Common Scaleup Mistakes #8 - Final Newsletter - Hiring the Wrong Person

When I started this series, I carefully considered which of the most common mistakes I've seen with scaleups to cover. It was no different when deciding on the last newsletter in the series.

After careful consideration, I believe hiring the wrong person to deliver the scaleup is one of the biggest (if not the biggest) mistakes that a company can make.

In much of my client work, I have seen cognitive deficiency in seniors tasked with delivering the scaleup numbers. Is it surprising that they failed?

To me, no. Not at all.

I say this because if you get the wrong person to manage and deliver the scaleup, you are bringing in someone who will create a cascade of mistakes I have covered so far (and more that I have not mentioned).

Namely, as per the prior Newsletters in the series:

#1 They fail to appreciate and assess the investment required to succeed.

#2 They fail to create a realisable strategy that can deliver the numbers—they have plenty of aspirations but no cohesive plan for HOW they will deliver the scaleup numbers.

#3 They ignore reality and instead see the business through rose-tinted spectacles, living in a delusional world where all will be fine when it clearly will not be. They crash the business like the Titanic on an iceberg - they abandon ship while the orchestra plays on the sinking deck.

#4 They set the wrong priorities and pursue the wrong opportunities. They may focus on the wrong (delusional) metrics.

#5 They have a flawed understanding of what it takes to succeed with the scaleup for each market, which leads them to create flawed models and strategies that can never succeed.

#6 They cannot execute, a key skill in seniors in charge of scaleup.

#7 When all else fails, in a desperate bid to save their position and career, they mistakenly believe that restructuring is a panacea for all ills.

Getting the right person into the role by a company seems to be poorly understood based on the high staff churn that I see between those seniors who make an investment case but fail to deliver those numbers and are either managed out or re-assigned to some insignificant role in Corporate Affairs or pushed into the office under the stairs in some role such as Commercial Excellence where they are as far away from delivering numbers as possible in staff roles.

Where do they go wrong in the selection of candidates?

I explain this by dedicating a whole chapter with several parts in my book:

Finding good candidates is not easy. There is no sure-fire, foolproof way to recruit with certainty that you have the square peg for a square hole or a round peg for a round hole. They often end up appointing a square peg for a round hole! It is easily done.

Some of the reasons I explain and elaborate on in my book are:

• Recruiters fail to search out evidence of achievements over five years documented on company letterhead paper. They take at face value the words of the candidate who avoids answering or confirming if he or she delivered the numbers. Instead, they talk about the business growth or the market prescription data—all meaningless compared to the budget numbers and whether they were delivered.
• Many candidates lack coalface experience of actually having done what you want them to deliver—the scaleup numbers. Bizarre? Yes. But it happens. Some are appointed without evidence that they have done the things required for the scaleup to be delivered. And that appointed person is a blind fool led by a blind team that saw off the prior manager who failed to deliver the numbers!
• The candidate's understanding of the financial side of running a business is often very limited. The candidate may have never managed a full Profit and Loss (P&L) responsibility. She may have delivered sales within defined costs. That is easy. The former is not. In a P&L role, a candidate can deliver sales within defined costs but fail to deliver the key metrics of Gross Margin and Gross Profit before tax.
• If the scaleup requires international expansion using distributors in 'partnership' or 'distributor' markets, the candidate may have little or no commercial negotiation experience, which is crucial to selecting good distributors. They often fail to understand the models available and lack an understanding of those models that can scale from those that can't. Many end up with a warehousing and logistics partner without realising they have an expensive box-shifter solution that isn't a distributor at all!

I could go on, as I do in my book, if you want my complete take on this subject.

The recruitment process must be seriously flawed if a company appoints the wrong person and repeatedly makes the same mistake over several successors.

One company I know is on its eighth head of the same cluster of international markets in 15 years - an average of around two years in the role with failed numbers by each of the predecessors - where the prior person before the series of failed appointments delivered those numbers for many years. The people involved with recruitment don't know how to pick winners if this is an example seen across different pharma players.

In the Sub-Saharan Africa (SSA) cluster, I recently published an article about the considerable staff churn mainly arising from recruiting the wrong person to lead the scaleup. Here is a link to the article:

https://www.dhirubhai.net/pulse/staff-churn-distributor-markets-personal-amit-vaidya-tudbf/

In my book, I explain that three things are non-negotiables when selecting a person for scale-up, especially international scale-up and working with and through distributor partners.

I also explain that where the person sits—in the corporate or regional head office or in the markets—and whether you appoint an ex-pat or local, matters not a jot, so long as my three non-negotiables are met. Any candidate who does not meet those three non-negotiables would automatically be on my "reject" list.

You can discover those non-negotiables and more in my book:

https://www.amazon.com/Right-Way-practical-distributor-models/dp/1803817828/

Conclusion:

This concludes my Newsletter series. I hope readers enjoyed it. Feel free to share it with your network and connections. If there are any topics on which you'd like me to write, please let me know either through a comment on this article or a direct message to my inbox if you are a first-degree connection with me.

About Samkoman Consulting Ltd:

I started SCL after a stellar career at AstraZeneca. I am focused on helping my clients succeed in scaling up in their home market and expanding into new markets, unblocking the factors stopping them from delivering scaleup after numerous attempts in existing markets, and advising senior Boardroom executives on international and domestic business commercial challenges.

I'm happy to chat to you at no cost or obligation about how I can help you without talking nonsense and jargon but truthfully telling you how it is, with straight-talking from a senior executive who has been where you are, has faced the issues and challenges that you face, and successfully addressed them.

I will use your time effectively. I won't waste your time. I'm down-to-earth and straight-talking.

If I can't add value or if your problem is complicated by someone else having a go and botched it up, I'll tell you and walk away.

You can book a free, no-obligation Teams or Zoom call directly into my diary using the link below.

Book a free consultation with me: https://calendly.com/amitvaidya2021