Tuesday, August 26, 2014

Strategic Planning Analogy #535: Only the Experienced Need Apply?

Of all the Help Wanted ads out there, I think the most inconsistent ones come from the advertising industry. They wax on about how they want a diverse workforce. They say that creative minds can come from any background and that they want to find all that diversity of creativity in order to serve their clients. Therefore, they claim to be open to looking at people from all walks of life to fill their job openings.

However, at the bottom of the advertising agency help wanted ads they always say that only people with 6 years or longer experience in an ad agency should apply for the job. Some say you need at least 10 years of ad agency experience.

How can you hire a diverse group of creative people from all walks of life if you only look in one place (inside other ad agencies)?

I pointed this inconsistency out to an ad agent executive who was hiring people, and her response was, “Yeah, we tend to do that.”

She didn’t say it was wrong, or a mistake, or apologize for it. She only admitted the hypocrisy was true.

It makes you wonder how an industry so full of professional advertising copywriters could write such bad Help Wanted ads.

I understand that there are some benefits to hiring people who already have experience within that industry. But there are also some drawbacks. This is especially true if the key criterion for success is diversity in creative thought.

If you keep drawing your talent out the same pool of candidates, who are trained in doing things the same way, you are never going to get diversity. It’s like inbreeding. That leads to nothing but disease.

And if everyone is creative in exactly the same way, is that truly creativity or is it just repetition of the way things have always been done in the past?

I think a similar dilemma can occur in strategic planning. Great strategic planners are skilled in strategic thinking. This is a skill somewhat akin to creativity. It is a particular way of approaching problems that really isn’t related to a particular industry. Strategic thinkers can come from all sorts of diverse backgrounds.

Yet, when you look at Help Wanted ads for strategic planners, they almost always put a high premium on finding people who spent a large part of their career within the industry of the hiring company. Just because I spent a long period of time in an industry does not mean that I can think strategically about that industry.

Strategic thinking is either a skill that you have or a skill you do not have. If you have it, then you can help a business with its strategy, pretty much no matter what industry it is in or where your background is. Conversely, if you don’t have the skill, then you cannot help the business do strategy, even if you have decades of experience in that industry.

So why do so many firms look for strategists within the industry pool rather than the strategic thinking pool?

The principle here is that if the critical success factor in strategic planners is strategic thinking, then hiring companies should put a higher priority on finding strategic thinkers then on finding people who know their industry.

Yes, I know…everyone will tell you that their industry is different. It has all sorts of quirks and idiosyncrasies, so you need to hire someone familiar with all of that.

Well, I’m here to tell you that it is a lot easier for a person gifted in strategic thinking to figure out your industry than it is for an industry veteran to learn strategic thinking if they are not naturally gifted in it. So go with best thinkers, regardless of their industry, because they can usually pick up the industry part pretty quickly once they are hired.

It reminds me of an old saying in the retail industry: “It’s better to hire someone naturally gifted in customer service and teach them retailing than to hire a retail veteran who doesn’t get customer service.” The idea is similar. If you get people with the right natural skills for success, you can teach them the industry. But if the natural skills are missing, then industry knowledge isn’t very useful.

Change Agents
I think this principal is especially true for strategic planners because of their common role as change agents. It often falls to the strategic planner the responsibility of figuring out how to change a business, so that it no longer continues the status quo.

This change can take many forms:

  1. Diversification or transformation from a declining industry to a growth industry.
  2. Reinventing the business model to be more in tune with a changing environment.
  3. Looking for ways to positively differentiate one’s business from the competition by doing something different than what everyone else is doing.
  4. Looking for competitive “white spaces” or “blue oceans”, i.e., new places where industries have not previously operated.
In all these cases, intimacy with the status quo is not of much use, because success is created by leaving the status quo to move in a new direction. If fact, too much experience in the status quo might blind you to all the new possibilities. Spending too much time perfecting one way of doing things may make it harder to think of other ways to do it.

By contrast, hiring a strategic thinker with a more diverse background may be better able to envision new ways to break away from the status quo. Because they are not bound by conventional industry wisdom, they are freer to envision better possibilities for change.

The Innovator’s Dilemma
In The Innovator’s Dilemma, Clayton Christensen talks about how most industries are revolutionized by those outside the industry rather than those on the inside. Those currently in the industry tend to focus on how to do the status quo better. Those from outside the industry look for radical new ways to better serve the customer. The outsiders then become the agents of change.

In the transformation from analog businesses to digital, it is the rare exception of a company that successfully maintained its leadership both before and after the transformation. Instead, the typical path was that the incumbent was replaced by an outsider.

The leaders in travel agencies were replaced by outsiders like Orbitz and Expedia. Kodak was replaced in imaging by outside firms like Apple and Instagram. Status quo brick and mortar retailers are losing out to outsiders like Amazon. One of the rare exceptions would be Staples, who is transferring its leadership from one space to the other. The rarity of exceptions tends to prove the case.

Given the preponderance of evidence that change tends to originate on the outside, why would you want to hire a change agent (strategist) whose majority of experience is from the inside? Looking outside seems to make sense.

When hiring a strategic planner, there is often a bias to hire someone with industry experience. This can be a mistake for three reasons. First, strategic thinking for a strategist is a more critical skill than industry knowledge. Therefore, hire for strategic thinking and then teach them the industry.

Second, strategic planners are often the agents of change. Experience in the past is not very relevant when looking for ways to reinvent for the future. In fact, it may be a hindrance.

Third, history shows us that most revolutionary change comes from industry outsiders rather than insiders. Therefore, it can make sense to bring some of those outsiders into your company, so that you can better adapt to revolutionary change.

You probably don’t want an entire company to be filled with outsiders, but if there is any place where outsider thinking is beneficial, I would think it would be in strategic planning. Therefore, be careful of what you ask for in your Help Wanted ad. You may get what you ask for rather than what you really need.

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