Few individuals can claim to have conducted 20,000 interviews (yes, that is twenty thousand!), which to put into context is four per working day for the last twenty years.
BusinessWeek calls Claudio Fernández-Aráoz ‘one of the most influential executive search consultants in the world.’ Add to that the list of internationally renowned names who have sought his consultancy, including Amazon’s Jeff Bezos, and you begin to get a picture of the level of expertise this man brings to the table.
Whether you are hiring, or hoping to in the future, Claudio Fernández-Aráoz shares with Enviable Workplace readers his vast experience on how to go about finding the right person to take your business forward.Photos of Claudio-Fernández-Aráoz taken by Alastair Fyfe Photography
In the early years, that is after only around a thousand or so interviews, Claudio began to get a sense of how to best judge candidates. ‘You get better once you know what to look for… once you have a valid and reliable inventory of competencies,’ he told me.
So when it comes to key leadership assets, what should you be looking for? Claudio has signposted four values common to all high-potential executives:
Curiosity – asking questions, taking genuine interest, and seeking new knowledge and experience
Insight – making innovative connections between existing concepts, offering fresh perspectives
Engagement – the ability to use emotion and logic to communicate a persuasive vision and connect people
Determination – the commitment to persevering in spite of adversity
But like many things, Claudio explains how this is easier on paper than in practise, ‘making people decisions is very hard, and making great people decisions is brutally hard.’
It is impossible to remove the human element from the process and this means it will always have its imperfections, ‘even Jack Welch once said to me that when he was first promoted at his first junior managerial role he started keeping track of his success and failure, and he initially would get 50% wrong. Thirty years after that, of which the last twenty at the helm of General Electric as CEO leading the largest value creation in world corporate history, he would still get it wrong 20% of the time.’
But why are these decisions so hard to get right?
‘It is difficult for two reasons. One is we have the wrong brain. We are full of unconscious psychological biases that lead us into surrounding with people similar to us, familiar to us, with whom we feel comfortable. A way to fight this bias is to make sure that you become explicit about the competencies needed for the job and you get the hard evidence that the person will be able to deliver according to the needs of the job.’
Claudio claims the second reason is that ‘we have the wrong education… very few people have studied assessment.’ He told me about a time he was giving a speech at the World Business Forum in New York in front of 4000 executives. ‘I asked how many of you have screwed up royally at least a few people decisions. All 4000 raised their hands. I asked how many of you have studied assessment. Only 20 raised their hands. How can you master this if you don’t study?’
Aside from starting out with the wrong brain and the wrong education another common mistake that people make is to make too many choices in one day, leading to what Claudio calls ego depletion or decision fatigue.
This means is that either resisting temptation or making difficult decisions tires us enormously, and as a result of that we fall into one of two negative behaviours. One is being afraid of making a decision and not deciding, and the other one is just taking risks on those decisions.
There is research on this. Judges in Israel were deciding on prisoners who were on parole. At the beginning of the day, fresh after breakfast, most of those individuals were left free, but when the day was advancing and they were tired a much larger percentage were not set free. ‘Whether you went to jail or not depended on how full the belly of the judge was, which is ridiculous.’
Once aware of this fact there are many ways to avoid ego depletion:
When it comes to assessing a candidate’s attributes, getting the interviewing process right is the first step. Claudio explained he defined the typical interview as a ‘conversation between two liars’.
Liar number one: is the one who’s trying to sell the job and the organisation and tells you welcome to paradise. “You will never find a place where you will have these career opportunities where you will make so much money, where you have such a wonderful culture. Welcome to paradise.”
Liar Number two: I am desperate to get the job. I present my best angle. I give the impression that the day I sign it’s going to be God himself working in paradise. That’s a bad interview.
Rather than asking frequent questions about things like strengths and weakness, Claudio suggests getting straight to the point: ‘if you’re looking for a project manager that needs to manage a project with a very tight deadline and a very strict budget, you ask the person if they have you ever managed a project with a tight deadline and a strict budget. What was your role? What were the circumstances? What was the situation? What did you do? How did you do it? What were the consequences? That’s a better interview. You probe and probe.’
Another way to mitigate potential errors in the interviewing process is to have the only the most appropriate people involved. Involve people who are good at assessing, who know what the job is about, and who have the right motivation.
Where one person’s judgement is too limited, any more than three people involved in the process brings no further advantage.
If you want to hire people who are top 10%, even if you are very accurate the problem is that most people are not top 10%. If you only put one interviewer, there is a significant chance that some who are not top 10%, because of the interviewing mistakes that we all make, gets hired. If, rather than having just one person assess the candidates, you have three filters, filter two only interviews those that have passed the assessment of filter one, and filter three only assesses those that have passed the assessment of the previous two filters, the probability of hiring a wrong person is very low.
The more filters you add, the more you increase the chances of the second type of error which is killing the right candidate for the wrong reason. Typically the best trade off is to have three people involved in the process and no more than that.
So which three people does Claudio recommend?
It should be the boss of the position, the boss of the boss, and some really senior human resources professional who is a master at assessing people.
Due to the imperfection of the interviewing process, Claudio explained the importance of complementing it with proper reference checking.
Aside from some people’s propensity to lie, he explained that there is also the fact that ‘unless you’re clinically depressed, we all have this optimistic bias. We think that we are much better than we are.’
BusinessWeek polled 2000 senior executives and middle managers, asking: within your own organisation in your own level, are you in the top ten percent, yes or no? ‘Out of 2000 people, you would expect that roughly 10% would say yes I’m in the top 10%, but the answer was that 90% believed they were in the top ten 10%. Obviously, that’s a mathematical impossibility. That’s why you need to check references.’
Claudio recommends reading between the lines of a reference, is the person saying too much or too little? This could be a negative sign. As with the interview, Claudio maintains it is best to get right to the details and probe for concrete examples where the individual has displayed the necessary skills.
In Claudio’s opinion, hiring the right people is the most important move a business can make and should have the correct resources dedicated to it, ‘making great people decisions is not an art. It’s not an intuition. It is a craft and a discipline that can be learned and should be learned for our success.’
‘We choose our spouses. We choose our bosses. We choose our friends. We choose the people who work with us. We choose our nannies. We choose our lawyers. We choose our doctors. It is definitely worthwhile investing in learning, because this is not rocket science, but it requires discipline.’
This article could be the beginning of that education. Next time you are considering hiring consider Claudio’s key points:
It’s Not the How or the What but the Who – Succeed by Surrounding Yourself with the Best. Find it on Amazon.