| -- End Ad Box ---> | | | | Pro Bowl invitation, are more than 73 percent likely to |
| Everyone loves a good sports analogy. The upcoming | | | | have future success! |
| NFL Draft prompted me to consider how the player | | | | Granted, the NFL’s decision makers have |
| selection process compares to how businesses | | | | resources not available to venture capital firms and |
| succeed with executive recruiting. Because I’m | | | | the rest of us in business. Without a business leaders |
| interested in how organizations assess a | | | | Combine performance and reels of film to review, |
| leader’s capabilities and their subsequent | | | | we have to rely on other measures to help |
| success, I set out to determine whether the NFL can | | | | determine a prospect’s potential for success. |
| offer a few tips to improve an organization's | | | | But what can the NFL draft teach us about |
| executive recruiting. | | | | executive recruiting for our business’s top |
| A recent New York Times article about Harvard | | | | leaders? |
| Business School (HBS) research gave me the basis | | | | 1. Don’t hire a wide-receiver to be your |
| for a football and business comparison. The research, | | | | linebacker. |
| conducted to determine whether CEOs learn from a | | | | A successful corporate and NFL leader has |
| failed business experience, studied entrepreneurs | | | | experience and expertise doing specifically what you |
| CEOs who received venture capital (VC) funding. | | | | need to have done. In the NFL, the large majority of |
| While a fun and timely comparison, there is a basic | | | | players play one position in college, perform at the |
| similarity between venture capital firms and NFL | | | | Combine in that same position and will attempt to |
| organizations. Both NFL teams as well as venture | | | | make an NFL roster in the same position. The |
| capital firms operate in a high risk and high reward | | | | successful NFL franchises use caution to avoid |
| environment where executive recruiting is a rigorous | | | | becoming awe struck by the super athlete, for |
| exercise to minimize risk and maximize reward. | | | | example Bo Jackson. It’s interesting to note |
| The HBS research found that
for the average | | | | that Jackson did not play in a single Pro Bowl game, |
| entrepreneur who failed, no learning happened. | | | | and he played in only one Baseball All-Star Game. NFL |
| What they found was that the only experience that | | | | teams and the individual players know their individual |
| counts is success. HBS’s definition of success | | | | role, their specific strengths and weaknesses in that |
| was going public or filing to go public during the time | | | | role and where their teammates need to support |
| period from 1986 to 2003. | | | | their deficiency. |
| Research Findings: | | | | In Corporate America's executive recruiting, the |
| 1st time entrepreneurial CEOs who received VC | | | | leader you hire should have industry knowledge and, |
| funding had a 22 percent success rate. | | | | based on my NFL research, the executive should |
| Entrepreneurs whose companies had been | | | | have recently played a similar role in a successful, |
| liquidated or gone bankrupt had a 23 percent follow | | | | previous business. |
| on success rate. Take away: Failure resulted in only | | | | 2. It’s hard work to assess soft skills. |
| one percentage point of learning. | | | | I talked briefly with Titans’ General Manager |
| Already successful entrepreneurs had a 34 | | | | Mike Reinfeldt about this article and asked him |
| percent success rate in their future role of leading a | | | | whether soft skills are important in determining which |
| VC funded business. Take away: Greater learning | | | | player the Titans draft. He quickly stated, Very |
| gained from success. | | | | important. Mr. Reinfeldt added that the draftee |
| As I watched ESPN’s Draft Review one | | | | will be paid like a leader, looked upon as a leader and |
| evening, Mel Kiper, Jr. and others debated each NFL | | | | expected to be a leader. How he communicates with |
| team’s probable selections and who they | | | | the team, the coaches and the community is very |
| believed were the best available performers. Kiper | | | | important. Draft prospects are interviewed by |
| pointed to an individual’s performance on the | | | | multiple people to assess fit within the organization |
| field during the last three years, at the recent | | | | and community, which Mr. Reinfeldt stated was |
