SmartRecruiters Blog

Tech “Geniuses” Aren’t Always the Right Hires

Organizational Hiring Practices should be Designed for the 99%, not the 1%. In the weeks since Facebook’s largest ever acquisition, it’s become popular to deride, or at least question the world’s largest social network for their failure to previously hire the acquiree’s co-founder, Brian Acton. Should Facebook feel ashamed that they turned down Acton for a job in 2009 only to acquire his creation for a price equivalent to 11% of Facebook’s market cap?

I don’t think so. And here’s why: Being CEO is Different from being a Middle Manager. As Jerome Ternynck says, “Top performance is nothing more than a human being who has found the right job.”

When Acton applied to Facebook, he was leaving Yahoo! as Vice President of Engineering. No small job. But while his Facebook interviewers may have asked him questions around strategy for the firm, they most likely didn’t pose the question: “If we gave you a few million dollars to create a consumer-centric product, what would it be?” They almost certainly didn’t pose that question with any real intent to give him the leash to achieve it.

The reality is that while Acton may have been able to create real value at Facebook, perhaps incrementally or significantly more than Facebook managed to create on its own in those 5 years, he would more likely have been staffed on a project to enhance Facebook as we understood it in 2009. A much more limited feature set. Big dreams, but narrower implementation in those days.

Those who argue that had Acton been hired, he would have created a tool worth $19 billion for Facebook for nothing more than a salary and a few stock options, speak with false certainty. The fact that Facebook turned him down gave Acton the freedom to experiment and create WhatsApp.

The real choices were (in retrospect): (1) work for Facebook and create something worth millions of dollars in exchange for a salary and some stock options, OR (2) found WhatsApp and later sell it to Facebook, recognizing that Facebook must think it will make even more money off of WhatsApp than it paid.

If Facebook makes a 10% return on WhatsApp, Acton will have created $1.9 billion for FB. Far more than he likely would have as an internal employee. When hiring, the right fit – at the right time – matters.

Steve Jobs was an incorrigibly difficult person to work with or (more often) work for. Yet, Dr. John Sullivan argues that not hiring Jobs was one of HP’s biggest mistakes. Was it? Who knows! But does anyone think Jobs’s tenure at HP would have been anything but rocky? To turn our attention back to Acton, what if he had joined Facebook and lobbied internally to move resources towards achieving his dream of a universal communication app like WhatsApp? Would that have distracted Facebook from its core mission of becoming the world’s largest social network, contextualizing online and offline events through the lens of our friends near and far?

Don’t forget: In February 2009, Facebook’s internal valuation was $3.7 billion, though it had previously raised money from Microsoft at $15 billion. Today, it’s market cap is $171 billion. FB added $150 billion in value since they turned down Acton.

Which brings us back to the idea of process. A Silicon Valley VC once asked me: “Would you rather be Steve Jobs or Bill Gates?”

Suspicious that this was a trick question, I chose the non-obvious answer. “Bill Gates,” I replied.

“Correct,” he said, “Steve Jobs, for all his success, has gone into bankruptcy proceedings at least twice while at the helm. Microsoft has 12 business lines that bring in over a billion in revenue each year.”

And that’s the reality. I see it with clients at ConnectCubed all the time. If you’re successful, at a certain point, you need to institutionalize business practices, like hiring. Those decisions should be based on data, which is what we help SmartRecruiters clients with every day. Those guidelines should enable employees to deploy their expertise everywhere it adds value, not constrain people with bureaucratic hangover.

But that also means creating a process that picks the best person for your organization at this time, and avoids problem hires 100% of the time. Mavericks are more often colossal failures than runaway successes.

We’ll never know the answer to the “what if Acton had joined FB in 2009?” question. But the lesson for all of us inside and outside recruiting should be to reexamine and question our recruitment process constantly, to demand answers to hard questions around what drives employee performance, and to work towards selecting employees who will thrive. We should all be careful not to turn away Actons in our own candidate pipeline, if we can benefit from their contributions to our organization. That said, if another tech company had hired Acton other than FB and he had gone on to a successful but not blockbuster career elsewhere, this would be a non-story.

Have you ever had an “Acton moment”- not hiring a quality candidate, only to have him or her return years later  in a bigger role? Or has an organization overlooked your Acton-potential in the past?

tbaumsMichael Tanenbaum is CEO of ConnectCubed. Using the power of big data, ConnectCubed utilizes epistemic gaming technology and psychometric testing to create next-generation pre-employment screening tests. Photo Credit Chrisitian Science MonitorFerdinand Magazine.

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Michael Tanenbaum