BUSINESS
Culture vs. Competency: Why Most Business Owners Focus on the Wrong One First
Nov 14, 2024
Hiring for experience rather than cultural fit often backfires. For example, Mark, an accounting firm owner, discovered this lesson the hard way: despite paying a premium for an experienced hire, team morale dropped, and productivity stalled.
The Tale of Two Hires: Experience vs. Cultural Fit
The Cost of Hiring for Competency Only
Sarah, a Sydney business owner, learned the hard way that prioritising experience can lead to chaos. When she hired James, who had 15 years of experience, she expected seamless integration. Instead, her team experienced:
- High turnover (two team members resigned)
- Client dissatisfaction
- Productivity loss from unapproved process changes
Hiring for Culture: A Success Story
After James’s departure, Sarah hired Amy, a junior with two years of experience but a positive attitude. Six months in, her team was thriving:
- Enhanced team systems and morale
- Client referrals increased
- Promotion to team leader within 18 months, now managing $500,000 annually
The Real Cost of Experience Without Fit
Business owner Peter calculated that hiring a senior “bad fit” cost his business nearly $268,000 in disruptions, replacements, and lost productivity. Meanwhile, hiring a junior cultural fit brought a net benefit of $20,000 in the first year, with positive impacts on morale and client satisfaction.
What Cultural Fit Looks Like: Key Indicators
Lisa, a Brisbane practice owner, redefined her hiring by focusing on these traits:
1. Attitude
a. Look for enthusiasm, openness to learning, and adaptability.
b. Example question: “What excites you most about learning new systems?”
2. Values Alignment
a. Assess candidates’ alignment with company values through behaviour-based questions.
b. Sample questions: “How do you handle mistakes?” or “What makes a great day at work for you?”
3. Growth Mindset
a. Avoid candidates with a fixed or blame-shifting attitude; look for those open to feedback and self-improvement.
Three Types of Problem Hires
1.The Blamer: Skilled but undermines morale by avoiding accountability, costing productivity.
2. The Promiser: Talks big in interviews but underdelivers, wasting managerial resources and risking client relationships.
3. The Lone Ranger: Highly capable but isolates knowledge, creating a single point of failure.
Building a Culture-First Organisation
Step 1: Define Your Culture
Document core values and create behavioural expectations. This approach helped David, a Perth firm owner, reduce turnover from 40% to 8%.
Step 2: Hire for Culture, Train for Competency
Incorporate values-based interview questions, involve the team, and use reference checks to confirm fit. Sarah’s shift to culture-first hiring improved her success rate from 50% to nearly 100%.
Step 3: Develop for Competency
Mark implemented a structured training program, allowing junior hires to reach senior capability 40% faster.
Real-World Transformation: Alice’s Story
Before Adopting Culture-First:
Alice, a Melbourne bookkeeping owner, dealt with high turnover, client dissatisfaction, and a stagnant revenue of $400,000.
12 Months After Implementation:
Her revenue increased to $600,000, team satisfaction soared, and turnover dropped to zero.
The Bottom Line
Mark, who initially prioritised experience, discovered that culture is the foundation upon which all else is built. By hiring for cultural fit and training for skills, his team and business transformed.
Want to transform your team culture? Join our upcoming “Building Teams That Last” workshop to develop a culture-first hiring strategy tailored to your business.