Enron, Google, Talent, and Katie Holmes

John Krystynak recently connected an old New Yorker article about Enron’s “overconfidence in the value of talent” to some of the reported culture of Google. It was a great connection that took me a week to digest. As John describes, “Not that Google's the next Enron, but the belief that they've somehow derived a new type of corporate culture based on smart people seems worrisome...”

I completely agree that talent is overrated. I’ve hired some extremely talented people who end up being completely ineffective. At flyswat, I hired so many talented but unproductive MBA interns that I stopped hiring MBAs altogether. (Fortunately, I’ve come back from that ledge to hire excellent full-time MBAs and interns since then.) I remember asking one of the flyswat interns to update some stuff on our website. He turned in his work a week late, and it was so poor that I think it took him about 30 minutes. When I suggested his work product needed improvement, his response was “I go to __ GSB.” Yes, and you no longer work for flyswat.

John’s post made me think about how I evaluate people during interviews. It seems like the predictors of employee success at a startup are (in no particular order):

1. Talent (= intelligence, education, credentials).

2. Ethics. Enron skipped this one and blew up.

3. Diligence. Unfortunately, talent and diligence are often inversely correlated. My MBA interns were so talented that they had been star performers elsewhere without working hard. That’s a bad sign. At well functioning companies, tangible work product is important, and you can’t produce enough of it without working hard.

Katie Holmes, in Batman Begins, says this best “It’s not who you are deep inside, it’s what you do that matters.” (I love that movie. I’ve seen it with my wife 3 times and another couple on my own.)

I always add a little assignment to my job postings now as an extra filter for this. Many apply without completing the assignment, and that seems to be a reasonable proxy for work ethic (or for their attention to detail - which is also important). This is one reason I like hiring JDs. Law school and law firms are all about the work product.

4. Confidence. Startups do well by taking calculated risks with limited data. You can’t do this if you lack confidence. First, you might not take risks at all. Second, taking a risk means making the wrong choice often, and the confidence to recover afterwards – “oops, this is what I screwed up, this is how I fix it in this case, this is what I do to avoid this issue next time” – is absolutely critical.

Confidence is also a critical element of learning. If you’re not confident enough to seek help where you’re weak, you’ll never get better.

5. Likeability. Obviously, doing well is tough if your coworkers hate you.

I believe people need all five characteristics to succeed in a well-functioning startup. Raw talent is important, but without some of the accoutrements, it’s a complete waste.

Related Tags: enron, google, startups, venture capital, business school, katie holmes