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How to use and develop great people decisions

Apr 18-2013   



 

 --A lecture by Claudio Fernandez-Araoz in BiMBA

by Hillary Wen

On the evening of July 4, teachers and students of National School of Development(Peking University）, consulting and management elites from other colleges of PKU and various circles of the society, welcomed Mr. Claudio Fernandez-Araoz in Langrun Garden, who is one of the members of Egon Zehnder International global executive committee. Mr. Claudio Fernandez-Araoz delivered a speech on “How to Use and Develop Great People Decisions” to all the students and entrepreneurs presented and interacted with them actively, sharing his twenty more years’ experience in Egon Zehnder International. Mr. Claudio Fernandez-Araoz is not only experienced, but also has a fine sense of humor, giving his profound understanding on great people decisions in an easy yet penetrating way. The lecture is hosted by Professsor John Yang, International Dean of BiMBA.

At the beginning of the lecture, Professor John Yang gave a brief introduction on Claudio Fernandez-Araoz, covering his career development, famous works and education background. Then Claudio Fernandez-Araoz began his lecture on “How to Use and Develop Great People Decisions” in a warm applause. The lecture is divided into three parts: why great people decisions matter so much, why they are so hard, and how you can master them. In addition, Claudio Fernandez-Araoz summarized the current situation of the great people decision field and previewed the bigger picture of it. Finally, Claudio Fernandez-Araoz answered the audiences’ questions in a professional and comprehensive way in the interactive section.

First of all, Claudio Fernandez-Araoz began his lecture in a humorous way by telling one of his own interesting experiences. In his opinion, there are all together 5 reasons accounting for the importance of great people decisions. First, it is the key for great career success. One’s career stages can be divided into 5 stages—student, professional, manager, senior executive and CEO/chairman, which are all influenced in different degree by 5 factors—genetics, development, career decisions and people decisions. And as the position goes higher, the factor of people decisions weighs more and more. As a matter of fact, it is the most important contributors of people’s career success. Second, it is the key for job performances. Top performances are highly productive, yet they are very rare. We are facing the reality that most frequent executives can do expected performances, yet only top performers can do potential performances. Thirdly, it is the key for company value, which is compromised by year effect, industry effect, company effect and leader effect. It is necessary to note that in some markets, the leader effect amounts for up to 40% of the variance in value. Fourthly, it has more impact in downturns and crisis, which can be opportunities for the companies if great people decisions are made. This is because it can leave more lasting impact on business, strengthen the companies’ core value and culture, have bigger impact on employee satisfaction and motivation, improve their external image and branding and help them recruit good talents with reasonable cost. Finally, there is a huge quantitive challenge on great people decisions, this obvious in the global background as more and more companies are planning to go abroad and locating outside headquarters.

Then Claudio Fernandez-Araoz explained why great people decisions are so hard to make. Generally speaking, it is because most companies react to hiring as emergencies and hiring practices lack even a model of best practice. Another reason is that executives have widely differing views about desirable attributes of new hires. To be more specific, Claudio Fernandez-Araoz holds the view that there are two reasons for being hard to reach a decision. On one hand, it is an old brain that faces a new job. As a result, the decision-making process can be disturbed by many factors: procrastination, overrating capability, snap judgments, branding, evaluating people in absolute terms, seeking confirmatory information, saving face, seeking with the familiar and so on, al of which resulting in difficulty in selecting management team members. On mentioning the negative influence of unconsiciously-made snap juagements, Claudio Fernandez-Araoz presented a short video of Susan Boyle (I Dreamed a Dream, Britain's Got Talent 2009) as an example to illustrate his point of view, which warms up the atmosphere.On the other hand, it is an old education that faces a new world. As study shows, talent is increasingly critical. In 1980, only 20% of the value of typical S&P 500 Company is created by talents, however, the number has soared to 70% today. Thus talents have become an intangible asset for the companies.

Finally, the problem comes to how one can master great people decisions. Claudio Fernandez-Araoz first briefly answered the question by giving the process for renovating management team: anticipate the need?specify the job?develop pool?assess the candidate?close the deal?integrate the new comer?audit and review. Then he gave a detailed answer on the question by four aspects, what to look for in great people decisions, then where to look, how to assess and how one can lead his way. Here Claudio Fernandez-Araoz emphasized the importance of emotional intelligence, the necessity to involve the right people and develop interviewers’ own skills. To lead his own way, one has to adopt a new mindset, make the business case, educate the powerful, cut the red tape and implement the best practices.

After covering all the three major points of the lecture, Claudio Fernandez-Araoz previewed the bigger picture of great people decisions by summarizing it as an amazing blind point, a hidden scandal, which result the necessity of educating the general population about the impact of great people decisions. If all these are realized, then individuals will be more successful, companies will be more valuable, countries will be better run, and the whole world will be a much better place.

In the interactive section, Claudio Fernandez-Araoz answered the audiences’ questions in a professional and comprehensive way, which gained bursts of enthusiastic applause from the audiences.

Fanally, Professor John Yang acknowledged Claudio Fernandez-Araoz’s wonderful lecture and sent him a present on behalf of BiMBA. The lecture concluded in a warm and friendly atmosphere.

