Читать книгу The Illusion of Invincibility - Paul Williams - Страница 11

“You can’t train someone to be smart. That’s something they just have to bring with them!”

—Dr. Timm Volmer, CEO Smartstep Consulting

2 Talent before Seniority (or the Creeping Danger of Mediocrity?)

The success of a business depends on the skills of its people. So, be honest: How many of your team colleagues would you re-employ? How many of them are just “OK” and how many do you put up with because you think you have no choice? After all, an incompetent employee can harm their employer and a dishonest one can ruin them. Considering the risk, it is remarkable how carefree some businesses are when hiring new people. The Incas would probably have been astonished by these questions. Their elite leaders were subjected to rigorous training in special schools called Yachaywasi and Machu Picchu is believed to have housed one of these “Inca Business Schools,” where sons of both the Inca nobility and tribal chiefs from the conquered territories were educated. Seventeenth-century chroniclers describe the curriculum in detail: history, religion, and poetry, as well as arithmetic, bookkeeping, statistics, statecraft, law, medical procedures, and of course warcraft, weaponry, and hand-to-hand combat. All in all, it was a course of study reminiscent of a cross between modern military academies and elite universities. In addition, the curriculum included topics such as discipline, self-control, and pain endurance. The training ended with a month-long test under the supervision of the ruling Inca and, if you passed, you were eligible for jobs in administration and in the military.

The sons of the Inca princes, too, had to excel in the elite school and earn their place in the Inca nobility, just like the potential successor to the throne, who had to pass some particularly strict tests. “On the basis of these merits, he earned…the right to govern, and this was much more important than the fact that he just happened to be his father’s first-born,” writes Garcilaso de la Vega in 1609. Yes, the new ruler was selected from among the Inca’s sons, but this was often a wide circle of candidates, and by law, succession was determined by who was the most able for the position. Furthermore, in determining his succession, the Inca was assisted by a council made up of twenty relatives, all of which sounds well thought through. Automatic succession and poorly prepared personnel decisions are rarely blessed with good fortune, and a decision to rely on your “second choice” frequently comes back to haunt you. But don’t we still fall into these traps far too often?

Once again, the Incas are capable of really shaking us out of the conviction that ours is the most advanced era, and sometimes the twenty-first century is astonishingly archaic. Laws of inheritance under which a farm automatically passes to the eldest son still hold sway in parts of Europe. Siblings, especially daughters, are “subsidiary heirs,” which is a polite way of saying they have no rights of inheritance. It is much the same in many family-run businesses. A poll conducted by the I.F.M., the Research Institute for Family-Owned Businesses, in Bonn, Germany, revealed that more than two-thirds of the owners of medium-sized businesses with over 250 employees would like management succession to stay in the family. Above all, sons are preferred (57.6 percent), little different from centuries ago, and there is no mention here of tough selection procedures or demanding probationary periods in which the candidates have to prove themselves worthy of the position. In this respect, the Incas were astonishingly farsighted.

What Happens When the Prince Automatically Becomes King?

Otto von Bismarck once mockingly observed, “The first generation creates the wealth, the second manages it, the third studies art history, and the fourth generation squanders it all.” Even if one of Germany’s most famous political leaders and Reichskanzler was talking about the economy of the nineteenth century, it is undeniable: even today, countless owner-managed businesses find it difficult to arrange for a qualified successor. Indeed, it has been shown that almost three-quarters of all such companies—which, after all, play a major role in Europe, with up to 70 percent of GDP in some countries—have “absolutely no” or “currently no” succession planning in place. Clearly, they live in a world with no traffic accidents, illnesses, or other similar strokes of fate. The illusion of invincibility is powerful, even among otherwise considered and prudent business people.

While a high value is placed on innovation in technology, software, and marketing, when it comes to another key success factor—leadership—hope is often the guiding principle. Just like hundreds of years ago, mothers and fathers want to believe that their legacy is in the safe hands of their sons and daughters. From a human point of view, that is understandable, however risky it may be from a business perspective. Rarely are the potential consequences of such an approach so openly exposed as in the following example.

“The Best Man Needs Help”

Such was the headline the German newspaper taz placed above the picture of Konstantin Neven DuMont in October 2010. He was the heir to the fourth-largest newspaper publisher in Germany and, at the time, a board member at the media group M. DuMont Schauberg.

