It's not the how or the what but the who

Some Impressionistic takes from the book ofClaudio Fernandez-Araoz“It’s Not the How or the What but the Who“ by Ramki–ramaddster@gmail.com

About the Author
ClaudioFernandez-AraozisaSeniorAdviseratleadingexecutivesearchfirmEgonZehnderandaformermemberofitsglobalexecutivecommittee.HeholdsanMBAfromStanfordandhaspreviouslyworkedforMcKinsey&Company.Heisaglobalexpertonhiringandpromotiondecisionsandleadershipdevelopment,andafrequentspeakeratmajorbusinessgatherings.HisadvicehasbeensoughtbytheCEOsofseveraloftheworld'slargestcompaniesandmanygovernments.Fernandez-AraozisaregularlectureratHarvardBusinessSchool,afrequentcontributortoHBR.org,andtheauthorofGreatPeopleDecisions:WhyTheyMatterSoMuch, WhyTheyAreSoHard,andHowYouCanMasterThem

Prelude
Atit’ssimplest,It’sNottheHowortheWhatButtheWhoisaguidetohiring,developing, andretainingtherightpeople.Thatseemslikeafairlystraightforwardproposition,butifyou’veeverhadtohirepeopleyouknowitiseasiersaidthandone.
Butwhyisitsohardtofindthebestpeopleforyourorganization?Araoztellsusthechallengesaremany,“bothinternal(yourunconsciousbiases)&external(organizationalandsocietalpressures).”Sothefirstthinghedoesishelpthereaderidentifythoseobstacles,becausethereare“unprecedentedopportunitiesavailableifyoucanovercomethem.”Andthat’sexactlywhatIt’snottheHowteachesyouhowtodonext:
Tothatend,lateressayswillteachyouhowtoidentifythebest—thepeoplewhohavetherightmotives,qualities,andpotentialtohelpyouexcel—witheffectiveassessmenttoolsandstrategiesandhowtoexpertlydevelopthepeopleyou’vechosenbyencouragingthemtobecomemoreagileandversatileandputtingthemtogetheringreatteams.
Perhapsthemostdifficultdecisionleadersmustmakewithregardstopersonnelislettinggoofthepeoplewhoareholdingyouback.Butwhyisitsohard.Araoztellsusit’sbecause:
Threepowerfulpsychologicalforcesworkagainstus:procrastination,lossaversion,andcompassion.

Prelude-continued
Inotherwords,puttingourselves,ourcompany,orotherpeopleindistressisdifficult,potentiallyrisky,andunpleasantemotionally.But,Araozremindsus, “Toughdecisionsarewhatmakeyoualeader.”Anotherdifficultdecisioniswhetheranopenleadershippositionshouldbefilledbysomeonefrominsidethecompanyorhiredfromoutsideit.Inmanycases,Araozshowsthatitpaysbigtohireanoutsider,andthatgrowthandsuccessoccursinmuchsmallermeasurewhenthecompanypromotesaninsider.Howtoinsurethatwhicheverapproachyoutakeresultsinsuccess?Don’thesitatetothoroughlyvetinsidersjustasyouwouldoutsiders.
AsImentionedattheopenofthisreview,insomeways,It’sNottheHowortheWhatButtheWhoisasimplehiringguide.ButAraoz’sbookstretchesitsboundariesfurtherthanmost,tacklingsensitiveissueslikethosethatoccurwithinfamilybusinesses,andevendelvingintohisconsiderationsonhowtointelligentlyandobjectivelyvoteduringapresidentialelection.Ultimately,itwillassistyou—whetheryouarealeaderoraparticipant—inmakingsoundassessmentsofthepeopleyourelyforyourownultimatesuccess.

Tale of Two CEOsThey have different backgrounds They lead different companiesUnited by two things Extraordinary Leadership successThe relentless focus on talent Committed to only hiring the bestDeveloping their brightest starsUniting them all into great teams ResultThey boost not only their own careers & organizations but also society
Jeff Bezos
Roger Agnelli

BorninAlbuquerquein1964
LittleJeff’schildhoodstartedonasadnote-hisfatherleftthefamilynotlongafterhewasborn.
HismothergotmarriedtocolleagueofherMiguelBezos–Jeffwasadoptedgivinghislastname.
Jeffshowedearlyinterestinhowthingsworked–turnedparentsgarageintoalab
Experimentedwithelectricalcontraptionsandotherprojects.
LaunchedhisfirstbusinessDreamInstitute–educationalsummercampforfourth,fifthandsixthgraders.
Fascinatedbycomputers,wentonstudycomputer&electricalengineeringatPrincetonUniversity
ThatiswhentheideaofAmazoncametohim-worldwidewebgrowingat2300%permonth.
Hedrewuplistoftwentypotentialproductstosellonweb&settledonbooks.
Quitthejob1994&startedworkingoutofhisgaragewithfewsoftwaredevelopers.
1990–mostofdot-comswentbust–Amazonflourished
SalesjumpingfromUS$0.5Min1995toUS$61billionoutofdozenproductsby2012.
TheCompanyemploys88,000employees–ratedamongtoptencompaniesintheWorld.
HBRrankedBezosasthebestlivingCEOintheWorld(andIIonlybehindLateSteveJobs)
MarketcapitalizationUS$153B–Mar2014
AmazonCountryadjustedreturnsduringthatperiodwere12431%(2012)
Industryadjustedreturnswere12,266%(2012)
Jeff Bezos-Amazon

“ I’ d rather interview 50 people & not hire anyone than hire the wrong person “-Jeff Bezos

BorninSaoPauloin1959-FatherSebastiaohadgrownupintheinteriorofthestate–10brothers&sisters.Fatherhadonlyonedayofformalschool–diligentlystudiedmathematicsathomewithatutor.
InventorofanamazingwooddryerandtopexporterofIndustrializedwood.
Rogenlovedtovisithisfather’sfactoryinhisearlyage–soakinginthetechnology,efficiency& cleanliness.
StudiedeconomicsatFAAPSauPaulo.JoinedInvestmentbankingofBradescoBank–11yearslaterattheageof33hewasaGMofthecapitalmarketsunit.
Heledmorethan500IPO’sofBraziliancompanies–Involvedinprivatizationofthecountry’ssteel,Telecom,Mining&energySectors.TheresultwashecametorunVale.
In2000,BradescoaskedAgnellitoheadtheadministrativecouncilofPrivatizedMiningCo.inwhichithadamajorshare.
CVRD(ComapanhiaValeDoRioDoce-knownasVale).
Gottoknowthepeopleatthecompany,ledastrategystudy–yearlaterwasappointedManagingPresident&CEO.
Lessthanonedecade-GrandsonofapoorimmigrantleadoneofthelargestcreationsinCorporatehistory.
Valewasthelargestnon-stateownedcompanyinLatinAmerica&oneofthe20largestglobalcorporations.FourthbestCEOintheworld–US$157bmarketcapitalizationduringhistenure.
2011–incomewasUS$23BonrevenuesofUS$59billion–comparedUS$1BonarevenueofUS$4Bin2001.BCGconfirmsthecompanyachievedhighestproductivity&profitabilityintheworldin2000.
Countryadjustedshareholderreturnwere934%-Industryadjustedfigurewas1773%
Roger Agnelli-Vale

Amazonwasstartup;Valewasanold,formerlyastateownedcompany
Amazonwasinahot,newhigh-techindustry;Valeinatraditional, historicone-mining
AmazonwasborninUSA,bythattimesthemostcompetitive,developednationontheearth;Valeisbasedinbrazil,perceivedatthetimetobeavolatile,high-riskemergingeconomy.
AmazongreworiginallyandmostlyinUSA;Valegrewbothorganically& throughM&A&expandedaroundtheworldveryrapidly.
AmazonisanextraordinaryB2ccompanydeliveringincrediblecustomerserviceandnowalsosophisticatedconsumerelectronicsforpersonaluse:ValesisaclassicB2B,aproducerofcommodityrawmaterialsforindustry
Contrast -Two companies

BothareincredibleLeaders–amazinglybright,hugelyambitious,Strictlydisciplinedinpursuingtheirwell-craftedstrategies.
Successisrootedinrelationships,inthepeoplearoundyou.
Bezos&Agnellirecognizethisfact,understandit,embraceit-Mostimportanttraittheyhaveincommon.
Theyknowthatinordertosucceed
“It is not the how or the what, but the who”
As Leaders …

