Why Companies Overpay for Tepid or Terrible Talent While Blocking, Rejecting & Trampling Top Talent

The Supercharged Hiring™ Series
Why Companies
Overpay for Tepid or Terrible Talent
While Blocking, Rejecting & Trampling
Top Talent
Written & Presented by:
James M. Santagata
Managing Director
© Copyright 2013-2014 SiliconEdge, All Rights Reserved Silicon-Edge.com
May 13, 2014
(Original: September 1, 2013)

Does Talent Matter? How Much So?
2© Copyright 2013-2014 SiliconEdge. All Rights Reserved. Why Companies Overpay for Tepid or Terrible Talent While Blocking, Rejecting & Trampling Top Talent
Let’s jump right ahead and consider:
Does Talent matter? And if so, how much does Talent matter?
We’re told that Talent is critical as it determines the fate of our
companies, organizations and institutions.
Moreover, we’re told that we’re in a War For Talent.

War For Talent
3
The War For Talent was coined in 1997 by Steven Hankin of McKinsey
& Company.
It’s used to describe an increasingly and fiercely competitive
marketplace for both acquiring and retaining talented employees.
© Copyright 2013-2014 SiliconEdge. All Rights Reserved. Why Companies Overpay for Tepid or Terrible Talent While Blocking, Rejecting & Trampling Top Talent

4
The fact is, Talent matters.
It matters because if we don’t understand it, we will either:
• Miss out on acquiring key Talent.
• Acquire the wrong Talent.
• Overpay for the Talent that we do acquire.
Why Does Talent Matter?

Talent: What Is It & How Do We Define It?
5
The foremost problem with “Talent” is that the very definition of Talent
is both nebulous and ill-defined:
Talent:
A natural aptitude or skill.
Example:
“he possesses more talent than any other player"
Synonyms:
flair, aptitude, facility, gift, knack, technique, touch, bent, ability,
expertise, capacity, faculty;

Concept of Talent Is Not Only Nebulous But Flawed
6
Beyond this, the very concept of “Talent” is flawed.
• How do we define it?
• How do we identify it?
• How do we assess it?
• How do we select it?
• How do we evaluate it?
• How do we productize it?
• How do we deploy it?
• How do we utilize it?
• How do we monetize it?

Some Talent Is Inherently “Bad”
7
In many cases, what we see as innate Talent is, in fact, not necessarily
Talent at all.
Or if it is “Talent" it may well be a completely different type of Talent
all together.
Such as the Talent for:
• Stealing or taking credit for other people's work.
• Politicking.
• Backstabbing.
• Persuading or directing other people to do your work.

Some Talent Purely Circumstantial
(or Reliant On Product, Brand, Team, Process, System)
8
In many other cases the “Talent" someone appears to possess comes
from either a set of unique or temporal circumstances they enjoy (the
right place @ the right time) or even from the company brand.
Is there really a true portability of talent?
Is it realistic to assume that a top sales person at, say, Google or Oracle
or any company that enjoys massive brand awareness, brand preference
and brand equity, solid company resources, strong support teams, etc.
can step into a dinky, unknown, boot-strapped startup and still bill the
same proportional amount of revenue let along the same amount?
The empirical evidence is a resounding, No, Nein, Nyet.

The Failure of “Great” Salespeople
9
Riddle Me This:
Why do seemingly
“Great” salespeople
often fail when they change
companies…

“Great” Salesperson At Strong Or Mega-Brand
Often Fails At Startup Or Lesser-known Brand
10
Why is this? What factors come into play?
First, we must consider cultural fit and company growth stage.
Question:
Does a strong sales person who works or worked at Oracle make the
best fit for a startup in the enterprise software space?
Answer:
Maybe but mostly likely not.
And not because there’s anything inherently wrong with either the
Oracle salesperson or the startup in question.

