In a rare example of rectitude, we will withhold our opinions on the relative qualifications of (in alphabetical order) Joe Biden, John McCain, Barack Obama and Sarah Palin for the office that each person respectively seeks. We will, however, extend a hat tip to Richard A. Aust of LiquidPress Company, a cold aseptic bottling technology consulting and implementation company headquartered in Lake Forest, California. He sent along one of his favorite quotes, which focuses on how to hire great people:
“Hire and promote first on the basis of integrity; second, motivation; third, capacity; fourth, understanding; fifth, knowledge; and last and least, experience. Without integrity, motivation is dangerous; without motivation, capacity is impotent; without capacity, understanding is limited; without understanding, knowledge is meaningless; without knowledge, experience is blind. Experience is easy to provide and quickly put to good use by people with all the other qualities.”
— Fast Company Magazine
“Dee Hock on Management”
by M. Mitchell Waldrop
Issue 05, October 1996
You can view the original Fast Company Magazine article here.
Dee Hock is the founder and former CEO of VISA Credit Card Association, which came about in 1968 when Mr. Hock persuaded Bank of America to give up ownership and control of its old BankAmericard program, thus allowing the old one bank card to blossom as other banks freely started distributing VISA cards.
Mr. Hock eventually moved to a 200-acre parcel west of Silicon Valley, where he lived in virtual isolation. He explained his isolation this way:
“Through the years, I have greatly feared and sought to keep at bay the four beasts that inevitably devour their keeper — Ego, Envy, Avarice, and Ambition. In 1984, I severed all connections with business for a life of isolation and anonymity, convinced I was making a great bargain by trading money for time, position for liberty, and ego for contentment — that the beasts were securely caged.”
He eventually became interested in social and business organization and left isolation to promote what he termed “Chaordic” systems — systems that combine elements of chaos and order.
We will have to study up before we have much to say on Chaordic systems, but we think his insight into proper hiring is pretty sound. Experience is a tricky widget. You never really know if a person has 20 years of experience or one year 20 times.
We also find that some things are very teachable and some things are not. We get a chuckle every time somebody endows an ethics institute at some MBA program, since we are pretty convinced that this really is a subject where if people didn’t listen to their mothers we doubt they will listen to a B-school professor.
So the focus on integrity — both because it is hard to lead without it and it is hard to teach it — is right on. Then we have to confess that we have rarely been disappointed by super-motivated employees. We may have to move them around, but there really is always a place for those willing to work hard and do what needs doing. So the focus on motivation is crucial. Capacity means so much. Everyone is limited to some degree; the question is at what level they are limited. Knowledge is crucial, whether it is technical knowledge — how to do accounting or food safety or knowing the right people to call and how to get them to respond.
Of course, experience is often an indicator — it is hard to have a golden rolodex if you started six months ago, and it is hard to have historical knowledge if you have been working two years — and temperament matters.
With golden names such as Bear Stearns, Lehman Brothers and Merrill Lynch now tarnished, one suspects that it wasn’t the 50-year veterans of these firms who pushed into subprime mortgages.
In many ways, the young have taken over the world and by that we mean that if the CEO of, say, Merrill Lynch, an old-line broker, had declined to get into subprime mortgages, Merrill Lynch would have under-performed the market for several years. Young bulls running hedge funds would have pushed Merrill’s stock down, and the Board of Directors would have felt the heat. Perhaps someone would have begun a proxy battle to have directors removed. In his pursuit of financial rectitude, he would have been tarred as old-fashioned.
In the end Merrill’s CEO would have been history — although by seeing what the move to junk would come to entail, he would have been right. Still that would have probably been of little consolation.
So, perhaps we need some old lions, filled with memory of things gone wrong to restrain the enthusiasm of the young.
Maybe this is one of the eternal tensions in society: A tension between the energy of youth, with its blindness to the possibility of loss, and the restraining influence of the aged, with memories of a lifetime of experience in which they have seen loss.
Maybe an election such as the one we hold this year will in the end depend on where the pendulum is swinging at this moment in time.
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Perishable Thoughts is a regular section of the Perishable Pundit. If you have a favorite quote that you would like to share with the industry, please send it on. You can do so right here.
