Although increasing the number of a company’s staff and managers isn’t a high priority right now, it is a good time to think about exactly who one wants to hire when shipping picks up. Of course for certain specialised positions of legal responsibility, the candidate needs experience and certification; one would not hire someone without experience at sea or the proper certifications to be a master of a vessel. But for many management and staff positions the criteria are not so clear. And in fact may need to be reexamined.
In the mid-1980s I worked at a major aerospace company in California. Mainframe computers had been in use but personal computers (PC) for individual engineers were just being introduced. The vice-president needed to hire someone as an interface between the computer department and the engineers, mathematicians, and scientists. The person to be hired would find out from the engineer information such as what software was needed on the PC and how a printer would be set up and shared by a group. Instead of looking for someone who had various certifications and computer science degrees, the vice-president hired a political glad-hander who had worked for a governor of Alaska. The theory was that someone who would interface well with engineers must have experience finding out people’s needs and fulfilling them. With these skills, the computer technology could be taught to the new hire. This turned out too a brilliant hire. The man was a success.
More recently, one of the top three internet companies, cognizant that innovation was the key to its growth, if not survival, decided to do internal research as to which employees had been the innovators. Surprisingly, the possession of an advanced degree or attendance at a big name university, such as Stanford, did not correlate with a record of high innovation. Of course at this point the question raised its head; what is going on here? Further research showed that people who were motivated by achievement of status or recognition were not necessarily great innovators. The people who excelled were individuals who got excited about working on a problem for its own challenges.
Unfortunately, too many personnel departments and hiring managers default to the applicant who has attended a name university and obtained advanced degrees and certifications. This was not always the case. Decades ago good managers looked for smart people, not necessarily highly schooled people.
Of course, today people immediately say, “But the world has changed. There is much more technology now.” In reality this is not totally true. Today there there are tools that make things like sophisticated computers easier to use. For example one can create an app for iPhones by downloading Xcode, the Apple development environment to their Mac and simply pointing and clicking. Not one line of code needs to be written. Even in directly writing code with languages like C++ or HTML5, programming environments have debuggers which didn’t exist decades ago. In the late 1950s or 1960s one could only have the mainframe operator print out a core dump. This was a listing of every bit in the memory. There was nothing else. There was no explanation of the location of stored variables or what instructions had been executed. The programmer could request the operator to write down the content of the instruction register and the number in the accumulator, which was the arithmetical register. That was it. The programmer then had to figure out everything that had gone on. And the problems that were being worked on were not simple. They had to do with the phenomenology of atmospheric nuclear weapons detonations, hardly trivial physics.
Some examples from the management are slightly different. There was guy with a great academic background. He also had an eidetic memory. He was also a very successful president of a major automotive company. With his photographic memory, he knew everything that was going on. He then moved into a US government cabinet position and brought modern changes to the department’s operation by introducing cost-effectiveness analyses. But he made a major judgmental mistake. He was Robert S. McNamara and his mistake was continuing the Vietnam War.
Two other examples of huge mistakes in business would be the demise of Kodak whose management destroyed the company by not pursuing digital photography, on which they had many patents. And then there is the purchase of AOL by Time Warner. Often this transaction is referred to as the biggest mistake in corporate history.
These management stories remind one that a board of directors needs to be vigilant. Boards whose members who are hand-picked by the company’s CEO can be failures in their oversight. Boards like hiring managers need to be sharp and think out of the box. Mistakes by a CEO can wreck a company.
So what are the things to be learned from these stories? First hire the smart ones, not the ones who have simply chased status. Second, boards of directors need to always be critical, in the true meaning of the word, of their senior officers. At this time in shipping when restraint on increasing capacity will be of great import as will efficient operations, great management and staff will make the difference in success or failure.