How I Hire: To Transform a Company, Don't Hire From Within

What do Marissa Mayer of Yahoo!, Alan Mulally of Ford, Joi Ito of the MIT Media Lab, Greg Maffei of Liberty Media, Mark Murphy of the Green Bay Packers, Dave Calhoun of Nielsen, and Gail McGovern of the American Red Cross and have in common?

They were all recruited into their organizations as CEOs from the outside. In a world when the chorus of conventional wisdom is that executives promoted from within – insiders, outperform outsiders, these leaders are exceptions to that presumed rule. They are but a small set of game changers that trace their lineage back to Lou Gerstner coming in from the outside to IBM in late 1993.

At Spencer Stuart we have conducted extensive research on the topic of insiders vs. outsidersand the facts are that insider CEOs do indeed outperform outsider CEOs when companies and organizations are healthy. This makes intuitive sense as internally promoted executives know the business, fit the culture, have the necessary internal networks, and have been a key part of creating the organization’s strategy and success. But when companies are in a crisis or need of a fundamental strategic shift, outsiders turn out to have a greater likelihood of achieving top performance than insiders. This too makes sense as outsiders by definition represent change, are not beholden to a culture or strategy that led to trouble in the first place, can question assumptions that have long been taken as givens, can bring sorely needed new skills, and can act as a catalyst for ambitious change.

As Microsoft and other companies consider their leadership succession, they would do well to keep the following two principles in mind:

1. The same person can be a raging success in one situation and an abject failure in another. Therefore the most important consideration in hiring is diagnosing the situation, assessing what is required for success, and then finding the best match for the circumstances.
2. If the situation calls for a leader from the outside, understand that the best executives will require some combination of “push” and “pull” to make the move.

By push I mean there needs to be some reason for receptivity to a new opportunity. Has an executive done everything that she can in her current position? Is he blocked from moving to the next level? Does she disagree with the direction of the company or does he have strained relations with his boss or board? Has she made enough money to take a risk? Is he at an age where he may have just “one more big role in him”? Has she lined up succession at her present company?

By pull I am referring to the fundamental quality of the opportunity, its size and scale, the prestige, wealth creation potential, as well as the ability for a new leader to have a major positive impact on the organization and more broadly. Pull will of course be stronger if the particular industry, the company’s brand, products and services align with an individual’s interests and passions. Do not underestimate the importance of chemistry and shared vision with a hiring board or manager with the candidate. The best leaders will be continually making a risk-adjusted assessment of how likely they will be to be successful in the new role. Also when the most important strategic, organizational, financial, and operational challenges of the opportunity align with a person’s expertise and strengths then that combines to create a powerful pull to the new opportunity.

Unrelenting global competition, make or break strategic bets, new customer attitudes, technology-stoked rapidly changing business models, talent wars, activist shareholders waiting to force out under-performing management teams, and billions of dollars of shareholder value waiting to be created for the winners and lost for the losers, make the case that the value of top-level leadership is beyond debate. It is important not only to identify the leaders who will dramatically improve the performance of organizations and make the case that motivates them to take on a difficult new challenge, but to create the conditions for these game changers to succeed.

Photo: Magnus Hoij/Flickr

The Undercover Interviewer: My Single Best Interview Tip

I was giving interview advice to a C-Suite executive the other day and had a revelation - that my counsel to her was almost identical to what I had advised a college senior preparing for his upcoming job interview just a couple of days earlier.

The tip: don't just answer questions. Tell a narrative. That is, establish a coherent thread, a story, throughout your interview and have your answers connect in a way that make sense to the interviewer and that he or she will remember. Let me give you two examples:

College Senior - a photography major interested in digital media advertising sales prepping for the basic question, "What are your greatest strengths and weaknesses?" His plan was to say "I'm a creative person, a good people person, and I'm passionate about media. However, I'm not expert in coding or the technical aspects of your product." This is a pretty solid answer. But after some discussion, here was the answer that he came up with. "I believe that my greatest strengths are that I'm a highly creative person with the ability to build powerful relationships and team well with others. As an example, in my photography honors thesis I had to go into the low-income public housing projects near campus and establish trust with the residents so I could take intimate portraits of their families. From playing soccer through high school and into college I learned the value of teamwork and collaboration which I apply consistently in our group project work. As to weaknesses, I haven't yet had training in coding but if I were to join your company I would find a way to learn."

