If you are to build a great business, you need to know how to hire great people. There are 3 things you want to see in a person to know that they will make a lasting positive impact on the organisation.
Can they do the job today
Will they do the job long term
Do they fit with the team
What do you look for in people when you are deciding whether to make an offer? What red flags have you identified?
In his TED talk, Stephen Duneier explains that what defines him are not titles, but an approach to decision making that transformed him from someone who struggled with simple tasks to a guy who is continuously achieving even his most ambitious dreams.
For thirty years, he has applied cognitive science to investing, business and life. The result has been the turnaround of numerous institutional businesses, career best returns for managers who have adopted his methods, the development of a $1.25 billion dollar hedge fund and a rapidly shrinking bucket list.
“Every one of my report cards basically said the same thing: Steven is a very bright young boy, if only he would just settle down and focus.”
“What they didn’t realize was I wanted that even more than they wanted it for me, I just couldn’t. And so, from kindergarten straight through the 2nd year of college, I was a really consistent C, C- student. But then going into my junior year, I’d had enough. I thought I want to make a change. I’m going to make a marginal adjustment, and I’m going to stop being a spectator of my decision-making and start becoming an active participant.”
“And so, that year, instead of pretending, again, that I would suddenly be able to settle down and focus on things for more than five or ten minutes at a time, I decided to assume I wouldn’t. And so, if I wanted to achieve the type of outcome that I desire – doing well in school – I was going to actually have to change my approach. And so I made a marginal adjustment. If I would get an assignment, let’s say, read five chapters in a book, I wouldn’t think of it as five chapters, I wouldn’t even think of it as one chapter. I would break it down into these tasks that I could achieve, that would require me to focus for just five or ten minutes at a time. So, maybe three or four paragraphs. That’s it.”
“I would do that and when I was done with those five or ten minutes, I would get up. I’d go shoot some hoops, do a little drawing, maybe play video games for a few minutes, and then I come back. Not necessarily to the same assignment, not even necessarily to the same subject, but just to another task that required just five to ten minutes of my attention. From that point forward, all the way through to graduation, I was a straight-A student, Dean’s List, President’s Honor Roll, every semester.”
“I then went on to one of the top graduate programs in the world for finance and economics. Same approach, same results. So then, I graduate. I start my career and I’m thinking, this worked really well for me. You know, you take these big concepts, these complex ideas, these big assignments, you break them down too much more manageable tasks, and then along the way, you make a marginal improvement to the process that ups the odds of success in your favor. I’m going to try and do this in my career. So I did. I started out as an exotic derivatives trader for credit Swiss. It then led me to be global head of currency option trading for Bank of America”
Mr. Duneier teaches graduate courses on Decision Analysis in UCSB’s College of Engineering. His book, AlphaBrain is due for release in early 2017 from Wiley & Sons. Through Bija Advisors, he helps business leaders improve performance by applying proven, proprietary decision-making methods to their own processes. His artwork has been featured around the world and is represented by the Sullivan Goss Gallery. As Commissioner of the League of Professional Educators, Duneier is using cognitive science to alter the landscape of American education. He is the former Head of Currency Option Trading at Bank of America and Emerging Markets at AIG International.
The more choices you make throughout the day, the harder each one becomes for your brain. As it tires, your brain looks for shortcuts. The 2 most common decision avoidance tactics are:
to act impulsively (without seeing the consequences of the decision)
to procrastinate (do nothing)
Taking decisions takes willpower. Willpower is a form of mental energy that can be exhausted. It is like a muscle that gets fatigued with use.
There are a limited number of good decisions that one can take in a day. You might be a more effective decision maker than those around you, but you will still have a finite limit on the number of good decisions you can take in a day.
How do you Ration your decision making?
In the toughest days of my life as a CEO – dealing with the fallout from the collapse of Lehman Brothers and the collapse in bank lending at the end of 2008 and beginning of 2009, I hit my limits of decision fatigue. In order to get through the weeks and have energy to deal with the things that would allow us as a business to get through these tough times, I rationed my decision making.
The first step was to specify when and where I would take decisions. (Initially… when: on a Friday; where: only in my office). Previously my team would approach me at any time in the day, over coffee, over lunch, via email, via sms to request budget for small projects or permission to do some new activity. I felt responsable as leader for providing an immediate answer. It was killing me and leaving me with no energy to dedicate to building our future once we survived the immediate crisis.
