Claudio Fernandez-Araoz - Choice of the strongest. How can a leader make major decisions about people?

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Claudio Fernández-Aráoz

Great People Decisions

Why They Matter So Much, Why They Are So Hard, and How You Can Master Them

John Wiley & Sons, Inc.

All rights reserved. No part of this book may be reproduced in any form without the written permission of the copyright holders.

© Claudio Fernández-Aráoz, 2007

© Translation into Russian, publication in Russian, design. Mann, Ivanov and Ferber LLC, 2016

* * *

From the author

The fact that personnel decides everything and that the most valuable capital is people is something everyone in the current generation of Russian top managers knows, even if they don’t remember who and under what circumstances stated this from the rostrum. Today, when the Russian edition of the book Great People Decisions is published, these statements are more relevant than ever - both for Russia itself and for every serious organization that operates in this part of the world.

Watching your great country For several decades, I have been continually amazed by the process of extraordinary political, economic and social change, surpassing in scale, speed and complexity those occurring in almost any other country in the world.

Many of today's Russian leaders grew up in a system that was oriented toward the long term and attempted to combine collective interests with those of individual development. Within this system, Russia had significant experience in developing human capital, including the institute of mentoring, personnel reserve (young specialists with high potential), scientific and technical youth societies. However, over time, this experience began to be emasculated: form prevailed over content, and the development of individual entrepreneurship was fundamentally limited.

Then the pendulum of history swung and, with the destruction of the Berlin Wall, opened the way to unprecedented career opportunities, spectacular rises, and functional and industry transitions that were previously unimaginable (and are again today). Able-bodied Russians, starting from the lowest level of the hierarchy of needs (security, shelter and physical survival), began to climb up Maslow’s pyramid with varying and yet surprising speed. Meanwhile, the market was becoming saturated with consumer goods, and enterprises were turning into companies with the goal of making a profit and receiving an adequate return on invested capital. Russian managers learned new things role models from bright local and visiting leaders, relying on their charisma, as well as on formal on-the-job training programs that often included only the minimum required knowledge. Some, however, studied and worked abroad, gaining access to the world's best practices.

In general, the Russians molded themselves as managers, and they succeeded quite well. The most in-demand competencies were results-orientation, quick decision-making, and the ability to adapt to a rapidly changing environment and manage these changes. At the same time, there were still more interesting promising projects than talented managers. Market entry valuable papers, mergers and acquisitions according to ever-increasing estimates... the faster, sharper, larger-scale - the more adrenaline. Time itself was compressed; looking a year or two ahead seemed unjustified.

Today, perhaps partly due to the recent global economic crisis, and perhaps due to our own “midlife crisis”, Russian leaders realize that achieving profit and success per se is not enough, that true growth and happiness require not just personal achievements, but also active and significant contributions to their organizations, to their society, to their country, to our shared planet. And now, to paraphrase the titles famous books, they try hard to “build something great that lasts.”

In this context, the Russians have unique opportunity Capitalize on your exceptional natural and human resources by learning to make outstanding people decisions.

Since the first publication of this book on English language, publishing its numerous translations, I traveled all over the world, covering a path several times greater than the distance from the Earth to the Moon. I've given a hundred speeches and conducted thousands round tables with CEOs, human resource management experts, members of company boards, prime ministers and presidents of states, heads of ministries and departments, public and utility services, university professors. As a result, today I am even more convinced than ever that whenever we choose the strongest anywhere on the planet, we open ourselves up to success, to growing the capitalization and value of our organizations, to developing great nations and creating a better world.

However, I find it hard to imagine a country where great people decisions come from more fertile soil than in Russia, and I sincerely hope that this book will help many Russian leaders achieve lasting personal success and make their companies great.

I am extremely grateful to my colleagues Artem Avdeev, Stanislav Kiselev, Ekaterina Rudelson, Vladimir Kochukov and Alexey Sokolov for their help in preparing the publication of the book in Russian. I am especially grateful to Catherine for her commitment and pursuit of excellence during our collaboration on this truly special edition.