The business had been under family control since the beginning of the nineteenth century and, as far as the current patriarch Alfred Neven DuMont was concerned, that was the way it was going to stay, so he brought his son Konstantin Neven DuMont into his circle of top managers. Insiders at the firm were somewhat skeptical about the abilities of his successor, but the new arrival was nevertheless happy to give the journalists a more than confident statement: “I have the qualifications and have already proven that I can do the job at least as well as all those people from the financial sector or the managing directors from other publishing houses.”

A dispute over business strategy between father and son—not least about how to tackle the challenges of digitization—broke out and was further aggravated by an interview Konstantin Neven DuMont gave to the Bild newspaper. Bild was the biggest competitor of the family’s tabloid newspaper, Express, and the interview had not been discussed with the other members of senior management, who could hardly have been happy about it. There were consequences as Bild, quite naturally, took full advantage of the situation.

In November 2010, Alfred Neven DuMont relieved his son of all duties in the business. At the end of 2012, Konstantin Neven DuMont transferred his shares back to his parents and, between 2013 and 2017, he was bought out of the business.

The family learned from its mistakes. The family representatives, Christian DuMont Schütte and Isabella Neven DuMont, now exercise control at supervisory board level, while an external manager runs the operating businesses.

If you find yourself shaking your head in a combination of amusement and disbelief, you might want to think about that just for a moment. Let’s face it: Even in “normal” families, arguments erupt and emotions can often run high on straightforward day-to-day issues. So how much more difficult must it be to find agreement between parents, siblings, cousins, and more distant relatives on matters of business strategy, division of responsibilities, and the distribution of considerable wealth? The heiress to a large family dynasty described the challenge very aptly as follows: “We have to somehow combine this highly subjective environment with the real-life numbers and facts to come up with sensible enterprise decisions.”

Anyone who can maintain composure as they navigate this emotional minefield commands our respect. It is one of the most deep-rooted of human instincts for parents to view their children through rose-tinted glasses. Equally human is the all-too-critical attitude of many patriarchs, whose fear of the loss of power and status prevents a timely handover to a younger successor, or the belief of many founders in their own invincibility, which can completely suffocate the next generation. And all of this is taking place in an increasingly fast-moving and global era which is crying out, louder than ever before, for smart leadership.

“In the twenty-first century it will be far less about simply handing down material assets and far more about passing on the entrepreneurial mentality and aptitude to the next generation,” says Peter May, one of Europe’s leading experts on family businesses.

The Incas also lived in an era of change, constantly faced with new challenges. And they would have been equally familiar with power battles, jealousy, envy, and family feuds, all of which makes their disciplined approach to leadership development even more admirable—an approach which limited personal preference through compulsory training followed by testing and assessment in front of a central board. Indeed, it is noteworthy and indicative that their eventual downfall was accelerated, at least in part, by a departure from this disciplined approach, leading to a less than clear succession policy and a subsequent weakening of the Inca Empire (see Chapter 5, “Tackling the Real Opponent”). But it is not only family businesses that make mistakes when recruiting their senior managers. Christine Wolff, an experienced business manager and non-executive member of a number of boards, considers “wrong personnel decisions” to be the most serious mistakes she has made in her career to date and identifies the most common pitfalls.

From Christine Wolff, multiple board member:

There are four typical mistakes made in the area of personnel management, all of which I have made myself:

1. Hanging on to average or bad managers for too long

2. Promoting the wrong people, either because you are under time pressure or because you are not focusing on their actual qualifications

3. Giving the job to the person who screams loudest, just to reduce the pressure at that moment

4. Promoting or transferring someone to another department to get them out of the way

And what have I learned from this? If possible, try to avoid time pressure, because under stress everyone makes mistakes. You should be well-structured in your approach, take time to look closely at the qualifications of each candidate, and it is never too soon to start actively developing talented people, something that is often overlooked.

We wonder if you have ever made one (or more) of these mistakes. We certainly have. One thing is certain: If the real cost (in dollars and cents) of poor personnel decisions were included in budgets in the same way as investment in technology or marketing, then recruitment and selection methods would look very different. Let’s do the mental arithmetic for a moment and add together annual salary, bonus, and employer’s Social Security contributions, costs for advertising the position, headhunter and search fees, and the salaries and time of internal people involved in the selection process, not to mention the time required to ensure a professional onboarding for the new recruit once they’ve agreed to start. Even for relatively junior positions, you will quickly be up to a six-figure sum and can triple that in the case of making a poor appointment, not only because the whole process has to start again from scratch, but also because the wrong person in the wrong place can have serious financial impact due to, among other things, lost orders, lost revenue, compliance issues, and resignations from frustrated colleagues. The latter effect refers to the situation when the inappropriate new recruit has people reporting to them, as it is well-known that people join companies but leave incompetent bosses. We have no doubt that, if there were more widespread and robust financial scrutiny of HR processes such as these, the temptation to make off-the-cuff decisions or follow the path of least resistance in matters of recruitment or career development would virtually disappear.

