Tomicide Solutions November 2009: Who Are We Hiring? Impressive Resumes Or World-Class Talents?

By Tom "Bald Dog" Varjan

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Have you heard that in Mohave County, Arizona, a decree declares that people who are caught stealing soap must wash themselves until all their soaps are used up?

And of course, some people, who are smart enough to steal quality soap with natural ingredients, have a great time enjoying their booties and their soothing effects.

But those unfortunate buggers who steal normal soaps, based on carcinogenic ingredients like Sodium Lauryl Sulfate (SLS), Sodium Laureth Sulfate (SLES), Ammonium Lauryl Sulfate or Sodium Myreth Sulfate, are in very deep shit [1].

Yes, in the short-term the effects are nice and bubbly, as these materials leather really well, but the long-term damage they cause is pretty devastating.

Sadly, most people can't see any further than they can kick a watermelon.

And the reason why I mention this mind-menglingly stupefying fact is because this is happening to many IT companies when hiring business development people.

They hire people with impressive resumes who look good on paper, show up at their interviews wearing $3,000 Armani or Ralph Lauren sartorial masterpieces and present themselves so eloquently that interviewers mistakenly believe that these people really have massive achievements behind them, and end up hiring them. After all, some of them have worked in large corporations and even have MBAs.

Let's take a quick look both at the large corporation and the MBA thing.

In large corporations, due to the large headcount, producing results is not really important. Playing the political game is important and the main criterion of promotion and pay increase. Besides, most large corporations do image marketing, so results can't even be measured. The mantra is...

"Let's sling a few 100 million to the wall and see what sticks. Then repeat."

So, everyone can hide behind the wall of "what I do is not measurable".

And the MBA thing?

Well, apart from a handful of universities in the world, the traditional MBA curriculum is all about marketing commodities to consumers. Typical MBA case studies are based on cases from Coke, Pepsi, Wal-Mart and many other companies that sell commodities in the B2C world. But you're in the premium world and you sell in B2B land. And that requires a slightly different approach.

Enron's MBA Fiasco

In the early 90's when Enron started its Enron Capital and Trade, big boss Jeffrey Skilling went ballistic on hiring a steady stream of MBAs with the top grades from the best business schools. That was his way of stuffing (I mean "u" not "a") Enron with top-notch talents with 250 freshly minted MBAs every year.

As one Enron executive bragged to Richard Foster, a McKinsey partner, in his book, Creative Destruction...

"We hire very smart people and we pay them more than they think they are worth."

So, Enron blindly followed McKinsey's (Enron's strategy advisor) advice of hiring top-graded MBAs from Ivey League business schools and rewarding them at obscene levels.

McKinsey's idea was that this was the only way of standing out and doing truly excellent work in the last decade of the 20th century.

So, Enron set up complicated evaluation systems to grade its associates. The best associates got rewarded and promoted beyond human imagination and the rest was eliminated.

And what were the evaluation factors for hiring these MBAs? Typically two factors: University grades and charisma.

But as psychologists Robert Hogan, Robert Raskin and Dan Fazzini point it out in their research study, "The Dark Side of Charisma", there is a problem with charisma, especially one aspect of charisma: Narcissism.

Look at some of the most charismatic people in the 20th century. Who were they? Well, how about Hitler, Stalin, Mao or even the former Hungarian prime minister, the leader of the pro-Nazi National Socialist Arrow Cross Party Ferenc Szálasi who, as Moustache Dolfi's (Hitler) close ally, was responsible for the deaths of some 15,000 Jews?

And what about the 21st century? How about the late Saddam Hussein or the Zimbabwean dictator Robert Mugabe?

Narcissists have incredible self-confidence and charm, which can lead them to amazing rewards and promotions. But they make horrible leaders for they believe they are better than anyone else and they know everything better than anyone else.

They are good at taking credit for everything under the sun but vehemently deny responsibility for their mistakes and do their best to blame their errors on anyone and everyone.

