The art (and science) of hiring good people

ROBERT C. POZEN IS CHAIRMAN emeritus of MFS Investment Management. As chairman from 2004 to 2010, he helped the firm overcome the 2003 market-timing scandals, which rocked it and other big fund companies. Before that, Mr. Pozen served as president of Fidelity Management & Research Co., where he was responsible for overseeing Fidelity Investments’ global portfolio management and research teams.

Now he is a senior lecturer of business administration at the Harvard Business School and a senior fellow at The Brookings Institution. He also recently co-authored a book, “The Fund Industry: How your Money is Managed” (John Wiley & Sons, 2011).

FG: Describe your leadership style.
RP: I would say that I am very straightforward and honest. I am usually very clear about what my position is on something.

FG: OK, but how do you manage people?
RP: I’ve developed a management style, which I call “the rebuttable-hypothesis” style of management.

FG: Tell me about that.
RP: Let’s say you have an issue that you bring to the table. Now, if you present the issue and say, “This is how I think it should be done. Who disagrees?” That’s very authoritarian, and people may be afraid to disagree with you. On the other hand, if you walk in the room and say, “Here’s the issue, let’s all think about it for a while,” that’s pretty unfocused and disjointed. My way is to say, “Here are the issues, and here is my preliminary hypothesis, but I really want you guys to debate it, and in the end, I want us to reach a consensus on what we think is the right answer.”

FG: Isn’t it hard to get people to disagree with you? You are the boss, after all.
RP: You’ve got to really make clear that you’re willing to change your mind. And then you’ve got to be willing to change from time to time.

FG: What kind of culture are you trying to foster at MFS?
RP: I want to foster a culture in which everybody feels like they own their position, their business or their unit.

FG: What does that mean?
RP: It means that they run their business as if it’s theirs. They don’t wait for the person above them to give them instructions. It means they are doing what needs to be done and using the chief executive as a resource, a sounding board or somebody to kick butt from time to time.

FG: How do you make that attitude part of a firm’s DNA?
RP: When you set up bonus objectives, you don’t say, “I think you should do this, this and this.” Instead, you say, “Look, we both want to build this business, and I want you to set up your objectives and tell me what you think you ought to be doing this year. I also want you to tell me how you and I are going to judge whether you are successful.”

FG: What is the most important job of the chief executive?
RP: Picking the right people. If you pick really good people, they learn how to deal with almost anything. If you pick the wrong person, you suffer for a long time. Even if that person is not terrible but just a B player, you are always sort of running after them. You get a really A player, [and] that person is always coming up with stuff and moving the ball forward.

FG: How do you know whether you are interviewing the right person?
RP: I always have tried to hire people smarter than me. Some CEOs are reluctant to hire people that are smarter then they are, and that is a big mistake.

FG: Do you have any unusual interview practices?
RP: I’ve always asked the job candidate where they went to high school. I actually have a preference for people who came from very meager backgrounds and managed to make it. That shows they have a lot of initiative.

FG: What else?
RP: I’ve always asked them to tell me about an area where they made a big contribution to their company. Now, most people react to that by saying, “Oh, I did a good job,” or, “I worked really hard there.” But what I really want to know is whether they started a new unit or created a new product. That is really important to me.

I also have them tell me about a work-related issue that involved them having to make a big decision.

FG: What are you getting at with that one?
RP: I want to get at how they came to their decision. I’m trying to see how rigorous they are in their thinking. As they present their problem and their decision, I ask a lot of questions and really try to poke holes in their argument. It allows me to see whether they really have the ability to think rigorously.

You would be surprised at what you can learn from those three things.

FG: If you could ask a job candidate only one question, what would that be?
RP: I’d probably ask why they think they could make a real big contribution to the job. That’s what I really want to know, and it shows me whether they really want and understand the job.

FG: How much importance do you place on the questions they ask you?
RP: You always have some people who have no questions. You have to wonder about that. Then you have people who ask questions that can essentially be boiled down to one thing: “How much am I going to get paid?” I tend to be a little reluctant on people where it seems like the main thing they want out of the job is money.

FG: What about questions that seem geared to getting at the work-life balance — like whether they can telecommute right away?
RP: I am a great believer in flexibility, but I am also really into producing. Look, I don’t care if an employee comes in at 10 p.m. and leaves at 4 a.m., as long as they do great work. So you’ve got to get a sense of whether the person is really asking for more leisure or whether they want more flexibility. Flexibility and control over your hours, I respect. People who are essentially saying, “Look, I don’t want to work too hard,” well, at the level that I am usually interviewing people, that’s just not really realistic.

FG: How long does it usually take you to reach a decision about whether to hire someone?
RP: It depends on the job and the candidate. If I have had a number of positions open, I’ve tried not to fill them all at once. You really want to see how things work out.

FG: Tell me about some mentors who have been important to you.
RP: I grew up in Bridgeport, Conn., and it was a pretty tough place. I went to public high school there, and academics weren’t a very high priority. There was one teacher there, Helen Clabby, an English teacher, without whom I would not have gone to Harvard. She gave me books and helped me to develop real intellectual interests.
She kept feeding me books, and we would talk about them. I also wrote a lot of stuff, and she would give me detailed comments in return. I think she helped increase my ambitions.

FG: You work with a lot of students these days. Tell me about them.
RP: Because of the financial crisis and the employment situation, many students want to be entrepreneurs. I think it’s great. Some of them will succeed and some won’t.

FG: What advice would you give to a chief operating officer who wants to become a chief executive?
RP: I would tell them they’ve got to make sure they understand all the different parts of their business. They have to force themselves to learn parts of the business that they aren’t otherwise involved in. They also need to understand the international aspects of their company and really spend some time outside their headquarters office.

FG: You are really talking about their focus.
RP: What really separates a CEO from a COO is how externally focused you are. It’s the CEO’s job to understand the overall external environment and make sure the firm’s strategy is responsive to that. A COO is really more of an implementation person and doesn’t really have to have that view.

FG: Do you have any tricks for managing time?
RP: I believe I’m one of the most time-efficient people around.

FG: Tell me about that.
RP: I’m a speed reader and a speed writer. I’ve trained myself.

FG: How did you do that?
RP: You have to ask yourself what you’re reading for. Most people when they read aren’t clear why they are reading what they are reading. For instance, when I read The Boston Globe, I am reading it for a very different purpose than when I’m reading The New York Times or the Financial Times. So I read these things really quickly because I know what I am reading for. Most people haven’t really figured that out.

In terms of speed writing, I’m very much into outlines and being willing to write first drafts. A lot of people get stuck because they are trying to write something perfect the first time.

FG: Anything else?
RP: I’m also a chronic multitasker.

FG: Can you give me an example?
RP: When I am on a conference call, I am almost always doing something else. Most conference calls go on for a long time.

FG: Speaking of things that can go on for a long time, how do you run meetings?
RP: I have a very strong view that no meeting should go on more than 60 to 90 minutes. I also think the people running the meeting should set an agenda in advance and distribute whatever materials are needed for that meeting in advance. They should also expect that everyone attending the meeting has reviewed those materials in advance. Do you know how many meetings I’ve been to where the presenter starts off by reading through 20 to 30 PowerPoint slides? Give me a break.

FG: Any other time management tips?
RP: I don’t carry a briefcase. This [he holds up an extra-large canvas tote bag] carries a lot more. I have everything you can ever need in here. And I always carry excess reading. I always assume whenever I am traveling that something will screw up and I will have two or three hours of downtime, so I will be prepared

Related Topics: The C Suite