How to hire great people and give them room

1 The bottom line

Hire people who are better than you in the areas where you are weak, then give each one a clear job and real authority. Your results depend on their skill, and hovering over them drives the best ones away.

2 Key takeaways

• Hire for the gaps you have, not for people like you. Your weak spots cap the company until someone better fills them.
  • Honda knew he was weak in finance and sales, so he recruited Takeo Fujisawa and stayed in the lab. The book's verdict is that there is no Honda without Fujisawa. Soichiro Honda, Honda26:55
  • After Beacon failed, Zuckerberg hired Sheryl Sandberg to run ads. Revenue went from $280 million in 2008 to $3.7 billion in 2011. Mark Zuckerberg, Meta2:56:19
• Set the hiring bar high and keep recruiting until you clear it. A strong team fixes a weak idea, but a weak team ruins a strong one.
  • Bezos called a high hiring bar the single most important element of Amazon's success. Jeff Bezos, Amazon20:30
  • Catmull found that the failed and the good Toy Story 2 shared the same story spine. Only the team changed. Ed Catmull, Pixar36:08
• Give each project one named owner with one clear goal. Shared ownership means nobody is accountable.
  • Bezos built single-threaded leaders after Amazon found it was spending more time coordinating than building. Jeff Bezos, Amazon7:22
  • Rockefeller gave Henry Flagler one job, transportation, which was the company's top priority. John D. Rockefeller, Standard Oil23:45
• Tell people what to achieve, not how, and let the decision be theirs. Owning the decision makes people grow and surprise you.
  • Noyce gave 24-year-old engineers guidelines and told them the decision was theirs. Fairchild grew from 12 to 12,000 employees in ten years and kept its startup spirit. Bob Noyce, Fairchild31:06
• Do not squeeze or hover over talented people. They can leave, and the best ones do.
  • Rockefeller gave able executives room and many stayed for life. Carnegie crushed his best men and ended in bitterness with Frick. Rockefeller, Standard Oil47:00

Don't tell people how to do things, tell them what to do, and let them surprise you with the results.

Phil Knight, Nike

2.1 Hire the people who fill your gaps

Name what you cannot do well, then recruit someone who does it better than you could.

• Admit your weakness and hire a partner for it. Soichiro Honda, Honda26:55
  • Honda knew he was weak in finance and marketing. After his own business nearly went bankrupt, he recruited Fujisawa, a man of very different temperament.
  • Fujisawa built distribution from scratch and fixed cash flow by making shops pay up front. Honda left the rest of the business to him.
  • Honda said a person who cannot mix with people of different temperaments is rather useless. Honda26:55
  • Ellison hired Safra Catz because she was disciplined and thorough, and he was not. She checked that his decisions were carried out, which nobody had done before. Larry Ellison, Oracle44:45
• When you fail at something, hire the best person in that field. Mark Zuckerberg, Meta2:56:19
  • After Beacon, Zuckerberg concluded he did not understand advertising as well as he thought. He recruited Sandberg, who had built Google's self-serve ads business.
  • She ran ads and operations and taught him to manage. He kept product, engineering and platform.
  • Revenue grew from $280 million in 2008 to almost $800 million in 2009, $2 billion in 2010 and $3.7 billion in 2011. Meta2:56:19
• Choose people who know more than you and organize them around the whole. Andrew Carnegie, Carnegie Steel13:33
  • Carnegie did not understand steam machinery. He tried to understand people, found experts for each part and saw how the parts served the whole.
  • Enzo Ferrari failed as a coach builder, then recognized Battista Pininfarina as the master. He wanted the coach builder involved from the start so body and engine were born together. Enzo Ferrari, Ferrari58:20
  • The Pininfarina partnership lasted 61 years, to 2013. Ferrari58:20
• Bring in a peer or a young outsider when you need what you cannot see yourself. Bill Gates, Microsoft37:53
  • Gates wanted a peer who would argue through big decisions, and Steve Ballmer joined in 1980 with the same excess energy.
  • Enzo Ferrari hired Luca di Montezemolo as an assistant and made him Formula 1 team manager before he was 30. Luca saw the sport had shifted from engines to aerodynamics and chassis. Ferrari1:33:20
  • Ferrari won the 1975 drivers and constructors championships, ending a 10-year drought. Ferrari1:33:20
  • The counterexample is Eisner's friend Michael Ovitz. An agent who thrives on saying yes was put in a job of meetings and saying no. He left in December 1996 with a $140 million severance. Michael Eisner, Disney1:19:13

