are done at this level. Furthermore recruiting senior executives is a complex process that requires human intervention in order to properly understand qualifications and assess fit since so much of this is subjective and an art form and not able to be distilled to simple profiles online or tweets into cyberspace.
On a more positive note tools like LinkedIn do allow people to approach each other in an informal manner and respond to each other’s queries efficiently. There is also great functionality for performing all sorts of checks on candidates like background and references. All in all, it may put it into perspective to remember that as of May 2009 there were 1.9 billion email users worldwide – this is slightly more than 1 in 5 persons on earth using email. By 2014 it is predicted that this number will rise to 2.5 billion. This took over thirty years to achieve so we may have some time to adjust but I firmly believe we “ain’t seen nothing yet”!!