When leadership changes create uncertainty, the pace of the organisation slows. Leaders and employees spend time and energy navigating ambiguity. Too many changes at the top can lead to decision fatigue, where the organisation loses the courage and capacity to make impactful choices.
At the same time, a mis-hire can be costly—lost results, wasted time, and a recruitment process that must start over. In short: mis-hires at the top level can create significant challenges for the organisation. That’s why it’s crucial to understand why it happens—and what we can learn from it.
Every Second Top-Level Hire Fails – And It’s Expensive
According to analyses from McKinsey and Harvard Business Review, 40–60% of newly hired top executives fail within their first 18 months[1] [2]. Some leave the role, others stay—but without delivering the results the organisation needed.
Several studies also highlight the financial consequences: the cost of a mis-hire at leadership level can exceed 200% of the annual salary when you factor in lost momentum, replacement, onboarding, and failure to implement strategic goals[3][4].
Why Does It Go Wrong?
The cause of mis-hiring is rarely a lack of professional skills. The problem is usually a mismatch between the leader and the organisation—and it typically arises because the recruitment framework doesn’t fit the task.
Many processes begin by reusing the old job description instead of openly analysing what the organisation truly needs in its next phase. The result is a profile that matches the past, but not the future.
Cultural fit is also often underestimated. A leader who has succeeded in one place may struggle elsewhere if values, communication style, and decision-making don’t align with the organisation’s culture.
Finally, many of the strongest candidates are overlooked because they’re not actively on the job market. If you only focus on visible, actively searching profiles, you risk excluding the very person who could have made the difference.
Once the mismatch occurs, it affects direction, results, and relationships. It wears down both the organisation and the leader, who often must leave the role prematurely.
Why Executive Search Is Necessary
When so many top-level hires go wrong, it’s often because the classic recruitment process isn’t sufficient. Leadership recruitment requires a method tailored to the unique demands and risks at this level—executive search.
Executive search isn’t just a longer or more expensive version of regular recruitment. It’s a different approach, where the starting point isn’t a standard job profile, but a strategic dialogue about the organisation’s direction, ambitions, and leadership needs.
From there, we work discreetly and purposefully to identify relevant profiles—including those not actively seeking a new job.
The focus is not only on skills and experience. Equally important is the leader’s ability to inspire loyalty, navigate complexity, and support culture and change. And once the leader has been found, the work does not stop: follow-up in the first few months is crucial to successful integration.
Would you like to see what a more traditional recruitment process looks like from start to finish? LRead our article How do you ensure a successful recruitment? Here, we focus in particular on the recruitment of specialists – which differs in many ways from executive search.
How Do We Avoid Mis-Hiring?
Mis-hiring can never be completely eliminated, but the risk can be reduced. At Compass, we work with some fundamental questions that we’ve found make a difference for the companies we assist:
- =Do you have a clear idea of what the organisation needs – and what you need to let go of?
- =Is there agreement on the type of leader who should take you into the next phase?
- =Do we have access to the right candidates – including those who haven’t raised their hand?
- =Does the process match the level being recruited for?
Our experience is that when the framework is set correctly, the likelihood of finding the right match increases significantly. Often, external sparring provides the opportunity to see things from a different perspective and challenge the status quo.
Conclusion
At Compass, executive search isn’t just about finding a leader—it’s about helping you as the recruiting organisation become crystal clear on who you need and why.
It takes courage to ask the fundamental questions and sometimes let go of old assumptions about what works.
When we succeed in uncovering both the strategic needs and the cultural foundation, we build a bridge between the organisation’s ambitions and the leader’s competencies and drivers.
That insight is crucial to minimising the risk of mis-hiring—and creating real value in both the short and long term.
Our results speak for themselves: only 1–2% of our executive assignments end as guarantee cases.
Do you measure how often your leadership recruitments miss the mark—and what it costs you?
[1] McKinsey & Company (2021): It really isn’t about 100 days
https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-organization-blog/it-really-isnt-about-100-days
[2] Harvard Business Review (2017): Executives Fail to Execute Strategy Because They’re Too Internally Focused
https://hbr.org/2017/11/executives-fail-to-execute-strategy-because-theyre-too-internally-focused
[3] Primethos (2022): The Cost of a Bad Executive Hire
https://primethos.com/the-cost-of-a-bad-executive-hire/
[4] Redline Executive (2023): The Real Cost of Hiring the Wrong Executive
https://www.redlineexecutive.com/content-hub/the-real-cost-of-hiring-the-wrong-executive
