Most people who do not work out in a new company don’t fail for lack of skills, but the corporate culture they are working in is not a good match. They are a square peg in a round hole.
Finding and retaining people that fit your specific corporate culture is one of the key factors in having a successful company. Corporate culture is not easy to define. It is the atmosphere that works for your company. For example: it might be a small company with an informal working atmosphere, an informal dress code, an open door policy, titles are not that important, a matrix organization with open lines of communications, ad hoc meetings, flexible policies and procedures and people are expected to be self starters with not a whole lot of formal training. Very often the CEO sets the tone and one has to figure out what they have to do to become accepted. This is indicative of many high tech start ups. People coming from a highly structured hierarchical setting such as an old line Fortune 500 Corporation or the military might find adapting to this culture well out of their comfort zone. Likewise, the reverse situation would not work well either where a person who is free to explore to get things done is going beyond the normal protocols of a more formal culture and does not fit in.
The difficulty is in finding out before hand if a person would be a good fit or not. One can use personality tests, reference checks and in house interviews to try to find this out, but there is no magic bullet. The best approach is to use all three and come up with a consensus, with multiple in depth interviews usually being the most reliable indicator. People are on their best interviewing behavior during the first interview or two. It is only through the attrition process of wearing someone down via well designed multiple interviews that one get past the programmed veneer to get a job and find out what the applicant is really about. Companies like Google sometimes takes this process to an extreme with a dozen or more interviews, because one or two doesn’t do the job.
When one calculates the cost of failure in hiring again and again for the same position, the time spend in doing the job right becomes clear.