Another post that might raise comments from “colleagues” saying “you shouldn’t talk about it” although there is nothing new in this post. It is more a philosophical approach in the sense we try to deconstruct the way we work. Our goal is not to explain that the market is saturated and that it is difficult to find a job, even if you are skilled as, fortunately, it doesn’t seem to be the case, at least from our point of view. The goal of this post is to highlight the facts making difficult for most companies to discriminate (and then hire) really skilled people.
In 1970, George Akerlof, who will receive later in 2001 a Nobel price of economy for his work, wrote one of the most quoted economic articles: “The Market for ‘Lemons’ : Quality Uncertainty and the Market Mechanism“. This article explains the effect of assymetry of information on the used car market behaviour. In short, as most buyers are not able to make the difference between a good quality used car and a bad one (called Lemon), the model suppose they are ready to pay 3/4 of the price of the best quality car for all cars (as they cannot make the difference) instead of 3/2 of the price of the car according to its quality (see the Wikipedia article on “Market for Lemons” for more details on the economic model).
In june 2013, in a New York Times interview, Lazlo Bock, senior vice president of people operations at Google, revealed that, according to their internal statistical researches (You may imagine how good Google people are at doing statistic) showed that it was very difficult to find a good predicator of an employee performance during interviews. According to Bock : “It’s a complete random mess, except for one guy who was highly predictive because he only interviewed people for a very specialized area, where he happened to be the world’s leading expert“. The only person that was good at hiring specialist was the leading expert in the field.
You may already see where we are going. We work with large organizations employing numberous specialists in IT, risks management, security, business laws, recruitment, marketing, finance, tax, logistic and so on… While talking to a specialist, you might get to the point where he (or she) will state something you cannot (easily) verify (like: “What you ask is impossible” or “This is the best and only viable solution”). Rings a bell? As he’s your specialist and you have to trust him (else, how can you work with him if you don’t), you accept the statement as the truth… until you discover, from another specialist’s mouth or by your own experience, that it is’nt true. You’ve been there before, for sure!
Maybe, at some point, if you have such experience repeating, you might wonder how reliable your specialists are? If you have other specialists in the same field working for you, you might ask them what they think of their colleague (and maybe start doubting how reliable they are if you don’t receive the correct answers – welcome paranoïa). If you don’t have a lot of experts at hand (what is most likely the case as, by definition, experts or specialists are rares and expensives), how can you tell? You might ask to an external party to help you but, most of the time, you will not be better equipped to determine how skilled this third party is and, evenmore, there is a potential conflict of interest as any other independant specialist might be interested in a mission to replace the presumabely un-skilled specialist you have and fix the issues.
In their excellent and famous book, Rework, Fried and Heinemeier Hansson highlighted the numberous advantages to hire someone only when you have performed his job first. At least, you will become a kind of expert yourself and you will have some clue about the potential candidates for the job. At least, you will be more likely to discover if they try to bullshit you.
Is there no other way to assess how good our specialists are? Yes, of course! Asking people what they did in the past (and how) and checking their background with previous employers might probably give you more relevant insight. But it is rarely the path followed.
Often, we, people, call other people that are renowned expert or at least that looks like experts. Unfortunately, we are often victims on numerous cognitive biases. One of the first should be the Halo effect. To make it short, our judgement of one person caracteristic will be influenced by a global first impression that we might have deduced from a tiny litlle detail. As an example, if you are not well shaved, I might have the impression that you are a messy person. The halo effect is well known, at least intuitively, by most people. If you go to a job interview, you will likely wear your best suit and ensure it is neat, just to make a good first impression. As multiple experiments like the one from Young, Beier and Beier (1979)1 or Bull & Rumsey (1988)2 showed, we all know how important it is to make a good first impression to get a job.
The halo effect is often based on extrapolation of small details. Nowadays, we could perceived a consultant as more skilled because he has an expensive car (Porsches make good impression not only on women), a lot of recommendation on Linkedin (or even just connections), a nice suit, because he’s tall and fit or even just because he has a louder voice and he displays more facial expressions of agressivity (that is often seen as a sign of authority). Maybe, the simple fact that you read this blog could give you a false impression of our notoriety and skills.