Steve Jobs
ThelatelegendaryCEOofApplehadmanytalents
Mostimportantleadershiptraitwastotolerateonly“A”players
Hesaidpartofhisjobistokeepthequalitypeopleintheorganization
Pioneeringraspingthevastgapbetweenthebest&therestinhisfield.
Peopleworkedwithhimfoundhimtobeextremelytoughbutinspirationalboss.
Whenyouhavegreatpeople,youdon’thavetobabythem.
Jobswouldneverhesitatetogetthewrongpeopleoffthebus
Hegotridofsomepeoplewhodidnotmeasureuptotherequirement.
Hediditinhumaneway
Nonethelessithastobedoneanditisneverfun

CEOofSamsungfrom1996-2008
Brilliantlytransformedfromsemiconductorbusinesstoamonsterglobalplayerinconsumerelectronics
Throughtechnology&manufacturingexcellence,top-notchcustomerservice, innovationandmarketingthroughtalentedpeople.
Resourcestorunabusinesssuccessfully
Technology/skill,Capital
Information,Speed
PEOPLE
Exceptforcapital-peopleareinstrumentalindeveloping,changing&utilizingtheotherthree.
Peoplefromdifferentbackgroundscanbringinnewperspectives&opinionsthatwillchallengetheexisting&sometimesstubbornorganization.
Talentacquisitionneedstobedonemassivelysothereisenoughprobabilitytosucceed.
Samsung–thefirstKoreancompanytominimizetheimportanceofacademicpedigreesinhiring&promotiondecisions
Peoplearetopofhismind
Yun Jong-Yong

1. The Enemy within
Human’sarenotprogrammedtomakegreatpeopledecisions.Thefirststepissurroundingyourselfwiththebestistorecognize-andcorrect-yourownfeelings

Leadersmakemajormistakeswhilemakingcrucialpeoplechoices
Mostleadersstruggletogetpeopleright–andiftheysaytheydon’t,theyarenottellingthetruth.
JackWelch–FormerCEOofGEsaid-“Makinggreatpeopledecisionsisbrutallyhard“
HeconfessedasJuniorMangeratGE,heprobablygot50%ofappointmentswrong,30yearslater,asCEOhewasstillwrong20%ofthetime.
Whyarepeoplechoicessohard?
Itisdifficulttopredictthefutureneeds&toquicklyandaccuratelyassesstraits&skills
Wehavethewrongbrain&wrongeducationtomakethesedecisionsright.
Humanbrainsnowarenotsignificantlydifferentthanthoseofprimitivehunters. Wearethereforethinking,acting,working,decidingonpeopletodaywithapieceofhardwarethatis10000yearsold.
Ourdecisionsorchoicesaremadewithlower,unconsciouspartsofourbrains– basedonsimilarity,familiarityandcomfort.
Weappreciateandtrustpeoplesimilartous–thatisfactoflife.
Prehistoric Hardware; Victorian Software-( 1/2 )

100yearsagotheworldwas
Moreinsular
Businesslesscomplex
Careersmorestable
Sothisprimitive,instinctivebehaviourmightnothavebeensuchaliability.
Inthecurrentcontextthesuccesscomesfromhighlyconnected,cross- cultural,globallymindedenvironment
Surroundyourselfwithpeoplewhohavediversebackgroundsandcomplimentaryskillsandwhoproperlychallengeyou.
VastmajorityofManagers/Leadershavenotreceivedthepropereducation/ trainingonassessingothers.
The3competenciesratedmostimportantinmanagingHumanCapital
ManagingDecisionmakingprocess
Managingstrategy
Managinginnovation.
These3areleastrepresentedintheMBAcourses
Prehistoric Hardware; Victorian Software-( 2/2)

The next time your are about to bring someone into your circle-whether it is team member, business partner, doctor or nanny-remember that making people judgments is extremely hard & can’t be done on automatic
Make list of what you know & ask yourself what other information you need to know and make sure you are surrounding yourself with the best.
So Sure, but So Wrong

Overconfidenceinpredictionsispervasivehumanbiasthathasadramaticimpactnotjustonourfinancialorweatherforecasts,butalsoonourpeopledecisions.
Leadersmakemajormistakeswhilemakingcrucialpeoplechoices
Mostleadersstruggletogetpeopleright–andiftheysaytheydon’t,theyarelying.
JackWelch–FormerCEOofGEsaid-“Makinggreatpeopledecisionsisbrutallyhard“
HeconfessedasJuniorMangeratGE,heprobablygot50%ofappointmentswrong,30yearslater,asCEOhewasstillwrong20%ofthetime.
Ourbrainishardwiredtomakefastpeoplechoicesbasedonsimilarity, familiarityandcomfort.
DanielKahnemancallsitWYSIATI–“Whatyouseeisallthereis”.
System-1–unconsciousformofthinking–makingstoriesoutoflimited, unreliable,oftenirrelevantinformation.
System2-Engagingintheconscious,deliberate,analyticthinking
So Sure, but So Wrong

Inertia overtakes all of us. In order to beat it , make formal commitments, think like a trader and compassionately consider long term consequences.
Inertia

Inertia
Researchfindings–Ifyouhavegivenchoicetorehiresomepeopleintheorganization,Leaderswanttohireonly50%-60%ofthepeople.
Leadersthought40%ofthecolleagueswerenotrightfortheirjobs.
Mostofusarebad&slowatgettingthewrongpeopleoffthebus!
RichardFairbank–CEOofCapitalOne–Peoplespend2%oftheirtimeinrecruiting&75%managingtheirrecruitingmistakes.
Whatisthereason?
Procrastination-Wanttoavoidunpleasantthings
Lossaversion-Weknowwedonothavetherightpeoplearoundus,wespendmoretimeworryingaboutwhatwemightlosethandreamingofwhatwecouldpossiblygain.
Compassion-Wearesocialanimals–wefinddifficulttocreatesituationsthatputotherpeopleindistress.–Whatabouthisfeelings? Hisfuture?Hisfamily
Wetoleratelessthanthebest
Ifacolleagueisnotmeetingyourstandards,behonestwithhim/her.Workwiththemtoimprove,Checkforalternateroles

Known Devils
Whether you are shopping for a house or deciding on your next CEO, comparative judgments give you’re the best .
They are the best way to avoid appointing the wrong outsiders, as well as those known devils who just are not right for the job

Known Devils –(1/3)
DifferenttypesofCEO’ssuccession
Aninsiderpromotedinafirmdoingwell
Aninsiderpromotedinafirmdoingpoorly.
Anoutsiderhiredtoafirmdoingwell
Anoutsiderhiredtoafirmdoingpoorly
Findings
Insidersdidnotsignificantlychangetheircompany’sperformance
Similarpeopleworkinginasimilarwayinthesamecompanywillproducesimilarresults.
Withoutsiders,theresultwasmuchmoreextreme
Theyaddedgreatvalue,mainlyinthescenario4–Anoutsiderhiredtoafirmdoingpoorly.
ButtheydestroyedthecompanyinScenario3.
Mostpeopleconcludefromthesefindingsthatissafertopromotefromwithin,particularlywhenyouaredoingwell

Known Devils –(2/3)
SomethingtoPonder
Whenthingsaregoingwell–wedon’twordashardtoevaluateinsiders–notonlyinCEO’ssuccessionbutinallappointments.
Outtypicalapproachistolookatlikelyinternalcandidates,analyzetheirperformance&promotethebest.
Wedon’tconsiderorananalyzewhatthefuturechallengesoftheroleinquestionorthecriticalcompetenciesrequiredtofacethem
Whenareforcetohirefromoutside,wewriteaproperjobdescription,considerlargepoolofcandidates,grilltheminwell- structuredinterviews,in-depthreferencechecks.
Noneoftheseareeasytodowithpeoplewhoarealreadythere.
Therightthingistoevaluateinsiderssimilartooutsiders.
Lookforopportunitiestopromoteyoutopinternalcandidateswhilealsobenchmarkingagainsthigh-qualityexternalones.
Bestappointmentshappenwhenthosehiringconsiderawidepoolofbothinsidersandoutsiders.

