"We hire the best people for the job we can
"We are seeking to hire people with real expertise in their
"We want people who are at the top of their game in ... (place name
of specialty here)"
It's a common refrain
heard in executive suites and boardrooms everywhere. And at first glance it
makes good sense. But as your Business Maverick I must warn you that when it
comes to hiring members of your top management team - or those you hope to groom
to be tomorrow's leaders - this conventional wisdom is as dangerous to your
country's future as the left-over landmines in Vietnam or Kosovo.
Everything depends on how you interpret the crucial phrases, "best
people for the job;" "people with real expertise," and "people at the top of
their game in
" If you interpret these phrases to mean that the thing to do is
to hire the best specialist to fill the special job you have in mind, I suggest
that you may be planting your own landmines on your company's path to success.
It's understandable why companies seek to hire the best specialists for
their top positions:
The press of time in today's hyper-speed business
environment means there's no time for on-the-job training or even a decent
interval to find the nearest deli or restroom It seems a no-brainer to pay the
30%, 50% or 100% premium in wages and stock options top performers demand in
order to get that imprint on the bottom line - or just to survive in business.
Then, too, there's the simple fact that most companies don't just hire
people in case they have a future need. Only the most successful companies have
the money (or the foresight!) to warehouse expensive talent. The hard reality is
that usually there is already crying need to solve a problem or seize an
opportunity when the calls go out to the headhunters. A company I recently
worked with hired a very expensive CFO because it desperately needed to raise
another round of money on Wall Street that very week. Sure enough, he was hired
on Monday and on Wednesday evening he was on a red-eye to New York. I've seen
the same go for CTOs, marketing gurus, R&D whizzes, brilliant engineers and
operations experts of all types.
But several recent experiences have
brought home to me how short-sighted this approach can be. In one case, an
Internet real estate services company hired as CTO one of the top fifty people
in the country known for creating back-end financial services transactions
systems and interfacing them with a Website. He had a stunning resume. He'd
helped create one of the most famous travel reservation computer systems, then
was off to help the spectacular launch of an Internet financial services
The new CTO rode in one day on his great white horse - and was
gone less than a year later, leaving behind no systems that actually worked to
process the company's transactions. His "legacy system" was nothing but huge
hardware and software contracts, endless information systems architecture plans,
half-finished programming and one unhappy top management team.
many an hour trying to analyze what went wrong. For surely it was hard to blame
the otherwise outstanding CEO for recruiting the very best CTO talent he could
find. But thinking about it more deeply, I came to these conclusions about the
dangers of hiring the "very best" specialists for a top executive position in a
- They often lock the company in to the special, highly-defined solution
space they know so much about. That's what happened in the case of my
Internet client. It's like the old joke about the person who dropped a coin on a
dark street and but insisted on searching for it under the street lamp. The
solution they know is the one they apply.
- They often can't handle the ambiguity and change that many businesses
face today. If the problem they can solve is in the bull's eye of their
expertise, they are great. But one inch outside the target and you have an
expensive disaster. In today's world the target itself is always moving. In the
case of the Internet CTO, I'm told that on the order of $15 million in hardware
and software was never put to good use.
Importantly, you can't
trust the specialist's own account of his or her ability to handle the problem.
The Internet company's CTO certainly felt he could handle the challenge -
creating a back-end processing system for the Web-based real-estate services was
well within his ken. But it turned out to be two degrees outside it: he had
created reservation and ordering systems where customer options were pretty cut
and dried, but not ones that handled the complexity of loan applications. So the
system was never finished. But several months later the company was.
- They often can't communicate outside their specialty. This, too, was
the case of our Internet CFO. He brought along with him a coterie of "business
system analysts" as well as programmers. He talked well with them. And he talked
a good game of milestones achieved and bugs fixed at top management meetings. He
nodded at the appropriate points. But the rest of the team always had the
feeling that he was missing the points the marketing people were making about
easy transactions. And what the operations people were saying about being able
to process transactions now.
Finally, there is a special danger to
recruiting what I call "superstar specialists." These are folks who have had
terrific success in their chosen field in past jobs. Usually they've achieved a
certain amount of fame - and fortune. Often they're recruited to turnaround a
desperate situation or fill out an all-star team. You see this in the top
management teams venture capitalists tend to recruit for their most expensive
What I've often seen happen is that these superstars try to
duplicate their past successes. In a literal sense they are prisoners of their
own resumes. So they use the same techniques, procedures, processes - and often
the same people, bringing their hangers-on en masse from their old employer.
But then what happens? It's not invariable, but quite often the new
situation is plenty different from the old - and the recipe fails. That's what
happened in the case of the Internet CTO: he tried to replicate the old solution
in a new situation.
Another piece of the puzzle is that when an
executive reaches superstar status, he or she forgets just the attitudes that
made for success in the old company. For that first major success probably
wasn't due to exercising a formula. It was more likely due to solid analysis,
hard work, the requisite amount of creative thrashing and good luck. Only
looking back on that success does our superstar think, "Aha! That's what I did
that was so smart! I've found the golden key to solving all these kinds of
Hiring a specialist - especially a superstar specialist - is,
then, a little like buying a piece of high-priced, specialized real estate: it's
great if it's just the right size, location and configuration. But it can be
hard to put to another use or sell if business needs change.
like some auto assembly robots Mazda installed some years ago at its auto
assembly plant in Hiroshima. They were extremely efficient and assembling autos
the market didn't want. These specialists can lock you in to a solution - or
even a whole corporate strategy - that doesn't fit the times.
What do I
recommend instead? That's the topic for The Business Maverick #6 in next month's
issue of Vancouver Business Journal. But for right now, beware the
specialist who seems like just the ticket to solve your problems. Ask yourself:
- What if the problem isn't exactly as I've spec'd it out to be?
- Can this person handle it if-or rather when-the situation changes
- Is this person so successful that he or she is tempted to replicate a past
- How well does this person communicate to people crucial to our business -
but unfamiliar with this specialty?
Next month, in The Business Heretic #6, we'll look at a more