When Experience is Over-Rated

Albert Einstein once defined insanity as doing the same thing over and over again and expecting different results.  I know that to some extent, this practice is prevalent in any workplace, but it seems to be more rampant in some fields than others.  One is in sports, where coaches seem to be recycled from one team or school to another.  Now sometimes coaches who are failures, actually grow and become a glowing success.  At other times, we fans wince at the poor dinosaur who was brought in to lead our favorite team.  We continue to watch in horror the team sink to the bottom of their division.

Financial service is another area where insanity can be witnessed.  Some in this industry seem to hold such high esteem those who just have experience in the industry, without any regard to their success in their positions or if the experienced have become so myopic in their approach that they are not relevant to the customer.  In doing so, they tend to bring all their poor programs, ideas, and decisions into the new job.  Often this is a great detriment to the success of a credit union or bank.

I have seen this firsthand at several times in my career.  One bank where I worked hired a head of retail from another institution.  One of the first things he did was to begin a small business line of credit program that required no underwriting at all, just some sort of score he created.  The commercial lenders were told that if we underwrote these small loans, there would be no profit in them.  Besides, this genius had “successfully” run this program at other banks so what could go wrong?

So my bank plunged headlong into the program, booking tens of millions of dollars of unsecured business lines of credit that were sold by retail folks who had no commercial experience.  Two years later, the program was beset by fraud, nearly $5MM of losses, and many more substandard loans.  Our retail king had moved on to another institution to provide the same program to that bank that he had done for ours and just as he did for the one before us.  Only this time, he could pad his resume with more experience in the industry, even though the industry experience had been a failure.

So the question is if you want an organization to be successful and if you want to create something truly great in your company, what type people do you need to bring on board as leaders to make this happen?  Now experience is valuable, and the gray-beards of the industry can bring in much wisdom and knowledge.  But just to hire people because of longevity in the industry without any real understanding of their commitment to excellence and ability to cast a vision and lead folks toward the promised land, may not yield the results you desire for your organization.  Hiring people who have been in the industry so long their senses are dulled to the outside world, tends to make the company look through a tunnel and fail to see other opportunities around them.

So a wise leader will ask several questions when seeking for new leaders to run parts of their organization:

1.       Is the person I am looking at really exceptional and has the ability to help propel us to the next level, or is their industry experience really confined to their ability to hold on longer to their job than others?

2.       Does the candidate have the ability to look outside the box and see the changes in the culture and industry?  Can they make and execute on relevant plans to move the company in a direction to better meet those changing needs?

3.       Does the prospective leader have the ability to inspire others to come along the journey toward greatness with them? 

4.       Is the candidate passionate about their work?  Do they have an obsession to be truly remarkable?

5.       Do they have the ability to build real connections with people around them?  Do they show real compassion for others?

6.       If you could talk to other institutions they have worked for, would they speak in longing terms of them as a person and their accomplishments?

If you can’t get positive responses to these questions, then you may be bringing people with industry experience on your team, who have no vision, ability, or willingness to help lead you out of your present situation.  You may be bringing a person on who will help you race to the bottom!  The issue with that is you may actually win the race!  And if you don’t win, second place is not a position you want to be in! 

It is such a temptation to just look at industry experience without looking at the total education, ability, aptitude, and attitudes in the candidate field.  Some of the most successful institutions are those who will look to find the best people, even those who may not have the required “industry” experience.  I know my organization is richer and better from the people we have who came to us with no industry resume’.  Yours may also be that way as well if you bring in some passionate leaders who have a different perspective.