The Heat of the Moment
Watchforpassioninthecandidate
Emotioncanseriouslyimpairjudgment-itislikeimpulsebuying&laterregretted.
Impulsebuyingisduetostoppageofthinking&startingofthefeeling.
Werecognizethatwehaveallundoneunwisethingsintheheatofthemoment.
Howtoavoidthedangersoftheheatofthemoment?
Likespeed-daters,createachecklistoftheskills&attributesyouwantinthecandidate
Starttheinterviewprocess
Reviewthechecklistasyoumeetpeople
Ifyouaretemptedtotweakthelist,askyourself-hasthesituationchangeoramIbeingswayedbythepeople
Useandecisionadvisorassoundingboard
Discussyourimpressionswiththem&theywillguidetowardcooldetachment.
Askyourselfthequestion–HowwillIfeelaboutmydecision10minutesfromnow,10monthsfromnowand10yearsfromnow.
Takesometimeoff–sleepondecisionforareason.

The Decision Fatigue
Ashumanbeingswegetimpactedby“DecisionFatigue”duetomakingpoorchoiceswhenourmentalenergyhasalreadybeendepleted.
Judgesareinfactparticularlysusceptibletothis–itisfoundcriminalsweremuchmorelikelytobegrantedleniencyatthestartoftheday&rightafterlunchthanothertimes.
Youareanywherebetweentwo&sixtimesaslikelytobereleasedifyouareoneofthefirst3prisonersvs.last3prisoners.
Gooddecisionmakingisnotatraitofaperson,inthesensethatitisalwaysthere.Itisastatethatfluctuates.
Themorechoiceswemakethroughouttheday,thehardereachonebecomes– welookforshortcutsintwodifferentways.
Eitheractingimpulsivelywithoutcarefulanalysis
Orsimplymaintainingthestatusquo&avoidingchoice.
Howtoovercomethis?
Makesuretoscheduleimportantinterviews/interactionsattherighttime.
Secondavoidunnecessaryorlow-prioritydecisions
Greatdecisionmakersneverscheduleendlessback-tobackmeetings–theyneverworkhungry

2. Outside Obstacles & Opportunities
Externalchallengescanalsopreventyoufromsurroundingyourselfwiththebest.Itisimportanttounderstandwhatyouareupagainst-fromshrinkingtalentpoolstolyingjobcandidates-andusethesituationtoyouradvantage.

MassiveTalentcrunch–3factors
Globalization
Companiesreachingbeyondtheirhometurf&competingforthepeoplewhocanhelpthemtoit.
NumberofChinesecompaniesmovedfrom8in2003to73by2012andalsoIndianandSouthKoreancompanies.
Demographics
Hiringpoolsisstaggering.
Sweetspotforexecutivesbetweentheageof35to45
DemographicshiftwasaffectingmostlyUSA&Europe
By2020manyotherlargeeconomics,includingRussia,Canada, SouthKorea&evenChinawillhavemorepeopleatretirementagethanenteringtheworkforce.
Pipeline
Related&equallypowerful,butmuchlessknown
Companiesarenotproperlydevelopingtheirpipelineoffutureleadersinthewaytheyneedto.
The Other GDP-( 1/2)

Globalization,Demographics&Pipelinewillcreateunprecedenteddemandfortherighttalentintherightplaceoverthenextdecade.
Thepaceofglobalizationisgoingtobefaster–theimbalancebetweenold&youngisgoingtobedramatic.
Howtoconfrontthesechallenges?
Thispresentsanopportunityatboththeindividual&teamororganizationlevel
Makewisecareermoves,workonhoningyourskillsandyouwillbeinhighdemand
AsManager/Leaderworkhardtohire,developandretainthebesttalent-youwillbeastepahead.
Thequestionsyouneedtoask?
Howglobalizationwillaffectyourcompany?
IStherearethreatduetodemographics?
Whatisthestrengthoftheleadershipbench?
Arethereddotpositionsyouneedtoworkonthepipeline?
Newtypesofhiresyouwillneedtotackleanewgeographicmarket,customersegment, technologyorstrategy.
Whoareyourmoststrategicplayers?
Themostcompetent&critical
Whichcompanyorcompetitorswillposethechallengeforyou?
Howareyougoingtoretain?
The Other GDP-( 2/2)

Whatisthedifferencebetweenatypicalperformer&Highlyproductiveone?
Astarperformerisabout40%moreproductivethanthetypicalone
E.g.-Atoplifeinsurancesalesperson240%moreproductivethantheaverageone.Standoutsoftwaredevelopersorconsultantsoutperformedmostpeersby1200%.
Appleisninetimesasproductiveastheaveragesoftwareengineeratothertechnologycompanies.
ThebestblackjackdealeratCaesarsPalaceinLasVegaskeepshistableplayingatleastfivetimesaslongastheaveragedealerontheStrip
Nordstromsellsatleasteighttimesasmuchastheaveragesalesassociateatotherdepartmentstores
Besttransplantsurgeonatatop-notchmedicalclinichasasuccessrateatleastsixtimesthatoftheaveragetransplantsurgeon.
The Best & the Rest –( 1/2)

The Best & the Rest –( 2/2 )
Starperformersareveryfew,yetincrediblyvaluable.
Differencebetweenthebest&therestishuge&growingfast
AverageJoes–typicalcandidates– businesscannotbesuccessful.
Averagebosses,companies, colleagues&challengesmakeyouaverage.
Insteadmakesurethepeopleabove&besideyoucanhelpyoupersonallymovetothefarrightofthetail

ATypicalInterview(nottherightInterview)
Aconversationbetweentwoliars
Liar-1–Interviewer–Paintinganunbelievablerosypictureofthecompany&job
Liar-2–Candidate–Respondsbyexplaininghowgreatheorsheis, givingtheimpressionthatthedayheorshestartsworkitwillbeGodhimselfwalkingin.
Humansnaturaltendencyistobelieveyouaremuchbetterthanyourare.
Weexaggerateourstrengths&playdownonourweaknesses.
Thisistheadvantageofboostingourself-esteem.Butmakesdifficultforotherstoaccuratelyevaluateus.
360degreereviewsareverygoodtoolstobringusclosertoreality-butthisprocessisofteninfrequent,threatening,sugarcoated,ortoolate
Youwillalwayswanttoputyourbestfootforward–soconsciously& unconsciouslyplayupyourattributeswhileignoringthefaults.
Blissfully Unaware-( 1/2 )

Wearemorepositivewhen
Weareassessingourselvesbroad,ill-definedandambiguousconcepts,suchas“ ManagerialCompetence”,becausewefocusonthecomponentsorinterpretationsinwhichwedobetter.
WearetakingonnewprojectsormarketsbecauseWYSIATI(whatyouseeisallthereis)makesusignorethemanyunknowns.
Webelievewehavenothingtolose,whichmeanstheunemployedandunhappyareparticularlypronetoembellishment.
Socheck
Forself-awareness&humilityinanycandidate.Lookfor2H-HungerandHumilityintheperson
Reducethesocialpressureforoverlypositiveself-assessments.
Donotdiscussoncompensation–theincentiveisalwaysonfit,notonmonetaryrewards.
Givedetailsaboutwhatyouneed-skills,behaviors&becandidabouttheexpectedchallenges.–Positives&negativesoftheJob
Thisiswillenablewrongpeopletooptout&vaccinatetheeventualhire.
Tellthepersontodiscussthepotentialroleandhisorherreadinessforitwithclose,trustedfriends.
Makesuretoconductsmartreferencechecks.
Blissfully Unaware-( 2/2 )

ReferenceCheck
Thereasonforreferencecheckisthatsomepeople,unfortunatelyeitherlieorhideimportantaspectsoftheirbackgroundonresumes&insocialmediaprofiles&interviews.
Routinebackgroundcheckscanhelpyoufindmore
Watchinglanguagealsoworks-liarstendtousemoreexpletives,thirdpersonpronounsandcomplexsentencesthattruth-tellers.
Haveaprobingconversationwithavarietyofpeoplewhohaveworkedcloselywiththecandidates.
Agreewiththecandidateoncomprehensive&relevantlistofpeopletocall, includingformerbosses,peers&subordinates.
Providetherefereewiththerightincentives
Stattheconversationbyhighlightinghowimportantitistohaveareliablereference
Emphasizethatthereferee’scommentswillbekeptconfidential
Speakinpersonoroveraphoneandnotone-mail.
Itiseasiertosolicitthewhole-truthwhenyoucanhearhesitationoremotioninaperson’svoiceorseeitonhisorherface.
Helptherefereetoavoidfrequentbiases.Avoidbroadquestions
Bespecificaboutthejob,knowledge&challenges
Bad Candidate , Great Reference

