Want to Innovate? Stop Hiring the Safest Option
After a three-month hiring process, my friend finally got the call. The job they were uniquely qualified for went to someone else. That person was an industry insider who was twice their age. Despite having skills the job posting mentioned no other applicants had, my friend didn’t have enough years at that seniority level or enough experience in the industry.
This sounds perfectly justified; who could argue with seniority and experience? But this role needed skills people don’t learn in that industry. They needed outside expertise to match the criteria they asked for. This team says it’s trying to innovate from within. So why not start with who they hire?
Innovation. Disruption. Creativity. Agility. Fearing the skills gap and the looming future of work, companies across industries use these buzzwords to describe what they’re looking for. And with a retail apocalypse, low unemployment, and automation at our heels, leaders are worried. Companies turn to innovation, hoping to disrupt before they become disrupted. This all sounds good. But what do companies really do?
They set up innovation hubs, but isolate them. They set up creativity boot camps, but they don’t design processes to turn ideas into successful products. Corporations donate to university innovation centers and fund design competitions, but entry-level jobs still require 3 years of experience. This say-do gap pays lip service to innovation.
There’s no silver bullet to magically become an innovative organization. But here’s a good first step: stop hiring the safest, most traditional person. What I mean is, stop hiring people with the same academic background as the rest of your team, who have already been doing your target job for years, and who only come from your industry. Stop choosing similarity over skill.
“Why?” you might ask. “It’s safer that way. Nobody got fired for buying IBM.”
You’re right. It is safer. And that attitude stops your company from embracing innovation. Innovation takes risk. If you aren’t going outside your comfort zone or bringing people in who think differently, how can you benefit from diverse-thinking teams?
Behavioral Science, Democratized
We make 35,000 decisions each day, often in environments that aren’t conducive to making sound choices.
At TDL, we work with organizations in the public and private sectors—from new startups, to governments, to established players like the Gates Foundation—to debias decision-making and create better outcomes for everyone.
Build company innovation by making better hiring choices
Here’s why innovation comes from making smarter, but less traditional, hiring decisions.
Contrary to what we all assume, previous experience is hardly related to job success1. In fact, a meta-analysis of 81 real-world studies covering more than 10,000 employees found that years of pre-hire work experience is essentially uncorrelated with actually job performance (6%) and very weakly related to training performance (11%). Knowing this, perhaps we can use work sample tests to measure crucial skills instead of relying on unrelated but easy-to-see information.
Innovative, high-performing teams have more diverse functional backgrounds. Across four research reviews2 with thousands of teams in each, teams with higher job-related diversity are shown to have more work innovation3 and better performance. By looking outside our niche, we can build diverse-thinking teams that create new ideas and products like Gmail, Google Maps, and Slack.
The stereotypes we have for who fits in our industry, our company, and our role are limiting. We prefer people who are more attractive4 and taller5 ; we even shift our criteria6 to get the prototypical person hired. These stereotypes are so powerful that people overwhelmingly stick with the status quo: one non-traditional candidate out of four has a near-zero chance7 of being hired. But we can change the status quo: by changing who we attract and hire, we can make it easier to innovate from within.
New ideas come from outside the “safe zone”
Let me tell you a story. Lemonade, an insurance company built on technology, grew from nothing to one hundred million dollars of revenue in three years. They are ranked #1 by consumers for renter’s insurance and they are the most searched-for brand in their category in major states like Texas. All in all, it’s a sweet success story. What should Lemonade’s 100-year-old competitors do?