There are plenty of examples of this blaming game in Ayn Rand's Atlas Shrugged.

The authors write...

"Narcissists typically make judgments with greater confidence than other people, and, because their judgments are rendered with such conviction, other people tend to believe them and the narcissists become disproportionately more influential in group situations. Finally, because of their self-confidence and strong need for recognition, narcissists tend to 'self-nominate'; consequently, when a leadership gap appears in a group or organization, the narcissists rush to fill it."

That's why I believe that the more vehemently people want to be leaders, the more vehemently they must be kept away from those positions.

Look at history. The greatest leaders, like Churchill or Gandhi, didn't become leaders by rushing in and proclaiming, "I'm the best for this position." Leadership just landed on them and they could live up to their roles.

So, with this MBA-obsessed approach, Enron, and many other similar companies, created a culture in which the universe was revolving around the superstars' arses and the shareholders and clients were put on the backburner as mere afterthoughts. Well, especially clients.

Now, everything you've read so far is a pretty harsh criticism of MBAs, so we'd better look at some more facts just to clear up any misunderstanding. And don't get me wrong. I don't blame people. There is an "MBA culture" out there that expects certain behaviours from new graduates if they want to succeed in corporate life.

According to the study "Academic Dishonesty in Graduate Business Programs: The Prevalence, Causes, and Proposed Actions", reported by The Toronto Star, 56% of graduate business students admit to cheating to obtain their credentials.

The study, which included 5,000 MBA students from 11 graduate schools in Canada and 21 schools in the U.S., was conducted by management professors at Rutgers, Washington State and Pennsylvania State universities. Researcher Donald McCabe also noted "Those numbers are probably under-reported."

This study points out an ongoing trend that lying and cheating in the world of business is just normal and they are here to stay. So, students learn at an early age that since business is based on lying and cheating anyway, using lying and cheating in studying towards business credentials is also an acceptable practice.

Based on that, the common notion is that one group of lucky bastards make their money by screwing a group of unlucky bastards out their money.

In a 2005 study by analysts at Wetfeet, over 800 students, who pursued careers in management consulting, were asked to select up to 3 factors that make their top ranked company appealing to them.

Only 0.25% 2 (two people) said that "Ethics" was one of their top 3 factors for choosing a consulting firm. Shockingly, even the category "Others" was rated more highly than "Ethics." Go figure.

And now think of the recent bailout events in the US and other countries.

What some of the most troubled US companies have in common is that they all have Ivey League MBAs in vital executive positions, and as a result of this MBA brainpower, these companies are lining up at the White House with begging bowls in hand and grovelling for alms.

At the same time, companies run by folks who've never seen the inside of business schools are creating delighted clients and making great profits in the middle of the recession.

What is also interesting to observe in the recession is that many companies that have street-smart marketers are having a great time in the recession and enjoy watching their competitors go out of business.

As Vancouver-based personal development expert, T. Harv Eker says...

"If you save your money for the rainy days, rest assured you'll have plenty of those days."

We just attract what we expect because our actions are congruent with our expectations. An expectation without an investment and commitment is merely a hope.

So, instead of hiring people with perfect-looking resumes and impressive alphabet soups behind their names, I think IT companies should...

Hire People With Applicable Knowledge Instead Of Conceptual Knowledge

Many people may ask what the difference is between conceptual knowledge and applicable knowledge.

Well, roughly the same as the difference between knowing and understanding.

In an article written for the American Marketing Association, Travis Adkins explains the difference this way...

"There's a difference between knowing and understanding, although the two are often confused. Two organizations might have the same knowledge, but the one that possesses [sic] understanding can see consequences and implications that remain invisible to the other."

Knowledge is out of context. Understanding is in context. Similarly conceptual knowledge may be the deepest knowledge on something but it's out of context.

Understanding something is in the context of something bigger.

Ophthalmologists have great knowledge of the eyes, but naturopathic doctors have understanding of the eyes in the context of the human body as a whole.