Noneoftheabovesystemsworkwell
WhatweneedisSelectiveAristocracy–agroupof3top-notchassessorperdecisiontogiveyouvaluableinput.
Badassessorsnotmonkey;theyaremonkey’swithmachineguns,randomlykillingcandidatesallovertheplace.
Andifyoulettheintoyourprocess,itisnotademocracy,itisanarchy
The Problem with Democracy
Modelsoforganizationforpeopledecisions
Dictatorship-Companyleadersunilaterallydecidewhoishired,fired,staffedorpromoted
BenevolentMonarchy–KingorQueenstillrules,butostensiblyinthegroup’sbestinterest.
Democracies-Whereallinterestedpartiesseemtohaveasayorvoteorextremecasesvetopower

Three Filters Eliminate almost all Wrong Candidates

Three Filters Eliminate also Eliminate 3 of 10 top candidates

The Problem with Democracy
HowtoformAristocracy?
Firstlookforpeoplewhotrulyunderstandwhatisneededtosucceedintherole&organizationforwhichyouarehiring.
Aimtohave3outstandinginterviewers
Secondchooseonlypeoplewhoaremotivatedtoconductathoroughassessment&makegooddecisioneitherbecausetheywillbenefitfromitorbecausetheytakegreatsatisfactioninhelpingothers.
Thisisoneofthegreatestdifferentiatorsbetweengreatinterviewersandterribleones.
Finallymakesureeveryonehasbeentrainedinthebestassessmenttechniques,includingstructuredinterviews&referencechecking.

Candidatesyouselect–ensurethereismatchinvalueswiththeorganization- conductingmultipleinterviews,Checkingreferences
TrackingHBA(HiringBattingAverage)–ensuretoptalentspotterswouldstayintherotation,worstsatatthebench.
AftersixmonthsofhiretheemployeeisevaluatedbytheManagersontheperformance-Below,MeetorExceedsexpectations.
ThecompanycalculatestheaccuracyofHBAofeachinterviewer.
Ifthemanagerhadapprovedtencandidatesandsixmonthslater,8ofthemareperformingatoraboveexpectations,hisorherHBAwouldbe0.8andheorshegettostayinvolvedinthetalentacquisition.
Fourgreatbenefits
Itseparateswheatfromthechaffamongyourinterviewers-the“Vice-gods’fromthe“monkeyswithmachineguns”
Second,itfightsinertia,forcingyoutoreviewyourpeopledecisionsearly, beforethebadoneshavetimetofester.
Thirditpromptsinterviewerstouptheirgame-Accountability
Finallyitmotivatesmanagerstostayinclosercontactwithnewhires-evencoaching&mentoringthem
Hiring Batting Average

Start Measuring your own HBA-make it a habit
Review all the hiring or promotions decisions you have participated in the past five years, mapping your opinion of the person against their actual performance.
If you are involved in an interview and the candidate is selected – mark in your calendar to check whether your initial assessment was accurate –6 months later.

3. The Right People
Tofindthebest,youhavetolookintherightplaces, considertherightnumber,& effectivelyassessthemontherightattributes& competencies-frommotivationtoEI,portabilitytoleadershipskills

PedroAlgorta’sstoryisanunbelievableone.
OnOctober13,1972,hewasoneof45passengersonatwin-engineturbopropplanethatcrashedinthefrozenAndes.
Theimpactinstantlykilled12people;fivediedfromtheirinjuriesthenextday. Andthatwasjustthebeginningofa72-dayordeal--oneofthemostdramaticsurvivalstoriesofthepasttwocenturies.
Ithasbeenchronicledinseveralbooksandonemovie,Alive,butI’llbrieflyrecountithere.
Thedayswerebitinglycold;thenightsfrigid,andendless.
Therewasnofood,otherthanwineandchocolate,whichthegrouprationedforafewdays.
Throughasmalltransistorradio,thesurvivorsheardthattheywereonlyexpectedtolast72hoursandthat,althoughsearch-and-rescueteamscanvassedtheAndesfor10days,theyhadultimatelybeengivenupfordead.
Soon,thegroupstartedtodiscusstheunthinkable–eatingthefleshofthefrozenbodiesaroundthem.Eventually,withbrokenglass,theycutasmallpiecefromonecorpse,thenateit,onebyone.Somehow,Algortaand15otherssurvivedformorethantwomonthsbeforetheywererescued.
Survivor to CEO

WhydidAlgortaexcel?
Becausehehadallthehallmarksofsomeonewithhighpotential–thatis, theabilitytoadaptandgrowintodifferentandincreasinglycomplexrolesandenvironments.
Whattolookforwhenassessingthepotential?
First,therightmotivation.Highpotentialshavegreatambitionandwanttoleavetheirmark,buttheyalsoaspiretobig,collectivegoalsandshowdeeppersonalhumility.
Wethenconsiderfourothertraits:
Curiosity:apenchantforseekingoutnewexperiences,knowledge,andcandidfeedbackandopennesstolearningandchange
Insight:theabilitytogatherandmakesenseofinformationthatsuggestsnewpossibilities
Engagement:aknackforusingemotionandlogictocommunicateapersuasivevisionandconnectwithpeople
Determination:thewherewithaltofightfordifficultgoalsdespitechallengesandtobouncebackfromadversity
Survivor to CEO

Theextraordinarycapacityofthehumanbeingtoovercomethemostadversesituations.Whenoneisalmostdefeatedordead,webuildupstrengthfromadversitytocontinuefightingforlife.Wegodeepintoourmostbasicinstinctsandgatherstrengthtolive.
Wewereordinarypeople.Anyone,undersimilarcircumstanceswouldhavedonethesame,andeventuallysurvived.Andonceyouhaveovercomeyourmountain,youhaveanotheronetoclimb. Ordinarypeoplecanaccomplishextraordinaryobjectives.
Wecouldn’thavesurvivedindividually.Survivalwasteamwork, whichneededeachoneofustobeOK.Youneedtoworkfortheteamandforyou.
Therewerenoabsoluteleaders.Differentleadersemergedaccordingtodifferentcircumstances.Youhavetofindyourauthenticleadershipstyle.Notallleadersarealike.Onethingistobeahero,anotheristolead.
Leadership Lessons from a plane crash-Pedro Algorta

Thefinalwalk,asagroupobjective.Theneedtolivefocusedonsurvivingdaybyday.Onedayatatime.
Wedidn´thavealltheanswers.Wewantedtolive,weworkedtosurvive,butwewerenotsureweweregoingtomakeit.
Ourenormouscapacitytorecover.Ourresilientcapacity. Afterthisordeal,wehavealllivedordinarylives.Howwemanaged.Theneedtoputitinabackpackandlookforward.
Thedifferentperceptions.Theordinaryoutoftheextraordinary.For35yearsthisordealwasnotanissueforme."
Leadership Lessons from a plane crash-Pedro Algorta

StanfordUniversityStudy-Tracked4yearoldyearchildrenthroughhighschool–PlacingatastyMarshmallowinfrontofthem&tellthemtheyhaveachoice-Theycaneatitimmediatelyorwaitabout15mins.AndgetanextraMarshmallowtoenjoy-ResultsforResistors
Moresociallycompetent,personallyeffective,,self-assertive& betterabletocopewithlifefrustrations.
Lesslikelytofreeze,regressorbecomedisorganizedwhenunderpressure.
Embraced&pursuedchallengesinthefaceofdifficulties.
Selfreliant&confident,,trustworthy,dependable,initiative
Stillabletodelaygratificationinpursuitoftheirgoals.
Moreacademicallycompetent,betterabletoputtheirideasintowords,touserespondtoreason,toconcentrateandtomakeplans&followthrough.Eagertolearn
Marshmallow Kids-Impulse Resistors

Thebestemployees&executivesarewhattalentmanagementexpertscall“portable”—abletoeffectivelytransitionfromonerole,company,industry,orcountrytothenext.
Mostpeopleassumethatthebesthiringstrategyistofindthebestperformersinagivenfieldandgetthemonyourteam,butHarvard’sBorisGroysberghasfoundthat,likethosecalvesfrombetterfarms,mostpeoplearen’tsoportable.
OneofthebestwayshedemonstratesthisiswithastudyonequityresearchanalystsmovingbetweenWallStreetinvestmentbanks.
Youwouldexpecthighportabilityinthesesituations:Makingsuchamove, theycontinueoperatinginasimilarenvironment,analyzingthesamecompaniesinthesamesector,workingwiththesameclients.
Theydon’thavetoselltheirhouse,movetoanotherstate,buyanewhouse, lookfornewschoolsforthechildren,orhelptheirspousescopeandadjusttoamove.
Whatcouldbeeasier?YetBorishasfoundthatwhilestarequityresearchanalystswhostayatonefirmcontinuetoshine,theperformanceofthosewhomovedeclinesquitedramaticallyinthefollowingyearandremainsbelowpreviousheightsevenafterfiveyears.
Fat Calves & Falling Stars-( 1/4)

