BNET: What types of firms are best at utilizing their clever employees?
Jones: We started to explore the dynamics of building "clever organizations" and created a little typology to distinguish between three different types of organizations. One type we call "Clever, Inc." which might be an organization like a fast-moving consumer goods company. We examine the M&A function at Nestle, which has been spectacularly successful during the last 10 years. Then we look at "Clever Services," which includes professional services companies such as top law firms and accounting firms. Finally, we talk about "Clever Collectives," the Googles of this world.
BNET: You mentioned how one of the main case studies in your book deals with the team supporting Formula 1 driver Lewis Hamilton at McLaren Racing. How did you get beyond the sports headlines and determine that the details behind his championship run would be help support the views you develop in your book?
Jones: Curiously, I used to be the HR director of the BBC. The guy who became the HR director at McLaren used to work for me when I was at the BBC. He invited me to visit their headquarters, and I was immediately captivated by the technology that goes into Formula 1. We had been watching the development of this season very carefully and keeping in touch with the chief operating officer at McLaren, who is in the book quite a lot, talking about the challenge of keeping these absolutely leading-edge engineers focused on the next race, since literally a tenth of a second can mean the difference between success and failure.
BNET: Why -- and how -- do clever people add so much value to organizations?
Jones: It's this question that led us to a more involved definition of the word "cleverness." It's not just people with high IQs or two PhDs...as a matter of fact, we have a little picture of David Beckham in the book where we note that, by our definition, he's clever, too. Clearly, organizations really want him, because he adds disproportionate amounts of value, not just on the field, but off it. It's almost an ex post facto definition that says "judge them by the outputs."
BNET: Well, once you've seen that individuals can create huge amounts of output and value, are you fated to lose them? What can you do to retain and inspire them?
Jones: No, you don't have to lose them, and that's an important point. Sometimes we ask managers who the clever people in their organizations are. Sometimes, they will say something that we would view as foolish, like "Everybody in our organization is excellent." A nodding acquaintance with statistics would suggest that's probably not true. Not everybody can be extraordinarily gifted.
Once you've identified your very best people, the issue becomes how you create the environment in which you are most likely to get them to deliver what they could deliver. In the book we present some new leadership rules, which should help you with that. What kind of rules do clever people like? They like few rules -- but ones that have the force of law. They like rules to be clear. Here are a few of these new rules:
- Create incentives that embrace failure and maximize learning. The example we use for this deals with a drink developed by Diageo: Smirnoff Ice, a mixture of alcohol and pop. It was the eleventh version of a sweet alcoholic drink that they had tried. Many organizations that try to innovate fail a few times and give up; they didn't.
- Protect clever employees from "organizational rain." Don't harass them if they're two weeks late handling their performance appraisals. Don't expose them to politics. Talk to them straight, and don't deceive them.
- Now, here's something that is in contradiction with much of the old business literature: give them real-world challenges, with constraints. Don't build ivory towers.
- Create a galaxy of stars, don't just recruit one star. You create a great team by having a lot of great players who say, "I want to play for the Lakers, because they are really good."
- Use expertise, rather than hierarchy. Provide boundaries, but don't create bureaucracy. Explain and persuade, but don't tell them what to do. If you have a great [engineer or architect] and your task is to come up with the new swimming pool for the Beijing Olympics, that's enough of a challenge. Don't worry; they'll apply their creativity and come up with something brilliant -- like the Beijing "Water Cube."