2.2 Set the bar high and keep recruiting

Great hires are scarce, so wait for them, chase them, and build a way to find them early.

• Ask three questions in every hiring decision. Jeff Bezos, Amazon20:30
  • Will I admire this person? Will they raise the average effectiveness of the group? Along what dimensions might they be a superstar?
  • The host reads the third question as hiring for spikes and tolerating the flaws that come with exceptional talent. Bezos20:30
• Wait for the right person and keep pitching, even after a no. Steve Jobs, NeXT39:20
  • Jobs spent a long time recruiting NeXT's chief operating officer. He said settling for second best is the cost of compromise.
  • Walton kept pitching the same people for years, including David Glass, who had written him off. Glass later became Walmart's CEO. Sam Walton, Walmart27:00
  • Bezos and Joy Covey spent about a year recruiting Walmart's Rick Dalzell, even after he backed out once. He brought roughly a dozen Walmart executives, and Amazon went from one warehouse to six distribution centers in 1998. Jeff Bezos, Amazon2:00:15
  • A high bar is not a guarantee. The COO Jobs finally got tried to sell NeXT behind his back. NeXT39:20
• Test whether the person can do the job, not just whether they are smart. Larry Ellison, Oracle30:50
  • Ellison hired a very smart CFO and defended him by pointing to his intellect. A colleague asked if he could actually do the job, and he could not. Ellison's lesson: brilliance is not enough.
  • Musk interviewed every SpaceX engineer himself and put a desire to work maniacally hard ahead of the resume. He believes skills can be taught but attitude cannot. Elon Musk, SpaceX and Tesla1:05:28
• Build a pipeline that reaches talent before others do. David Packard, Hewlett-Packard30:30
  • HP and Fred Terman built the Honors Cooperative program. Top graduates from across the country got paid tuition and full salary while earning advanced degrees at Stanford.
  • Gates preferred freshly minted bachelor degrees and went after the brightest, called the Microkids. Microsoft had fewer than 40 employees when it signed with IBM. Bill Gates, Microsoft1:00:58
  • Home Depot hired plumbers, electricians and carpenters, who offered expertise no ordinary retail hire had. A steady job with regular hours beat the hardships of contracting. Bernie Marcus and Arthur Blank, Home Depot1:29:45
  • More than 400 HP engineers earned master's or doctoral degrees through the program. HP30:30
  • Gates moved Microsoft to Seattle in 1979 because recruiting was impossible in Albuquerque. The University of Washington kept feeding talent. Microsoft1:18:40
  • Sebastian Thrun brought AI professors into Google part-time while they kept their university posts. The model led to Google Brain. Google28:59
• Back young people with real work. Bob Noyce, Intel47:06
  • Noyce consistently gave young talent latitude, responsibility and resources. Ted Hoff, about the age Noyce was when he invented the integrated circuit, invented the microprocessor.
  • Honda wrote youthfulness into company policy. Each R&D engineer could make any proposal and take responsibility for the research. Soichiro Honda, Honda46:10
  • Intel's sales grew from $64 million in 1973 to almost a billion dollars a year in 1983. Intel47:06

2.3 Give each person one job and one name

Clear ownership lets you step back, because everyone knows who is responsible.