| Combine and during workouts with NFL team scouts | | | | equally important to the level of athleticism. |
| in discussing the player’s projected success in | | | | A business leader’s soft skills and ability to be |
| the NFL. Suddenly, it hit me. Each NFL prospect goes | | | | effective with investors and the board, senior |
| through tremendous public scrutiny on specifics of his | | | | management and staff, prospects and customers, |
| past and recent performances to determine the | | | | policy and regulatory authorities, vendors and those |
| environments where the player would be most likely | | | | within the community are vitally important in your |
| to succeed. I laughed as I wondered; can NFL teams | | | | executive recruiting process and hiring the right |
| and the NFL draft teach VC firms how to improve | | | | leader. |
| executive recruiting outcomes? | | | | 3. The Heisman Trophy winner may not be the best |
| I decided to compare business leaders to Top 10 NFL | | | | leader. |
| draftees. Each year these Top 10 NFL draftees are | | | | Only two of the eight Heisman Trophy winners |
| the highest paid athletes, they are clearly world-class | | | | selected from 1996 to 2003 have been named to a |
| performers and they are expected to provide team | | | | Pro Bowl. An equally interesting comparison is that |
| leadership. HBS researchers used going | | | | during the 1986-2003 time period, eight individuals |
| public’ as their measure of success, and I | | | | who were #1 draftees made at least one Pro Bowl |
| decided to measure each of the NFL’s Top 10 | | | | while seven individuals who were #10 Draftees made |
| Draftee’s success by being named to the | | | | at least one Pro Bowl. There is a dramatic perception |
| annual Pro Bowl. I used the same 1986 — | | | | difference and guaranteed income difference |
| 2003 time period and needed to determine the | | | | between the Number 1 draft pick and the Number 10 |
| percentage of Top 10 NFL draftees who achieved | | | | draft pick; however; the significant income difference |
| Pro Bowl status. Additionally, I wanted to know which | | | | does not correspond to results on the field. |
| players among this draft group achieved follow-on | | | | When a business experiences a vertical growth |
| success, defined as being named to multiple Pro | | | | trajectory, it creates the perception that the |
| Bowls. The results of my research: | | | | company’s leaders are truly world-class. As a |
| Top 10 NFL draftees who played in at least one | | | | result, we may rush to hire an individual from this |
| Pro Bowl: 43 percent | | | | company. While this strategy may lead to a great |
| Of the Top 10 NFL draftees who played in at | | | | hire, do not let yourself get caught up in the |
| least one Pro Bowl, the percentage of these same | | | | excitement and conduct the executive recruiting |
| Top 10 NFL draftees who played in more than one | | | | process without proper and thorough diligence. |
| Pro Bowl: 73 percent. | | | | In Summary: |
| Venture capital firms successfully choose the right | | | | My light-hearted comparison was interesting to |
| performer 22 percent of the time while NFL teams | | | | highlight a few thoughts to consider when hiring a |
| successfully chose the best performer 43 percent of | | | | key executive. Companies do not follow business |
| the time. Even more contrasting, those who succeed | | | | leaders like the NFL follows prospects; nor do we |
| with venture capital firms achieve a 32 percent | | | | interview business leaders like the NFL Combine. Top |
| success rate in a follow-on attempt where NFL | | | | executive recruiting firms may be a very good |
| players who achieve one Pro Bowl have a 73 percent | | | | resource to you as they are supposed to know |
| success rate in being named to at least one additional | | | | these business leaders well and possess knowledge |
| Pro Bowl. Some light research (loosely using the term | | | | of their past performance. Additionally, a good |
| research), reveals that the NFL is twice as | | | | executive recruiting firm should also have the ability |
| good in identifying top performers. Even more | | | | to thoroughly and accurately assess a |
| interesting is that the NFL teams that hire correctly | | | | prospect’s relative fit within your organization |
| end up picking long-term performers. Again, | | | | and his/her performance ability. |
| performers who achieve our definition of success, a | | | | |