Leadership Due Diligence is a Long-Term Investment

Leadership Due Diligence is a Long-Term Investment

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The role of any leader in the top management of a company is one of the most important within the organisation. After all, leadership is the cornerstone for team motivation, setting business objectives, creating compliances as well as driving organisational culture. Every company faces the quest for growth, expansion and impact, and a major portion of the success of this imperative quest relies on the leadership.

Importance of leadership due diligence for business success

The success of any business greatly depends on the kind of people who perform the most important tasks. This is why a thorough leadership background verification is so important. Especially in the industry of today, where competition is getting fiercer by the day, the need for a competent set of leaders is greater than ever. An exhaustive leadership screening is required to meet this need. Hiring for executive positions is among the most important decisions made by any organisation. Much of its success is so dependent on this choice that many often say an organisation lives and dies based on its ability to hire the right leaders. Regardless of which industry your company belongs to, recruiting an effective and efficient leader can result in a dramatic increase in the overall productivity, increase morale among employees at every level and greatly increase your company’s competitive advantage overall. Not only is business success a direct function of leadership hire quality, organisations also put a sizeable investment in their pay package and fees paid to recruitment consultants. This is exactly why leadership due diligence is such a crucial process.

As per the U.S. Department of Labour, a bad hire will cost a company at least 30 percent of that employee’s earnings in the first year. If this is how much the cost of a bad hire is for regular employees, imagine how big of a loss it would be for a company if they hire the wrong person for a leadership position. To cater to this need, AuthBridge devised a dedicated leadership due diligence offering called AuthLead™.

Also Read: 3 Essential Steps for Leadership Screening


How is leadership screening different from traditional background verification?

Since the role of a leader is clearly more crucial than others, no organisation should simply rely on traditional background verification steps before onboarding people for such positions. Leadership due diligence should be much more comprehensive and detailed. Here is how:

  • Only rely on self-researched primary references for leadership due diligence

For any position, especially for leadership positions, references are important. Even if an applicant provides impressive references, don’t just accept them without verification first. Do your own research to make sure that the references are trustworthy.  This goes a long way in validating the prospective hire’s character/reputation and attitude in general. A culture fit with the right set of values is indispensable while making senior level hires

  • A thorough executive screening through competency mapping

Every exhaustive leadership screening should include competency mapping. In simple words, competency mapping refers to a process where the candidate’s strengths and weaknesses are identified and assessed. This is essential even for executive positions. Competency mapping is so important in leadership due diligence because it is easy to put industry experience ahead of a candidate’s innate traits and abilities, and assessing the candidate’s qualities by accurately identifying strengths and weaknesses can make sure you do not make this mistake.

  • Leadership due diligence must involve career tracking

A comprehensive leadership due diligence must involve career track – how the candidate has grown or developed his/her career through the years. In other words, identify the various positions (both vertical and lateral/cross-functional growth) the candidate has held in chronological order till date. Apart from allowing you to understand just how qualified, experienced and efficient the candidate is, this process also throws light on the kind of reputation they have in the industry.

In all, leaders are pivots to an organisations success and associated with a higher level of risk. Hence, organisations need to pay more attention to leadership due diligence with a focused approach to the same.

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