It was a highly embarrassing day for Myer this past Tuesday.
After announcing the previous Thursday that 'Andrew Flanagan, has been appointed group general manager for strategy and business development', Myer confirmed on Tuesday that Flanagan had been fired after it was revealed that he was not, as reported, 'formerly managing director and Asia-Pacific vice-president for Spanish fashion giant Inditex (owner of Zara).'
The media jumped all over the story. I was interviewed for 10 minutes on Sydney radio station 2UE by morning host, Angela Catterns about the story. Later in the day an AFR journalist called me to seek comment.
Fairfax Media reported 'A spokeswoman for Zara contacted Fairfax Media this morning and confirmed the company had never heard of Mr Flanagan.
It is believed Myer is conducting an investigation into how Mr Flanagan managed to pass an apparently thorough background check by a reputable executive hiring company and how he managed to succeed in getting the job as Myer's new group general manager of strategy and business development, reporting to Myer chief financial officer Mark Ashby.'
On the day of Flanagan's appointment being made public the CEO of Myer, Bernie Brookes said:
'Andrew set up Zara in Australia and was looking after 800 stores throughout Asia, and before that he was with Walmart and Tesco, so he has this worldly experience that will help us look at things in a different perspective,' he said.
Dear, oh dear.
There will be some very red faces all 'round after this massive howler. The recruitment firm named by Fairfax Media, Quest Personnel, have the double whammy of a massive credit (I suspect around the $150k mark) and an even more massive credibility hit. I can't even begin to imagine how much finger pointing and arse-covering there must be going on right now.
Fairfax Media reported what can only be 'background' gleaned directly from knowledgeable sources inside Myer (attempting to place Quest fairly in the spotlight), as follows:
'It is believed that as part of the executive search process Myer was provided with a transcript, running to four or five pages, of an interview conducted by the recruitment company with a person purporting to be a senior executive at Inditex.
Myer was also provided with another transcript, of about the same length, with a purported Tesco executive. In both cases it was represented that Mr Flanagan directly reported to the interviewee.
Another, smaller retailer is believed to have offered Mr Flanagan a job about the same time as the Myer offer. It is believed the head of that company spoke directly to a person who claimed to be a senior executive at Inditex.'
On Seek today I found 12 jobs listed under Quest Personnel of which half are for roles with a salary under six figures including House Keeper/Nanny, Cafe Supervisor, and Admin Assistant. I have heard nothing but positive reports about Quest over the years so I am sure they are very good in their niche however it would appear that they have been caught well out of their depth on this one.
If the reports, above, are true then clearly Mr Flanagan has gone to a significant amount of trouble to arrange fake referees to provide extensive 'references' on his behalf.
Unfortunately, there are plenty of precedents for this sort of deception.
Background checking company First Advantage presciently noted the following three points after the release of their 2010 research:
'The bigger an organisation, the more likely target they become for fraudsters'
Strike 1 for Myer!
'Senior Management appointments create the greatest risk for businesses'
Strike 2 for Myer!
'The greatest risk for Australian employers is individuals applying for roles while abroad.'
(Apparently Flanagan's 'referees' were not in Australia)
Strike 3 for Myer - you're out!
There you have it - Flanagan's (is his name even Flanagan?) fraud was one in the high probability range if any Myer HR or recruitment executive had bothered to appraise themselves of the evidence in this area.
I can only conclude that less rigourous background checking (or satisfying yourself as to the bona-fides of the 'referee') is undertaken as a candidate aspires higher up the corporate food chain.
I am sure you are asking yourself the same question that I am - how on earth did Flanagan expect to get away with such a blatant lie? Given that Myer is a public company and all public companies, especially ones that have just hired you, like to promote you to the media, the truth was bound to be unearthed pretty quickly. It appears that Mr Flanagan even approved the media release touting his appointment!
You would think the senior Myer team would be networked into the retail fashion industry to such an extent that finding out 'the word on the street' about Flanagan at Zara shouldn't have taken too many calls. Obviously not.
The whole episode (can I call it Flanagan-gate?) calls into huge question the judgment, leadership and capability of Bernie Brookes and the other Myer executives that were involved in this hiring decision. It's beyond embarrassing.
Yet how many other companies have similar stories that have not reached the media? Hundreds I would suspect.
What an A1 debacle.
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