All this facts may sounds confusing but, here comes the link. Let’s take Akerlof’s model and apply it to the expert world, let even narrow this to the area of experts (or senior) consultants for the purpose of the exercise. We can easily presume that there is an effective information assymetry between the buyer (the organization) and the seller (the consultant) as the latter knows much better what he’s capable of than the organization wishing to hire him. Most of the time, organizations are not able to make the difference between a good and a bad expert consultant. Consequently, organization are ready, according to Akerlof’s theory, to pay a certain price for a consultant, whatever his quality is. Let’s call this price the market rate. If a skilled consultant (let give him a note of 9/10 for his quality) believes his services worth more than the market rate (matching a consultant with a 7,5/10 quality level) because he provides better quality services (better, faster), he might want to raise his rate. Unfortunately for him, as his potential clients (luckily, it will not be the case for all) can not assess his quality, they might just find him too expensive and discard his candidacy. Instead, they might select a less skilled consultant (quality=5/10) with a high opinion of himself that will see and sell himself like a 8/10.
The rate we pay for a consultant might create a halo effect and generate the perception (and our trend to confirm our believes) that the consultant is more skilled, of better quality, than what he is in reality. Unfortunately, the rate of a consultant is not the direct result of his experience and abilities but more of non-relevant factors (for the hiring organization at least) like the markets perception, its capability to sell himself, to bargain, his ego, his reputation, his financial needs and its intermediaries (As you know, more intermediaries mean higher rate as each middle-man will add his margin – often between 10 to 30% – on top of the others). Also, reputation is sometimes assimilated to quality by hiring organization. “Famous” or more visible consultants may ask for higher rates as they are perceived as more qualified (although their reputation is often not based on their intrinsinc qualities but more on their visibility and the halo effect).
Some consultants have sometimes so well understood this principle that they managed to build their own reputation not on the quality of their work but more on their presence and their visibility, thanks to their involvment in organizations, meetings or magazines. They also benefit from the halo effect generated by their more skilled peers in the organisation. Consequently, organizations are often victims of personal marketing.
So, what to do? Use your common sense! Ask specific questions and expect practical answers. As Bock mentionned in his NY Times interview, ask your candidate what did they do during their previous assignments, practically. What where the challenges (so you will at least know what they consider a challenge)? How did they react? Ask them to explain why they did things and why they believe you should make things the same way or another way. When you know your job, you should be able to explain it to a layman. At least, we should expect that from a skilled specialist. If you don’t understand what he tells you, ask again! Don’t assume you are not skilled enough to understand. Too often, bad consultants impersonate experts by using complex and/or meaningless babbling. As you will likely pay the price for a consultant of 7,5 or 8/10 quality, you should expect at least to understand what it does or it is likely that you will get screwed.
If we were not good at what we do, we could get a job because we understand these principles. And, unfortunately, even if we are good at what we do, we might not get a job if we don’t want to play the game, out of respect for our customer, or just because we have better things to do than drinking cocktails and play golf (just for the stereotype) to lobby and build our reputation in another way that just the word of mouth of our customers. But, fortunately, you already knew it, like most of our customers and readers.
You should’nt share this with your “coopetitors” as it might help you if they continue to hire the bad consultant for the price of the good one. This way, the real good one will still work for you.
1Young, D. M., Beier, E. G. and Beier, S. (1979), Beyond Words: Influence of Nonverbal Behavior of Female Job Applicants in the Employment Interview. The Personnel and Guidance Journal, 57: 346–350. doi: 10.1002/j.2164-4918.1979.tb05408.x
2 Bull, R. & Rumsey, N (1988) “The Effects of Facial Appearance in Persuasion, Politics, Employment, and Advertising” in “The Social Psychology of Facial Appearance”, Springer Series in Social Psychology, pp 41-79 http://link.springer.com/chapter/10.1007/978-1-4612-3782-2_3