Betting Odds (#203)

A few months ago I published an article about why I believe companies should not make counteroffers to employees. One of the main arguments for this is based on data. Various studies and articles estimate that about 80% of the people who accept a counteroffer are no longer working at the company 12 to 18 months later.

As expected, my article garnered a lot of comments. Some people who disagreed with my viewpoint shared an example of where a counteroffer had worked. What they overlooked in their argument was the cost associated with all the times where it does not work. They pointed out the exceptions, or the 20% in this case.

One of the simplest and most profound leadership lessons I have learned is that success is often a matter of making more good decisions than bad ones. And one of the best ways to make good decisions consistently is to establish rules for situations and scenarios that repeat themselves – and to stick to those rules, even when it’s hard.

For example, let’s say we know from experience/data that hiring managers into a certain role from outside the company has an 80% failure rate versus candidates who are promoted from within. In my experience, unless we understand the root cause and can change it, we are better off adopting a blanket policy of not hiring for the role from the outside.