Introduction
The important choice is yours

No Nothing more important for the company’s work than the manager’s skill in attracting and promoting outstanding people. The personal success of each manager also directly depends on his ability to competently form a team by recruiting the right people.

But filling key vacancies is difficult. At the same time, oddly enough, only very few managers receive at least some vocational training in that the most important form activities, and there are no well-designed tools to help them in the absence of such training.

Our book aims to fill this gap.

As you've probably learned throughout your career, organizations are the people who make them up. It doesn't matter how technologized, automated, offshored, decentralized, or rationalized a company is (or how believes yourself as such). In the end, any organization is still people.

Managers don't sleep at night because of many problems: insufficient cash flows, litigation, failed strategies, failed mergers and acquisitions, competitor attacks on the most profitable product lines, etc. But home the reason for the insomnia of successful managers is people: “How to find the best employees and competently distribute the scope of work between them? How to choose the right person for each job?

People are both the problem and the solution. How does a manager solve a serious problem? Usually he looks for the best people who could solve it, either inside or outside the organization.

The companies that succeed are those that are adept at solving the “people puzzle”—that is, at finding, attracting, hiring, promoting, and retaining the people who can do a particular job better than anyone else. (Jack Welch told me that during his time at GE, he spent more than half his time recruiting and placing the right people in the right positions.) Organizations that fail to do this are doomed to failure in the long run.

But the truth is that puzzles are not solved by organizations, but by themselves People. Within every organization, many people (and perhaps you are one of them) must make critical decisions about employee selection.

Perhaps you are a member of the Human Resources department, and making such decisions may be part of your daily job responsibilities. Or you are a member of the board of directors and in this capacity take part in the selection of a new CEO or senior executive. Or maybe you are one of a group of middle managers who from time to time must make decisions about people in their functional units or regional product divisions. Most importantly, these decisions are vital. I use the word “important” here in two ways.

1. This is vital for you.

Firstly (and this main reason, which prompted me to write a book), solutions about people are extremely important to you, the “decision maker.” By proving your ability to competently solve “human puzzles,” you will certainly secure tempting career prospects. And vice versa - by making a mistake in your choice over and over again, you knock down your future career. Analyze the experience of your colleagues, and you will probably agree that those who know how to find good employees are moving up, and the rest are “out”!

The problem is that few managers are specifically trained in how to properly search for and select good employees. Business schools most often push the issues of human resource management somewhere into the fifth, if not the tenth, plan. Very rarely do they consider these issues as an important component of managerial skills that need to be developed in practice.

I sometimes use an investing analogy to make my point. Would you like to be as successful an investor as, say, Warren Buffett? Me too. Would you like to achieve this without having the necessary skills and knowledge? I wouldn’t refuse either, but it’s impossible! To be as successful in recruiting professionals as Warren Buffett was in investing, you must become an HR expert. You need the right experience and a set of the right tools.

The book “The Choice of the Strongest. How to make major decisions about people as a leader” offers just such a set of tools for managers who want to improve their skills in recruiting and promoting employees. This is not an art - it is a craft that can be learned. And such training is extremely important for you.

2. It is vital to your organization.

Secondly, I want to emphasize that Making decisions to hire and retain great people is vital to your organization. The correct appointment of a CEO, for example, is a matter of enormous importance. Everyone knows this, but still a third of CEOs who leave companies leave their post involuntarily: due to inadequacy of the position they hold. The same thing happens at all levels in organizations. For example, in a study I conducted involving thousands of executives at leading companies around the world, approximately a third of the participants we assessed were at the bottom of the competency curve compared to their peers at other companies in the same industries.

In other words, even in best companies the wrong people occupy positions that are inappropriate for them. Are we not capable of better?

My experience

Here you have every reason to ask: what are the personal qualifications of the author? Who was he to talk about the importance of such things?

I have been recruiting and developing outstanding employees for over twenty years. I received an engineering degree from a university in my home country, Argentina, and then an MBA from Stanford, both with honors. He worked for McKinsey & Co in Madrid and Milan and in 1986 joined Egon Zehnder International (EZI), a leading international executive search firm. I am currently a partner at EZI and a member of its management committee. And I must say this global role. I have to travel all over the world, while my home and my family are in Buenos Aires.

