I got a call recently from a former colleague asking if I would be comfortable being a reference for him. Of course, I was happy to do this, as this person worked for me previously in two different companies and had performed exceptionally well. He was super excited and all set to accept a new job reporting to the CEO of a high-growth IT Services firm.
But then, the written offer letter, when it arrived, failed to reflect some of the specifics of what they had previously discussed, and the compensation plan had details that also had never been discussed. No problem, as the candidate called the CEO, and while he did not apologize, he agreed to fix the “oversights.” The next version of the letter was better, but still not perfect. The candidate had to go back yet one more time to get the written offer letter to accurately reflect the conversation leading up to the offer.
In another situation, an accomplished executive I know well agreed to join a high-growth software company that wanted to transform sales and marketing, go forward with an outside capital raise to fund an aggressive growth strategy, and triple the size of the company over the next few years. This was an achievable goal as this company was in a hot space and their technology was superior to the alternatives in the space. One of their competitors had recently been sold to a strategic buyer for a multiple of over ten times revenue, which showcased the upside of a successful sales and marketing transformation effort. The owners of this business were adamant they were ready to make the transformation from a family run business to one that was professionally managed.
Except strange things happened when that executive started. She could not get any financial information on the firm’s performance, not even revenue figures by customer. Meetings she attempted to set with potential outside private equity investors were not taken. Inappropriate emails were routinely sent by the CEO. And finally, when the equity component of the compensation deal finally arrived in the promised equity documents, the deal as described in those documents did not resemble what was agreed to in the offer letter.
You can likely guess how both of these circumstances ended up. In the first case, the executive got cold feet and instead accepted a different job offer. The IT services firm in effect fumbled the ball on the one-yard line; what happened was entirely preventable. This person wanted really to work for the CEO at this IT services firm. From an objective perspective on paper, the job was superior in both compensation and in reporting relationship in comparison to his other alternatives. In the second example, the miss on delivering equity documents that accurately reflected the deal defined in the offer letter caused this executive to seriously reflect on the first three months in a more holistic fashion. Over the weekend, she realized she had made a serious mistake, and the owner’s stated desire to transform the business was not likely to be realized in practice. Even though the executive likely could have worked to get the equity documents to reflect the written offer letter, she called the CEO that following Monday and resigned after just three months, a serious setback for her, but a bigger setback for the firm that hired her.
These two examples highlight a notion that I think that does not get enough attention. The recruitment – and engagement – of very talented employees is a two-way street. Talented individuals do have many other options, and over time, they will not settle for commitments that are not kept, behavior that is not in keeping with their belief system, and they rightfully expect that what is agreed to in conversations will be accurately documented in subsequent written communication. Or, if promises are made in an offer letter, that they are actually fulfilled in practice once someone joins the firm. Talented employees understand that executive behavior really matters; they watch what people do as opposed to what people say they will do.
In the first example, the CEO conducted all of the conversations with the candidate in a fashion where the candidate really wanted to join his firm. But the misses in execution between oral offer and written offer gave him pause, and he began to have serious doubts about what it would be like to work there. He took a different job. My guess is the CEO of the firm trying to recruit him has no idea what went wrong.
In the second example, the executive had actually already started and was fully committed despite some significant cultural challenges she perceived that existed in the firm, But when the equity paperwork arrived, three months later than expected, and with a complete re-trading on the equity component of compensation, intentional or not, this caused her to step back and rethink the overall likelihood of success for the firm she had joined. She elected to pull the rip cord that next Monday before more time had elapsed.
So, something to think about. Recruitment and retention is a two-way street. Yes, do vet candidates seriously and be sure they possess the skills and experience you need for the role. Expect that people you hire perform at high levels. But also, if you underestimate the impact that comes from disconnects from what was said or what is expected compared to what is delivered, you will do so at your peril.