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Drucker Perspective

Picking People: Systematically Matching Strengths with Opportunities

Posted: 08/26/2008

No one can guarantee the performance of a manager or executive appointed to a new position.

Indeed, if the reports and surveys we are constantly bombarded with are correct, we can safely say most executives make poor promotion and staffing decisions.

By all accounts, about one-third of such decisions turn out to be right; one-third are marginally effective; and one-third are colossal blunders.

Peter F. Drucker repeatedly said:

"In no other area of management would we put up with such miserable performance (as we do in people decisions)...indeed, we need not and should not...Managers making people decisions will never be perfect...But they should come pretty close to batting 1,000, especially because in no other area of management do we know so much..."

Drucker’s Staffing Decision Rules

Drucker, in many of his articles, tapes and books, stressed the following two principles in making effective promotion and staffing decisions:

1) Think through the assignment. When the task is to select a new marketing chieftain, the responsible executive must first know what the heart of the assignment is. For example, is the assignment to recruit marketing personnel, to better implement what's already been done?

Or is it to geographically expand into new markets? Or, is it become a true multi-channel marketing organization with online marketing as the core strategy?

Or, because the bulk of sales still come from products that are 15 years old, is it to establish a market presence for potential new products and services?

Each of these is a different assignment and may require a different kind of person.

Drucker hammered this point home with the following example:

"When putting a man in as division commander during World War II, George Marshall, the Army's chief of staff, always looked first at the nature of the assignment for the next 18 months or two years.

"To raise a division and train is one assignment, but to lead it into combat is quite another. To take command of a division that has been badly mauled and restore its morale and fighting strength is another still."

Failure to think through the assignment, Drucker observed, was the number-one reason for staffing failures. Put differently, executives making staffing decisions must "match strengths to opportunity."

Putting the best people on the most promising projects seems quite straightforward. Yet, in reality, this doesn't always work because of the failure to systematically match strengths with the assignment.

Further, many times when thinking through the assignment, the necessity for reorganizing the existing organization becomes apparent. The nature of the assignment requires multiple knowledges and a variety of skills impossible to find in one person.

A Difficult Question: Was the New Hire a Success or a Failure?

Take the age-old story of a bank loan officer, Mr. Smith, who was considered a great success because every year, for two decades, he increased profitability of his unit by 15 percent or more...

Top management was satisfied with Smith because he achieved his goals. He was judged to be a good performer by all involved.

Then Smith was ready to retire. The organization tried everything imaginable to persuade him to stay beyond his planned retirement date. Nothing worked. He left.

Smith was replaced by a younger person, who proceeded to increase the loan volume and profitability by 50 percent the following year!

The bank painfully learned that Smith failed to conduct marketing research, to measure the potential of its various markets, to require marketing plans, to set quotas based on potential and to develop appropriate reward systems.

Ultimately, and quite typically, the former executive proved to be minimally effective. Yet Smith was considered "the best" for nearly two decades. Among other things, this story illuminates the fact that hiring decisions are long lasting in their consequences and quite difficult to unmake.

2) Make sure the appointee understands the job. After selecting the "right" new hire and they've been on the new assignment for three or four months, Drucker reminded us, it's a good policy to make certain they are focusing on the demands of the new assignment rather than the requirements of proceeding assignments.

Drucker contended that new hires must be asked, "What do you have to do to be a success in your new assignment? Think it through and come back in a week and explain in detail (verbally or in writing) what must be done and how must it be done."

"It is not intuitively obvious to most people that a new and different job requires new and different behavior," Drucker said. "Most people continue to do what they've done before."

It's the senior-level manager's responsibility to make sure the appointee understands that a new job means different behavior, a different focus and perhaps the hiring of people equipped with entirely new skills sets. It also requires competency upgrades and even massive training of the existing workforce.

The Right New Hire For the Right Job

While all this seems just common sense, managers continue to make the same mistakes over and over again. A successful bus driver, in all likelihood, cannot run the bus company.

But, yet, many organizations make this type of mistake when promoting first-rate engineers, star salespeople and other wealth-producing individuals into new management positions.

Perhaps this story will help you internalize Drucker's staffing decision rules. We were once told by a cabdriver that he went bankrupt because of an unsuccessful business venture. He opened up a Russian nightclub in a New York area populated by Russians.

There was a need for such a nightclub. He even hired a master chef who worked 25 years for a wealthy Russian family. The problem?

When working for the family, the chef had to cook for only six people. Working in the nightclub required cooking for 150 people.

Unfortunately, the former nightclub owner, now cabdriver, failed to take corrective action until it was too late.

It appears that he and his partners failed to ask the following questions: "What is the task?" "What is the experience and knowledge base required to carry out the task?" "Does the appointee understand the job?"

Of course, creating new opportunities for people also involves helping them learn and develop. But that's another issue. In subsequent articles, we will discuss how this can be done most effectively.

Posted: 08/26/2008