Weighting criteria bleg

Steven Jobs is perhaps the best CEO of the last hundred years.  This may reflect my ignorance of other CEOs – which is bordering on the comprehensive – but my reasoning goes like this this: In identifying extraordinary talent, one has to guard against luck.  How do we decide between luck and extraordinary talent? Run the experiment again.  I don’t know of too many executives who, in addition to having about five huge wins running a corporation – in this case Apple II, Mac, iPod, iTunes, iPhone, iPad (not to mention Pixar) – (and OK that’s not five things but no-one expects the Spanish Inquisition).  And he got himself ousted in the middle of this performance his successful comeback providing the best possible test of whether his earlier successes were just luck.

In any event I often wonder how Steve would go in a CEO review. After all, he’d be ranked on all sorts of metrics, the weight of each metric would probably be fixed in advance so his skills of leadership and vision (surely where he excels) would be rated 10/10 if there’s any sense to the world, but there would be other criteria. Like “makes all staff feel involved and valued and provides them with confidence in the transparency and integrity of the organisation”. Criteria like “has a transparent, open and constructive relationship with the board”.  Now I expect that Steve would do badly on the first of these and who knows about the second. So if, together they account for say 30% of his score, he wouldn’t do particularly well.

In fact an organisation is an organic entity and what one really wants is people at senior levels who are very good at certain things and some effective division of labour – so there’s an effective spread of talents and expertise and people play to their strengths and cover others’ weakness.

I wonder if anyone can point me to literature which explores the fallacy of composition I’ve implied is going on above and what might be done about it in determining criteria and the weighting between criteria that should apply when deliberating on important decisions.

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Alfred Nock
Alfred Nock
10 years ago

Good call. America’s greatest living artist would likely lose heart, and amount to nothing much, were he starting out on the forklift today. We have gone further and let the system degrade to where stupidity is upwardly-mobile. Genius “need not apply.”

“I used to think this country was a land of opportunity. Now its become a Gestapo-Karzee.”

KS
KS
10 years ago

http://economics.com.au/?p=7946

Joshua Gans has recently posted on this at Core Economics. Contrary to your suggestion that Jobs would do badly on the first of your criteria Gans seems to suggest otherwise?

“A couple of months ago, a Fortune article — sadly, only available behind a paywall — described the cultural transformation inside Apple (It will be the best 99 cent purchase ever on your Kindle). The last 15 years have been about establishing an internal culture for innovation and a set of norms of behaviour and expectations. While the culture came from the drive of Steve Jobs, it is a reasonable expectation that it is infused in the organisation itself.”

JC
JC
10 years ago

Like “makes all staff feel involved and valued and provides them with confidence in the transparency and integrity of the organisation”. Criteria like “has a transparent, open and constructive relationship with the board”. Now I expect that Steve would do badly on the first of these and who knows about the second. So if, together they account for say 30% of his score, he wouldn’t do particularly well.

Why would he do badly in any of these metrics? By all appearances it wasn’t just Jobs that was instrumental in making the firm great. The new CEO was a genius at running inventory, the head of design was unbelievable, as he was the one that came up with the creations/the beautiful lines. Job’s may have been the glue that held it together, however he also created a great bench there and they are likely to have momentum for the next decade with the product line.

According to some, Jobs talent was actually in screwing down the price of the subbies and maximizing returns that way.

Des Griffin
10 years ago

I enjoyed this short post. I also consider Jobs to be truly outstanding as revealed for instance by his comments at the Stanford Commencement address and his launch of the iMac. He is also warmly praised by his successor in his commencement address (at some small university).

I keep a list of bad judgments, including bad judgments about people. But the story below by Lucy Kellaway from the Financial Times gets to the nub of the issue – summarised in the last par – I think and agrees with what you say: recruitment is something that most organisations do very badly. And they don’t seem to learn.

In a commentary on Business on the BBC World Service in January 2008, Lucy Kellaway, recounted her experiences spending a day with Korn Ferry pretending to be a headhunter. “I raced around London in taxis, sat in on interviews and drew up lists. When it was time to go home, I asked the woman I had been shadowing if she would give me a job. No, she replied after an indecently short pause. The main problem with me, she said, was that I said what I thought.”

Acknowledging that finding the right person for the right job is more important than most things, and anyone who can do it deserves not only a place in heaven (or similar) but also the thwacking great fee they extract for their efforts”, Kellaway went on to describe how one large executive search firm provides their clients, amongst other things, with a “Leadership Advantage Toolkit. This is intended “to assist them to define the kind of person they are seeking. Included were 66 characteristics that might be desirable in a leader, including “dealing with paradox” and “organisational agility” to be rated according to “mission critical”, “important” and so on.

“This is a low trick. It is about making clients think they are buying rigour in the hope this will make them less likely to protest when presented with the inevitably disappointing shortlist of candidates.”

Kellaway says, “In fact headhunting is both simple and difficult. The theory is simple: there are good managers and not-so-good ones. Alas, most are fairly mediocre, as managing isn’t easy. Choosing the good ones has nothing at all to do with 66 carefully weighted competencies: it is more a matter of finding three. The ability to think, the ability to act, and (most important) the ability to get others to act.”