In this edition of Overture Fidelio takes issue with Lucy Kellaway’s Financial Times column of 7th October “The question with interviews is why we bother”. Lucy provides amusing examples as to how random selection is probably as good as the interview process. While enjoying the column and recognising the examples, Fidelio begs to differ about the value of interviewing.
Gillian Karran-Cumberlege
There is certainly evidence that face-to-face interviewing can be ineffective. Lucy Kellaway recounts how easy it was to pull the wool over the eyes of J P Morgan bankers. Don A. Moore, associate professor at the Haas School of Business in Berkeley, has conducted research which demonstrates that face-to-face interviews are poor indicators of future performance. And Daniel S. Hamermesh, U.S. economist and Professor in Economics at the University of Texas at Austin, attributes an economic value to good looks in “Beauty Pays. Why attractive people are more successful”. Success extends to interviewing.
Investors will often interview management before backing a company. Legendary investor Warren Buffett warns however “the managements are not the best reporting parties in most cases. The figures tell us more than management. Before we buy a business, we look at the record to determine what the management’s like.” Other investors, including the highly-regarded Anthony Bolton, disagree arguing that “a key input into our process is meeting the management.”
The reason that no one has found a good way to interview is that there isn’t one. Study after study shows this charade to which we are all so addicted is not much better than picking people at random. The only reason we persist is that we are all way overconfident of our ability to judge others.
– ‘The question with interviews is why we bother’, Lucy Kellaway, Financial Times, 7th October 2012
Fidelio too considers the scepticism regarding interviews to be misplaced. If face-to-face interviewing is flawed, this is typically due to the interviewer. As with driving we all consider ourselves to be above average in our interview technique. As with driving this is empirically impossible and in the context of the interview, our hubris can have costly if not disastrous corporate consequences.
Indeed “The Definitive Guide to Recruiting in Good Times and Bad”, a Harvard Business Review contribution from May 2009 argues that recessions can provide a great opportunity to snap up fresh talent. Most companies however lack the interviewing capability to benefit from this.
It is clear that no interview can provide a guaranteed outcome. We cannot look into the future and there are always imponderables. Nonetheless, Fidelio is of the firm opinion that a well-constructed interview process can go far to de-risk the selection process.
Before even embarking on the interview schedule, establishing clarity around the role is fundamental – and often overlooked. The quality of questions and answers from all involved in the interview process cannot but fail to be improved if all participants understand what the role involves. Better still if it is clear how the role supports the corporate objectives and targets.
Interviewer and interviewee thereby embark upon the interview with the knowledge that they are discussing the same opportunity and this in itself eliminates much potential for misunderstanding.
Most interview processes quite rightly involve more than one interviewer. The best selection processes will be clearly mapped and planned and all parties will have a good understanding of how the sequence of interviews is likely to develop. Interviewers will be well prepared. They will understand the role, will have read the CV and briefing, and understand why they are meeting with the candidate. Interviewers will also know what information and feedback they want and therefore what questions to ask. Rather mundanely good interviewers will also be timely in capturing their conclusions from the interview.
A well-conducted interview operates on a number of levels. First and foremost it is a source of information about the candidate. Relevant and open questions are most likely to shed light on the candidate’s ability to perform the role. We agree with Lucy Kellaway that, unless hugely lateral and creative thinking is part of the role specification, straightforward questions are often the best.
The best interviewers are deeply familiar with the range of experience and skills the position requires and are sufficiently selfconfident to look for the best possible candidates, even those they may deem more talented than themselves.
– The Definitive Guide to Recruiting in Good Times and Bad, Claudio Fernández-Aráoz, Prof Boris Groysberg and Prof Nitin Nohria, Havard Business Review, May 2009
Candidates warm to a sensible interview process. There are several subliminal messages – this is a well-managed company, this is a company that knows what it wants, this is a company that is using both the interviewers’ and interviewees’ time well.
Interviews are also an opportunity to market the company and its attractiveness as an employer. At the very least the candidate should leave the interview, and the interview process, favourably disposed towards the prospective employer. And finally interviewing is also very legitimately a good source of market intelligence.
Of course real life can intervene in the interview process. Corporate agendas can suddenly change but on the whole if the role has been well thought out and the need clearly identified, only the truly unforeseen should knock the process off course. A messy and protracted interview process generally results from lack of preparation.
Much is written about the cost to hire. Yes, one element is the Search fee. Another significant element that is seldom calculated is management time tied up in the process. For some companies, and in particular partnerships, this can be very substantial. Very obviously making the wrong hire can be supremely expensive. Interestingly, the opportunity cost of not having a good person in a key role is seldom considered.
Instinctively we recognise there is value in face-to-face interviews. As with driving, it is difficult to admit we could interview better. Rather than ditching the interview as a selection technique, some well thought through interview training adds substantial value. Intriguingly “The Definitive Guide to Recruiting in Good Times and Bad” also suggests tracking those in the company who are particularly effective at interviewing and attracting talent, as well as holding poor interviewers to account. Now that is an interesting metric for investors – valuing a company on the quality of its interview technique.
Coming Up…
Overture explores how talent drives valuation. Future editions of Overture will deal with
• Board composition driving growth
• Unlearning CEO behaviours
• De-risking the hiring process
• Communications in China – the talent bottle neck
Please contact us with comments or for more information on Fidelio Partners on info@fideliopartners.com