Perhaps the phrase “executive recruitment” requires some clarification. This concept involves the so-called “headhunting”, that is, hiring external candidates for leading positions both for business and for non-profit organizations. I personally conducted about 300 such searches and actively participated in about one and a half thousand more. My activities covered positions at all management levels - from chairman of the board of directors and CEO to project manager. I've done this for both leading billion-dollar corporations and small firms, as well as for some non-governmental and non-profit organizations. My personal hiring success rate has consistently been over 90%, which is very high, especially considering the fact that hiring external people The customer company usually resorts to it when it finds itself in a difficult situation.

But executive selection in a broader sense also includes management level assessment, that is, assessing the competencies of managers in the client organization. In some situations this point becomes critical. For example, during a merger/acquisition, a company must be able to correctly distribute its management resources, including deciding who will leave and who will stay. Another example is when a new CEO comes to a company and wants to conduct a quick, professional, accurate and independent assessment your team. In these cases, professionals of my class are also involved. A management assessment can be very useful when a company is faced with intense competition, changing technologies or changes in regulation in the industry, which entails a change in the “rules of the game.” In such cases, we have to assess not only competence (that is, the current ability to perform the current job), but also potential growth each person. We provide recommendations for promotion, appointment to new roles and positions, advice regarding development plans, etc. That is, in this case we work mainly with internal candidates.

For some time I headed our global practice “Assessing the effectiveness of management teams”. We recently compared our findings and assessments with the actual performance and career progression of the managers we assessed. Once again, their accuracy in predicting managers' performance and growth potential was 90% globally, while the accuracy of our client companies' internal assessments was often less than 30%.

Don't get me wrong - I'm not citing these numbers to brag. I want to emphasize two important points. First of all, I really have a lot of experience making HR decisions. I know this area firsthand. And secondly, the recommendations given in this book really cover the entire range of issues of hiring and promoting both external and internal candidates.

I must add that I have been developing this topic for a long time and intensively. Since 1994, in addition to my work in search and selection of personnel, I have become responsible for the professional development of consultants in global network of our firm and currently leads the development of intellectual capital in a network of 62 offices worldwide. In the 1990s, I led efforts to further develop our executive search and selection methodology, and recently again led a similar program to help our clients recruit and promote the world's best talent.

I have read thousands of books and articles relating to all aspects of decisions about people. I have written articles for Harvard Business Review and MIT Sloan Management Review. I also wrote a chapter for the book The Emotionally Intelligent Workplace, edited by Daniel Goleman and Carey Cherniss. I collaborated with Jack Welch on his book Winning and worked with Jim Kouzes on the latest edition of The Leadership Challenge.

And finally, without false modesty, I will say that I am real enthusiast in helping others improve their hiring and promotion decision-making skills. I truly believe that the world can be a better place if outstanding hiring and promotion decisions, from the shop floor to the boardroom, are made more professionally. And I believe that it is improvement Maybe. I know that I have the skills, and therefore the obligation, to contribute to improving those skills.

What's in this book

The first two chapters of this book are dedicated to explaining in detail why outstanding people decisions mean so much to you and your organization.

In Chapter 3 I will explain why they are so difficult to take. It's not just that the "talent pool" is limited, but that too often the people doing the searching make one or more tactical mistakes, which together significantly reduce the likelihood of success. Chapters 4, 5, and 6 will tell you the “what, where, when”: what to look for, when to look for it, and where you're most likely to find what you're looking for. In these chapters (and others), I will tell you how and when to engage external consultants, and explain why, in most cases, the solution is to seek only within the company turns out to be not the best option.

But b O Most of the book is devoted to how to evaluate, attract, motivate, and integrate the best employees. Chapter 7 details the specifics of assessing people. To many, the process seems obvious and trivial: you need to sit the candidate in front of you, ask him a few questions and check his recommendations. But my experience suggests that each of these tasks is not as simple as it looks at first glance. For example: how to check the references of a person in a situation where his former employers are wary prosecution for disclosing unseemly facts of his biography? (Answer: dig deeper. I'll tell you how to do this.) Is it necessary to involve people occupying lower positions in the service hierarchy in evaluating a candidate? (Answer: in most cases - no.)

And as you, of course, know, find the right person- not all. You need to convince him to accept the offer using the right incentives, and then integrate it into a new functional context. Despite the wealth of books and articles on the topic of new employee integration, many companies still mistakenly believe that a person must be “pushed into the water” to “swim or sink.”

In the final chapter I will return to the question lasting importance topic under discussion. I'm sure that the most effective organizations not only provide good jobs and generate profits for owners, but also make better society generally. Great companies—made up of great people—raise our living standards, expand our horizons, and embody hope for the future.

Chapter 1
Outstanding decisions about people: your personal resource

In the summer of 1986, I was on my way to an important meeting in Zurich. Along the way, I had stopped in London, Paris, Copenhagen and Brussels over the previous four days. In each of these cities, I met with consultants from Egon Zehnder International (EZI), an international executive search firm. I have already had about thirty such conversations with many of the firm's partners and with all members of the executive committee.

But now in Zurich I had a meeting with Egon Zender himself, the founder of the company and at that moment its chairman. I was, to put it mildly, excited (and even now, many years later, I still feel excited). I was well aware of the status of this man who, having graduated from Harvard Business School in the year in which I was born, in 1959 founded the very profession of executive search in Europe, and in 1964 founded his own firm, which immediately began international expansion. He was a true legend.

I'm embarrassed to admit, but I don't remember most of the questions he asked me that day. But I remember very well the questions that I asked him myself, perhaps because of Zender’s amazing answers. So, I asked him, “Based on your 25+ years of executive recruiting experience and numerous meetings with both clients and top candidates, what makes a person successful?”

I was finally expecting to hear a clearly thought-out and repeatedly proven theory of success. After all, Zender himself was a very successful man. I saw him as a solid person with strong convictions. Without hesitating for a second, he said calmly and simply: “Good luck!”

The answer, I must admit, stunned me. "Luck?" But Egon continued: “Of course, all the successful people I have met have been smart. They were real hard workers. They believed in the importance of preparation for any action. They knew how to find mutual language with others. But if you ask me about the important factor their success, I answer, is luck. Their luck lay in the fact that they were born into specific families and in specific countries. The fact that they had certain unique abilities. The fact that they studied in good schools and received a quality education. The fact that they worked in the right companies. The fact that they remained healthy. The fact is that they were presented with opportunities for advancement. So, I argue that the main reason for individual success is luck.”

Probably, if I had been a little quicker and braver then, I would have thought to ask him the following question: what is second important reason success? But the moment was lost, we moved on to other topics.

Over the many years since our meeting, I have returned more than once to my question and Zender's answer. How often have I shared our founder's wisdom with colleagues: Luck certainly plays a significant role in the careers of many people, including myself. But I also tried to find more systems approach that would help people act. (Obviously, simply wishing them luck is not enough.) So, interviewing exceptional candidates, meeting impressive clients, talking to executives who were thinking about new career paths, lecturing to Harvard Business School students, observing their own as kids, I kept asking the same question: “What exactly leads to irrefutable career success?”

More than twenty years have passed since our first meeting with Egon. During this time, I conducted about twenty thousand personal interviews (a thousand per year and an average of four per day). I have traveled all over the world - fulfilling client orders, training colleagues, attending our firm's executive committee meetings or meetings with its partners, giving speeches and giving lectures. During these travels, I have had thousands of personal, deep and candid conversations with managers and executives, during which we discussed their careers and lives, successes and failures.

I have witnessed the highest highs and staggering lows. I have seen examples of outstanding career and life management. Unfortunately, I have seen more than once how amazingly talented people kill themselves - literally and figuratively.

I admit that I have become obsessed with finding the answer to the question: Why are some people successful and others not? Now I think I have the answer.

Buy and download for 399 ₽ (€ 5,53 )

Translator M. Ferber

Fernandez-Araz, Claudio

The choice of the strongest. How a leader can make major decisions about people / Claudio Fernandez-Aráoz; [translation from English]. - Moscow: Mann, Ivanov and Ferber, 2016.

ISBN 978-5-91657-438-8

Everyone knows that “personnel decide everything.” However, not all leaders work on one of the most important skills - the ability to find and place the “right people in the right positions.” Trial and error is expensive. Therefore, it is customary to consider such ability as talent and entrust it to experts. But this skill can be trained even in those who considered themselves deprived of this kind of “intuition.” The author of this book, a partner at Egon Zehnder International, a senior executive search firm, has spent twenty years searching for top managers for the world's leading companies and has honed his ability to understand people to near perfection. His ideas will be very useful to businessmen, executives and top managers of companies.

All rights reserved. No part of this book may be reproduced in any form without the written permission of the copyright holders.

© Claudio Fernández-Aráoz, 2007

© Translation into Russian, publication in Russian, design. Mann, Ivanov and Ferber LLC, 2016

Reviews about the book:

Unfortunately, we like to present old stuff or outright rubbish as a revelation from... The publishing house of the three comrades does not shun this either. The book is absolutely empty! Selection is technology, it is certain methods this very selection - the choice of these methods depends on the task of personnel selection. not a single method, not a single technology, not even approximate questions... nothing except “you must understand”, “you must be able to see in a person...”, “a certain structured interview” and blah blah blah. Do we really seriously expect that they will reveal to us the secrets for which these people receive from 20 to 100% of their annual earnings for headhunting or executive search of top management? The afftor “opened our eyes” to competency-based interviews and the importance of “emotional intelligence”... Mamma Mia! It's 2012 and not 2002. Wayst of Time!

It’s not often that you come across a situation on Ozone when all the reviews are laudatory, “A”, but for some reason the readers “minus”, disagreeing with the authors. The book left a double impression on me. I liked that it was written by a professional, without pathos or pretentiousness. A man who knows and loves his job. I didn't like that the main idea, which remains after reading the book is simple and merciless. “All people are the same, they can be put on shelves, and at the right time they can be taken out and used as required.” I am naively inclined to believe otherwise. Recommended reading. 4 points for a slight bias towards theory.

Pavel Ivanov, 34, St. Petersburg

It is about life and business, and not about some kind of “personnel selection”... Personally, this book, with its “ideological message”, reminded me, first of all, of the books of Ayn Rand and N. Hill. But it is written in a popular science style, in the style of MBA textbooks (which are relaxing in comparison), without pathos or pretentiousness. To teach, this book, of course, will not teach anything (otherwise it should have been 30 times thicker, however, at the end of the book there is a list of references), but it will set the right direction. True, in our Soviet-Asian swamp such thoughts will find it difficult to take root...

Bulankin Alexey0, Moscow

Any manager will agree that the personnel problem is truly of cosmic proportions! A good deputy is luck of the most valuable kind, a good top manager is an even rarer phenomenon, since he often works at a greater distance from you. The book explains exactly how to see the right potential in applicants for leadership positions in your company. The author is a recognized authority on the issue of selecting and motivating senior management - the basis and support of your team. Presented in detail and convincingly. I recommend.

Alex Alex0, Moscow

Professionals consider this book one of the best on the topic of selecting, integrating and motivating senior executives. The author has spent decades searching for suitable top managers for his clients’ companies, has deeply researched this area, and has now generously shared with readers his approaches to solving the “personnel issue.” He first explains “why” to try to hire the best people for managerial positions, and then explains in great detail “how” to do this successfully. For the reader who is serious about succeeding in building a team of "powerhouse" executives, this book encourages further exploration of the topics of competencies, structured interviewing, and emotional intelligence. Fortunately, the author recommends best books on these issues, which have already been published in Russian.