Talentismuchlessportablethanwethink,becauseperformanceisn’tjustoneP;itisbuiltonfive
Processes,Platforms,Products,People,andPolitics—andmostofthoseyoucan’ttakewithyou.
Whereyoucomefromandwhereyougotomatter.Whilecattlefromfertilefarmsdon’tgainasmuchweightatregularfarms,thesurvivorsofpoorenvironmentsflourish.
Likewisewhenastarexecutivemovestoaweakerfirm,hisorherperformanceislikelytoloseitsluster;ifthepersonmovestoastrongerfirm,bycontrast,heorshewillkeepshining.
Thinkaboutitinpracticalterms:ShouldyouonlyembracecandidatesfromoutstandingfirmslikeMcKinseyorGoldmanSachs,asmanycompaniesdo?Orwouldyoubebetterofffollowingamorecounterintuitivestrategyandfindingthetruetalentswhohavemanagedtothriveatweakerfirms?
Teamsareimportanttoo.Whenpeoplemovetogether,theytendtodobetterthanwhentheymovealone.
Inaddition,sometypesofrolearemoreportablethanothers:COOsaremuchlesssobecausetheirjobrequireslotsofinternalknowledgeandmanyrelationships;CFOsandotherfunctionalexpertsareusuallybetterpositionedtomove.Youmustcheckforhowwellanincomingstarwillfitintoyourindustrygivenitsdynamics,intoyourorganizationgivenitscultureandstrategy,andintoyourteamgiventhepersonalitiesonit.

Perhapsthebiggestkeytofindingportabletalent,however,isanotherP,potential—theabilitytoadaptandgrowintoincreasinglychallengingrolesandbusinessenvironments.
Althoughtoday’sbestH.R.practicestendtofocusonexperienceandcompetencyfit(makingsurethatsomeone’sabilitiesmatchthoserequiredforthejob),intoday’svolatile,uncertain,complex,andambiguousworld,that’snolongerenough,becausethejobitselfissolikelytochange.
First,therightmotivation.Highpotentialshavegreatambitionandwanttoleavetheirmark,buttheyalsoaspiretobig,collectivegoalsandshowdeeppersonalhumility.
Highpotentialsalsohavefourothertraits:
Curiosity:apenchantforseekingoutnewexperiences,knowledge,andcandidfeedback,andanopennesstolearningandchange.
Insight:theabilitytogatherandmakesenseofinformationthatsuggestsnewpossibilities.
Engagement:aknackforusingemotionandlogictocommunicateapersuasivevisionandconnectwithpeople.
Determination:thewherewithaltofightfordifficultgoalsdespitechallenges, andtobouncebackfromadversity.

Ifyouwanttokeepyourcalvesfatandavoidfallingstars,rejectthemythoftheexecutivewhothrivesatalltimesandinallplaces.Instead,considerhowportableyourcandidatesreallyare.
UnderstandhowthefivePshaveplayedintotheirperformance. And,mostimportant,checkthattheyhavethepotentialtoembraceandexcelthroughunrelentingchange.
Fat Calves & Falling Stars

Professionalsuccessusedtodependonexperience,knowledge,&skill.Butthingshavechangedinrecentdecades.
First,knowledgehasbecomeasrapidlyobsoleteasuniversallyavailable.
Second,weliveinanincreasinglyuncertainandvolatileworldwhere,eventhepasthasbecomeunpredictable.And,finally,businesshasbecomemoreglobalanddiverse.
Inthisnewnormal,experienceandknowledgearelessrelevant,whiletheabilitiestolearnandadapt,toberesilientandtoconnectwithothersareevermorecrucial.
Youshouldlookforcandidateswhohavefollowednon-traditionalcareerpaths.
Lookforpeoplewhohaveshownthepenchantforpersonaldisruption
Whenmakingseniorappointments,lookfortwothings:
Readinessforthejob
Readinessisaboutthefitbetweentherequirementsofthepositionandthecandidateatthatparticularstageinhisorhercareer.Itrestsoncriticalcompetenciesandculturalfit. And,inmyview,non-linearjobchangescantellalotaboutseveralpowerfulemotionalintelligence-basedcompetencies—flexibility,adaptability,empathy,organizationalawarenessandrelationshipmanagement—thatdifferentiatestarsfromaverageperformersinnewroles.
Potentialforfurtherdevelopment.
Disruptivemovescanalsotellyoualotaboutpotentialbecausetheyshowacandidate’scuriosity,insight,inspirationanddetermination,whichinturnindicateasearchforlearningandchallenge.Infact,I’musuallyworriedwhenIdon’tseemajorjobshiftsoncandidates’resumes.Itcouldsuggestthey’renotseekinggrowthandthatthey’renotfullypreparedforaleadershiptransition.
Unconventional Resumes

Oneofthemostdramaticexamplesseenonthis,atanationallevel,isthatofJapan.
ItisdiscoveredyoungJapaneseexecutiveshadhigherpotentialthantheaverageintheglobaldatabase.
WhileseniorJapaneseexecutiveshadlower-than-averagecompetence.Whyweren’ttheseleaderslivinguptotheirpromise?
It’sduetotheextremelylimiteddegreeofjob-andcareer-shiftinginJapan,notonlyacrosscompaniesbutevenwithinthem.
Ofcourse,there’snothingwrongwithaperfectlylinearcareerifyouarestillproactivelygrowingandlearningandsuccessfullyperformingateverhigherlevelsofcomplexity.
ButasNitinNohriaandBorisGroysberghaveshown,Leadersarenotasportableaswemightassume
Employers—andrecruiters—knowthis.
Soit’simportantforallaspiringexecutivestothinkaboutdisruptioninthecontextoftheircareersandtoconsiderjobchangesthatproveanabilitytomasternewcompanies,sectors,culturesandstrategies.
You’llbemeasuredagainstpeoplewhoalreadyhave.
Unconventional Resumes

Imaginethatyoulightathousandidenticallightbulbs–samemake
Leavethemonuntiltheyburnout
Inevitably,onewilllastlongerthanallothers
Itisverydifficulttopredictwhichoneitwouldbe
Somepeoplethinkthesameistrueofexecutives,includingCEO’s
Luckisthereasonafewoutperform??
Yettheyareheldupasshiningexamplesfortherestofthepeople
Leadershipisnotbasedonluck
JimCollinssaying“Whetheryouprevailorfail,endureordie,dependsmoreonwhatyoudotoyourselfthanonwhattheworlddoesforyou“?
Therightleaderscanhelpcompanymakeitsownluck.
ThenthequestionishowtoseparatetheSkilledonefromtheluckyone?
GoingbacktoBulbanalogy,IdentifythebestCEO’s,Managers&staffwithoutburningthroughthemall?
Light bulbs & CEO’s-(1/2)

Firstneedtoconsider
Intelligence,Values,Keyindicatorsofpotential,EI,Portability
AsperEgonZehnderthereare8Leadershipcompetencies
StrategicOrientation–Thinkinglong-term&outsideone’sownarea.Requiresbusinessawareness, criticalanalysis&conceptualizationofinformationinawaythatdefinesthenextsteps.Highperformerschallengethecurrentdirectionandproposenewlong-termdirection.
Marketinsight-Understandingthemarketinwhichthebusinessoperates,includingthecompetition, suppliers,customerbaseandregulatoryenvironment.Highperformerssegmentthemarketandanticipatewhereitwillgo,basedonunderstandingthedriversandthecompetition.
Resultsorientation-Focusingondelivering&improvingmeasurablebusinessresults.Highperformersimprovethewaythingsaredonebasedonathoughtful,calculatedapproachtorisk.
Customerimpact-Servingandbuildingvalue-addedrelationships.Highperformerscultivaterelationshipsandanticipatethecustomers’needsfromtheirownperspective
Collaboration&Influencing-Workingwithandinfluencingthoseoutsideone’sfunctionalareatocreateapositiveimpactonbusinessperformance.Highperformersfacilitatecollaborationandpartnerships.
DevelopingorganizationalcapabilityDevelopingthelong-termcapabilitiesofothersandtheorganizationasawhole.Highperformersprovideconstructivebehavioralfeedbackinalong-termcareercontext.
TeamLeadership-Buildingeffectiveteamsinone’simmediateorganization.Thisappliestovirtualorcross-functionalteams,whetherornotthereisaformalleader.Highperformersbuildempoweredteamsthatcandevelopanddeliverongoals.
Changeleadership-Transforming,aligningandenergizinganorganization.Highperformerscreatechangeleaderstopropagateanewmessage
Light bulbs & CEO’s-( 2/2)

Globalizationmakestheworldflat–Culturaldifferencesstillabound.
Howtoread&assesspeoplefromdiversebackgrounds?
Doesittakedifferentabilitiestoleadsuccessfullyindifferentcountries?
Canwetransplantpeoplefromoneculturetoanother?
HowtopreserveCompany’sEthosacrossmarketswhilestillacknowledginglocalcustomers?
Nationalcultureshavedistinctvalues,whichinturncreatedifferentbehaviors.
Reading People around the World –(1/2)
Therearemanywaysofmappingthese,butthemodeldevelopedby………….

