Prevention and Repair
You discover a frayed wire on the thick electrical cord feeding your home air conditioning condensing unit – the big box outside (rodents love to chew on wires and insulation). But you don’t have an electrician you regularly use, and you are too busy to call around to find one, so you pull a MacGyver/MacGruber, and use an unfolded paper clip, some chewing gum and duct tape, to make a repair. A week later, when it is 90 degrees out, you hear a pop, your lights dim, and your A/C stops running. The next day, the A/C repair guy says you blew out the compressor, and by the way, your condensing coils are shot, and you need a new A/C unit for $3000. Oh, and a new $30 connector cable to replace the one that the rodents chewed through – you remember, the $30 cable you could have replaced last week. This type of thing happens to homeowners all the time.
How about in business? What about the rodents chewing through the circuitry of your company, and causing your “machinery” to pop and hiss, and not work properly? Many employers who have unproductive people on the executive team also make MacGyver repairs and hope for the best. We give them another chance, or a warning. We surround them with people who can pick up the slack. Or, even worse, just do their job ourselves. We get into fire-fighting mode, and then don’t even have the time to do “preventive maintenance.” After all, it is a lot of trouble to find replacements. And expensive. Or is it?
In air conditioning, plumbing, and electrical wiring, preventive maintenance is often available for 10 cents on the dollar compared to costly repairs done after the item actually breaks. You could spend $200 (including labor) to replace a cable and save $3000 on a condensing unit.
The comparison in business is the cost of a bad hire compared to making the right hire in the beginning (or moving quickly to make a strategic replacement). In companies, CEOs often downplay or rationalize the harm done by a bad employee. Customer dissatisfaction, lost sales, reduced market share, inadequate processes, late deliveries, bad morale – these are byproducts of bad hires, and the intangible cost of these can be many times the actual cost of the bad hire. You could hire a $150K executive, and lose $2 million in the aftermath. And repairing a bad hire isn’t like repairing an A/C system. A new A/C system is up and running the next day. A new executive can take months to find, months to get acclimated and months to become effective. And, in the meantime, you are still fire-fighting instead of being a strategic leader. Time is money – more money lost to the bad hire. Hiring expert Brad Smart (Topgrading) says it can be as much as 14-28 times the salary in lost opportunities and other fallout from the bad hire.
Prevention of bad hiring is simply “Good hiring”. Good hiring practices include: casting a wide net to find the best candidates, creating a performance based position profile to outline clear tangible objectives, and screening candidates to their ability to get the job done for you. You can do this yourself if you have good talent acquisition processes implemented, or you can hire a professional to do it for you.
Is good hiring expensive? Not compared to the ultimate cost of a mistake.
Does it take more time? Not compared to time to get rid of a bad hire and get a replacement up to speed.
Can you afford the $2 million in “damage” that could result from ignoring “preventive maintenance?” You can let the rats chew through your wiring, or you can call the exterminator and the electrician, and get rid of the rats and replace the cable.