Outliers: A Sustainable Hiring Model?
By John Parkinson
I have always been fascinated by what we can learn from looking at edge cases - what Malcolm Gladwell called "Outliers" in his eponymous book. In almost every area of human endeavor, the best performers do orders of magnitude better than the average.
Over the past 30 years, I've occasionally been able to build teams using only the best people and I've also advised (usually small) businesses who have taken the same approach to building a product or service. There's no question that it works -- assuming you can find the right people and manage them the right way -- but is it sustainable for the long haul? Can you build a successful, growing business, operating dynamically and at global scale on the "Outliers" model?
For most of my advisory career I have suggested to most clients that you can't. Certainly not everyone can -- there simply isn't enough "outlier"-level talent to go around. But can anyone beyond the early stages of a new company really make this strategy work?
You'd have to overcome some pretty steep obstacles, most rooted in the personalities and behavioral traits that come with truly high performers or the extent to which much of businesses' operating processes are too mundane to be interesting to the very talented. And you'd have key man (or woman) risks all over the place.
Still, the idea remains intriguing and lately I have been giving some thought to what would be needed to make the strategy work. Here's a (work in process) guide to the issues that you'd need to solve.
- Understand what you need the talent for and let the talent work on nothing but these things. You should be able to divide everything you need to do to run your business into "core" and "non-core" activities. You'll need the best people working on what you decide is core. Make sure they agree that these activities really are core, and don't make them do anything non-core.
- Get someone else to do the non-core activities for you. Just because something isn't core to your business doesn't mean you can choose to not do it. All kinds of regulation and reporting requirements encumber your core activities, especially if you're a public company and you operate globally. So, get someone else to do these things for you, and preferably keep them at arm's length. This way, your talent pool doesn't get distracted by the sight and sound of mundane work. Better yet, automate as many of your non-core activies as possible.
- The identification, nurturing and growth of highly talented people should be one of your core capabilities. This is a tough one, because no matter how talented your core group is, you're going to see some attrition. Finding new people who can fit in quickly and non-disruptively is never easy. Highly talented people aren't always very good at applying their talent when they're young, and by the time they're good they may be embedded somewhere else.
- Avoid the trap of averaging down. This is also tough. There will be two big temptations here: Hiring someone less talented because you just have to have the capacity, never mind the capability; and allowing your hiring managers to recruit people who are less (rather than more) talented than they are. This puts a cap on how fast you can grow and how big your talent pool can be, which "the market" might not like. If you don't avoid the trap of averaging down, though, sooner or later your next hire will make your organization worse, not better, and that's the beginning of the end.
- Actively manage collaboration amongst the talent pool. In my experience, highly talented people are only occasionally natural collaborators, and it takes work to make them into an effective team.
- If you allow your most talented people free rein to innovate, don't stigmatize failure. That's a guaranteed culture killer.
Not many organizations have made the "outlier" approach work successfully. Bell Labs for a while. IBM Research. Google today, maybe. There are other success model available (GE, Microsoft, Cisco, Amazon, Apple). It's often easy to spot the company that has implemented this approach, but it's rarely easy to copy it successfully in your own organization.
Yet, the lure of working with the most talented people and seeing what they can do remains. Ready for some game changing anyone?
About the Author John Parkinson is the head of the Global Program Management Office at AXIS Capital. He has been a technology executive, strategist, consultant and author for 25 years.