Talent Comparisons:
Candidate A: Ivy Leaguer With High Grades
11
• Consider a book smart Ivy Leaguer who tests well & has a solid GPA
in a “solid major”.
• He starts career with great branded company, surrounded by a great
team at a great time (right place @ right time).
• Now he has “earned” a "track record" (albeit unearned) & social proof
though still thoroughly incompetent or non-competitive.
• He moves on from this "success“ only to fail at the next 2 companies.
• Halo Effect & Trait Ascription Bias activated, his last 2 failures
framed & solely attributed to bad luck rather than personal
incompetency.

Candidate B: “Podunk University” With Low Grades
12
• Consider a "Podunk University" graduate with low grades in a
“soft major”.
• She possesses massive talent & can easily sell ice to the Eskimos.
• With no “track record” ends up at small, poorly performing company.
• Her talent is massive & deep but the company still fails (1:100 theory).
• Her talent, thus, remains hidden, waiting for someone "extract it".
• She moves on to the next 2 companies, delivering an earth-shattering
performance at each one.
• Her "new found" success at #3 simply chalked up to her being "lucky".

Skills Are Important….But…
13
Skills are very important yet skills are just one factor.
However, skills are important as long as you:
• Understand what skills are needed.
• How to properly evaluate & assess these
needed skills.

Useless Interview Questions:
Colored Hat Sequences, Hammer & Nail Costs, Manhole Covers
14
Old LSAT logic test question such as:
If there's a man wearing a blue-hat standing behind a man wearing a
yellow-hat man and a man wearing a green-hat and a man wearing a
black-hat cannot be standing together, what’s the color of the hat worn
by the next man standing in the line?
USELESS.
Why are manhole covers round?
USELESS.
A hammer and nail, together cost $1.10. The hammer costs $1.00 more
than the nail. How much does the hammer cost?
USELESS.

Assess Skills As Baseline, Force Candidate To Demo
15
Instead assess each candidate’s skills as a baseline and then:
• Assess the skills needed to do the job and perform at XX level.
• Have the candidate demonstrate those skills:
Live Demo || Role-play || Walk-Throughs

Walk Me Through Your _____ Process
Now Let’s Role Play…
16
Example 1: Salesperson
You’re a salesperson so…
• Walk me through your business development process…
• Now let’s go on a sales call…..
• Now let's role play… can you take me down? (I doubt it…)
Example 2: Economist
You're an economist so…
• Okay, now walk me through Abenomics, what does it mean,
what you see and why?

Don’t Rely on Experience Alone
17
Experience should never be relied upon.
Most “experienced people” have 1 year of (bad) experience repeated
for as many years as they worked at the company.
Worse it's normally what I term to be "Matrix Knowledge" and is not
beneficial but limiting or even destructive.
Takeaway:
Previously, the most learned professed the Ptolemaic view of the
universe and most believed it.
• Focus on expertise.
• Focus on results.
• Make them demo it.

Re-evaluate Talent Characterizations & Assessments
18
• One Player alone won't make the team win (with rare exceptions).
• Most organizations can't define talent nor deploy it correctly.
• Even great talent must be aligned, few can properly align it.
• Due to definitional, alignment & team issues, talent is not portable.
• A team of average but aligned talent can outperform solo superstars.
• Most talent selection methodologies and processes are flawed.

One Player Doesn’t Make A Winning Team
19
One player by himself/herself will often not make the team win.
Although depending on the rules of the game and/or the size of the
team there may be a bigger or smaller impact:
Example: Baskeball
So with only 5 people on a team in basketball, Michael Jordan matters.
Example: War / Combat
In a world war, with one million troops often deployed from just one
country, it’s a fact that one Marine, even the very best Marine in the
world does not make a difference armed solely with his rifle and knife.

Can’t Define Or Properly Deploy Talent
20
Most companies and organizations can't even define talent let along
correctly deploy it.
Example: Vietnam War
Battle of Khe Sanh (Operation Niagara )(1968)
+
Operation Rolling Thunder (1965-68)
(Strategic Persuasion; Gradualism)
vs
Operation Linebacker (5/9-10/23, 1972)
+
Operation Linebacker II (aka Christmas Bombings)(12/18-12/29, 1972)

Talent Is Often Not Uniformly Portable
– It Requires Alignment
21
Without the proper skills alignment, Talent is not uniformly portable.
Even Talent that is top grade and properly deployed must be aligned
with the entire team and company, group or institutions objectives.
The result is that in many or most cases, Talent is not portable.

