“By and large, executives make poor promotion and staffing decisions,” Peter Drucker observed. “By all accounts, their batting average is no better than .333: At most one-third of such decisions turn out right; one-third are minimally effective; and one-third are outright failures. In no other area of management would we put up with such miserable performance.”
Yet some companies seem to identify and attract great people consistently. What sets them apart?
Many organizations swear by testing, among them the U.S. military. The Army Alpha and Beta tests, first created in 1917, have evolved into the Armed Services Vocational Aptitude Battery, and its predictive powers seem to be generally acknowledged. Similarly, Procter & Gamble gives employees a reasoning test to “measure skills and accomplishments that generally do not emerge from interviews.”
Today, a number of firms (such as ClearFit, which is featured in our “Frame Work” video) offer online surveys and algorithms to gain special insights into job candidates.
But if testing and surveying were enough, it would be plenty easy to slip the perfect person into an ideal role each and every time. Obviously, that’s not reality.
NETFLIX: DITCH THE JOB DESCRIPTION
Nowadays, Patricia McCord has her own consultancy, working with clients like Warby Parker and Etsy. But what made her famous was something Facebook’s Sheryl Sandberg has called “the most important document ever to come out of” Silicon Valley.
It was titled “The Netflix Culture: Freedom and Responsibility” and written by McCord and Reed Hastings, the CEO of Netflix, where McCord was chief talent officer from 1998 to 2012. (McCord says they drew heavily on input from Netflix employees.) Among its memorable maxims was “Adequate performance gets a generous severance package.”
Netflix operates in a particularly fast-paced environment, and its HR principles are not necessarily applicable to all organizations. But some are.
For instance, McCord says, forget about starting with a job description. It’s almost never accurate, in her view, and it can lead to filtering out great candidates just because they lack certain credentials that might be in the formal posting—such as experience with coding—but may actually be irrelevant to the task at hand.
Instead, McCord advises, figure out what you’re trying to accomplish and what a great team would look like to get you there. “You sell to those applicants the problem you want to solve,” she says. “That’s going to leave you open to a lot more possibilities.”
In the same vein, McCord says, think holistically about talent budgets. If landing a certain new hire would require paying twice as much as the people you already have but this person is likely three times as productive as any of them, consider shrinking your team and ponying up the necessary compensation.
Says McCord, “Divorce headcount from butt count.”
FORT COLLINS, COLORADO: CLIMB INSIDE THEIR HEADS
Fort Collins, Colo., rarely makes the national news, and that’s a good sign. Life there is generally calm, at least according to livability.com, which ranks it as the nation’s 25th best city to live in.
The city manager in Fort Collins for the past 11 years has been Darin Atteberry, who oversees 2,300 workers. He says a key reason that the city runs so smoothly is that it’s tremendously careful about staffing. “Getting the right person on board is a critical part of what we do,” he says.
To ensure the best chance of success, potential hires undergo multiphase interviews—first on the phone, then in person. They must pass muster with interview panelists and then, often, with staffers from other agencies.
For the most senior executives, Atteberry goes one step further: He enlists the services of an industrial psychologist to ferret out any undetected complications. “If you think about the costs of hiring and onboarding,” Atteberry says, “this minor investment is well worth it.”
The psychologist visits the candidate at home and puts him or her through a battery of tests.
The process has never revealed any candidate to be fatally flawed. “It has, though, given us pretty significant feedback about banana peels,” Atteberry says.
For instance, because the psychologist is well versed in Atteberry’s leadership style (he’s a big-picture, not a detail, guy), he can flag any personality traits that might make it a difficult match. Says Atteberry: “It’s good to have that candidate know what works for me and make sure this is also a good fit for them.”
NESTLÉ PURINA: ROOT OUT YOUR OWN BIASES
Like at many large organizations, those evaluating talent at Nestlé Purina spend a lot of time trying to assess the frame of mind of particular job candidates.
But they’re also careful to do something else: question their own frame of mind.
Each year, the top executives at the pet food maker spend a week evaluating a cross section of 200 executives at all levels, both senior people and up-and-comers, mulling their performance and their futures at the company.
To make sure the assessments are as unblinkered as possible, they systematically focus on possible sources of bias. Among them: “anchoring” (the tendency to trust the first piece of information most), “availability” (overestimating the importance of information that is available to you), “bandwagon” (groupthink), “confirmation” (hearing what you expect to hear and discounting the rest) and “recency” (prizing later information over what you learned previously).
