Entities structured with the traditional hierarchy often hire reactively, such as when an opening occurs due to attrition or poor employee performance. Consequently, firms facing market environments where change, innovation and rapid evolution take place can rush into a process that ends with a candidate to “fill the job.” Not knowing any better, HR managers or recruiters often take a narrow view of the skill set required to best solve the problem. They pick from a pool of prospective employees who come from within the organization or have similar backgrounds to the senior manager. For example, managers of GE heritage gravitate toward GE-trained candidates because of organizational familiarity and preconceived notions about the quality and familiarity of the ex-employees. Insert nearly any company for GE and the same holds true. This focus on familiar pedigree – but even more importantly the functional requirements (for instance, the need for a manager with “materials science Ph.D. or substitute “consumer marketing” and 10 years of experience managing materials science projects, etc,) result in the employee search space lacking critical levels of diversity in both experience and thinking. The Center for Creative Leadership has shown that in nearly one in four recruiting cases within Fortune 500 companies, the candidate selected was the only candidate considered. Unfortunately, recruiting from the same organization enhances groupthink, furthers bureaucracy and limits risk-taking. It also can create an environment where problems that could have been avoided were missed due to homogenous thinking and adoption of a rigid problem-solving methodology. GE’s fabled six sigma process “DMAIC” is a highly successful set of analytic tools but rarely encourages outside-of-the-box thinking.
Focus on familiar pedigree – but even more importantly the functional requirements…result in the employee search space lacking critical levels of diversity in both experience and thinking
Leaders can be successful in the rigid traditional hierarchy built with functional recruiting but much of the impetus then falls on the leader to ask probing questions and demonstrate flexibility in adopting the best possible solution to a problem. This leader must also encourage a culture of independent perspectives, no repercussions for promoting ideas and a willingness to iterate on solutions as a team. He or she must take great care in keeping the entrepreneurial spirit alive. Traditional recruiting and techniques can be used to encourage and manage innovation. Intuit founder and Chairman, Scott Cook, has described a recent directional change in middle managers as “guiding experimentation” rather than “managing projects”.