Management

Yesterday I read an article on Malcolm Gladwell's site (he of Tipping Point, Blink!, and others) where he posited that organizations which value intelligence over anything else, including their own processes, do themselves a disservice. The article, which is about five years old, is here. This is my very short summary of his points --

After interviewing 18 successful companies in depth, Mckinsey concluded that talent trumps everything.
This attitude was exemplified by Enron, a McKinsey client.
Enron hired the best and the brightest, paid them lavishly, and promoted then ‘without regard for seniority or experience’.
What if the collapse of Enron was due to this attitude?
McKinsey championed ‘differentiation and affirmation’ - rank and yank
There is low correlation between intelligence and job performance; what works in school doesn’t necessarily work at work.
Ranking managers is subjective, not objective; evaluation by peers has a low correlation to evaluation by boss. The only way to assess performance is to use specific critieria over time. At Enron, people moved around a lot; there was no ongoing evaluation record.
Evaluations were based on willingness to take risks, regardless of prior results. Talent was more important than results.
The attitude was that your stars must be delighted and indulged. One person built an informal network to do something that she thought the company ought to be doing. She started buying equipment and engaging in legal reviews before any senior manager knew it was going on. This action on her part was regarded as ‘exactly the kind of behavior that will ...drive this company forward."
Skilling said that the company business was whatever excited the managers and drew employees to them. Gladwell’s observation is that the needs of the managers were more important than the needs of the customers and shareholders, more important than making a profit.
One study said that bad managers are either easy going always liked people who get promoted, resentful people who plot against enemies, or charmers with energy and selfconfidence who believe only in themselves, trusting no one. The last ones believe any success is due to them; any failure is due to others.
If you think your intelligence level can be changed, you act one way; if you think its level is static, you act another. Gladwell makes an observation about a study involving non-english speakers and willingness to take advanced language traing; the changeable-believers took it, the statics did not.
People praised for intelligence act differently than people praised for accomplishments. People praised for intelligence exaggerate their accomplishments. If talent cannot handle tough problems, they fake the results rather than taking difficult actions which may reflect badly on their presumed ability.
Enron failed because the assumption was that the organization is bright if the people are bright. But organizations are bright if they function effectively, which is not necessarily a function of intelligence alone.
Organizations succeed where individuals, even supremely talented ones, cannot.
At Enron, talented people could go wherever they wanted. No one seemed to care what their departure would do to the organizations they left.
No one seemed to care about the structure, at either McKinsey or Enron.

When I first read the article, I thought 'how dumb is that -- of course you want bright people!' Then I realized that he wasn't saying that you don't want them -- what he was saying was that you don't want them if having them trumps the qualities that only an organization has -- repeatability, coordination across disparate elements, processes. Much of what is described in the article could have easily come from articles about how great it is to work at Google, Microsoft, Ideo -- but those places don't usually let people do whatever they want, and tell the managers later. They encourage and cherish talent, but they do it within a structure, with an eye toward why the organization exists -- which is to make money.

Interesting, huh?