Ophthalmologists look at the eyes as separate entities. Naturopathic doctors look at the eyes as the sub-systems of the whole human body.

This is why traditional, palliative medicine is all about reducing symptoms in isolation as opposed to preventing or eliminating the cause, as done in holistic medicine.

Conceptual knowledge is how to make the perfect steak. The ultimate, best of the best, perfect steak.

Applicable knowledge is that a "merely" great steak as part of a full gourmet meal that is properly marketed is more valuable to the market than the world's most perfect but non-marketed steak which sits on a piece of tin foil.

This difference was nicely demonstrated in Donald Trump's reality show The Apprentice (2nd season)...

Kelly Perdew, a West Point graduate and former military officer with Ranger qualification won because he could lead a team and deal with unexpected situations.

His opponent, Jennifer Massey, was busy touting her excellent school credentials (a Phi Beta Kappa graduate of Princeton and another degree from Harvard Law School.)

Perdew had applicable knowledge, while Massey had conceptual knowledge.

But there is another point to consider...

Hire People With Character That Fits Into Your Culture

And here let's go back to another episode of The Apprentice...

By the end of the first season two remaining apprentice candidates were a Harvard MBA, Kwame Jackson and Bill Rancic, the founder of a multimillion-dollar Internet company.

Each candidate was asked to select assistants from the already fired candidates. Kwame selected Troy McClain, a successful entrepreneur and proven project leader.

As a second choice, Kwame selected Omarosa Manigault-Stallworth, a rather controversial character with a celebrity syndrome who proved again and again that she couldn't be trusted and relied upon.

Her ace was that she had an Ivey League MBA and was working on her Ph.D. It was later discovered that she had been fired from four different jobs while working in the White House as an intern.

Throughout the project Omarosa proved that, among others, she was also an expert at blaming, lying, refusing to follow instructions, deceiving, vanishing unexpectedly, failing to communicate, sweeping problems under the carpet and hell knows what else.

Omarosa also used every opportunity to berate Kwame for his incompetence and being too laid back.

When announcing Rancic as the winner, Trump told Kwame...

"She lied to you twice. You should have fired her or got her out of the way where she could have done no damage."

Kwame tried to build a peak-performing team based on a superbly schooled "superstar" who had no discipline and other vital characters to be part of a team.

I firmly believe that in assembling a good IT business development team, you should focus on two elements: Character and applicable knowledge.

Applicable knowledge leads to the ability to apply skills that are required to be able to do the job, and character leads to the will to actually do it.

When we look at some of the best and most profitable IT companies, they are very similar to the military.

The military is all about...

Preparing teams of soldiers for battle

Leading teams of soldiers in battle

Having character and applicable knowledge, soldiers have the skill to fight battles and the will to win them. Without will, they would merely go through the motions as long as it's easy and comfortable. They would quickly acquire the mindset of the typical unionised employee...

"Give as little as you can, but take as much as you can. Then negotiate for giving less and taking more."

And unfortunately Comrade Obama only deepens this entitlement-based mindset first in the USA and then all over the world.

So, how does this play out in IT companies?

An IT business development team is all about...

Preparing for acquiring great clients with sexy projects

Designing and executing campaigns to acquire great clients with sexy projects

Simple really.

And just as military leaders' number one priority is to build battle ready units, business development executives' top priority must be to build top-notch business development teams that can design and implement client acquisition campaigns.

For the military, in order to win battles three key elements must be in place...

Soldiers and weapons are concentrated at specific locations and at specific times

The battle must be controlled to achieve maximum impact with minimum casualties and equipment damage

At the crunch point, soldiers must apply their skills to fight and their willingness to win battles

For IT business development teams, the situation is pretty similar...

People and systems are concentrated at specific locations and at specific times

The client acquisition process must be controlled to achieve the pre-set objectives using minimum internal resources (People, time and money)

At the crunch point, team members must apply their skills to do the work and their willingness to win land great clients with sexy opportunities

And if you're seeking people with applicable knowledge not merely with conceptual knowledge, then...