Mikhailov Leonid0

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Everyone knows that “personnel decide everything.” However, not all leaders work on one of the most important skills - the ability to find and place the “right people in the right positions.” Trial and error is expensive. Therefore, it is customary to consider such ability as talent and entrust it to experts. But this skill can be trained even in those who considered themselves deprived of this kind of “intuition.” The author of this book, a partner at Egon Zehnder International, an executive search firm, has spent twenty years searching for top managers for the world's leading companies and has honed his ability to understand people to near perfection. His ideas will be very useful to businessmen, executives and top managers of companies.

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Claudio Fernandez-Araoz

The choice of the strongest. How can a leader make major decisions about people?

Claudio Fernández-Aráoz

Great People Decisions

Why They Matter So Much, Why They Are So Hard, and How You Can Master Them

John Wiley & Sons, Inc.

All rights reserved. No part of this book may be reproduced in any form without the written permission of the copyright holders.

© Claudio Fernández-Aráoz, 2007

© Translation into Russian, publication in Russian, design. Mann, Ivanov and Ferber LLC, 2016

The fact that personnel decides everything and that the most valuable capital is people is something everyone in the current generation of Russian top managers knows, even if they don’t remember who and under what circumstances stated this from the rostrum. Today, when the Russian edition of the book Great People Decisions is published, these statements are more relevant than ever - both for Russia itself and for every serious organization that operates in this part of the world.

Having observed your great country for several decades, I am continually amazed by the process of extraordinary political, economic and social change, surpassing in scale, speed and complexity those occurring in almost any other country in the world.

Many of today's Russian leaders grew up in a system that was oriented toward the long term and attempted to combine collective interests with those of individual development. Within this system, Russia had significant experience in the development of human capital, including the institute of mentoring, personnel reserve (young specialists with high potential), and scientific and technical youth societies. However, over time, this experience began to be emasculated: form prevailed over content, and the development of individual entrepreneurship was fundamentally limited.

Then the pendulum of history swung and, with the destruction of the Berlin Wall, opened the way to unprecedented career opportunities, spectacular rises, and functional and industry transitions that were previously unimaginable (and are again today). Able-bodied Russians, starting from the lowest level of the hierarchy of needs (security, shelter and physical survival), began to climb up Maslow’s pyramid with varying and yet surprising speed. Meanwhile, the market was becoming saturated with consumer goods, and enterprises were turning into companies with the goal of making a profit and receiving an adequate return on invested capital. Russian managers learned new role models from bright local and visiting leaders, relying on their charisma as well as formal on-the-job training programs that often included only the bare minimum of knowledge. Some, however, studied and worked abroad, gaining access to the world's best practices.

In general, the Russians molded themselves as managers, and they succeeded quite well. The most in-demand competencies were results-orientation, quick decision-making, and the ability to adapt to a rapidly changing environment and manage these changes. At the same time, there were still more interesting promising projects than talented managers. Entries into the securities markets, mergers and acquisitions, according to ever-increasing estimates... the faster, sharper, larger-scale - the more adrenaline. Time itself was compressed; looking a year or two ahead seemed unjustified.

Today, perhaps in part due to the recent global economic crisis, and perhaps due to their own “midlife crisis,” Russian leaders are realizing that achieving profit and success as such is not enough, that true growth and happiness require not just personal achievement, but also active and significant contributions to their organizations, to their society, to their country, to our shared planet. And now, to paraphrase the titles of famous books, they are diligently trying to “build something great that lasts forever.”

In this context, Russians have a unique opportunity to capitalize on their exceptional natural and human resources by learning to make outstanding decisions about people.

Since the first publication of this book in English, publishing numerous translations of it, I have traveled all over the world, covering a distance several times greater than the distance from the Earth to the Moon. I gave hundreds of speeches and held thousands of round tables with CEOs, human resource management experts, members of company boards, prime ministers and presidents of states, heads of ministries and departments, public and utility services, and university professors. As a result, today I am even more convinced than ever that whenever we choose the strongest anywhere on the planet, we open ourselves up to success, to growing the capitalization and value of our organizations, to developing great nations and creating a better world.