A successful business that wants to stay that way is well advised to take great care in the way it goes about recruitment and selection. However, the reality is often very different. In his talks, Andreas Krebs particularly enjoys the moment when he invites his listeners to take part in a short exercise. “Think of your ten most important key people. Imagine you could recruit them again from scratch. Who would you keep?” Immediately, you can see on the faces of the assembled managers the mental screening process, as they think through the names in their departments. “Her? Yes, immediately! And him? Not in a million years!” Within just a couple of minutes, at least in their heads, most departments have shrunk dramatically. On one occasion, a clearly frustrated manager answered the question by loudly shouting out “None of them!” Most would retain no more than half of their colleagues, and the remainder would not be rehired. So, what does this actually mean? Are we working with people, in our team, in whom we don’t really have any confidence? And we are not talking about serious weaknesses which could justify sacking people, but just the everyday frustration of team members delivering average, ordinary, unexciting work. But whose fault is this ultimately? The employees themselves? Or perhaps those who recruit carelessly and surround themselves with the mediocre, only to then complain about their lack of inspiration and good ideas?

And, just in case you are thinking, “Well, I had no choice” because you inherited your team, ask yourself this: What’s your plan to shift these colleagues from a “perhaps keep” to a “solid yes”? And then from a “solid yes” to an “absolutely must retain”?

Dilettantism, Disinterest, and Delegation

This apparently simple exercise (“Which of my colleagues would I hire again?”) is an acid test for any leader. Anyone who would prefer to see most of their team move on should ask themselves why they were hired in the first place or why they have allowed them to carry on working without doing something about it. How did it come to this? Where were mistakes made? Managers who have been in their companies or roles or business sectors for a long time frequently swear by their intuition, their “gut feeling,” when it comes to candidate assessment. Now, we don’t want to dismiss or devalue the importance of life experience or the insight into human nature gained through many years in the workplace. The question is whether you can consistently rely on this intuition in the heat of the moment, whether this intuition is equally relevant for different business functions and age groups, or whether our intuitive insight and gut feeling really are as good as we would like to believe. One of our interviewees, a highly experienced leader and human resources expert, gave us food for thought.

From Dr. Alexander von Preen, CEO of Intersport eG:

I don’t think that this sense [a reliable first impression of candidates] stays with you forever. The longer you are in a position of authority (let’s say ten years), the more time this intuition has to decay and wither. You start making poor decisions. Your antennae get rusty and stuck in time. Society changes a lot, different age groups tick differently, life conditions change, education changes, values change, etc. I see this over and over again, also among top managers. Your instinct for people can deteriorate over time and you have to be aware of this.

Wise words, indeed. And let’s be very frank: Can you ever really “know” another person? If the answer is yes, then it certainly is a process that normally takes a number of years. And a colleague who excels in his current job can just as easily fail in the next. We all know the classic example of the good performer who’s been moved into the wrong job for the wrong reasons—the best salesman who is rewarded with a promotion to a management position and fails abysmally. The change is detrimental to the company and very tough for the individual, yet it happens over and over again.

From Christine Wolff, multiple board member:

I come from the engineering sector, mainly working with engineers, scientists, etc., technically top-notch people. And I have made the basic error of not being careful enough about moving very good technicians into management roles. It’s a mistake to assume that a good technician is also automatically a good manager. Some are, but some aren’t and don’t even want to be—and it’s a mistake that can potentially do damage to the business.

In my case, it was different. I am an average scientist, but I have better leadership skills. Hardly a week had gone by in my job and I had pulled together my first team and worked with groups to achieve good results. It wouldn’t have helped the company much if I’d carried on working on the technical side. Others can do that better.

This is a straight-to-the-point and very succinct example of putting the principle of “talent before seniority” into practice. Unfortunately, the idea is frequently turned on its head when proven specialists are rewarded with management positions. Company loyalty and good performance over an extended period of time in a specific position is rewarded, rather than considering what a person can do best and whether this is what is actually needed in the future role. Anyone who closely monitors when and where colleagues blossom and flourish, and where they do not, is somewhat better placed to avoid such mistakes. In order to fill leadership positions with the right people (those with the best chance of success, see below), it would be helpful to move away from the idea that career progression is solely defined by how many people report to you or the size of the budget you control. Do we really value specialist skills enough? The Incas used to elevate proven craftsmen to the central court. How do we show that we value colleagues who are “only” experts, but whose expertise is critical to the company’s success? Anybody who understands the basics of motivation knows it’s not principally a question of money, but rather has to do with recognition, appreciation and being seen to have the right status in the organization.

Returning to the topic of assessing colleagues, it has long been known that human perception and judgment are highly unreliable and subjective. But how many of us fall into the trap of believing that these frailties only apply to everyone else? Perhaps it’s worthwhile to take another look at the seven common causes of poor judgment:

1.Our perception is highly selective. We cannot process all the information our senses pick up. That’s the reason the police are generally skeptical about eyewitnesses, as five bystanders at the scene of a crime have probably seen five different-colored cars. Black, blue, or maybe gray? And how often do you actually see your team members in action? Do you really know what they do well or what they are not so good at? And who do you focus your attention on during team meetings?

2.Perceptions and judgments are guided by our expectations; we see what we want to see, and this can lead to self-fulfilling prophecies. US psychologists Robert Rosenthal and Lenore F. Jacobson conducted a famous experiment in the mid-1960s. They led some primary school teachers to believe that, with the help of scientific testing, they had identified the 20 percent of pupils who were just about to begin a development spurt. In reality, the children had been chosen at random, but at the end of the school year this group had, in fact, outperformed their classmates, presumably because they had had more attention and affirmation from the teachers. So, does that mean, for example, that so-called “high potentials” are our beacon of hope because they really are better? Or is it because we expect them to be better?

3.We allow ourselves to be blinded by one characteristic or attribute which outshines all others—the “halo effect”—for example, above-average height suggesting assertiveness, good looks suggesting intelligence, or self-assurance suggesting a higher readiness to work hard and be committed. Did you know that height and income are correlated? Or that most CEOs of Fortune 500 companies and most US presidents (about 90 percent) are taller than average? So much for intrinsic values.

4.We prefer people who are like ourselves; it’s the “similar-to-me effect.” Someone with a similar background, maybe even somebody who went to the same business school: well, she must be good! Psychologists say that sympathy is essentially perceived similarity. Who could disagree with giving a promotion to a pleasant colleague? Sociologist and elite researcher Michael Hartmann goes further. Talking about how top jobs in the economy and society at large are filled, he states that social background and appearance are more important than skills and performance. Furthermore, in an increasingly global work environment, self-awareness of the phenomenon of ethnic bias is becoming ever more important.

5.We always look for confirmation of first impressions, and first impressions are made subconsciously and in a flash. Since our perceptions are selective (see point 1 above), it is extremely easy to then confirm our expectations. Look how long it took to see Bernard Madoff, one of the biggest investment fraudsters of all time, in the right light. Although there had been plenty of indications for years, nobody wanted to believe that the former chairman of NASDAQ and member of the NASD Board of Governors could have been capable of such dishonesty. Due to his extremely confident and convincing manner and his numerous donations to charities and cultural institutions (including many board positions in theaters, foundations, and schools), many philanthropic organizations entrusted him with their money; only after it became more and more clear that he had embezzled over sixty billion dollars and had ruined about 4,800 investors did the full extent of his duplicity become visible. He was sentenced June 29, 2009, to 150 years of imprisonment.

6.All sorts of things can influence how we assess people—general beliefs, prior experience, kitchen-sink psychology—and sometimes this works out well enough, but not always. In fact, we often draw conclusions which are, to put it bluntly, devoid of any logic whatsoever: “If someone demonstrates he really wants the job during the interview phase, then he’s bound to make a big effort later on as well,” or “Someone coming from a family of entrepreneurs is much more likely to be driven and ambitious than someone whose father was a civil servant,” and there are plenty more examples like these.

7.We generalize our own view of the world and project it onto others. So, somebody who has enthusiastically taken on leadership responsibility can quickly fall into the trap of believing that this must also be the dream of every other colleague or candidate. Or someone who enjoys being praised in public cannot imagine that another colleague might find such an experience unpleasant and embarrassing.

All in all, we tend to overestimate our objectivity when assessing others, something psychologists call “the illusion of sound judgment.” With this in mind, it seems pretty rash to be taking an important hiring decision almost off the cuff, following a sixty- to ninety-minute discussion. And yet the job interview remains the most popular way of making hiring decisions. After all, who really wants to spend long and intensive days at an assessment center? Admittedly, it is possible to learn a lot about a person in the course of a well-prepared and properly structured conversation, even more so if the questions are well thought through and derived from a clear description of the position. But how often is this really the case? Or is it more often than not something like this: Your assistant knocks gently on the door and reminds you that your meeting with Mr. or Ms. X is in a few minutes. You grab the file, take a quick glance at the candidate’s resume, and rush off to meet them. Everything else is down to “intuition,” how you feel on the day and, with any luck, your colleague from the Human Resources department who is sitting in on the meeting. Paul Williams spent a number of years as a senior manager in HR and knows this problem all too well. He has drawn up the following list of “rules,” based on his experience running hundreds of interviews alongside senior line managers. Paul is happy to leave it up to the reader to decide how seriously to take the list:

Rules of Thumb for Job Interviews

The amount of time a recruiting manager spends talking (about) himself during an interview is directly proportional to his level of seniority in the organization.

The capacity of a manager to listen carefully to a candidate during an interview is inversely proportional to his level of seniority in the organization.

The more senior a manager is, the greater the probability that he will answer the question that he has just asked himself, rather than waiting for the candidate to speak.

The more a manager speaks (about) himself during the interview, the better his impression will be of the candidate.

While we’ve discussed the issues concerning human perception and intuition, and addressed the dangers of poor preparation, there is another, equally serious and problematic issue with recruitment which we have not yet mentioned at all, namely the self-interest of the department head which, shocker, is not always driven solely by the best interests of the business. “As hire As, Bs hire Cs” is a well-known phenomenon; a poor boss is seldom interested in bringing unnecessary competition into their area of responsibility and usually prefers mediocrity, which they can more easily control. And if by chance a top performer lands in their department, then they are unlikely to hang around for very long. Nevertheless, a lot of organizations actually do seem to manage to just muddle along. It has been shown often enough that a performance-driven company culture is one of the cornerstones of sustainable business success (see Probst and Raisch, The Logic of Business Failure, 2004). The question is not whether we “manage to muddle along,” but rather “How much better could it be if we actually had the right people in the key positions?” Unfortunately (or perhaps fortunately), it can take quite some time, particularly in large companies, for the full impact of poor personnel decisions to be reflected in the bottom line. And, equally, managers are often slow to correct mistakes. Let’s not underestimate the loss of potential business brought about by having the wrong person in an important position for too long.

So, what might be an alternative to the traditional job interview? Well, for one thing, it is certainly not following the popular trend of outsourcing the whole process to external consultants, even if being able to blame them when things don’t work out is an attractive proposition. There is no doubt that the standard array of techniques such as personality type and interaction style tests, assessment centers, and structured interviews have their place. But these can only work well if all those involved, both internal staff and external consultants, have agreed on a detailed brief for the position to be filled and have the full support of senior managers within the business. When it comes to recruitment and development from within the company, especially for key positions and the selection of next-generation leaders, it is advisable to refer to internal assessments, 360-degree feedback tools, and experiences gained from personal interactions over many years, in favor of management audits run by external consultants. And it’s downright negligent when top management steers clear of important personnel decisions, thinking these are better left to the HR department and the relevant line managers. An experienced CEO we’ve worked with for many years once said, “The most important decision we make as a company is who we hire and then systematically develop.” We thoroughly agree!

Are You a Consumer or a Producer of Talent?

A large American corporation introduced a special remuneration system for its board members. Twenty percent of variable income was linked to the “talent” balance of each director. Was their division able to supply talent for the top two hundred senior management positions, or did they have to recruit externally for crucial vacancies or even draw on talent from other divisions? The key question was “Are you a net producer or a net consumer of talent?”

This process proved to be very effective, not only in terms of remuneration, but also because it helped to establish consistent talent development as a core element in the corporation’s business philosophy. As is so often the case, “What you measure is what you get!”

One of our interviewees elegantly describes how a top manager can nurture talent and benefit from the process along the way. His following statement is reminiscent of the recruitment method the Inca lords used. They’d deploy to the various regions graduates of their elite Yachaywasi Academy who’d been selected as students from either their own or the region’s upper class.

From Dr. Alexander von Preen, CEO of Intersport eG: