Hire Right, Because the Penalties for Hiring Wrong Are Huge Remember back in Understand That People Are Wired Very Differently when I described Bridgewater’s hit-or-miss hiring practices in its early days? At the very beginning, we just hired people we liked. But too many of them turned out to be bad fits. Because we liked them, we were reluctant to give up on them, and things often went from bad to worse. So we started hiring like most companies do, by looking at résumés, narrowing the lists, and then interviewing to get a gut feel for who was right. But the questions we asked our candidates, unlike the questions on a scientifically constructed personality test, were unlikely to elicit answers truly indicative of what they were like. What we were doing, essentially, was looking at prospective employees through our own biased perspectives. Those of us who were linear thinkers tended to want to hire linear thinkers; those of us who were lateral thinkers tended to want to hire lateral thinkers. We all thought the type we chose would perform best in all jobs, and as a result we weren’t able to accurately predict who would succeed and who would fail in our very unusual environment. As a result, we continued to make a lot of bad hires. Eventually we learned from our mistakes and failures that we could improve our hiring results in two ways: by always being crisp and clear on exactly what kind of person we were looking for and by developing our vocabulary for and means of evaluating people’s abilities at a much more granular level. Here we lay out in detail the principles we’ve learned for doing this. While we still make too many hiring mistakes, we have significantly reduced the odds of making them by following these processes, which we continually try to improve. At a high level, we look for people who think independently, argue open-mindedly and assertively, and above all else value the intense pursuit of truth and excellence, and through it, the rapid improvement of themselves and the organization. Because we treat work as more than just what we do to make a living, we look at every potential hire not just as an employee but as someone we’d want share our lives with. We insist that the people we work with are considerate and have a high sense of personal accountability to do the difficult, right things. We look for people with generous natures and high standards of fairness. Most important, they must be able to put their egos aside and assess themselves candidly. Whether you choose to look for these same traits or others, the most important thing you can do is understand that hiring is a high-risk gamble that needs to be approached deliberately. A lot of time, effort, and resources go into hiring and developing new employees before it’s clear whether or not they are good fits. Months or even years and countless dollars can be wasted in training and retraining. Some of those costs are intangible, including loss of morale and a gradual diminishment of standards as people who aren’t excellent in their roles bump into each other; other costs from bad outcomes can be measured all too easily in dollars and cents. So whenever you think you are ready to make someone an offer, think one last time about the important things that might go wrong and what else you can do to better assess those risks and raise your probability of being right.
Match the person to the design. When building a “machine,” design precedes people because the type of people you will need will depend on the design. As you design, create a clear mental image of the attributes required for each person to do their job well. It is futile to give responsibilities to people who do not have the qualities required to succeed. It frustrates, and inevitably angers, all parties, which is damaging to the environment. In order to match a person to the design, start by creating a spec sheet so that there will be a consistent set of criteria that can be applied from recruiting through performance reviews. Bridgewater’s spec sheets use the same bank of qualities as our Baseball Cards. Don’t design jobs to fit people; over time, this almost always turns out to be a mistake. This often happens when someone you are reluctant to let go doesn’t work out, and there is an inclination to try to find out what else that person can do. Frequently managers fail to be objective about their own strengths and weaknesses, and put themselves into roles that they’re not a click for.