Ignore Conventional HR Wisdom

As Alan Weiss and Nancy Mackay put it in their recent book, The Talent Advantage...

"Human resources is to talent search as airplane food is to fine dining."

My belief is that workers can be hired and retained but top-talents must be attracted to a company and inspired to stay.

And what about the attraction? The culture and the values of the company.

You can't find many vegetarians working at slaughterhouses. Similarly, I've never met unionised workers to aspire to start their own businesses. Different mindsets and different values.

Now I would never call myself an HR expert, but over the years I've assisted clients to hire over 500 people in various business development positions from rank and file to senior executives.

I also believe that the very reason why over 95% my hires have worked out is because I asked clients to kick their local HR experts out of the recruiting process, and regard talent acquisition as a top-priority function for the executive team.

And there is a world of difference between being recruited by HR and attracted by a great culture and values and being inspired to stay.

The problem is that in the traditional HR world, people are hired by HR folks who don't have subject matter expertise. Imagine an HR professional trying to hire a graphics designer but the HR person knows nothing about graphics design. They can't even communicate on the same wavelength.

So, what gives this candidate a chance to get hired? Two things...

A perfect gap-free resume from cradle to grave

Excellent school and college grades (being on Dean's is a plus)

Then this person gets interviewed and maybe hired because she's managed to account for each second of her life and learnt how to pass exams with flying colours.

That is she's proved she might have excellent conceptual knowledge.

The fact that she can still be the proverbial Omarosa with a grossly distorted character or someone who is full of theory but void of practical applications of that theory, doesn't seem to matter.

At a veneer level, beyond which HR doesn't have the expertise do dig, she is the perfect candidate. At a deeper level, she may well be a ticking time bomb.

When we're hiring for character and applicable knowledge, we have to structure the interview process drastically differently from the traditional interview.

Traditional hiring is about hiring workers for a non-transparent master-servant (employer-employee) relationship.

Just read Beware Of Crazy Recruiter Tricks at Techepublic.com.

It seems to me that HR deception has no upper limit. So, I find it a bit funny that companies screen the living daylights out of candidates to avoid hiring rotten apples, and in order to do that many companies are willing to use scumbaggy tricks as outlined in another article, entitled Hiring Tricks That Job Seekers Must Know

What we have to realise is that talents don't choose business development as a job. They choose it as a career.

And career people must be treated differently from the people who take jobs at McDonald's to save up for an iPod and then bugger off.

So, How To Recruit Talents?

Instead of conducting interviews between superiors and subordinates, as it's done in traditional recruiting, talents are engaged through dialogues where peers compare notes about the value candidates can bring to the table and what companies are willing to invest to acquire that value.

While for jobseekers money is a major driver, for talents money is just a sign that their potential employers take them seriously and value their contribution.

According to the Austrian liberal economist, Ludwig Von Mises...

"The price paid for the purchase of a slave is determined by the net yield expected from his employment. Just like the price of a cow is determined by the net yield expected from her utilisation."

The purchase price, the investment, gives owners the right to expect performance from their slaves or cows. Without upfront investment, owners have the right only to hope for performance but not to expect it.

If you treat your people like cattle, you can expect only cattle-like performance. If you expect human performance, you have to provide human inducements.

And when we look at traditional HR practices, we can easily conclude that it is the hiring proverbial prize-winning (equivalent of top schooling) cattle.

When it comes to engaging talents in your company, you'd better forget about competitive wages. Good companies want to hire excellent people not merely competitively competent ones.

In April 2009, Navy SEALs rescued the hostage Richard Phillips, captain of the Maersk Alabama, which was hijacked by Somali pirates. The SEAL guys shot three pirates in the head.

After the rescue, SEAL Captain Roger Herbert mentioned that although the Navy invests huge sums of money to train SEALs, training is no substitute for real combat experience. He continued saying...

