Tuesday, October 16, 2012

Insiders vs. Outsiders: Sweeping Generalizations Don't Make Sense

I read an interesting blog post this week on the HBR site.  The post consists of an interview with Harvard Professor Gautum Mukunda.   Here is an excerpt (video posted below as well):

The finding: The best leaders tend to be outsiders who don’t have a great deal of experience.
 
The research: Gautam Mukunda studied political, business, and military leaders, categorizing them into two groups: “filtered leaders,” insiders whose careers followed a normal progression; and “unfiltered leaders,” who either were outsiders with little experience or got their jobs through fluke circumstances. He then compared the groups’ effectiveness; for instance, with U.S. presidents, he looked at historians’ rankings from the past 60 years. He discovered that the unfiltered leaders were the most effective—and also the least effective—while highly filtered leaders landed in the middle of the pack. 
 
The challenge: Is searching for a leader with a long, impressive résumé a waste of time? Is experience a predictor of mediocre performance? Professor Mukunda, defend your research.
 
Mukunda: I was surprised by how unambiguous the data were, but they confirmed what I suspected: If you choose an insider who you know can do the job well, most of the time that person won’t perform any differently from any other top candidate with lots of experience. Such insiders—I call them “filtered leaders”—might be good, but they probably won’t be brilliant. It’s the unfiltered leaders, the outsiders without lots of experience, who perform the very best.

I'm highly skeptical of such a sweeping generalization.  I don't think we can argue that outsiders are ALWAYS preferable to insiders, that unfiltered folks are always preferable to experienced individuals.    The bottom line is: It depends!  Certain circumstances call for an outsider or a person with fresh perspective, while others lend themselves to an insider or someone with deep experience in an industry or company. Each company needs to assess its situation and make the right choice for that organization, given its strategy and culture, AT THAT POINT IN TIME.  The right solution for Company XYZ in 2012 may not make sense in 2018, as conditions change.   Moreover, the search for that superstar outsider can be a futile one, as I've written about in earlier blog posts.  We sometimes become enamored with the outside "star" hire... and then feel very underwhelmed a few years later.  

1 comment:

Gautam Mukunda said...

Hi Michael,
Actually "it depends" is my answer too. It's _exactly_ my answer - basically the whole of the last chapter of my book talks about what it depends on. I wrote a little bit about that on HBR's website too: http://blogs.hbr.org/cs/2012/10/should_you_gamble_on_your_companys_leadership.html