• Put one named leader on each project. Jeff Bezos, Amazon7:22
  • Amazon found every overlap between teams created a dependency. Bezos's answer was one leader and one team on one project alone.
  • Jensen Huang gives every project a pilot in command who reports directly to him, so no one hides behind a team. Jensen Huang, Nvidia33:30
  • Each leader is judged on one thing, and the authors note that great leaders became the scarce input. Amazon7:22
• Hand over a single objective tied to your top priority. John D. Rockefeller, Standard Oil23:45
  • Rockefeller recruited Flagler, who was as talented as he was, and told him to concentrate fully on transportation.
  • Flagler insisted on solid, best-in-class refineries when rivals built flimsy shacks. Standard Oil23:45
• Push accountability down to the smallest unit. Henry Singleton, Teledyne32:54
  • Singleton ran Teledyne with fewer than 50 people at headquarters and over 40,000 employees. He made each local manager fully responsible for results.
  • Belinda Wong would run Starbucks China only with control and a decentralized structure. She reported to Schultz and the International head, with no Seattle designing menus for China. Howard Schultz, Starbucks2:16:40
  • Hermès gives each store manager a budget twice a year to buy what suits local clients. Hermès3:36:00
  • China is now 18% of Starbucks revenue with nearly 7,000 stores, up from 500 in 2011. Starbucks2:16:40
  • Windows 95 was built by 360 people on product principles, with responsibility pushed down to developers. It sold 7 million copies in its first month. Brad Silverberg, Microsoft3:46:00

2.4 Say what, not how, and let them decide

Set the goal, then stay out of the method and the decision.

• Give one clear message and leave the method to them. Phil Knight, Nike32:02
  • Knight told Jeff Johnson to sell more shoes and left the method to him. Johnson built customer files, ad campaigns and the first store on his own.
  • Sol Price believed a manual substitutes for thinking. He taught people why each job mattered so they would do it as well as the owner would. Sol Price, Price Club34:45
  • Johnson hit the ambitious target Knight set for the first store, which Knight had not expected. Nike32:02
  • Jim Sinegal, one of Price's alter egos, started at Fedmart at 18 and went on to found Costco. Price Club34:45
• Make the decision theirs, even when they ask you to make it. Bob Noyce, Fairchild31:06
  • No one had semiconductor management experience, so Noyce hired engineers from graduate school. He gave them guidelines and told them the decision was theirs.
  • Kroc believed authority should go with the job. Wrong decisions would sometimes be made, but strong people only grow if given authority. Ray Kroc, McDonald's46:51
  • Packard gave Chuck House a medal for contempt and defiance after he pushed a monitor through that he had been told to drop. Packard said the difference between insubordination and entrepreneurship is the intent to make HP succeed. David Packard, Hewlett-Packard40:00
  • Young engineers were exhilarated rather than scared. Fairchild31:06
  • HP sold more than 17,000 monitors, worth $35 million. HP40:00
• Stay out of the work where others know more than you do. Ed Catmull, Pixar43:12
  • At Apple Jobs sweated every detail. At Pixar he believed Lasseter and the story people knew narrative better, and he took charge of the money and negotiations.
  • Catmull rebuilt Pixar to find, develop and support good people, who then find and own good ideas. Ed Catmull, Pixar36:57
  • Rockefeller let scientists, not trustees, control spending at his medical institute. John D. Rockefeller, Standard Oil44:00
  • Bill Cone argued with Jobs about widescreen and won his respect. Pixar43:12
  • 38 Nobel laureates have come through the Rockefeller Institute and later Rockefeller University. Standard Oil44:00
• Check lightly and early, with numbers. Henry Singleton, Teledyne28:33
  • Singleton left managers alone as long as they hit their numbers. A monthly financial reporting system caught trouble early.
  • Packard learned from moving cattle that steady gentle pressure from the rear works best. Pressing too hard made the herd panic and scatter. David Packard, Hewlett-Packard31:51
  • Most acquired managers stayed on, many having built their companies over 20 or 30 years. Teledyne28:33

2.5 Hovering costs you your best people

Micromanaging, envy and credit-taking make talented people leave or stop growing.