ModeldevelopedbytheDutchResearcherGeertHofstede
Powerdistance
Reflectswillingnessofweakermembersoforganizationstoacceptanunequaldistributionsofpower.
ItisquitehighinLatinAmerica,Africa,Asia&theMiddleEast
ItisverylowinAnglo&GermanCountries
Individualism
Measuresthedegreetowhichthepersonisdistinguishedfromthegroup
NorthAmerica&Europearehighindividualistic.
Asia,Africa&LatinAmericahavemuchstrongercollectivisticvalues
UncertaintyAvoidance
Indicatestoleranceforambiguity
ItisquitehighinLatinAmerica,Manysouthern&easternEuropeancountries&Japan& lowerforAnglo,Nordic&ChineseCulture
Masculinity
Scoresthedistributionofrolesacrossgenders
Japan&SeveralEuropeancountriesrankashighlymasculine,whileNordiccountriesaremuchlessso.
Long-termOrientation
Whetherpeoplefocusondistantratherthanimmediateoutcomes.
ItishighinEastAsia,moderateinEurope,andlowintheAnglocountries,Muslimworld& LatinAmerica
Reading People around the World-( 2/2)

4. The Bright Future
Surroundingyourselfwiththebestdoesn’tstopatselection. Yourstarsneedtherightintegration,development, coaching,andpromotionifyouwantthemtotrulyshine.

InUSAalongmorethan1,00,000peoplearewaitingforthebodypartstheyneedtolive-buttheyalsofaceasignificantchanceoforganrejection,sincethebody’simmunesystemisbuilttofightoffanyforeignpresence.
Whennewpersonjoinsyourteam/takesanewrole,therearesimilarthreatofrejections-strategiesforsuccessarethesame.
Imperativesforsuccessfulhire
Tofindtherightpeople(Healthyorgans)
Ensuretheyfitintoyourorganization(compatibility)
Properlysupporttheirintegration
Encouragethenewpersontomeetwitheveryonewhowillplayaroleintheirsuccess
Outreachshouldbeinfivedirections
Up(toyou&otherbosses)
Across(topeers)
Down(Tosubordinates)
Out(toclients)
In(topersonalcontacts,familymembers&friends)
Accelerated Integration

SayingbyLyleSpencer-“Youcantrainaturkeytoclimbatree,butI’dratherhireasquirrel”
FindSquirrels–thatispeoplewhoseexperience,knowledge&skillsmakethemperfectlysuitedfortherole
Havingsaidthisdon’tdiscounttheturkeysthatshowpotential-withrightsupport, somecanindeedlearntoclimbasfar&asfast.
Whentrainingpeopleinyourteamtodobigger&betterthecompetenciesrequiredare:
StrategicOrientation
Marketinsights
Resultsorientation
Customerimpact
Collaboration&Influencing
Developingorganizationalcapability
Teamleadership
Changeleadership
AlsoconcentrateonEI–SelfManagement,Relationshipmanagement
Teaching a Turkey to climb a tree-( 1/2)

ToDeveloppeoplearoundyou
Firstmakesuretheyreallywanttoimproveandhaveastrongvisionofthedesiredfuture.
Helpyourpeopleobjectivelyassestheirstrengths&areasthatneedimprovements.
Findthegapsbetweentheir“Realselves”andtheir“ Idealselves”–360degreefeedback
Developalearningagendaoractionplantoclosethosegaps.-Highlyfocused&practical
Don’ttrytochangetoomuchatonce.
Encouragepeopletoworkonspecificbehaviors&setincrementalgoals
Encourageyourlearnerstorelentlesslypracticetheirnewbehaviors
Teaching a Turkey to climb a tree-( 2/2)

As a leader who wants to be surrounded by the best, you need to get your people inspired about improving themselves, especially when it comes to Emotional Competencies-to understand where they stand and where they fall short of ideal; to develop a cleverer change plan; and to persevere in practice.
Turkeys can’t learn to climb tress all by themselves
Teaching a Turkey to Climb a Tree

JapaneseProfessionalshadhigherpotentialthantheglobalaverage,butlowercompetence.
Greatrawmaterial,butapoorfinalproduct.
Japanflawedrefinementprocess.
Country’seducationalsystems&culturegiveitsmanagersajump-startintheircareers,butlacksdevelopmentalprocessthereafter.
Givingpeoplebiggerjobswithfanciertitles&largersalarieswon’tmakethembetter.Morecomplexassignmentswill.
InANZ–employeeidentifiedashighpotentialispromoted,thecompanymakessureitisnotthesamejobonalargerscale.
CompanieslikeGE,Unilever&McKinseydothesame
Foryourteammembers,youhavetomakesuretheyhaveaccesstosimilaropportunities.
SixleadershippassagesdescribedbyRamCharaninLeadershippipeline.
ManagingSelftoManagingotherstofunctionalManager;fromFunctionalManagertoBusinessManager;thentoGroupManager;thentoenterpriseManager.
Growth from Complexity

Potential should trump seniority and that-when it comes to the jobs that help leaders grow most-complexity always beats size
Growth from Complexity

Highgrowthcompanieshadexecutiveswithhigherratingsinall8keyleadershipcompetencies.
Firstone–drivingperformancethroughCustomerimpact
Secondone–Collectivecompetencymattersmorethanindividualstars
Thirdone–CompanieswithdifferentstrategiesexcelledwithdifferenttypesofExecutivesatdifferentlevels.
Lessonfromthis
Focusondevelopmentalefforts
Understanding&buildingoneachperson’sspikystrengths.
Ensuringthatteammembershaveskillsthatcomplementeachother, makingthewholegreaterthanthesumofitsparts
Trainingyourleadersincompetenciesthatmatchtheircareerstageandyourteam,unitororganization’sbroadergoals.
Normaltemptationistotrytomakeeveryonegoodateverything,butitisfool’serrand,becauseitrequiresahugeamountoftime&investmenttomakeeveryonegoodateverything.
Finding Alignment

As a Leader you should be disciplined about aligning your people development practices with your situation & goals.
Aim to cultivate a balanced team & to build everyone’s unique strength to the highest levels of mastery
Finding Alignment

TEDtalks–FransDeWall
TwoCapuchinmonkeysarekeptinside-by-sidecages.
Eachmonkeyisgiventhesametasktocomplete:handingtheexperimenterarock.Their“pay”isasliceofcucumber.
Thefirsttimeamonkeycompletestherequiredtaskheisrecompensedwithasmallchunkofcucumberandeatsitwithoutakerfuffle.
Butwhentheexperimenterstartspayingoneofthemonkeysingrapes(whichthemonkeyslikebetterthancucumbersandisobviouslyregardedasabetterpay),themonkeywhowasbeingpaidincucumbersgoesbananasandprotestsovertheunequalpay.
Heditcheshissecondchunkofcucumberatthescientistthenpoundsthetableandrattlesthewallsofhiscageinprotestofthepaydisparity.
Mr.deWaalsaidifbothmonkeysgetcucumberasarewardtheyarehappytorepeatthetaskupto25times.
‘Butifyougiveonegrapes,whichisafarbetterfood,thenyoucreateinequitybetweenthem,’Mr.deWaalsaid.
Equal work deserves Equal pay
Capuchin Monkeys & Equal pay

Whenitcomestopeople–toattracting,retaining&motivatingthem-payisalsoimportant.
Peopleexpecttobeequallycompensatedfortheworktheyprovide.
Wearedrivenby3essentialthings
Autonomy-thefreedomtodirectourlives
Mastery-Thedesiretoachieveexcellenceinwhatwedo
Purpose-Theknowledgethatwhatwedoisinserviceofsomethingbiggerthanourselves
Moneywillnevermotivatethewrongpeopletodorightthing.
Incentivizealltherightpeopleyouhavepickedwiththeopportunitytoplayindependentrolesonyourteam,tomastertheirskills,andtopursuebroaderteam,organizationalorsocialgoals.
Capuchin Monkeys & Equal pay

5. Teams That Thrive
Thebestgetevenbetterwhentheyworktogether.Asaleader,itisyourjobtobuildadiverse,effective,committedgroupcapableofachievingcollectivegreateness.

