[ten_fingers]

Let's see:

(1) See a market opportunity in yachts 55 feet long. Need to hire a yacht designer to get the engines, hull shape, hull construction, safety, other engineering details right and supervise the construction including selecting the people for the interior design and finishing the interior. Want (A) someone who has done such work with high success for two dozen yachts from length 30 feet to 150 feet or (B) someone with the potential?

(2) Have a small but rapidly growing Web site and need to hire someone to get the server farm going for scaling the site. They need to design the hardware and software architecture, select the means of system real time instrumentation, monitoring, and management, work with the software team to make needed changes in the software, design the means of reliability, performance, and security, get the backup and recovery going, design the server farm bridge and the internal network operations center (NOC), write the job descriptions for the staff, select and train the staff, etc. Now, want someone who has recently "been there, done that, gotten the T-shirt" or someone with the 'potential' of doing that?

(3) Need heart bypass surgery. Now, want someone who has done an average of eight heart bypass operations a week for the past two years with no patient deaths or repeat operations or someone with that 'potential'?

(4) Similarly for putting a new roof on a house, fixing a bad problem with the plumbing, installing a new furnace and hot water heater, installing a high end HVAC system, etc.?

War Story: My wife and I were in graduate school getting our Ph.D. degrees and ran out of money. I took a part time job in applied math and computing on some US DoD problems -- hush, hush stuff. We had two Fortran programmers using IBM's MVS TSO, and in the past 12 months they had spent $80 K. We wanted to save money and also do much more computing. We went shopping and bought a $120 K Prime (really, essentially a baby Multics).

Soon I inherited the system and ran it in addition to programming it, doing applied math, etc. When I got my Ph.D., soon I was a prof in a B-school. They had an MVS system with punched cards, a new MBA program, and wanted better computing for the MBA program. I wanted TeX or at least something to drive a daisy wheel printer. Bummer.

At a faculty meeting the college computing committee gave a sad report on options for better computing. I stood and said: "Why don't we get a machine such as can be had for about $5000 a month, put it in a room in the basement, and do it ourselves?". Soon the operational Dean wanted more info, and I lead a one person selection committee. I looked at DG as in "Soul of a New Machine', DEC VAX PDP 11/780, and a Prime.

The long sitting head of the central university computer center went to the Dean and said that my proposal would not work. I got a sudden call to come to the Dean's office and met the critic. I happened to bring a cubic foot or so of technical papers related to my computer shopping. I'd specified enough ordinary, inexpensive 'comfort' A/C to handle the heat, but the critic claimed that the hard disk drives needed tight temperature and humidity control or would fail. I said: "These disk drives are sold by Prime but they are actually manufactured by Control Data. I happen to have with me the official engineering specifications for these drives directly from Control Data.". So I read them the temperature and humidity specifications that we could easily meet. The critic still claimed the disks would fail. Then I explained that at my earlier site, we had no A/C at all. By summer the room got too warm for humans, so we put an electric van in the doorway. Later we had an A/C evaporator hung off the ceiling. Worked fine for three years. The Dean sided with me.

In the end we got a Prime. What we got was a near exact copy of what I had run in grad school, down to the terminals and the Belden general purpose 5 conductor signal cable used to connect the terminals at 9600 bps. The system became the world site for TeX on Prime, lasted 15 years, and was a great success. The system was running one year after that faculty meeting. I was made Chair of the college computer committee.

That faculty meeting had been only two weeks after I had arrived on campus. There was one big, huge reason my planning was accepted: I'd been there, done that, and gotten the T-shirt. That is, in contradiction to the article, what mattered was actual, prior accomplishment, not 'potential'.

Why the industrial psychological researchers came to their conclusions I don't know, but I don't believe their conclusions.

[m_myers]

You're talking more about one-time jobs; the article focuses on hiring people for long term employment or in places where a bad experience is only mildly annoying (restaurants, comedians). In both cases, the risk of a bad decision isn't as high as the (perceived) possible reward from a good one.

When you're hiring a plumber, the best possible outcome is not very different from an average outcome with an average plumber, and the worst is significantly worse.

[lifeisstillgood]

That is the key - with low downside, you can afford to take a risk on the untried "potential" - payoff could be huge.

With high downside, you want to minimise that risk.

So, no brain tricks, just risk/reward behaviour

[jman1]

Nicely condensed

[ten_fingers]

The claim in the article is tough to swallow and seems to have been written to get attention.

I can't believe the claim as stated, but there might be a way to restate their claim and get something believable in some narrow cases.

First, however, for your "One-time jobs"? I was appointed Chair of the college computing committee and held that position until I left the college after five years. I was also appointed to other computing committees in the university. And I gave a graduate course on computer system selection and management. So my role was 'long-term' and not just "one time".

Indeed, my next job was at Yorktown Heights in using artificial intelligence for monitoring and management of server farms and networks, and likely that position was based partly on my success in computer system management. So, I pursued that work long-term and not just "one-time", and at each step that I was given the responsibility was heavily from my accomplishments and not just my potential.

If you are a yacht company, you may want to build yachts in several sizes, and then you will likely want to hire a yacht designer for the long term and will, again, want someone with accomplishments and not just potential. Believe me, you don't want to build a yacht and discover that the performance is poor because the engineering was wrong. Once I saw that happen; it was a sad story.

If you are running a hospital and want a heart surgeon, no doubt for the long term, again you want to hire based on accomplishments and not just potential.

If you are running an HVAC company and need a technical leader for the long-term, then again you want someone with a lot of relevant accomplishments and not just someone with potential.

I don't see the issue as short versus long term, but I do see an issue, so let's move on to that:

E.g., in my computer selection, there was an accusation that I was just selecting again what I had done before and, thus, was possibly not getting the best selection for the time and for the college. Interesting claim. Actually my first recommendation had been for the Data General system as in the book 'The Soul of a New Machine'. When that system was just too expensive, I fell back to the Prime system. The main competitor was the DEC VAX already quite popular on campus and with some good advantages in applications software for the physical science departments. But for the B-school, those application software advantages didn't apply, and the Prime was easier to manage and use and provided much more computing per dollar. So, the Prime was a good choice.

So, here was the fear of going with a person with accomplishments: Such a person may just redo what they did before and not really make the best decision for the new time and place. I'm not saying that people should or usually do have this fear, just that they may have this fear in some cases anyway.

So, more generally suppose the need is for a lot of creativity and originality but where past accomplishments, knowledge, and experience are not very important. E.g., maybe are hiring a graphic artist for, say, the box for a new consumer product to be sold from shelves in retail stores. So, if hire someone with "accomplishments", say, who had just designed a successful box, then may fear that the box they design for you will be too much like the last box they designed and not original enough. But that explanation is not the claim of the article.

The claim of the article is stark: For doing essentially any task X, people prefer to hire a person with the potential of doing X instead of someone who has actually done X. This claim is doesn't pass the giggle test.

It looks like we are entering the campaign season of the US presidential election!

[SatvikBeri]

In practice many people tend to overvalue potential, regardless of what the logical outcome would be. For example, investors tend to overprice stocks based on potential growth. This can be seen in the fact that high P/E stocks typically underperform low P/E stocks when considering risk-adjusted returns.

[aretiste]

Not sure how much it relates to the article, but I enjoyed the war story. Good stuff.

There's a lot of garabge in online HBR in recent years, mainly on their blogs, as they grovel for traffic like any other site using whatever means possible. I am rarely tempted to even read HBR links that get posted here.

War stories are much more interesting!