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The Allure of Experience

May 6, 2019 by Jeff Anderson, President and CEO of LFGSM

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THE ALLURE
OF
EXPERIENCE

 

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.

What really matters is fit with the culture, the character and leaderships skills of the individual and the composition of the team.

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.

Filed Under: Blog

About Jeff Anderson, President and CEO of LFGSM

Jeffrey J. Anderson is the 5th President and CEO of Lake Forest Graduate School of Management (LFGSM). Prior to joining the School in October 2014, Mr. Anderson served as an Associate Dean for Leadership Development at the University of Chicago’s Booth School of Business. At Booth, Anderson harnessed his business experience to bring a practical, proven perspective to the leadership development curriculum.

Mr. Anderson is also a co-founder and partner at The Chatham Group, a consulting advisory firm that he launched in 2003. He has worked with senior executives in the distribution, consumer product, energy, investment banking, consulting, telecommunication and automotive industries. And, like LFGSM’s Business Leader Faculty™, Anderson continues to perform at the top of his field. While leading the School he also advises senior executives on how best to grow their businesses and advance their careers.

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