C-Suite Executive - a global general manager preparing to meet the CEO of a major consumer company to interview for the president position. She had done an enormous amount of homework on the company, the strategy, the competition, and the culture. But she was wondering what the best answer would be when the CEO would inevitably ask her to "Walk me through your career." We came up with the following approach to re-frame and sharpen the question: "Absolutely, however, before I do that can I share what I believe is most important to you and your company?" No CEO in this context would think this an inappropriate ask. In fact in doing this she could demonstrate her insights about the company and that she had indeed done her homework. She would also project strength and confidence to take charge without being aggressive, and most importantly, it would give her the clues about exactly what parts of her career she should pull out as part of her narrative. "In doing my research, talking to current and former employees, reading the press and analyst reports, it seems to me that the three most important values and priorities for your company are a passion for the brand, innovation in product development, and a culture of direct communication based on intellectual honesty." Pause -- the CEO would either concur with this list or edit it to add one or two elements. In this scenario the conversation has already advanced positively and the executive hasn't even answered the specific question yet. With the three or four pillars now known about what is most important in the company and to the CEO, she will now be able tell her story weaving in specific anecdotes that connect to each.

The key to effective interviewing is to be savvy about what it is that the interviewer is looking for - through doing your homework before the interview and effective listening during - and then weaving your answers to questions in a narrative with brief anecdotes that illustrate how what you've done matches what's most important to the company.

The Undercover Interviewer: "Do You Have Any Questions for Me?"

"Do you have any questions for me?" could be the biggest trap of the professional job interview. That is, when the interviewer turns the tables and offers to answer whatever questions may be on your mind. Don't be fooled. This is not the moment to relax or think that the interviewer is just being polite. In fact it is often the most important part of the interview. This is your chance to show how much homework you've done - or not - about the company. How much insight you have - or don't - about the position you're discussing. And whether or not you are accurately reading the dynamics of the interview.

Do not wait to be surprised when this question comes at you with five or seven minutes left in the interview. Get ready beforehand and use it as the opportunity to differentiate yourself from your competition.

The worst possible answer to this question is, "No, thanks, I think I have everything I need." If you do that the interviewer will write you off, then and there. as someone who isn't hungry, isn't curious about the organization or doesn't care about the interviewer him or herself. Rather, prepare a series of questions that link to your narrative as discussed in my previous "Undercover Interviewer" post.

Some examples of good areas to probe and effective questions to ask when given the chance:

• About the culture - "How would you describe the kinds of people that thrive in the company and those that don't fit in? What does that say about the culture?" Or even more specific, "As I reflect on my two previous organizations, one culture was all about collaboration, teamwork, never using the word 'I' and the other was much more a star system, where it was all about standing out as an individual performer. How does this organization operate on that dimension?"

• About the position - "What would success look like in the position? If I were to be offered the job and a year from now we were reviewing how it's going, what would I have accomplished for you to say, 'What an amazing year you've had?'

• About the interviewer - "Tell me a little bit about your story. How did you find your way into the company? What have you enjoyed most and what's been most frustrating?" It goes without saying (but it is worth repeating), people love to be asked about themselves. An even better way to ask this question is to have Googled the person you're meeting and framing a question about them with specifics about what they've done, where they went to school, what they may be known for.

• About the company - "In the most recent earnings call, the CFO said that the company is now projecting flat revenue for the year. Given that the market is growing double digits, shouldn't I be concerned about the strategy not working?" Or "Would it be an accurate interpretation to say that your two most recent acquisitions were made to attract talent, or 'acquihires?" If that is the case, why do you think it's been so difficult to attract the talent you need?" When asking about the company and strategy, assuming you've done your homework it's fine to be challenging - as long as you're not being insulting or personal about it.

As you can see, there are any number of questions to ask when you're given the opportunity in the last part of an interview. Your goal for the interview is for the interviewer to describe you, once you've left as being "very sharp and asking great questions." Asking great questions in an interview is among the most sure-fire ways to get the job.