How to use and develop great people decisions

Apr 18-2013   



 

 --A lecture by Claudio Fernandez-Araoz in BiMBA

by Hillary Wen

On the evening of July 4, teachers and students of National School of Development(Peking University）, consulting and management elites from other colleges of PKU and various circles of the society, welcomed Mr. Claudio Fernandez-Araoz in Langrun Garden, who is one of the members of Egon Zehnder International global executive committee. Mr. Claudio Fernandez-Araoz delivered a speech on “How to Use and Develop Great People Decisions” to all the students and entrepreneurs presented and interacted with them actively, sharing his twenty more years’ experience in Egon Zehnder International. Mr. Claudio Fernandez-Araoz is not only experienced, but also has a fine sense of humor, giving his profound understanding on great people decisions in an easy yet penetrating way. The lecture is hosted by Professsor John Yang, International Dean of BiMBA.

At the beginning of the lecture, Professor John Yang gave a brief introduction on Claudio Fernandez-Araoz, covering his career development, famous works and education background. Then Claudio Fernandez-Araoz began his lecture on “How to Use and Develop Great People Decisions” in a warm applause. The lecture is divided into three parts: why great people decisions matter so much, why they are so hard, and how you can master them. In addition, Claudio Fernandez-Araoz summarized the current situation of the great people decision field and previewed the bigger picture of it. Finally, Claudio Fernandez-Araoz answered the audiences’ questions in a professional and comprehensive way in the interactive section.

First of all, Claudio Fernandez-Araoz began his lecture in a humorous way by telling one of his own interesting experiences. In his opinion, there are all together 5 reasons accounting for the importance of great people decisions. First, it is the key for great career success. One’s career stages can be divided into 5 stages—student, professional, manager, senior executive and CEO/chairman, which are all influenced in different degree by 5 factors—genetics, development, career decisions and people decisions. And as the position goes higher, the factor of people decisions weighs more and more. As a matter of fact, it is the most important contributors of people’s career success. Second, it is the key for job performances. Top performances are highly productive, yet they are very rare. We are facing the reality that most frequent executives can do expected performances, yet only top performers can do potential performances. Thirdly, it is the key for company value, which is compromised by year effect, industry effect, company effect and leader effect. It is necessary to note that in some markets, the leader effect amounts for up to 40% of the variance in value. Fourthly, it has more impact in downturns and crisis, which can be opportunities for the companies if great people decisions are made. This is because it can leave more lasting impact on business, strengthen the companies’ core value and culture, have bigger impact on employee satisfaction and motivation, improve their external image and branding and help them recruit good talents with reasonable cost. Finally, there is a huge quantitive challenge on great people decisions, this obvious in the global background as more and more companies are planning to go abroad and locating outside headquarters.

Then Claudio Fernandez-Araoz explained why great people decisions are so hard to make. Generally speaking, it is because most companies react to hiring as emergencies and hiring practices lack even a model of best practice. Another reason is that executives have widely differing views about desirable attributes of new hires. To be more specific, Claudio Fernandez-Araoz holds the view that there are two reasons for being hard to reach a decision. On one hand, it is an old brain that faces a new job. As a result, the decision-making process can be disturbed by many factors: procrastination, overrating capability, snap judgments, branding, evaluating people in absolute terms, seeking confirmatory information, saving face, seeking with the familiar and so on, al of which resulting in difficulty in selecting management team members. On mentioning the negative influence of unconsiciously-made snap juagements, Claudio Fernandez-Araoz presented a short video of Susan Boyle (I Dreamed a Dream, Britain's Got Talent 2009) as an example to illustrate his point of view, which warms up the atmosphere.On the other hand, it is an old education that faces a new world. As study shows, talent is increasingly critical. In 1980, only 20% of the value of typical S&P 500 Company is created by talents, however, the number has soared to 70% today. Thus talents have become an intangible asset for the companies.

Finally, the problem comes to how one can master great people decisions. Claudio Fernandez-Araoz first briefly answered the question by giving the process for renovating management team: anticipate the need?specify the job?develop pool?assess the candidate?close the deal?integrate the new comer?audit and review. Then he gave a detailed answer on the question by four aspects, what to look for in great people decisions, then where to look, how to assess and how one can lead his way. Here Claudio Fernandez-Araoz emphasized the importance of emotional intelligence, the necessity to involve the right people and develop interviewers’ own skills. To lead his own way, one has to adopt a new mindset, make the business case, educate the powerful, cut the red tape and implement the best practices.

After covering all the three major points of the lecture, Claudio Fernandez-Araoz previewed the bigger picture of great people decisions by summarizing it as an amazing blind point, a hidden scandal, which result the necessity of educating the general population about the impact of great people decisions. If all these are realized, then individuals will be more successful, companies will be more valuable, countries will be better run, and the whole world will be a much better place.

In the interactive section, Claudio Fernandez-Araoz answered the audiences’ questions in a professional and comprehensive way, which gained bursts of enthusiastic applause from the audiences.

Fanally, Professor John Yang acknowledged Claudio Fernandez-Araoz’s wonderful lecture and sent him a present on behalf of BiMBA. The lecture concluded in a warm and friendly atmosphere.