The Prediction Problem Going to give you some thoughts on the world of talent, specifically the PP. Just how big is the problem? we spend an insane amount of money on recruitment, and our ability to predict performance in our organizations isn’t improving Examples of where the problem exists… How you can solve the problem… OTBB Recruitment industry is insane… PP: Researching for the last 13 years helping organizations to hire great people… What we’ll show you today is what are the problems… why does it happen? How do you get aorund it? Despite all the money and investment that goes into recruiting, and the cost of a mis-hire, the data shows that we’re not particularly good at it… What I’m going to talk about today is www.thechemistrygroup.com

Until 1972, when the modern athletic shoe was invented, people ran in very thin-soled shoes, had strong feet and had a much lower incidence of knee injuries. Just how big is this problem… I was spending money thinking I was solving a problem… actually I wasn’t at all. I’m going to talk about how current recruitment and selection practices are insane… I’m going to talk about running shoes A few months ago I went to see my knee specialist, who diagnosed me with a form of insanity It turns out I had been paying a lot of money for running shoes, thinking that would solve my injury problems, and actually, it’s making it worse The problem I was trying to solve was less injuries… I’d spent $1000s of dollars on running shoes trying to solve that problem, and the outcome was more injuries www.thechemistrygroup.com

3/4 46% 86% 3 in 4 hires made are the wrong ones! 46% of new hires fail within the first 18 months 86% of people either miserable or very miserable at work Just how big is this problem? 125bn… We think we’re solving a problem, and actually we’re not solving it at all The opportunity cost of getting this right more of the time is huge… from an organizational perspective and from a human perspective. That’s why I think you guys have the most important job in the business… Because you are central to the performance of the business, but you also have this amazing opportunity to find a place for someone where they can be brilliant Organizations have been spending serious money on the problem of performance at work forever, and the truth is they continue to do so with very little change in either the organisations performance, or better outcomes for the employees Now this got me thinking about my day job… It would seem to me that given all the money we spend on recruiting, selecting, promoting our people… we’re not getting bang for all those bucks… Based on our studies, 3 in 4 of the hires or promotions we make are the wrong ones… and it leads to these outcomes It’s because most businesses also have Onomania. We are spending more money than we ever have done in HR, we have more tools and more technology, and our symptoms are not going away… we are not addressing the single most important issue, which is how do we match the right people to the right jobs? What percent of this is spent on truly determining what predcits performance at work? Most companies are haemorrraging money on their talent acquisition, because they’re not measuring the wrong things. www.thechemistrygroup.com

Linchpins Presentees Mood Hoovers Our first experience of this problem was 13 years ago… Of not understanding the key predcitors of job performance pre hire… There were Roger – Nortel networks Our work has told us two things… What if these numbers looked different? What if 80% of your sales people were the right ones, rather than 20%? And we see this time and time again in organisations ever since… Of an organisation of 100,000, 20,000 were linchpins, what about the other 80,000?

Talent is abundant… Achievement is scarce. What our research at Nortel and every other organization we have met since tell us is… you are not born a mood hoover, you are not born a presentee, you are not born a linchpin. There should not be a war for talent. Everyone has talent – what we need to do is a better job of matching that talent to a job or organisation. However, the mechanisms, the systems, the processes, and the criteria we use for select our new hires, is in most cases

We have a problem… called bias… and it undermines our hiring decisions every single day Let me give you a sporting example

? DEGREE EXPERIENCE "In our analysis, the school you went to and the previous places you have worked are poor predictors of performance at Google, it's mind blowing…" Laszlo Block, Snr VP People Operations, Google Use NHS example here… Or pilots… Our question is… what really makes the difference?

The 5 Box Model Talk about the NHS here… Also talk about shifting to Agile ways of working… And leadership… Knowing what to do… and showing compassion for patients Intellect… A+E ward, vs heart surgeon specialist Here’s the danger… AVERAGES Then talk about What we think we’re looking for isn’t what we’re actually looking for… We’re buying more and more pairs of trainers, with better and better technology, and wondering why it’s not working… The ley problem is that what we think predicts performance, actually doesn’t predict performance at all.

Change the lens, change the outcome What the process looked for What the data showed was true Performance Outcomes Top university degree Top score in IQ test Mavericks No degree Bottom score in IQ test Conformists New hire attrition dropped from 89% to 12%

Change the lens, change the outcome What the process looked for What the data showed was true Performance Outcomes Top academic institution Male Extraverted Degree and academic institution inconsequential Collaborators Challengers Hired from 401 new universities 35% increase in sales target attainment Gender diversity jumped from 20% to 50%

So what can you do today?

Hiring Manager Challenges Recruiter Challenges They don’t get me top candidates They don’t understand the business strategy I could hire better than most of these guys I am unsure what they mean by a top candidate I have heard multiple versions of the strategy They have no idea what they are doing!

2. Answer these questions 1. Map your process 2. Answer these questions 1 Step: Measures: What does your process measure today? What % of what you measure can you prove predicts performance in role? 2 Step: Measures: 3 Step: Measures: