Why Can’t We Figure Out How to Select Leaders?

Original Article

Selection is on my mind again. Perhaps it is prompted by the inauguration of a new U.S. President or the drama of leaders of our largest financial institutions worldwide struggling to justify decisions that have placed their organizations in jeopardy. I was reminded, too, of the CEO of a well-known retail organization who, I believe, would be regarded by Jim Collins (of Good to Great fame) as a Level 5 leader—"Builds enduring greatness through a paradoxical blend of personal humility and professional will"—except for the fact that he has been plagued with bad decisions regarding his choices for senior management positions and a reluctance to repair them quickly enough. Collins writes about the need to get the wrong people off the bus, but what about the need to avoid putting the wrong people on the bus in the first place? As Capital One's CEO, Richard Fairbank, put it several years ago, "At most companies, people spend 2 percent of their time recruiting and 75 percent managing their recruiting mistakes."

Now Malcolm Gladwell (author of The Tipping Point, Blink, and Outliers) has come forth with the proposition that there may be some jobs for which it is impossible to hire with any confidence. As he puts it, "There are certain jobs where almost nothing you can learn about candidates before they start predicts how they'll do once they're hired." Three that he cites in a recent article in The New Yorker are pro football quarterbacks, high-performing financial advisors, and teachers.

Learning is more strongly influenced by individual teachers, for example, than any other factor, including class size and quality of the facilities. In various studies, the truly great teachers do things like giving good, individualized feedback while remaining sensitive and responding to interactions going on around them that might indicate needs of other students. The reason that these findings are important to the field of management is that all good leaders, among other things, teach as well as learn. It requires careful listening and responding, often to individual needs. I suspect that they apply the same sensitivity to the social, economic, and legal environment in the search for effective competitive strategies.

At our institution, like many others, we've addressed the problem by hiring at least four people for every one that we expect to succeed at the tasks of teaching and research that our faculty members face. That's a solution that most business organizations would consider too costly. Some organizations have inventoried the qualities that successful employees display, then try to select others with the same qualities. But the process is often applied only to those at middle or lower levels.

Are there leadership jobs in business for which it is simply impossible to select people with any degree of confidence? Do behaviors change when one is anointed with the power of a leadership position? Are we condemned to an on-the-job training approach, with the attendant obligation to correct mistakes quickly (which boards understandably are reluctant to do)? Or are there more affordable approaches to the problem? What do you think?

To read more:

Mike McNamee, "Credit Card Revolutionary," Stanford Business, May, 2001, p. 23.

Jim Colliins, Good to Great: Why Some Companies Make the Leap ... and Others Don't (New York: HarperBusiness, 2001) Note: Selecting companies for good to greatness may be just as difficult as selecting leaders. One of the 11 companies that Collins cited as going from good to great went on to bankruptcy in just seven years after the publication of the book.

Malcolm Gladwell, "Most Likely to Succeed: How do we hire when we can't tell who's right for the job?," The New Yorker, December 15, 2008, pp. 36-42.