Is it true that to do the best work, you need to hire the best people?

I’ve read a few posts by prominent Silicon Valley people that say this.

Here’s a quote about hiring from Slava Akhmechet at RethinkDB:

I look to Bell Labs for inspiration. At its peak, the folks at Bell Labs developed radio astronomy, the transistor, the laser, information theory, the C programming language, and the UNIX operating system. These are the kinds of people you should be trying to hire. Think Dennis Ritchie before he developed the C language. Think Claude Shannon before he invented information theory. When in doubt, ask yourself: “would this person have been good enough to be hired for a junior position at Bell Labs during its peak?” If the answer isn’t a resounding yes, it’s a No Hire.

Joel Spolsky also stresses the importance of hiring good people. Similarly, HR consultants often stress the importance of hiring only the best. As the Boston Consulting Group puts it, A players hire other A players, B players hire C players and C players hire F’s. Are they right to focus so much attention on hiring only outstanding people?

It’s clear that if you are trying to sort through an applicant pool, you need to get the best possible sense of what an applicant will look like once they’re hired. It’s not good to make mistakes in your interviews, or fail to interview candidates thoroughly enough. Two, it’s possible that people will be biased toward hiring too low quality employees, and emphasizing hiring good people will help HR raise hiring standards.

It’s also true that in a startup, any one individual has a much greater effect on the final shape of the company than at Wells Fargo. So startups and small firms might be right to exercise lots of caution in hiring. Furthermore, the best programmers can be five times as productive as average programmers.

But as Bob Sutton and Jeffrey Pfeffer point out, it’s a myth that the best companies are best because they have the best people. Usually the best companies have great systems that bring out the best in people.

Take a look at urban poor schools that dramatically outperform their peers and even richer schools, like the KIPP schools, or Jaime Escalante’s calculus program, which brought a bunch of kids from inner city LA through Calc BC and sent many onto the nation’s most prestigious colleges. Where so many others have seen kids who were unwilling to learn, they have succeeded and turned ordinary street kids into superstars. Escalante and KIPP don’t have the luxury of hiring the best people, like Philips Exeter, Wharton, or RethinkDB. Instead they built a great system that brings out the best in their students, which is far more impressive than doing great things with people who are already great.

Another example is Toyota, which has such a great production system that the upper management’s role is largely to simply support the system. Sutton and Pfeffer write, “One study showed that Toyota was the only major automobile company where a change in CEO had no effect on performance. The system is so robust that changing CEOs at Toyota is a lot like changing lightbulbs; there is little noticeable effect between the old one and the new one.

The supply of talented people isn’t fixed. Furthermore, our ability to measure talent is limited at best; people have off days, or bloom late, like Kurt Warner, for example.

Furthermore, if you’re a firm that can’t afford to hire the top 10%, implying to your staff that their ability level is fixed would be disastrous. As Columbia University researcher Carol Dweck has shown, mindset is extremely important; people who believe intelligence is fixed become worried about hiding their true level of cleverness, where those who believe it’s malleable work on their skills and continuously improve. If your staff became too enamored of the first mindset, they wouldn’t be doing their best work.

In summary, bad systems are more damaging than bad people, and good systems can turn average workers into stars. Like anything else, hiring workers has tradeoffs; with the best staff come long periods of unfilled positions, increased search costs, and high salary, etc. The importance of hiring “only the best” is probably overstated; clearly hiring good staff is important but it may not be crucial.

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