In1990’sworkingintheBuenosAiresofficeofEgonZehndertheirArgentineexecutivesearchpracticesoared,recordingthehighestpercapitafinancialperformanceinthewholefirmforfiveconsecutiveyears.
Butweallknowwhathappenedin2001.Bytheendoftheyear,Argentina’seconomyhadcollapsed.
Itwasthelargestsovereigndebtdefaultinworldhistory,andGDPfellbysome30%coupledwitha300%currencydevaluation.
Over12days,fivedifferentpresidentstookcontrolofthecountry.Onebanklostmoremoneyinafewweeksthanithadaccumulatedoverthepreviouscentury.
Therewerecompanieswithlosseslargerthantheirsales,andonemonththenumberofnewcarssoldinthecountrywaslowerthanthenumberofcarsstolen!Asyoucanimagine,thatwasnotaneasytimeforme.Nooneintheirrightmindwaslookingtohireasearchconsultant.
AssoonasIfinished,oneofourDutchpartners,SikkoOnnes,stoodupandsaid:“Claudio, ifIunderstandwhatyouareimplying,youaretotallywrong.Ourpartnershiphasbenefitedfromtheextraordinarycontributionofyourofficeforwelloveradecade.Nowit’sthetimeforustosupportyou.YouronlyjobistogobacktotheBuenosAiresofficeandtelleverysinglememberoftheconsultingandsupportstaffthattheyallhaveourfullandunconditionalsupport.”
Thewholegroupthenstoodupandapplauded.ItriedtothankSikko,butIcouldn’tbecauseIwasintears.WhatIfeltthen,frommycolleagues,wasunconditionallove.
A Culture of Unconditional Love

ThankstoEgonZehnder’scorporateculture,it’ssomethingIgetatworkeverysingleday,andit’swhatencouragesmetogivemyabsolutebestinreturn,nowfor28years.Anyfirmthatwantstonotonlyhirethebesttalentbutalsopullthemtogetherintostrongandlastingteamscan’tdosowithoutfosteringacompellingandinspiringculture.That’showyouovercomechallenges,andkeepyourmissiongoinginyourabsence.
Allseriousresearch,allrespectedbusinessthinkers,andallgreatleadersconfirmthispoint.AsPeterDruckerputit,“cultureeatsstrategyoverbreakfast”.JusttakealookatSouthwestAirlines,thecompanywhichsawthegreatestvalueexpansionintheS&P500between1971and2001.HerbKelleher—itsCEOfor35years—oncesaid: “Givenenoughtimeandmoney,yourcompetitorscanduplicatealmosteverythingyou’vegotworkingforyou.Theycanhireawaysomeofyourbestpeople.Theycanreverse- engineeryourprocesses.Theonlythingtheycan’tduplicateisyourculture…Doyouknowthedifferencebetweenstrategyandculture?Well,whenNapoleonwasinParisinaroomwithallhisgeneralsaroundatable,discussinghowtoattackRussia,that’sstrategy.ButwhatmakesamillionmenmarchtoMoscow,thatisculture!”
Ofcourseyoustillneedtohireoutstandingperformerswithgreatpotential;appointthemtotherightroles;identify,retain,motivateanddevelopyourbrighteststars;andbuildgreatteamsfitforthepurpose.Butyoucan’tmakethemistakeofignoringculture.Ifyoudo,you’llachieveverylittle,anditwon’tlastlong.Yourpeoplewon’tgoasfarastheycould,ortheywillleave.
A Culture of Unconditional Love

Twobasiccompensationmodels
Eat-What-You-Kill–inwhichpeoplepaydirectlyreflectsthebusinesstheygenerateandtheworktheyproduceforcustomers.–Equitable&economicallylogical
Lock-Step-inwhichpeople’spayisunrelatedtotheirpersonalcontribution&insteadvariesaccordingtosomepre-establishedformulaerelatedtoyearsofserviceetc.
Lock-stepisnon-existentinUSAfirms
Professionalservicefirmsfollowaneat-what-you-killsystem.
FewLock-steps-LawfirmWatchtell,Lipton,Rosen&KatzandMckinsey
Thekeytoout-goingtheeat-what-you-killmodel–rigorouspeopleprocess&strongculture
Lone Wolves Starving

6. The Better Society
Oncewehaveallsurroundedourselveswiththebestinourownpersonal&professionallives,whynotextendthepracticetoourorganizations, institutions&nations?Thatiswheregreatpeopledecisionsmatterthemost.

BestPracticesforCEOsuccession
StartPlanningearly,ideallywhenCEOtakescharge,butneverlaterthan3to4yearsbeforeheorsheexpectstoleave
Create&maintainaclearoutlineofwhatyouneedfromtheCEOrole,informedbytheBoard&detailingalltherequiredcompetencies,
Regularlyassessyourleadersagainstit.
Buildyourinternalbench–identifying,assessing&developingpotentialCEOcandidates&benchmarkingthemagainstthebestexternaltalent.
Lookexternallyformorecandidates-Plannedsuccessionapproach
Considerbothinsiders&outsiders
Executivesearchfirmcanaddgreatvalueinthis.
Boardtoconductperiodicemergencysuccessiondrills-since50% ofCEOsuccessionsareunplanned.
Robusttransitionprocess
Russian Roulette at the top

Withouttherightpeopleonthetop&therightmixofboardacompanycannotsucceed.
Clearstrategy,Alignmentoftheboardoncriticalchallengeslikethecompanyshouldgopublic,pursueabigtakeoveroramerger,ormakesmaller,moretargetedacquisitionsetc.
Knowledgeoftheboardabouttheinsideknowledgeofthecompanyiskeytothequalityofboardcomposition.
Unexploitedtalent–Womenontheboard
Atrueleadingboardshouldmovefromcompliance&certificationtotrueLeadership,addingrealvaluethroughtheirvision&judgment.
Getrightpeopleontheboard–createaprofileoftheidealcandidates
Thereisnoneedforlineexperienceorexposureindustry-whatisneededisexceptionalprovencompetenceinkeyareasthatotherboardsmembersdon’thave.
Healthymixofinsiders,whoprovidecriticalcompanyknowledgetotheboard,andoutsiderswhoofferdifferentperspectives.Leveragecultural& genderdiversityfortheteamtobeeffective
True Leading Boards.. (1/2)

Boardcandidatesshouldalsobeformallyassessednotjustonexperienceandculturalfit.Butalsoonfourspecificboardcompetencies.
Twoarerelatedtojudgment
Resultsorientation(Astrongfocusonlong-termvalue&awillingnesstochallengethestatusquo)
Strategicorientation(anabilitytohelpshape&implementcorporatestrategybyraisingkeyissues&providingrelevantadvice&counsel)
TwoothersreflectValues&Behavior
Collaboration&Influencing(anopennesstoteamwork&robust, rigorousdebate)
Integrity&Independence(adesiretotakeprincipledaction,evenatpersonalrisk,forthegoodofthecompany).
Prepareyourbestpeopletobegreatdirectorsbytakingonworkthateitherinvolvesmacrostrategy&otherbroadissues.
InUSAalonetherearemorethan12,000publiccompaniesofferingmorethan100,000opportunitiesforboardservice.
True Leading Boards.. (2/2)