• Do not badger, play people against each other, or cheat them. John D. Rockefeller, Standard Oil47:00
  • Rockefeller was quiet and reasonable, reached for the ablest executives and gave them running room and support. Many stayed bound to him for the rest of their careers.
  • Carnegie pushed, badgered and took credit for successes. He tried to cheat Henry Clay Frick of his stake, and Frick's last words to him were to meet him in hell. Andrew Carnegie, Carnegie Steel10:40
  • Rockefeller never held a majority stake in Standard. Standard Oil47:00
• Share the credit, or your best people will decide they can do it without you. Bob Noyce, Fairchild19:00
  • Shockley assembled the best young engineers of his era, then made them all take lie detector tests over suspected sabotage. No saboteur was found.
  • He was obsessed with credit and never imagined his engineers saw themselves as geniuses too. They left to raise money.
  • The Traitorous Eight went on to build Fairchild and then much of Silicon Valley. Fairchild19:00
  • Walt Disney micromanaged everything, down to the light bulb inventory, and employees complained he would not delegate creative authority. Walt Disney, Disney51:30
• Treat your control habit as a skill gap you can fix. Ed Catmull, Pixar47:27
  • Catmull saw Jobs's early recklessness as a lack of skill, not meanness. Jobs learned at Pixar, slowly, to give talented people room instead of micromanaging.
  • At NeXT Jobs brushed aside engineers' warning about the magnesium casing. The plan was 16,000 machines in a year, and the factory made about eight a day. Steve Jobs, NeXT25:54
  • By 1995 Jobs said that if you do not treat talented workers right, they can get another job in 10 minutes. Those with him by the end of 1995 mostly stayed for life. Steve Jobs, NeXT47:19
• Free capable managers from a stifling center. John D. Rockefeller, Standard Oil1:46:32
  • After the breakup, operating managers at the spun-out companies were overjoyed. William Burton at Standard of Indiana patented a cracking process in 1913 that gave a much higher gasoline yield.
  • Kroc warned that if you sit on strong people, they are stifled and the best go elsewhere. Harry Sonneborn resigned in 1967 after a clash over a construction moratorium. Ray Kroc, McDonald's46:51

2.6 Where they differ

Founders agree on picking strong people, but disagree on how long to keep them and how close to stand.

• Loyalty versus churn. Rockefeller built lifelong loyalty by giving executives room. John D. Rockefeller, Standard Oil47:00
  • Walton burned through executives like logs in a fireplace and kept replenishing talent. Sam Walton, Walmart27:00
  • Musk worries about long-time employees who are rich enough to lose their hunger. Elon Musk, SpaceX and Tesla1:05:28
  • Singleton kept acquired managers who had built their companies over 20 or 30 years. Henry Singleton, Teledyne28:33
• Thin direction versus close contact. Google product leaders built what they thought was cool, and many could not name a through line, though the top-level strategy was tight. Larry Page and Sergey Brin, Google3:17:43
  • Huang is rumored to have 40 direct reports and treats senior people as the best in the world at what they do. Jensen Huang, Nvidia1:55:27
  • Walton gave capable younger people big jobs but pushed back hard on their spending plans. Sam Walton, Walmart1:44:00
  • Chris Pinkham built EC2 from Cape Town and said he spent most of his time hiding from Bezos, because becoming his pet project meant being loved to distraction. Jeff Bezos, Amazon Web Services1:13:00
• Stretch people or fit them to the role. Knight put people in over their heads. Nike bought bankrupt factories and ran them with people who had never run a factory. Phil Knight, Nike50:30
  • Eisner's friend Ovitz was a poor fit from the start, because the skills of the agent did not match the job. Michael Eisner, Disney1:19:13
  • Knight told Jeff Johnson the unvarnished truth about the debts, and Johnson still asked to work full-time. Phil Knight, Nike25:59