Some of the best lessons for recruiting and hiring come from realities that are experienced in other parts of a business. Principles that are discovered through the application of buying, selling, customer service, and other business functions often give us important insight into our talent management efforts.
Michael Mauboussin wrote an article in Harvard Business Review this month that demonstrates such an
application. The article is called When Individuals Don’t Matter, and the topic is understanding the behaviors of a complex system. More specifically, it addresses the hard-to-predict behaviors that emerge from the interaction of individuals in a business system.
I know, this article sounds like something you’d want to pick up when you’re having a hard time sleeping, but stick with me—I think you’ll see how this can make you a more effective hiring manager.
Mauboussin lays the groundwork by describing the nature of a complex system:
“ ‘If you watch an ant try to accomplish something, you’ll be impressed by how inept it is,’ said Stanford biologist Deborah Gordon in a National Geographic article about swarm theory. ‘Ants aren’t smart…ant colonies are.’ If you’re familiar with the ideas behind the wisdom of crowds and swarm intelligence, you’re probably nodding knowingly. Under the right conditions, groups—whether ant colonies, markets, or corporations—can be smarter than any of their members.”
Effective hiring managers understand that their organizations are made up of individuals, but only gain their true synergy as a team. When bringing new members onto the team, they spend time considering how a person will fit with the culture and what contribution the person will offer to make the team better.
This is not easy to do. When there are deadlines and performance pressures with regard to the hiring process, hiring mangers often focus on what’s right in front of them. The chances of making a hiring mistake increase under these conditions.
Mauboussin goes on to lay out three mistakes that executives make when dealing with complex systems. A pertinent application can be made to an organization’s hiring process.
Mistake #1: Managers extrapolate individual behavior to explain collective behavior.
If your team is performing well, there is a tendency to attribute that success to the most visible members on the team. In turn, we want to hire more individuals who are like the prominent high-performing employees. This is not a bad strategy, but it can’t be successfully implemented without considering what resources the new high potential employees could disproportionately consume. For example, if support resources are reduced or diluted in the support of the new employee, could the performance of the existing high performing employees be diminished due to lack of support? The collective may end up performing worse as you add high performers.
Mistake #2: Managers fail to recognize that changes in one component of a complex system have unintended consequences on the whole.
Let’s imagine that you manage a real estate office in a prominent suburb of a large metropolitan area. While your office is successful, you also have two competitors who regularly attain sales volume equal to your organization. Recruiting high-performing agents from your competitors is a quick way to gain market share and increase your revenues, right? It may not be that simple.
One of our clients told us about a prominent real estate agent in his community who was very effective at marketing his services. He drew a huge amount of attention and new clients as a result of his efforts. However, due to his ego and abrasive personality, a percentage of his prospects would look for alternatives after initially interacting with the “celebrity agent.” Several of the agents in our client’s office would scoop up these disgruntled prospects and receive the direct benefit (and low cost) of the competitor’s marketing efforts.
What if you were able to hire the “celebrity agent?” On one hand, it would be a significant win for your marketing prominence in the community and your short-term market share and revenues would almost certainly increase. But, hiring this person could disrupt the complex system of how the real estate companies interact with each other and the customers in your community. You may end up with less business in the long-run because the system compensated in a way that worked to your disadvantage.
Mistake #3: Managers tend to prize standout individuals while ignoring how much they draw on their surrounding systems for support.
When you recruit a high performer (especially if it is someone you lure away from a competitor), you naturally have high expectations. You hope that the new employee’s high performance can be duplicated in your organization. The reality is…it rarely happens.
One Harvard Business School study tracked more than 1000 high-performing equity analysts over a decade and monitored how their performance changed when they switched firms. The disappointing conclusion of the research was that only 20% of the analysts could duplicate their high performance once hired into a new company. Why? Because the support structures that helped make the person successful in the first company were not made available in the new company.
Conclusion: All three mistakes have the same root: Wrong assumptions about the relevance of an individual to the behavior of a complex adaptive system. While change is necessary, still going to happen, and not something you should fear, effective managers navigate change with the needs and dynamics of the overall team in mind. In the end, the performance of the organization is going to trump the potential of any particular individual—no matter how high-performing the person may be.
Editor’s Note: This article was written by Ben Hess. Ben is the Founding Partner and Managing Director of Tidemark, Inc. and a regular contributor to WorkPuzzle. Comments or questions are welcome. If you’re an email subscriber, reply to this WorkPuzzle email. If you read the blog directly from the web, you can click the “comments” link below.