Companiesneeddifferenttypesofpeopleleadingthecharge,dependingonwheretheystand.
Inearlystagestocreateavisionofsustainability–Strongchangeleadership&influencingskills
FromVisionintoactionsuccessfully&profitably–Resultorientation& commercialacumen.
Fromthistoprogressionandproactivesustainability–leadersneedoutstandingstrategic&commercialorientationtoanticipatefutureneeds- drivemotivation&long-termrelationship
Sustainabilitybecomesavirtuouscircle.
Whenyoupursueit,yougetthesmartest,mostcreative,passionate& principledpeople.
Thesepeoplecreateasharedvalueforall
Thepeopleshouldworkforthecompanybecausethelovesitsvalues& thesenseofempowermenttheyget.
AsperChouinard–“Hiregreatpeopleandleavethemalone“
Sustainability-the Virtuous circle

Greatpeopledecisionsfirststartwithawidepoolofcandidates–insiders&outsiders.
Thesecondimportantaspectismakinggreatpeopledecisionsistocarefullyassesscandidatesagainstthemostrelevantcompetenciesfortherole/job.
Partofthechallengeistochoosepeoplewhoaresimilar&familiarandmakeusfeelcomfortable.
InthebookIndispensable:WhenLeadersreallymatter–varietyofcasestudiesfromAbrahamLincolntoWinstonChurchilltoshowhowasingleindividualattherightplaceintherighttiecansaveordestroyacountry.
Twocategoriesofleaders
FilteredLeaders–mostlyInsiderswhosecareerfollowedanormalprogression
UnfilteredLeaders–Wereeitheroutsiderswhohadlittleexperienceorgottheirjobthroughexceptionalcircumstances.
Highlyfilteredleadersachievedlittlechange
Unfilteredoneshadthemostimpact.
Electing Country Presidents

Singapore&Jamaicawereidenticaltwinsuntil1965.
Bothcountriesaresubtropicalislandsofsimilarsize&population.
Bothveryweakeconomicswithlowpercapitaincome.
50yearslater–SingaporehasbecomeoneofthemostcompetitivenationsinWorld-Percapitaincome>$60,000-4thhighestintheWorld
Jamaicaremainsathirdworldstate,withapercapitaincome<$7,000.- 101stPlace.
Singapore–extraordinaryevolution-startedwithasabenigndictatorship&evolvedthroughthedecadestoamuchmoreopen&democraticcountry.
Nonaturalresources-Itthrivesbecauseinvestedintalentpassionatelywithconsistencybothinprivate&publicsector.
Itwasduetotheextraordinaryleadershipwithaclearvision-Mr.LeeKuanYew.
Hebroughtbestineachyear’scropofgraduatesintogovernment.
Hedidnotlookatjustacademicresults,butalsoimagination,qualityofleadership,dynamism-especiallycharacter&motivation
Singapore & Jamaica-(1/2)

Infewyears
Publicsectorinstitutedmassivescholarshipprograms
Rigorousassessmentpracticesfocusedonpotential.
Extensivetraining&development
Exemplaryrotation&milestonescourses.
Outstandingpromotions,recognition&salarybenchmarkingpracticestoprivatesector
ResultedinHigh-Quality,forwardthinkingpublicleadership–madeSingaporemoreattractivetoPrivatesector&talent.
InvestingintopTalent,Singapore’spolitical&publicleadershavecreatedasocial&economicmiracle,overcomingboththecountry’sdifficulthistory.
Allothernations,includingthosethataremuchfavored,shouldstrivetodothesame.
Singapore & Jamaica-(2/2)

ThePopehasmorethan4,000bishopsreportingtohim,whointurnleadsome400,000priests,whotendtomorethanonebillionfollowers.I
Insuchanorganization,fewthingsaremoreimportantthanmakinggreatappointments.
ChoosingasuccessortoPopeisagreatchallenge.
Onepositivesignisthepope’swisechoicetoretireat85,acknowledgingthathenolongerhasthe“strengthofmindandbody”todothejobinsucharapidlychangingworld.
Ageinevitablyerodesdecision-makingskillsandparticularlythefluidintelligencethatenablesustosolveproblemsnotencounteredbefore.
Appointinghissuccessorisamuchmorecomplicated&challengingdecision.
Thepope’sjobisvastlydifferentthantheonesdonebycardinals,justastheCEOroleisnothinglikethoseofC-Levelexecutives.
Thepopeisaloneatthetop,withnopeersandnoday-to-dayboss(otherthanGod,whohappenstobeamasterdelegator).
How to Pick up the next Pope-( 1/3)

Hehastodecideonallsortsofcomplexissues,inanvolatileglobalenvironment, facingenormouspressure.Meanwhile,thereisafixedpoolofcandidates:thecardinalswhomakeuptheselectioncommittee.(It’sanunusualprocessinwhichtherecruitersarethepotentialhiresandthedirectreportschoosetheirownfutureleader!)
Butthecardinalsneedtoconsidertherightcriteria.
ThreequartersofCatholicsliveinthedevelopingworld,whiletwo-thirdsoftheelectors(andcandidates)comefromEurope.Butthisisasideissue.Whatmattersarethefactorsthatbestpredictleadershipsuccess.
ConsideringcandidatesforCEOroles,myprimaryconcernistheperson’spotentialtoperformwellinlarger,morecomplexroles.Therearethreecentralindicators.
Thefirstistherightmotive.
Doesthecandidatedisplaytheproverbialparadoxicalblendoffiercecommitmentanddeeppersonalhumility?
Ishereallycommittedtobuildinglastinggreatnessandtomakeourworldabetterplace,fortrulyselflessreasons?
Whilemostcardinalsshouldhopefullysatisfythiscriterion,ofcoursesomewilldoitmorethanothers
How to pick up the next Pope-(2/3)

Fourkeyleadershipassets:
Curiosity,
Insight,
Engagement,and
Determination.
Doesthecandidateproactivelyseeknewexperiences,ideasandknowledge, solicitingfeedbackandstayingopentolearningandchange?
Canhegatherandmakesenseofavastrangeofinformationanddiscovernewinsightsthat,whenapplied,transformpastviewsorsetnewdirections?
Ishegoodatconnectingonanemotionallevelwithothers,communicatingapersuasivevisionandhelpingothersstayconnectedwiththebroaderorganization?
Doesheseekself-awareness,demonstrateempathy,andinspirecommitment?
Finally,willhehavethestrengthtopersistinthefaceofdifficultiesandtheabilitytobouncebackfrommajorsetbacksoradversity?
Last,butnotleast,Ilookatthecandidate’sabilitytomakegreatappointments.
ThisisevenmoreimportantintheCatholicChurch;givenitsflatstructure,hugereachandgeographicspread,delegationisessential.
“Themostimportantleadershipskillis,clearly,theabilitytomakegreatpeopledecisions,toputpeopleintherightseatsandtorigorouslytakethemoffthebuswhenyouhaveto.”
How to pick up the next Pope-(3/3)

Take Away
It'saclichéthatitis"people"whomakethedifferencewhenitcomestotopcompanies,butlikealotofcliches,it'sprobablytrue.
AsSouthwestAirlines'HerbKelleheroncesaid:
"Givenenoughtimeandmoney,yourcompetitioncanduplicatealmosteverythingyou’vegotworkingforyou.Theycanhireawaysomeofyourbestpeople.Theycanreverse-engineeryourprocesses.Theonlythingtheycan’tduplicateisyourculture.”
AsauthorClaudioFernández-Aráozmakesclear,thewaytostartcreatingthatgreatcultureis"withyou,theleader,usingitasafilterforhiring",andthisbookaimstohelpinthatprocess.
Asheexplains,thisisunsurprising.WearestillhardwiredtomakedecisionsaccordingtofourFs:Flight,Fight,FoodandFornication.Incavemantimes,whendeciding"CanIeatthatthingorisitgoingtoeatme?",relyingonotherswasimportant,andlookingforsimilaritiesnatural.Butwhatwasonceaneffectivestrategyisseriouslylimiting.Weappreciateandtrustpeoplesimilartous,yes, but:
“Youcannotbesuccessfulinahighlyconnected,cross-cultural,globally-mindedenvironmentifyouseeksupportonlyfromothersexactlylikeyou.Youneedtosurroundyourselfwithpeoplewhohavediversebackgroundsandcomplementaryskills,andwhoproperlychallengeyou.”

To Sum up…
Recognizingyourfailings
Understandingexternalchallenges
Assessingandselectingthebest
Helpingyourstarsshine
Fosteringcollectivegreatness
Makinggreatpeopledecisionswheretheymatterthemost.
“ Hire for Potential & Just not experience

Mail your comments to ramaddster&gmail.com

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