There’s also “sunk-cost bias”: We’ve already poured so much money into developing this person, let’s stick him in the job no matter what.
In most cases, when you have a good process, it almost works like a science, and the right candidates rise to the top.
Chief HR Officer, Nestlé Purina
COMMUNITIES IN SCHOOLS: LOOK FOR THOSE WITH GRIT
Since its founding in 1970, the nonprofit Communities In Schools has grown dramatically.
The organization, which is dedicated to preventing kids in kindergarten through 12th grade from dropping out of school by bringing in whatever resources they need, now has more than 160 affiliates nationwide who are supported by dozens of staffers at headquarters in Arlington, Va. Even more impressive, Communities In Schools has gained a reputation as one of the best nonprofit workplaces in the country.
Dan Cardinali, who has been president of the organization since 2004, says that many of his insights into hiring have come only over time. Today, he and the organization approach people decisions with care, rigor and strict analytics. Each hire can take months; they wait patiently until they find the right fit.
Communities In Schools looks for many qualities when it’s considering a job candidate, but there’s one that stands out: resilience.
“We’re dealing with at-risk kids, and they will test your boundaries, and sometimes it might seem like you’re going backwards,” Cardinali says. “Resilience means understanding that this can be part of the change process.”
In other words, Cardinali is looking for people who can get back up if they’ve been knocked down—and learn something valuable from the experience.
This trait is right in line with the research of University of Pennsylvania psychologist Angela Lee Duckworth, who has found that “passion and perseverance, especially for long-term goals,” is a strong predictor of school performance and, according to studies so far, work performance as well.
“Progress is never linear in our work,” Cardinali says. “We know we’ll experience setbacks, conflict or heat, but over time we’ve learned how to channel it, learn from it and grow.”
In today’s fast-changing world, that’s a perspective that almost any organization, no matter what field it’s in, would be wise to adopt.
FREMONT, CALIFORNIA: REMEMBER YOUR OWN
Fremont, Calif., is only a 45-minute drive from San Francisco. But it’s a world away in terms of having a huge talent pool to draw upon.
So, while Fremont City Manager Fred Diaz always casts a wide net when it comes to hiring, he also relies heavily on internal promotions. “You have to grow your own,” he says.
Doing so can require that a manager be willing to stretch his or her own thinking about someone’s capabilities. “Look at people with an open mind,” Diaz says. “Coach them, and get them the resources they need.” Sometimes, this means paying for them to attend an executive education course offsite.
Just recently, Diaz promoted three city employees into senior roles. It was a leap for each of them, he says, but the transition seems to be working out.
Still, going this route can be tough. When junior people take on ambitious new positions, they invariably require more coaching and mentoring than someone with a wealth of experience. “I’ve become a built-in management consultant,” Diaz says.
That in turn leaves less time for oversight of other things, and Diaz says he must delegate more heavily than he used to.
Anytime a relative newcomer fills a big role, of course, there is a risk involved. But Diaz believes that a willingness to take chances is one of the qualities that have helped Fremont—like Fort Collins—score well in various best-run-cities-in-America rankings.
“In our business, risk is not generally encouraged, but it makes for a more innovative culture,” Diaz says, adding that he could recall only one failed promotion among many more successes. He attributes that mistake to having consulted insufficiently with the person’s colleagues.
“If a hire doesn’t work, it’s not the end of the world,” he says. “There’ll be a hole that you have to plug. It’ll be time to start again.”*
What will you do on Monday that’s different?
CONSIDER WHAT BEFORE WHO
Look at any open position that you have and ask yourself, “Have I really thought through the assignment?” Is the incoming head of sales supposed to open up new markets—or train a growing staff to push an existing line? Those represent very different hiring needs.
BEWARE THE ‘WIDOW MAKER’
Assess whether you have any spot in your organization that is what Peter Drucker called a “widow maker”—a job that has defeated two or three otherwise good performers in a row. If so, abolish the position. Don’t try to hire for it again.
GET AN EXTRA DOSE OF DRUCKER
Have your management team master Peter Drucker’s principles for making good people decisions by taking an online course from the Drucker Institute. You can get your 50% discount coupon by clicking here.