From our (limited) knowledge of American Football we know that the quarterback is the key player (filling the role of a creative midfielder in soccer). This week the Cleveland Browns will choose a quarterback in the annual NFA draft. Whoever they pick will get US$30mn. So it is important that they make the right pick. How will they get it right? “It turns out that best practices in hiring have much in common with what psychologists have preached for decades. a structured decision process is especially valuable. The best teams have philosophies and policies that firmly guide the draft process. There are few organizations capable of doing that consistently, and it’s a real advantage for those who can…There is no silver bullet…there is no test or technology that reliably distinguishes star from bust, despite all our advances and many promises otherwise. How should we do it then? What can we learn from how NFL teams draft?”
Firstly, the recruiter needs to be clear about her goals. “…if you don’t know where you’re going, any road will get you there. An easy way to flub a hire from the beginning is to skip asking exactly what it is you’re looking for. People often don’t understand their decision objectives, but the most successful sports teams are clear about their goal and don’t stray from the principles and attributes they’ve established.”
Secondly, keep your judges or interviewers separated from each other. “People are impressionable. When they are exposed to other’s opinions before forming their own, they tend to anchor on the existing view. More generally, the “wisdom of the crowd” depends on the independence of the respective opinions within the crowd.”
Thirdly, break down the evaluation of the candidate into detailed component parts.“NFL teams break players down in minute detail. There are physical qualities: For a quarterback it includes, for example, arm strength, mobility, and release. And then there is their “makeup,” or the intangibles considered critical for success. Ideally even these intangibles are broken into component parts, such as work ethic and selflessness. This decomposition means players are explicitly evaluated on many distinct dimensions….It’s much easier to give one, global evaluation—like or dislike, hire or reject. These overarching evaluations are natural and efficient, but unfortunately, they are often biased….Daniel Kahneman recognized the importance of this step years ago when designing performance evaluations for the Israeli military and has advocated for them since.”
Fourthly, create a mechanical model for pulling all our interviewers views on each candidate’s each skillset into one overall score.“Letting a spreadsheet—or a model—summarize your judgment may seem like an abdication, but we’ve known for decades that simple linear models outperform intuitive judgment. This isn’t because evaluators don’t have expertise but rather because they apply their expertise inconsistently. Hiring decisions shouldn’t depend on the loudest voice in the room or how many strong candidates were seen earlier that day. The best way to ensure this is to aggregate mechanically. It also happens to be a big time-saver, freeing you to focus on the issues humans handle better than machines.”
Fifthly, capture data on the performance of your interviewers so that over time you can tell your model which interviewer is more reliable than others (and hence whose inputs should you attach more weight to). “The trick is to capture those judgments and track them over time to learn how predictive they are. This applies to all judgments. Hiring is best thought of as a forecasting process, and the only way to improve forecasts is to map them against results and refine the process over time. By doing this, teams learn which tests matter most, which questions are more informative, and which scouts are best with each position on the field…At the moment, the defending champions in all three major professional sports—the Eagles, Astros, and Warriors—are unapologetic devotees of “Moneyball” in some form. Moneyball isn’t about a model or a technology but rather a decision-making process. The tenets of that process suggest steps any organization can take to improve their hiring.”
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this email in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services and as an Investment Advisor.
Copyright © 2018 Marcellus Investment Managers Pvt Ltd, All rights reserved.
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.