We need someone who is genetically programmed to recognize and avoid serious risks, including those never before encountered. Temperament, independent thinking, emotional stability, and a keen understanding of both human and institutional behavior are also important. I’ve seen a lot of very educated people who have lacked these virtues.
—Warren Buffett
(“Warren Buffett tackles the tricky question of succession,” Telegraph, May 5, 2012.)
If diversity is to evolve to human equity—that is, optimizing on all the tangible and intangible assets people bring to the world of work—we need to move beyond a group focus to the individual. Among those “intangibles,” we could list a person’s attitude, his or her life experiences, and virtues such as optimism. Here, we take a deeper look at these intangibles and how to measure them.
For many years, the corporate world has relied on two proxies to measure individual talent. The first is credentials, which provide a convenient estimate of the facts a person has mastered or the knowledge an individual possesses. The second is a person’s technical skills, which usually are assessed by previous work experience. For example, if a person has prepared a budget in one organization, it is a pretty safe bet he or she can do it in another. The overlap between the “right” credentials and the “right” skills has become the standard way to identify the best candidates for recruitment or promotion. But could there be more?
In his groundbreaking book, “Good to Great,” Jim Collins notes: “In a good-to-great transformation, people are not your most important asset. The right people are. In determining ‘the right people,’ the good-to-great companies place greater weight on character attributes than on specific educational background, practical skills, specialized knowledge or work experience… One good-to-great executive said his best hiring decisions often came from people with no industry or business experience (“Good to Great: Why Some Companies Make the Leap…and Others Don’t” by Jim Collins, New York: HarperCollins Publishers, 2001, p. 64.).
There truly is nothing new about this perspective. In fact, to some, it is just common sense. But while it may be common sense, it is far from common practice. There are, however, a few legendary leaders who did not just talk about the importance of recognizing great talent but actually practiced it. One such leader is Jack Welch, the former CEO of General Electric.
Apparently Welch was obsessed with finding the best talent, and he would look long and hard to find it, sometimes even conducting reference checks himself on people applying for relatively junior management positions. The surprised HR people receiving his calls would ask why he was doing a reference check on someone this junior. “Don’t you have an HR department that does this?” they would ask.
“Yes,” he would reply, “but I am looking for something.”
“What are you looking for?”
“I can’t tell you,” he would respond.
What he meant was that he was looking for something intangible. It was not something he could put into words, it was a je ne sais quoi. He knew it when he saw it and knew it when he heard it. He would ask the referral source to simply describe what the candidate was like at work—how they acted, their work ethic, their attitude. He was interested in things that were not covered in the candidate’s resume. If his personal reference check unearthed some information about the candidate that was of interest to him, he would interview the candidate himself. After this interview, if he still thought the candidate had the indefinable “it” factor, he would hire the person and immediately put him or her on a developmental path to an executive position.
The epigraph that opens this article reflects what Warren Buffett believes would be the most important traits of his eventual successor. He was looking beyond educational qualifications and technical skills; the traits he was searching for could not be learned in school or acquired through years of experience. As he says, they are “genetically programmed” into some people.
Excerpt from “The Human Equity Advantage: Beyond Diversity to Talent Optimization” by Trevor Wilson (Jossey-Bass: A Wiley Brand, June 2013). For more information, visit www.humanequityadvantage.com.
Trevor Wilson is the CEO of TWI Inc., creator of the human equity management model, and author of “The Human Equity Advantage.” He is a global diversity, inclusion, and human equity strategist who regularly speaks at corporate functions. TWI’s clients include including Coca-Cola, Ernst & Young, BNP Paribas, and Home Depot. TWI’s trademarked human equity approach was instrumental in catapulting Coca-Cola’s South Africa division to the top performing division worldwide.
