Pay attention to people’s track records. People’s personalities are pretty well formed before they come to you, and they’ve been leaving their fingerprints all over the place since childhood; anyone is fairly knowable if you do your homework. You have to get at their values, abilities, and skills: Do they have a track record of excellence in what you’re expecting them to do? Have they done the thing you want them to do successfully at least three times? If not, you’re making a lower-probability bet, so you want to have really good reasons for doing so. That doesn’t mean you should never allow yourself or others to do anything new; of course you should. But do it with appropriate caution and with guardrails. That is, have an experienced person oversee the inexperienced person, yourself included (if you fit that description).
Check references. Don’t rely exclusively on the candidate for information about their track record: Talk to believable people who know them, look for documented evidence, and ask for past reviews from their bosses, subordinates, and peers. As much as possible, you want to get a clear and objective picture of the path that they have chosen for themselves and how they have evolved along the way. I’ve seen plenty of people who claimed to be successful elsewhere operate ineffectively at Bridgewater. A closer look often revealed that they were either not as successful as they portrayed themselves or they got credit for others’ accomplishments.
Recognize that performance in school doesn’t tell you much about whether a person has the values and abilities you are looking for. Largely because they are the easiest to measure, memory and processing speed tend to be the abilities that determine success in school, so school performance is an excellent gauge of these qualities. School performance is also a good gauge of a person’s determination to succeed, as well as their willingness and ability to follow directions. But when it comes to assessing a candidate’s common sense, vision, creativity, or decision-making abilities, school records are of limited value. Since those traits are the most important, you must look beyond school to ascertain whether an applicant has them.
While it’s best to have great conceptual thinkers, understand that great experience and a great track record also count for a lot. There are all sorts of jobs and they require all types of people to handle them. I am frequently biased toward finding the entrepreneur type, a clever, open-minded scrapper who will find the best solution, and I have often been disappointed. On the other hand, sometimes I have found a master craftsman who has devoted decades to his specialty who I could completely rely on. What keeps coming to my mind is Malcolm Gladwell’s rule that it takes ten thousand hours of doing something to build expertise, and the value of looking at batting averages to judge how well a person can hit. One way you can tell how well a talented rookie will do relative to a proven star is to get them into a debate with each other and see how well they each hold up.
Beware of the impractical idealist. Idealistic people who have moralistic notions about how people should behave without understanding how people really do behave do more harm than good. As a global macroeconomist and businessman and as a philanthropist I have seen this repeatedly in all those domains. I have come to believe that as well-intentioned as they are, impractical idealists are dangerous and destructive, whereas practical idealists make the world a better place. To be practical one needs to be a realist, to know where people’s interests lie and how to design machines that produce results, as well as metrics that measure those benefits in relation to the costs. Without such measures, waste will limit or erase the benefits, and with them the benefits will keep flowing.
Don’t assume that a person who has been successful elsewhere will be successful in the job you’re giving them. No matter how good you are at hiring, some of your hires won’t work out. Know how the people you’re considering operate and visualize how that will produce successful results. Knowing what they did is valuable only insofar as it helps you figure out what they are like.