Great People Decisions
Posted on December 20th, 2009 by Paul McArdle – 3 Comments.
In 2010, as a result of our Autopsy 2 process, we have identified that we need to make two key appointments in 2010:
We need to do this for a number of reasons – not least of which is to ensure that the company can become sustainable over the longer term, and to allow me to spend more time focused on other aspects of continuing to grow the business.
These appointments will be key positions for us, moving forwards. Hence this book was very timely….
1) Binary Review
… not to mention a great read!
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The Book |
What we thought |
 “Great People Decisions” by Claudio Fernandez Araoz |
 Very thought-provoking |
| Full Disclosure – yes, that’s a tracked link to Amazon shown above. We buy quite a large number of books on a wide range of topics, all relevant to our business in some way. If you did happen to purchase the book from Amazon, they’d throw a few shekels our way, which would help us to buy (and hence publish reviews of) even more books. Hence, Karma would return the benefits to you… |
Back in October I mentioned that this book was referenced in an article written for the Fin Review about “picking leaders the brainy way”.
As noted at the time, I added this book to our shopping cart at Amazon.
Given that the contents are very topical to the recruitment we will need to be conducting in 2010, it went to the top of a very tall pile of books we have in our bookshelf to read in future weeks and months!
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2) “Right People on the Bus”
I have read Jim Collins recommend that “getting the right people on the bus” is on of the first, and most critical, decisions that any business owner/CEO can make.
As part of the autopsy 2 process, I have come to an increased realisation of how important this decision is for our company, particularly at this stage of where we are at:
In simple terms, we’ve reached a barrier to further sustainable growth in the company given the current mix of people we have in the business at present.
We need to find a couple of new people to add to our team who can come in and, with the benefit of their different capabilities and experience, help us onto the next stages of our growth.
Hence, I am investing a significant amount of time at present on this area of the business, cognisant that it is the area in which I can exert the greatest leverage at present.
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3) About the author
My sense is that it is necessary to understand the background of the author in order to understand the strong views he has developed about the best way to recruit the key people your organisation requires.
Claudio is a a partner and member of the global executive committee in Egon Zehnder (an executive search firm). He was hired into the firm many years ago from a well-known management consulting firm (and believes in the firm’s methods of continuing to recruit in the same way – i.e. from outside the recruitment industry).
It’s a bit of a chicken-and-egg proposition, given he has progressed in the company to such a level that he is now influencing their own practices – but it is noted that Claudio’s views are aligned with the way the company works.
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4) Structure of the Book
There’s much more in the book than I can post about here, and I thoroughly recommend you read it (if it is the itch you need to scratch at present). To give you some idea, here are a listing of some of the main chapters, and a few comments about each:
Ch3 = Why Great People Decisions are Hard
For a start, I concur – I might be good at some things, but “people decisions” I find very challenging.
The author provides many different examples of why this is the case, but makes it more useful to me by arranging them under 3 categories:
Reason #1) The Odds are against Us
The author makes it clear that the distribution of personal competence amongst potential applicants has a very large spread – which gets wider the higher up in an organisation we are trying to fill positions for.
I am very aware of this factor with respect to each of the key positions noted above!
Reason #2) Difficult Assessments
The author also notes that assessing people for complex positions is inherently difficult. Again, this difficulty increases (and the significance of any error increases) with more senior positions.
Reason #3) Psychological Biases
The author notes that (p64) “Finding the right person for any job is hindered by various psychological biases and other forces, operating within both the hiring team and the company at large”
Reason #4) Wrong Incentives
Finally, the author notes that the incentives involved (for the candidate, for the recruitment agent, and for the employer) may contribute to the wrong decisions being taken.
Ch4 = Knowing When a Change is Needed
The author cites numerous sources (as he does through the book) to support his main proposition – that, when times change for a company, this will often mean a change is needed in the competency-mix of people working within the organisation.
For us, we have reached this conclusion internally – we have had some successes in building our business, to date, but have disappointed in other areas, such as:
1) We have not yet streamlined a product prototyping process to get ideas to market quickly.
2) Our product development process is not as customer-centric, nor as nimble/agile, as what we need it to be.
3) Our marketing, whilst it has enabled us to reach our current market share, will not be sufficient to allow us to expand our reach internationally (or even to the extent that it is possible within Australia).Hence we will be looking to hire the 2 key people (noted above) to play core roles in the resolution of these issues.
Ch5 = What to Look For?
Why are we taking our time, now, before starting the recruitment process?
It is predominantly to enable us to answer this question, and subsequent questions. We know we need to lift our game, in terms of attraction, selection and motivation, if we are to find the right people who will drive our business forward.
The author has written this chapter in full acknowledgement that there will be difficult tradeoffs to make, and so has presented much useful information in answering questions such as:
1) What relative weighting should be placed on the following three categories (see p138 for the answer):
(a) Experience
(b) Leadership & Relationship Skills
(c) IQ2) What is the respective merit of “competence” over “intelligence” (HINT: the author likes competencies)?
3) What are the essential competencies for managers and executives:
The author lists four primary competencies (p128):
(a) Strong results orientation (to which I would add that the results must be tangible results that really make a difference in the world)
(b) Team Leadership
(c) Collaboration and Influencing
(d) Strategic OrientationIn addition, the author also cites five second-tier competencies (you’ll have to read the book for these).
4) Where do values fit in this process?
Ch6 = Where to Look (Inside and Out)?
The answer to this question is easy for us – because we need to find people who can work with, and develop, our less-experienced current staff, we must focus externally.
The author states the core challenges (p158) as follows:
1) Where to look for candidates
2) When to stop looking.There’s plenty of good information in this chapter (including the obligatory plug for executive search firms, of course!) that we will be looking to put into practice in 2010.
Ch7 = How to Appraise People?
A key point made by the author in this chapter is akin to “you get out what you put in” – i.e. if a company is well prepared for an selection process, it has a much better chance of selecting the right people.
Ch8 = How to Attract and Motivate the Best People?
The author is pretty clear that this step should occur after you have shortlisted potential candidates.
In our case, I know we will have to do this somewhat differently:
1) We are a start-up company with a silly name that is not well known outside of our target client base (i.e. people involved with, or interested in, the competitive wholesale electricity market).
2) Hence, we will have to do some things, up front, to promote our opportunity/challenges such that they will be of interest to the right kinds of people.
Ch9 = How to Integrate the Best People
I was grateful to see that the author also devoted a chapter to this topic, which (for us) will be a key to the success of the people we hire.
In particular, it was with interest that I read the authors take on the “three waves of integration” (p257), which the author cited as being proposed in the book “The dynamics of taking charge” by John Gabarro – another one on its way to us now.
In particular, the author talked about a 3-year integration period, which is roughly what I was envisaging we were looking at.
I found this book to be of great value to me in helping me to scope out the recruitment process we’ll be working through several times in 2010 – and then into the future.
I will be re-reading this book in the next couple of weeks to see if I can maximise the value we gain from the insights contained therein.
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5) Your recommendations?
If you have other recommendations for good books (or other resources) on recruitment that I can read over the next few weeks, would certainly like to hear from you!
Either post them in the comments below, or just give me a call (+61 (0)7 3368 4064) to let me know.
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