It matters that we hire the right people. Fine, I'll just go hire the right people, I mean, how hard can it be? We just talk to some people pick the best ones. Turns out it's not quite that easy. On top of the fact that having the right people matters, there's also a lot of evidence that hiring the right people, choosing the right people, is not something that we do terribly well naturally. One of my favorite stories about this, the problems of doing this comes from a guy called Daniel Kahneman. Daniel Kahneman is a Nobel Prize winning psychologist, which is quite a neat trick because there isn't actually a Nobel Prize in psychology, he won it for economics. But he tells a wonderful story about the hiring that he did in his very first job. His very first job, he was a psychologist in the military and what they were supposed to be doing was selecting people for officer training camp. The idea was that they were to get a group of five or six people who were potential candidates for officer training. They'll give them all this big logs, huge chunk of wood, and they would tell them you need to get yourselves and the log over this six-foot wall, but, and here's where it gets complicated, you can't touch the wall at any stage. The log can't touch the wall at any stage, the log can never touch the ground. If you break any of these rules at any point, you're going to have to start again. It turns out this is quite a difficult exercise and so people would try it, they'd fail, they try it, they'd fail and that have to keep going back and doing it several times people get frustrated. While they're doing it, Kahneman and his colleagues are standing on the outside with their clipboards taking notes. What he says is, "It was very easy based on this to make predictions about who was going to be successful. You could see who are the people who are energetic trying to get things going, who are the ones who to stand back and are disengaged. Who are the ones, particularly, when things aren't going well, who step forward with plans, help to organize people." He said, "On the base of this, they were really quite willing to declaring, "This one will never make it, this fellow is rather mediocre but should do okay, he'll be a star. No need to question our forecasts, moderate them or equivalent, we can be really confident about what we're saying." The interesting thing about this is they actually knew how good their predictions were. Every few months reports would come back from officer training camp saying, "These people made it through the training and these people didn't." They could go and look at these and then go back and look at their scores and say, "How well did we predict who was going to succeed?" They found pretty much not at all. They found, as they said, their predictions were little better than random and yet what they found was most shocking, or he says, particularly in retrospect, was that even though they knew this toss didn't do a good job of predicting how people would actually perform in their organizations, nonetheless, they were totally happy making these predictions. The insight based on this is we often don't do a very good job with these judgments. I think predicting who's going to be successful in an organization, which is really what we're trying to do when we hire people, is a classic of these. He described this as what you see is all there is. Why didn't this exercise work? You just seeing a tiny slice of people in one task, whereas being successful as an officer requires a huge variety of different things. But we don't feel that we need to see all of those attributes, just a couple of pieces of information on one person and we fill out all of the rest, and we become very confident in predictions we really shouldn't be. It turns out that this problem really contaminates hiring. The extent to which there is a huge raft of research that suggests on our own we do not do very well selecting the right people and that in order to do so, we need to follow well-structured, well-designed processes, and it's those processes that I want to talk through next.