“That’s great, bring it on Friday…”
I decided that I would take all budget decisions on a Friday between 9-12. If someone came to me with a request, I learnt to say “that’s great, bring it on Friday and we can take a decision”. It was hard at first, people were frustrated and angry and didn’t like my lack of willingness to engage at the time and place that they wanted. Over the following months, the people around me learnt to plan ahead and bring the information necessary to take a good decision on the Friday before they needed the decision.
It gave me peace at lunchtimes, in the break area, even in my office when someone opened the door on a Tuesday. It was a challenge to remove my sense of responsibility to decide at all moments. I learnt to be able to have a conversation where I could contribute ideas, but allow it to be clear that no final decision would be taken during this discussion.
When One decision is not really One decision…
My wife realised that one of her struggles with going to the gym is that it was never just one single decision. Each trip to the gym was a series of decisions: do I change at home or at the gym? do I shower at the gym or at home? will I eat there or not? which t-shirt will I bring? which trainers will I use today? which bag will I use? As the idea of gym came up, her brain knew that it would be exhausted by the series of 20 decisions. Her solution? She wrote down all the questions that she used to ask herself and wrote the answers. She make going to the gym become one simple decision, with a written template of pre-decided answers (shower=yes, trainers=blue, eat=there…)
In Vistage one of the first processes of change that we see in a new CEO member, is a greater awareness of which decisions they should be taking and which decisions they should not be taking.
Are you taking €10,000 decisions, €100 decisions or €1 decisions?
If you are taking the €1 decisions, your brain’s decision willpower will be depleted before lunchtime.
If you are taking the €1 decisions, your €10,000 decisions will not be receiving the analysis and impact that they deserve.
Jack Welch spoke about the size of decisions that he allowed himself to be taking. GE is a multi-billion business. As leader Jack allowed himself to only be taking decisions that could affect at least $50M of the market capitalisation.
Steve Jobs is famous for having a wardrobe full of identical blue jeans and black t-shirts. It was not a fashion decision, it was a conservation of decision willpower for the important decisions of Apple. Barrack Obama speaks about a similar challenge as President of the USA. He set up a structure around him that ensured that he would take no more than 5 important leadership decisions in a day.
The Structure of Leadership Decision Making
The Vistage Decision Model captures 60 years of experience of working with CEOs as they take operational and strategic decisions to lead their companies and their lives. There are 3 levels of Decision “skill” – Instinct, Judgement and Perspectives. There are 5 areas of leadership decision: Talent, Operations, Financials, Customers and Leadership Style.
This video is inspired by George RR Martin and his view on leadership and the price of power. Kouzes and Posner in The Leadership Challenge show that being a good person gets the greatest effort out of the people around you, but just being a nice person can mean you avoid the really tough decisions of Leadership.
What’s the toughest leadership decision of all time? Answer below the video…
Tough Leadership Decisions?
The toughest decision of Leadership: Odysseus’ choice between Scylla and Charybdis.
I’ve been part of Entrepreneurs’ Organisation for the last 10 years and for almost any significant decision I have taken in the last decade, there are 9 people in my forum group who have helped me take a better decision. I would share with them:
the background to the decision
the why of the decision
what I’m seeking to achieve in my life
There is no major decision I’ve taken in the last 10 years that has not had at least those other 9 wise brains also looking at it. They are also giving me different perspectives, helping me think through:
Who I am
What what my strengths are
What my company strengths are and
How I can better play into the opportunities that I have
My question to you: “how many brains do you get involved in the big decisions you have to make?”
If it is just one brain (your own) then you are really going to struggle over your life as a business leader. Join Vistage, join EO, join Young Presidents’ Organization… Get into a peer group where others can give you multiple different perspectives, different ideas, different experiences that have worked for them in the past.
Get as many brains as you can to help you take important decisions, to help you think through the problems you face, to see how to seize (or say no to) the opportunities coming into your life.
Get access to brains to share your problems. Ask lots of questions and get as much coming back from other’s life experiences as you can.
There is a saying: “if you’re the smartest person in the room, find another room.”
Are you the smartest in the room? If you find that you are often the smartest person in the room, you’ve got to expand your network. Get out of that room and get yourself onto a bigger playing field.
