For many years, we have conducted a simple activity to illustrate the bias that causes us to put too much emphasis on experience when selecting leaders. We start by asking participants to develop a simple equation for effective leadership. The results are pretty predictable – they put a lot of emphasis on things like vision, communication skills, emotional intelligence and inspiration. We have never had anyone mention the leader’s background or technical knowledge. In fact, no one has ever asked for any context (size of the business, competitive situation, etc.).
We then ask the participants to work together as a search committee looking for a new CEO. We give them extensive data on the complex and challenging business situation. When asked for the top 3-4 things they are looking for in the new leader, almost every group focuses exclusively on experience – a demonstrated track record, international experience, turnaround experience, etc. The stuff highlighted in the equation exercise gets complexly crowded out.
Experience has become this convenient handle that we can grasp and understand. It makes our boss or Board comfortable knowing that the person has operated in a similar background. But, what do we really know about the true value of a candidate’s experience? We only know that they were in the seat. Were they the real drivers of the value creation, or was it just fortunate timing? Did they learn any valuable lessons? Did they learn the right lessons? Most importantly, can they transfer what they learned to a new situation?
It shouldn’t be a surprise that no NFL coach has ever won a Super Bowl with more than one team. A recent study by Spencer Stuart found absolutely no link between prior CEO experience and greater shareholder return. What really matters is fit with the culture, the character and leaderships skills of the individual and the composition of the team. What if we used experience as the final filter in the recruiting process instead of the first one? We have seen it used dozens of times and it always leads to better choices. Give it a try.