Instead of solving their own customer challenges to provide a superior product, State Farm launched an attack ad against Lemonade. T-Mobile’s parent company launched a lawsuit over their company colour. Other competitors created copycat brands, including Liberty Mutual’s “Lulo”, complete with an eerily similar logo and benefits page. See for yourself:
Source: Lemonade’s blog post about copycat brands
Yesterday, I saw an ad that tried to shame me for getting insurance in minutes. As a customer, why would I choose a company where I’ll face more hassle and frustration? With established competitors reacting to these threats with fear instead of creativity, it’s no surprise that Lemonade’s cofounders didn’t come from inside the industry. In fact, Lemonade workers say they never expected to work in insurance. This company’s success is unlikely to come from a homogeneous team saying, “this is the way we’ve always done things”. Just like my friend, Lemonade’s employees wouldn’t have passed the industry experience or “years in the role” test.
“Lemonade is one company,” you might say. Yet Microsoft is creating new products and entering new markets by changing who they bring into their company. Their inclusive hiring strategy taps into an ignored talent pool: people with cognitive and physical differences. These folks have lots to offer, but they are hugely excluded from the workforce. You may have seen Microsoft’s “We All Win” Superbowl ad about kids with physical differences finally joining their friends to play video games. But you might not know about Microsoft’s Learning Tools applications, a new way to help children read with cognitive or learning differences. This new service came from an employee hackathon, where a functionally diverse team of developers, speech pathologists, and reading specialists came together to innovate to solve an unaddressed challenge. Microsoft is creating new products as we speak because they broadened their hiring.
Of course, changing who you hire is only one step towards innovation. But by starting here, we defend against the forces that push us towards homogeneity. The more similar our company is, the narrower our talent pool will be. The stronger our culture of conformity, the more likely workers who think differently will leave. We need to design processes to make hiring for innovation easier. Fortunately, we can take controlled risks and design for diverse-thinking teams by stepping out of our safe zone.
References
[1] Van Iddekinge, C. H., Arnold, J. D., Frieder, R. E., & Roth, P. L. (2019). A meta‐analysis of the criterion‐related validity of prehire work experience. Personnel Psychology, 72(4), 571-598.
[2] Horwitz, S. K., & Horwitz, I. B. (2007). The effects of team diversity on team outcomes: A meta-analytic review of team demography. Journal of Management, 33(6), 987-1015. Bell, S. T., Villado, A. J., Lukasik, M. A., Belau, L., & Briggs, A. L. (2011). Getting specific about demographic diversity variable and team performance relationships: A meta-analysis. Journal of Management, 37(3), 709-743. Van Dijk, H., Van Engen, M. L., & Van Knippenberg, D. (2012). Defying conventional wisdom: A meta-analytical examination of the differences between demographic and job-related diversity relationships with performance. Organizational Behavior and Human Decision Processes, 119(1), 38-53.
[3] Hülsheger, U. R., Anderson, N., & Salgado, J. F. (2009). Team-level predictors of innovation at work: a comprehensive meta-analysis spanning three decades of research. Journal of Applied Psychology, 94(5), 1128.
[4] Bóo, F. L., Rossi, M. A., & Urzúa, S. S. (2013). The labor market return to an attractive face: Evidence from a field experiment. Economics Letters, 118(1), 170-172.
[5] Agerström, J. (2014). Why does height matter in hiring? Journal of Behavioral and Experimental Economics, 52, 35-38.
[6] Uhlmann, E. L., & Cohen, G. L. (2005). Constructed criteria: Redefining merit to justify discrimination. Psychological Science, 16(6), 474-480.
[7] Johnson, S. K., Hekman, D. R., & Chan, E. T. (2016). If there’s only one woman in your candidate pool, there’s statistically no chance she’ll be hired. Harvard Business Review, 26(04).
About the Author
Natasha Ouslis
Natasha is a behavior change consultant, writer, and researcher. She started her own workplace behavioral science consulting firm after working as a consultant at fast-growing behavioral economics companies including BEworks. Natasha is also finishing her PhD in organizational psychology at Western University, specializing in team conflict and collaboration, where she completed her Master of Science in the same field. She has a monthly column on workplace behavioral design in the Habit Weekly newsletter and is a Director and science translator at the nonprofit ScienceForWork.
