08/29/2011 10:17 am ET Updated Oct 29, 2011

Hiring 101: Developing a True Nose for Talent

Most organizations never reach their full potential, because most managers lack enough honesty and courage to help under-performing or misplaced employees move on to a better place, which we discussed in Firing 101.

Yet even if an organization is able to reorganize in a way that eases out its under-performers, most managers still lack solid hiring skills, and few have a well-developed nose for talent that makes a difference. Here are a few counter-intuitive rules for finding the best talent.

1. Never confuse pedigree with talent.
It seems impressive to hire a person with a background from an Ivy League school or other highly selective institution. We like bragging that we just brought in some hotshot from a name-brand school. These persons are the best and the brightest, right? Wrong. A person may attend elite private elementary and secondary schools that help her graduate with honors from Brown. But that does not mean that she's as much of an achiever as someone who had the deck stacked against her but who fought her way to graduate from the local state college. The branding of elite college grad is more effective than it should be, and this allows many jewels in the rough never to be discovered. More to the point, loading up on Ivy League grads may be counterproductive, because you don't know enough about what they're made of. That leads to the second rule.

2. Keep an eye out for beach-balls.
Next time you're at the beach or a swimming pool, try submerging a beach ball completely under water. It's exhausting just to try to hold it down, isn't it? Many people are like beach-balls-- they'll rise up, no matter what the circumstance. They're the opposite of people who "coulda been a contender" if only all the stars had aligned. These people don't make excuses for why their life had disappointments, and they don't blame bosses or colleagues for keeping them from reaching their potential. That comes out soon enough in an interview.

Their resume offers signs of their irresistible upward push. While some gifted gabbers can indefinitely keep parlaying a good job at one company into a better job at another company, (until they come up against the Peter Principle) the beach-ball has a consistent habit of being rewarded with more responsibility within the same department or organization. These people also often have outside interests, and show a similar tendency to be handed extra responsibilities in those other voluntary capacities. They typically emerge as the indispensable leaders or key lieutenants in any career-related or volunteer endeavor. And their references are usually willing to say that about them. If no reference makes such an observation, take that as a cautionary sign.

3. There's more than one way to measure intelligence.
Psychologist and science writer Daniel Goleman stood management on its head more than 15 years ago when he articulated his theories of "emotional intelligence." Contrary to traditional belief, Goleman held that only a third of a person's success could be attributed to her IQ and technical expertise. A baseline of intelligence gets you in the game, Goleman said, but up to two-thirds of a person's career success derived from her "emotional intelligence" -- her ability to get along with other people, read other people, and move other people in new directions.

Evidence of Goleman's rightness isn't hard to find. It's the reason that "dumb" politicians regularly win election over colder egghead politicians, here in a democracy that's supposed to know better but which chooses to have a beer with the dumb guy anyway. It's the reason that most brilliant Silicon Valley nerd-leaders crash against the rocks once their puny decision-making algorithms are pitted against the unfathomable mysteries of consumer and investor behavior.

One Silicon Valley firm asks prospective employees for their SAT scores, even if they're 20 years out of college. This seems sensible to its managers, given how SATs are supposed to measure aptitude. But as Malcolm Gladwell pointed out in Outliers, standardized tests are "convergence tests" -- they require you to converge on one narrow answer out of multiple choices. That, in essence, measures and rewards conformity. A divergence test, on the other hand, tests a person's creativity, through questions such as, "How many uses can you come up with for a brick? For a blanket?" How many times were you tested and rewarded in school for that ability? Not many, of course. And yet divergent thinking is incredibly important to any company, especially in a place such as Silicon Valley, where constant change demands vision and creativity within the talent base. This is one reason for the expression, "the MFA is the new MBA." Imagination matters more than ever.

Raw IQ alone isn't enough. Charisma alone isn't enough. An outstanding academic pedigree alone isn't enough. In many cases, these traits may be unnecessary and counterproductive. True talent must be measured in ways that are contrary to most conventional management wisdom.