Peer Group Organisations
Vistage (requirements: CEO of €5M+ turnover business)
“Some People Go 24 Hours Without Hearing a Single Positive Thing Said About Them” Coach George Raveling (on the Tim Ferriss podcast)
I was struck by this sentence. I was inspired by Tim Ferriss’ interview with Coach George Raveling. George speaks so clearly and concisely about life and learning and our role. His life has had some amazing adventures that came from him being open to the advice and suggestions of mentors at a young age.
So I made a video… back again after a couple of months away from video making for YouTube.
Who will get a positive word from you today? Don’t forget the power we each have with our words…
Leadership is about raising up those who follow you. Leadership is not so much about doing, but about having an effect on how others do.
Mark Fritz is a regular Vistage speaker who is on a mission to end micromanagement around the world. He is passionate about helping leaders create highly engaged organisations where every employee treats the business as if it were their own.
One of my favourite examples from Mark is his question: “why does nobody ever wash a rental car?”
Why Does Nobody Ever Wash a Rental Car?
Have you ever washed a rental car? No. It is not your car. You give it back covered in muck and full of litter. It’s not your problem. Its someone else’s car. It got you from A to B.
Many people treat their work like a rental car. Do your employees treat your business like it is their rental car, or do they take care of it as if it were their own vehicle?
Leaders must be great at 3 things to create Success…
The 3 Necessary Conditions for the Success of your Organisation
Clarity – when things are clear, you take more action. When things are clear, everybody takes more action.
People – it is not your people that are your most important asset, it is your people pipeline. How are you developing the next generation of people? If you are not developing people to replace your current leaders, your current leaders can’t grow into their next roles.
Influencing Skills – if your people can’t influence someone else on the team, where do they come to get help? to you. If your people can’t influence, they depend too much on you.
As a leader who really wants everyone to grow around you, you need to help people around you develop two abilities:
Check out Mark’s short video from a recent Vistage open day in the UK:
I am biased. I believe business schools are excellent at developing business judgement. During the 19 months of my MBA program at IESE Business School, I worked through 650 cases. Each case is a business decision. Each case requires some individual work to practice your own ability to focus on what is important and develop a plan. Each case then requires that you work with a small team to influence them about your plan, and to allow your ideas to be tested and changed by their influence. Each case then requires that you enter a classroom with an excellent teacher who will take the discussion even deeper. There is no better way to develop general business judgement than in the business school environment.
Learning to Influence
I have a vested interest in this. I have taught over 44,000 business leaders, MBAs and political leaders to Speak more Powerfully – specifically to Move People to Action. I would suggest you begin by taking my Speaking as a Leader online course (currently free). You can also watch the playlist on my Youtube channel (over 70K subscribers) called Develop Your Speaking Skills.
This video is about how to become someone who is inspiring to those around you.
There are 4 key ingredients of the people that get the best out of the teams around them. I shared this talk with over 800 school heads, teaching leaders and educational leaders at the Global Forum on Girls Education in Washington on June 19 this year.
The book mentioned in the video is “The Leadership Challenge” by Kouzes and Posner.
The Leadership Challenge is considered a classic on leadership principles. Kouzes and Posner have spent more than three decades studying the best practices of top leaders. In their book, they explain five practices that all great leaders engage in. Under these five practices, they also discuss ten commitments of exemplary leadership. Below are some of the ideas and quotes that stood out to me.
Practice 1 – Model the Way
1. The first step to being a great leader is to clarify your values.
“You must be able to “clearly articulate deeply held belief” (44).
“To find your voice, you have to explore your inner self. You have to discover what you care about most, what defines you, and what makes you who you are” (46).
Question: What values guide your current decisions, priorities, and actions? (69).
2. The second step is to set an example by aligning actions with shared values.
“Credibility is the foundation of leadership” (37). You have to practice what you preach. Do what you say you will do. (39).
“Titles are granted, but it’s your behavior that earns you respect” (16).
“Leader’s deeds are far more important than their words” (17).
“Leading by example is more effective than leading by command” (17).
“What you do speaks more loudly than what you say” (76).
Use stories to “pass on lessons about shared values” (91).
“How you spend your time is the single best indicator of what’s important to you” (96).
Question: How are you spending your time?
Practice 2 – Inspire a Shared Vision
3. The third step is to envision the future by imagining exciting and ennobling possibilities.
Vision begins with “one person’s imagination” (103).
“Leaders are dreamers. Leaders are idealists. Leaders are possibility thinkers” (105).
“Leaders need to spend considerable time reading, thinking, and talking about the long-term view, not only for their specific organization but also for the environment in which they operate” (110).