"There's simply no way we are ever going to replace a veteran SEAL who has two, three or four combat deployments with a new guy."

That is why the military offers a - currently - $125,000 bonus to a SEAL who signs on for another five years of service.

The US Navy seems to understand talent because the stakes are so high. The military can't go to investors and say...

"Sorry, we've blown all of your money, so give us some more."

Congress would investigate such high level of financial abuse.

My skydiving buddies are highly decorated former soldiers from the US Marines, the British SAS, the German Special Forces (KSK) and Russian Spetsnaz, and none of them joined the army for the money.

However, world-class talents need more than "competitive wages", as HR is fond of calling low wages.

The way I see it is that for competitive wages we can get competitive people, so our business can keep competing in the often cutthroat marketplace. But for excellent compensation - plus the other attraction factors of course - we can get top-tier talents, so our business can rise above the competition and become industry leader.

What People Need To Know About Their Work And Potential Employers

"Career people" want to know a few things about their positions and companies that "job people" don't care much about. Let's look at all 12 of them (adapted from First, Break All the Rules: What the World's Greatest Managers Do Differently by Marcus Buckingham and Curt Coffman)...

Career people want to know what outcomes they're expected to create. Tell them what you want and that's all. They know how to do it more than you do.

Career people want to know they have access to all the necessary resources they need to do excellent work. If you hire a graphics designer, don't give her an old computer with Windows 98 that crashes every 10 minutes.

Career people want to know they have the opportunity to do what they do best. Just because a PHP programmer finishes his work before 5:00pm, don't ask him to fill up the day by cleaning the windows or taking out the rubbish. Hire a janitor and leave your programmer alone to invent new things.

Career people, being proud of their expertise, want to receive praise and recognition for good work. This is a normal human need. Praise upfront and you get better work. That's all to it. Anyone who's even been to rock concerts knows that in order to get a truly an amazing concert, the audience had better give the band a standing ovation BEFORE the concert.

Career people want to belong to a culture where their supervisors or managers care about them as human beings not only as employees.

Career people want to work in an environment where their professional development is encouraged and supported.

Career people want to make sure they can speak their minds on company matters without being punished, and their opinions actually count.

Career people want to know that what they do is important and contributes to something bigger than the company's bottom line, the owner's personal wealth and shareholder value.

Career people want to know that everyone around them is equally committed to doing high-quality work and everyone is equally accountable for that quality. They don't tolerate organisational blue-eyed boys.

Career people want to have best friends at work. These people don't balance their personal and professional lives but seamlessly blend them, so there are no boundaries.

Career people want to receive frequent feedback on their work and progress. They want to be in constant communication with their direct reports, peers and managers. The annual review is plain retarded. People need instant feedback on their work. If you're on a diet, could you lose weight by weighing yourself only once a year? I doubt it.

Career people want to learn and grow on the job, so they want to work at companies that are growing. But not rowing in terms of the bottom line but improving in terms of technology. You can have great bottom line but if your computers run on Windows 3.1, then lots of great people will quit.

The reality is that most IT companies are excellent at demanding outstanding performance from their people, but pathetic at bringing out excellence in their people and support them on their quest for excellence.

On Summary On Attracting Top Tier Talents

Attracting and keeping top-tier talents for IT companies is drastically different from hiring competent workers for competitive wages for manual labour type jobs.

First of all, IT is knowledge work, and there is one important point we have to know about knowledge work: Knowledge workers own the means of their performance in their heads.

While a truck driver needs the company's vehicle to do his job, knowledge workers can quit their jobs and get into competition against their former employers.

And don't tell me you ask your newly hired people to sign nondisclosure and non-compete documents. They are useless. People find the way.

Or as Dr. Malcolm put it in Jurassic Park, when the scientists tell him the dinosaurs can't breed because the lab produces only female dinosaurs...

"Nature always finds the way."

