In an interview for Inc. Magazine, founder Tony Hsieh once admitted that hiring mistakes had cost the iconic online retailer “well over $100 million” through the years. After briefly explaining how their bad hiring decisions had led to this astronomical number, he summed up the company’s key take away, “We learned instead of hiring quickly and firing slowly, really it should be the reverse. We should hire slowly and fire quickly when it’s not the right fit.”

When Hiring Goes Wrong

Making good hiring decisions doesn’t come easy, and the truth is that the majority of leadership teams consistently get their hiring decisions wrong.

I recently read the book, It’s Not the How or the What but the Who: Succeed by Surrounding Yourself with the Best, by Claudio Fernández-Aráoz, a senior adviser at the leading executive search firm Egon Zehnder. In one of the most telling sections of the book, the author posed the following question to a group of 300 CEOs: ”If you were building your organisation from the ground up, how many of the current people would you rehire?” The average answer was 50 percent.

This should be a wake up call to architecture and design firms.

High profile CEOs, such as Andrew Forrest and the late Steve Jobs, were able achieve their phenomenal success by building teams of exceptionally talented and motivated people, and they did this within extremely competitive niches. Yet, their approach to hiring and the lessons to be learned from it seem to be eluding even the biggest, most successful firms.

The reality is that the difference between a successful hire and a bad one is very great. Hiring the wrong people can eat up valuable resources and lead to missed opportunities. It impairs business performance, reduces profitability, and can significantly hurt a company’s culture and brand. Once you start moving up the leadership hierarchy, the more authority and seniority these bad hires have and the more complex their job is, the greater the damage. As Fernández-Aráoz writes, “[M]ost companies’ senior leaders spend 2 percent of their time recruiting and 75 percent of their time managing their recruiting mistakes.”

When Hiring Goes Right

The best hirers that I have dealt with in the architecture and design industry, the ones who are consistently able to attract the best candidates, all have one common trait: articulating the company’s vision. In an interview process they take the time to describe where they’re going and how they’re going to get there. They talk beyond the immediate project or pipeline of projects and instead create an image or a flight path of where the company is headed, allowing the candidate to envision how they can fit in with the journey and where their own career could be going.

When companies have loyal, talented, and passionate employees, it usually means the senior leadership has two fundamental competencies in place:

They are very clear about who they are looking for now and what they want these people to look like in the future. Good hiring means not just looking at what a candidate can do now, but what he or she may potentially be able to do in the future. Both Andrew Forrest and Steve Jobs would frequently single out people with exceptional talents and skills often unrelated to their jobs. They put a lot of emphasis on personality, choosing the people with passion and initiative, coupled with the willingness to learn, to ask questions, and figure things out.

They know how to ask the right questions. The right questions allow you to assess a potential hire’s abilities and personality. For example, Andrew Forrest often drilled down on how candidates overcame an issue or conundrum in the business and how they solved it, taking particular notice of people who could think outside the box. Asking the right questions also includes knowing how to properly do reference checks. In this case, it’s not just a matter of what you are asking, but to whom. If, for example, you want to know about a candidate’s leadership skills, you don’t want to ask his or her boss. You need to speak to the person’s subordinates.

The bottom line is that good hiring is not rocket science, but it is still a skill that needs to be learned. The quicker your senior leadership can acknowledge this learning process, the closer you’ll be to truly hiring the best people for your firm.