Teams: Cohesive, culturally-bound, Dedicated
Compete Highest Level
22
Teams that are cohesive, culturally-bound & dedicated compete at the
highest level.
A team of average ability that is properly aligned to hit “Keys of
Success" will crush a team of superstars:
Example:
Michael Lewis' Money Ball / Billy Beane / Bill James's Sabermetrics /
Value-based Analysis
The former USSR's Red Army hockey team routinely stomped the
very best all-stars from the NHL.
A team that is cohesive, culturally-bound and dedicated to each other
will almost always stomp the better "team on paper".

Talent Selection Is Flawed
(Trait Ascription Bias / Halo Effect / Social Proof)
23
Most Talent selection is inherently flawed and, in fact, organizations
tend to greatly over pay as they rely are subjective assessments and
evaluations.
This are assessments are tainted by Trait Ascription Bias, Halo Effect /
Horns Effect, Social Proof and Just World Hypothesis.
For instance, consider cultural fit.
Does the a strong sales person at Oracle make the best fit for a startup
in the enterprise space? Maybe but mostly likely not.
And not because there is anything inherently wrong with either the
Oracle salesperson or the startup.

Which Is The Best Salesperson?
24
Which one of these is or makes the best salesperson?
1. At Major Brand, selling to other Major Brands, closing lukewarm.
2. At Major Brand, selling to Mid-tier brands, closing well.
3. At No-name/Generic, selling to Major Brands, closing huge.
Who do you think makes a better salesman in this case?
#1, #2 or #3?

Which Is The Best Salesperson?
25
Now let’s make it a bit less abstract…
Which of these is or makes the best salesperson?
And more importantly why?
1. A Google Salesperson selling to Top-tier firms, closing lukewarm?
2. A Google Salesperson selling to Mid-tier firms, closing well?
3. A No-Name Firm salesperson selling to Google, closing huge?

No-Box, Jedi-Level Talent vs Non-Portable Talent
26
Analysis:
#3 salesperson must possess No-Box Jedi-Level talent.
#1 and #2 salespersons may be lukewarm to consistent performers,
however, they are reliant on Brand, Product-mix, Teams, Processes and
Systems.
• They often become complacent and their skills quickly atrophy.
• If you take away their Brand, Product-Mix, Teams, Processes &
Systems they fail or underperform.

Trait Ascription Biases Lead Firms To Overpay For Talent
27
Trait Ascription Biases often lead firms to overpay for Talent, acquire
he wrong Talent or filter out the Strong Talent.
In most cases, the Hiring Firm / Authority would gladly and willingly
overpay for the Salesperson in cases #1 and #2.
...Most likely they will not consider that the “success” of the
Salesperson in these two cases many be due to the huge brands behind
them, huge support teams, proven processes, solid product mix and so
on.
Conversely, in most cases, the Hiring Firm / Authority would filter out
the case #3 Salesperson OR if they kept this person in the process, we
should expect that they may underpay that person.

What Is The Value of Sports Analogies To Illustrate Points
28
People often use sports analogies....
Sports analogies are great to help people relate to or illustrate a point or
concept regarding Talent, however, business is opaque.
However, Sports Talent analogies have some very big limitations for
business and can actually be dangerous..

What Is The Value of Sports Analogies To Illustrate Points
29
The reason for this is simple:
In sports, the players and the game (game play and outcome) are 100%
transparent.
You could see Michael Jordan get an assist or slam dunk the ball. You
could see Wayne Gretzky skate and you see him slip the puck into the
net.
Businesses, for the very most part, doesn't work this way.
The process of a business is opaque. Organizations are shrouded in
secrecy and most importantly, people steal other's work, they impede
and block and politic. They also create, build and strategize, in secret.

