Hiring People Smarter Than You -A Leadership Lesson

In 1974, immediately after Ph.D. graduation, Ed Catmull got a job to establish and run a research lab on Long Island’s North Shore. The lab’s mission was to bring computers into the animation process.

Ed Catmull, being just out of college, had limited experience in hiring people and running an organization. One of the first hires he interviewed was Alvy Ray Smith, who had a Ph.D. in computer science, a career that included teaching experience at New York University, UC Berkeley, and research experience at Xerox PARC lab.

Ed Catmull perceived that Smith’s knowledge and experience would help the lab to achieve its mission. Sadly, he also had an incompatible feeling -He felt that Alvy was the better person than him to lead the lab, considering his knowledge and experience. It evoked certain uneasiness in his mind. Ed Catmull thought that Alvy could be the guy who would take his job one day. He was a potential threat.

What should Ed do in this scenario?

Ed Catmull writes that as a leader, instead of focusing on personal gains or successes or threats, our decision making should be based on what would be beneficial to the company, what would be the right thing that would help a company to reinforce and maintain core values.

To ensure the success of his company, Ed Catmull realized that it was for him to attract smart minds. Alvy Smith was one of the best talents he had met. For the benefit of the company, he had set aside his insecurities, uneasiness, and hired Smith. It turned out to be a blessing for him. Ed Catmull gained several benefits.

Ed Catmull writes that when you hire exceptional & passionate people, they work hard, innovate, excel, and generally make your company -and, by extension, you -look good.

Ed Catmull further adds, “There is another, less obvious payoff that only occurred to me in retrospect. The act of hiring Alvy changed me as a manager: By ignoring my fear, I learned that the fear was groundless. By hiring Alvy, I had taken a risk and that risk yielded the highest reward -a brilliant, committed teammate”. Alvy became one of the closest friends and most trusted collaborators for Ed Catmull.

And ever since, Ed Catmull has made a policy of trying to hire people who are smarter than him.

HIRING PEOPLE SMARTER THAN FOUNDERS

One of the reasons why ‘Good’ brands failed to become ‘Great’ brands -The founders were afraid of hiring people who are far more experienced, knowledgeable, and with better leadership skills than them. Even if the founders have hired those people, they failed to cede control and authority to them in specific domains.

Why hiring somebody smarter than a founder is necessary? A founder may not have all the skills needed to build a sustainable brand. Hiring the right people who have expertise in a specific aspect of your business and who share your brand vision & core values would make a huge difference.

Howard Schultz, CEO of Starbucks, hired experienced people who were strong-willed, self-reliant & confident and who would not be afraid of debating with him.

• In the late 1980s, competitors were fast catching up with Starbucks. Howard felt that opening up multiple stores as quickly as possible would be the best solution to widen the gap between his brand and the competitor. But then he had no retail experience that could help in achieving this goal. What did Howard do? He hired Howard Behar, who had 25 years of retail experience in the furniture business. Howard Behar was extremely familiar with the process of opening and running multiple retail stores at once. He helped Starbucks to expand rapidly.
• As Starbucks was expanding rapidly, the organization was also growing and becoming more complex. A small company management rules were no more applicable. Howard Schultz felt that the company was on the verge of collapse. What did Howard do? He hired Orin Smith, who had broad experience managing large and complex organizations.

Though Howard Schultz was initially apprehensive of delegating the power, he went ahead and handed them the authority, for the benefit of the company and its customers.

Both Orin and Behar were older and experienced than Howard Schultz. Being experienced, they could anticipate the pitfalls of growth and plan and react accordingly.

The experienced people brought in attitudes, values, and leadership skills that were different from the founders.

Today, Howard concludes that if he had stopped those people from performing, Starbucks would have never matured into a sustainable company with strong people-oriented values. He handed them the authority to do what they needed to do. He made departments report to them and not to him.

On the contrary, Starbucks’ competitor brands continued to hire inexperienced people and went out of radar.

References: Creativity Inc. by Ed Catmull, Pour Your Heart by Howard Schultz.