“Imagination is more important than intelligence” – Albert Einstein (112).
It is easier to drive fast when there is no fog on the road. This “analogy illustrates the importance of clarity of vision…You’re better able to go fast when your vision is clear” (123).
Question: What do you care about? What drives you? Where do your passions lie? What do you want to accomplish and why? (126). What ideas and visions do you hold in your mind of what can be? (100).
4. The fourth step is to enlist others in a common vision by appealing to shared aspirations.
“You can’t command commitment; you have to inspire it. You have to enlist others in a common vision by appealing to shared aspirations” (18).
“No matter how grand the dream of an individual visionary, if others don’t see in it the possibility of realizing their own hopes and desires, they won’t follow voluntarily or wholeheartedly” (117).
“The best leaders are great listeners (118).
“People commit to causes, not to plans” (121).
“People aren’t going to follow someone who’s only mildly enthusiastic about something. Leaders have to be wildly enthusiastic for constituents to give it their all” (129).
“Visions are about ideals. They’re about hopes, dreams, and aspirations. They’re about the strong desire to achieve something great. They’re ambitious. They’re expressions of optimism. Can you imagine a leader enlisting other in a cause by saying, “I’d like you to join me in doing the ordinary?” (130).
“Feeling special fosters a sense of pride” (134).
“Show people how their dreams will be realized” (138).
“Visions are images in the mind…They become real as leaders express those images in concrete terms to their constituents” (143).
Question: What common ideas are you appealing to? (152).
Practice 3 – Challenge the Process
5. The fifth step is to search for opportunities by seizing the initiative and looking outward for innovative ways to improve.
“Maintaining the status quo simply breeds mediocrity” (156).
100% of the shots you do not take will miss going into the basket (166).
“Find ways for people to stretch themselves. Set the bar incrementally higher, but at a level at which people feel they can succeed” (169).
“Be on the lookout for new ideas, wherever you are” (181).
Question: What are you doing new today in order to become better than yesterday?
6. The sixth step is to experiment and take risks by constantly generating small wins and learning from experience.
“Nothing new and nothing great is achieved by doing things the way you’ve always done them. You have to test unproven strategies…break out of the norms that box you in…venture beyond the limitations you normally place on yourself” (188).
“Big things are done by doing lots of little things” (196).
“It is hard to argue with success” (197).
“Small wins produce results because they make people feel like winners and make it easier for leaders to get others to want to go along with their requests” (199).
“Learning is the master skill” (202).
Question: How are you changing, improving, growing, and innovating?
Practice 4 – Enable others to Act
7. The seventh step is to foster collaboration by building trust and facilitating relationships.
“The team is larger than any individual on the team” (21).
“‘We’ can’t happen without trust” (219).
“When you create a climate of trust, you create an environment that allows people to freely contribute and innovate” (222).
“Placing trust in others is the safer bet with most people most of the time” (223).
“People have to believe that you know what you’re talking about and that you know what you’re doing” (226).
“Once you help others succeed, acknowledge their accomplishments, and help them shine, they’ll never forget it” (234).
“Demonstrate that you trust them before you ask them to trust you” (239).
Question: Who are you willing to trust?
8. The eighth step is to strengthen others by increasing self-determination and developing competence.
“The paradox of power: you become more powerful when you give your own power away” (244).
“Feeling powerful…comes from a deep sense of being in control of your own life” (246).
“Individual accountability is a critical element of every collaborative effort” (252).
“The more freedom of choice people have, the more personal responsibility they must accept” (253).
“If your constituents aren’t growing and learning in their jobs, they’re highly likely to leave and find better ones” (261).
Question: Do the people around you feel powerful?
Practice 5 – Encourage the Heart
9. The ninth step is to recognise contributions by showing appreciation.
“The climb to the top is arduous and steep. People become exhausted, frustrated, and disenchanted, and are often tempted to give up. Genuine acts of caring draw people forward. “recognition is the most powerful currency you have and it costs you nothing.” (23).
“Say Thank You” (294).
“Spontaneous, unexpected rewards are often more meaningful than expected, formal ones” (292).
Question: Do you say “thank you” enough?
10. The tenth step is to celebrate values and victories by creating a spirit of community.
“Leaders never get extraordinary things accomplished all by themselves” (30).
“Celebrate accomplishments in public” (307).
“Get personally involved…leadership is a relationship” (315).
“Make celebrations part of organizational life” (323).