HR Dilemma: How To Forecast Performance?
30
Is it possible for HR to accurately forecast future performance?
Can HR begin to understand why “good” Talent fails to perform?
When you see the number #1 Sales Performer, what does that mean?
Is it due to great products, a great team, a great sales person or did they
steal accounts from others?
Where they given a hot territory or an established, loyal and polished
account?
These things happens ALL the time. This is why HR has so much
trouble trying to understand why supposedly good people fail or
underperform when moving to a new firm.

Selection Process Must Identify & Weigh Metrics and
Informational Signals
31
• Identifying Talent requires an intimate knowledge of what metrics or
informational signals are being evaluated as well as how much weight
to put on these.
• During the assessment and selection process, HR must separate
experience & competency from expertise and performance.
• Lastly, HR must understand and determine the portability of this
Talent:
How much of the Talent’s success is due to the organization, brand,
resources, product, team, circumstances and individual, respectively.

Roadblocks To Success
32
There are many roadblocks for the successful acquisition of Talent and
for the success of that Talent.
The selection testing process and even selecting testing software may
be extremely good.
However, the biggest roadblock to be faced is people.
Always people – their fears and egos.

But What About “The War For Talent”
33
What do you mean people’s egos and fears block out good Talent?
We are in a “War For Talent” and Wars cut through the red tape, they
simplify politics…
Actually, war is simply an extension of politics by other means.
The “War For Talent” is a meme.
Few understand what it means, even fewer act on it.
In many organizations, the “War For Talent” becomes or has become
a “War On Talent”…

Truly Great Talent Is Terrifying
34
Even simply “Good Talent” can be scary or frightening to those in
power or to incompetents holding any position.
Beyond that, truly Great Talent can be terrifying.
It takes an aware and healthy company or organization to select and
acquire Great Talent and bring it into the fold, allowing it to grow,
develop and produce.
It is apparent that in many cases Terror trumps Talent.

Thanks for your Time!
http://www.Silicon-Edge.com

Author of The Forthcoming Book Psychological Jujutsu™
 Certified Professional Coach
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SiliconEdge™ : James Santagata’s Profile (Founder & Principal Consultant)
As the Founder and Principal Consultant of SiliconEdge™, James is a proven International Executive Coach and Leadership Development professional having
deep US, Japan and Asia-Pacific Coaching, Training and Consulting experience coupled with hands-on business & technical expertise.
With over 20 years of industry experience, James has spent 11 of those years working in Silicon Valley for companies ranging from New Venture Start-ups to
established Industry Leaders engaged in developing nascent technologies & pioneering emerging markets such as Applied Materials, Solectron, Cisco, eBay, Bank
of America, Wells Fargo, Toshiba, Streaming21, Collabria, HereUAre wireless and many others.
Originally beginning his career as a software developer, he has held positions in product management, product marketing, business development and sales and
founded four companies. Since 1991, he has maintained a strong Japan and Asia-Pacific related focus to his work and has been based in Tokyo, Japan since 2006.
He has studied Japanese, Vietnamese and Korean and previously was accepted into the CLAIR/Monbusho JET Exchange Programme spending one year living and
working in Shizuoka, Japan.
This has enabled James to develop a deep understanding of Japanese and Asia-Pacific business cultures and working styles as well as a proven ability to understand
and bridge the often wide chasm between East and West, ensuring that professionals and companies are able to smoothly, productively and effectively meet their
business goals and objectives.
He is also the author of the forthcoming book Psychological Jujutsu™ and the creator of the highly-acclaimed Crush Any Interview!™ interview preparation
methodology and training system as well as the Supercharged Candidate Interviewing for human resources and hiring managers.
James graduated from San Diego State University with a BS in Business Administration/Marketing (Magna Cum Laude & Distinction in Field) and
has also studied at the University of Southern California, Marshall School of Business‘s MBA program focusing on Entrepreneurship. He is a member of
Mitsubishi Estate’s (三菱地所) exclusive Tokyo21c Club Entrepreneur Program as well as a member of the NF NLP and PARW.
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Why Companies Overpay for Tepid or Terrible Talent While Blocking, Rejecting & Trampling Top Talent

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