And when these knowledge workers are mistreated, they find the way to get their revenge. So, it's a good idea not to piss them off.

Let's remember what Peter Drucker wrote about knowledge workers many years ago...

"Knowledge workers are volunteers who own the means of their performance, and whether or not they remain with any one company is totally volitional. Just like most investors, they will go where they can earn a fair economic return-measured in wages, fringe benefits, and other pecuniary rewards-as well as where they are well treated and respected, the psychological return. In the knowledge society, the most probable assumption for organisations - and certainly the assumption on which they have to conduct their affairs - is that they need knowledge workers far more than knowledge workers need them."

Re-read the last few words... they [companies] need knowledge workers far more than knowledge workers need them.

Knowledge workers, with a bit of entrepreneurial spirit can make it in life quite nicely. But companies without knowledge workers collapse.

Where traditional HR "best practices" make the mistake is that they are still tailored towards the industrial age of mass-hiring of manual labourers with pretty high attrition rate.

Similarly, let's forget about abdicating recruitment to headhunter agencies. They are good for finding workers, but finding and attracting talents must be a concerted effort by the top executives.

This is why...

When you're hiring workers, everything you need to know is either above or right under the veneer. You don't have to dig deep. It's on the resume how much manure this person can shovel in a day. Or at least you can find it out from the previous employer.

But when acquiring talents, the essence of these people lies very deep under the veneer. And I dare to say, 80-90% of a talent's essence cannot be detected by from resumes. Sadly, headhunters and HR folks don't have the expertise to go any further.

How could they? They have all their experience in comparing resumes to job descriptions. They have never learnt how to access wealth-creating capabilities. But that's why companies hire people. Producing results.

So, HR folks make decisions based on incomplete information.

I find it shocking to see how reluctant executives are about getting involved in work related to attracting and inspiring talents.

In comparison to marketing and talent "management", everything else is trivia.

Executives must understand that their companies' success stands or falls on the quality of people they can bring to the table and how well they can market their people's expertise and their value-creating capabilities to their markets.

Yes, I know executives have busy lives, but they also have to evaluate what makes them busy in the first place. In most cases it's useless minutiae and micromanaging. They have to make sure their work is more strategic and less tactical.

When you look at a cruise ship, you find three groups of people:

People who keep the ship in motion: Tactical work

The captain and other officers who sail the ship to the given destination: Both strategic and tactical work

The owner(s) of the cruise ship company who set the overall direction for the cruise ship company: Strategic work

Similarly, executives must know their roles, and they should stop running down to the proverbial engine room to make sure each cylinder is firing.

They should work on strategic issues, that is, where the company is headed.

So What's Next?

Replace the HR director with a talent director. The same person might be suitable but you have to change the title to make the person feel that now her job is to help to make the company attractive to talents.

Replace activity-based job descriptions with outcome-based talent agreements or talent contracts. Talents love knowing what they work on but hate to be micromanaged as to how to do it. Sadly, a huge percentage of managers regard micromanaging people as the most enjoyable form of intellectual masturbation, so they practise it with exceptional (sickening?) vehemence.

Look at your whole department and see what you can do to improve talent retention. Remember, money alone doesn't keep talents.

Re-evaluate your talent management practices. Do you manage your people as talents or as kindergarten kids? For many IT companies it's the latter. Make sure you treat your people as peers not as subordinates.

During the Vietnam war, some 1,600 officers were killed by their own soldiers, called fragging (killing officers with fragmentation grenades) as a revenge for the nasty treatment they inflicted on their soldiers during training.

Remember, you may be in charge of your department, but it's your people who run it.

[1]Is Your Beauty Routine Causing Long-Term Health Damage? By Dr. Joseph Mercola. Continue where you've left off...

Attribution: "This article was written by Tom "Bald Dog" Varjan who helps privately held information technology companies to develop high leverage client acquisition systems and business development teams in order to sell their products and services to premium clients at premium fees and prices. Visit Tom's website at http://www.varjan.com.