Many companies are run from the executive office, predominantly by a president who serves as the staff’s primary motivator and provides daily direction for their activities, goals, and objectives. Imagine a company currently paying not one but three leaders simultaneously. One of them was canned two years into a five-year agreement; another dumped two years into their five-year contract and the current one who has done nothing but lead the company to the near bottom of the ranks of its industry. You need not imagine too hard because that floundering company is the New York Football Giants.
Not to be outdone, the only sure bet in Vegas these days is that the Raiders are paying yet another coach. With the recent firing of Anotonio Pierce, when they hire his replacement, they will have four head coaches at the same time on the payroll. Pathetic.
But it’s far from being a solely pro sports issue. In college, they hire and fire coaches like teenagers change their shoes.
No business industry in America exists where 20% of their top-level leadership is shown the door yearly, except for college sports. And still the bigger problem is that these universities also blow money on knee-jerk hiring decisions using public funds.
Over 200 college football and basketball coaches make over $1 million in annual compensation, with 50 hauling in at least $3 million. Say what you will about the pro situation, but college sports long ago became big business. A prior study done by ESPN showed that more than $533 million was paid out by universities to fired coaches alone over an 11-year period.
The key for any organization, on or off a playing field or court, is to do its due diligence while implementing a practice of “patient hiring.” Make sure that potential hires can perform the duties they were selected for and are also a good fit in the company culture.
Last year, Starbucks fired a CEO who had been with the company for 11 months. He received a $10.6M payout to walk away, plus health insurance premiums. That total represented 1.5-2x his annual salary and bonus. He also “led“ the company to a $32 billion drop in market value. Was he a good fit? Obviously not, which led Starbucks to bring back their founder, Howard Schultz, for a second time.
The bottom line? Slow down. Do your homework. Develop a process to determine the cultural fit of the new hire in your organization. And for goodness’s sake, try not to emulate the New York Giants.