The face of hiring is changing in light of the economic crisis. Harvard management professor Bill George weighs in on how a company should approach measuring emotional intelligence.

Question: How should companies learn to hire better in light of the crisis?

Bill George:  I think we need to hire people less on their IQ and more on their EQ, more on the values, how well grounded they are, how good team players they are, how well they relate and do they have the self awareness?  Do they have a good sense of themselves so that they can understand it’s not all about me?  It’s about “we” and as long as they’re hiring leaders and putting leaders in place that think it’s all about them we’re just going to have more upsets and more destroyed corporations.  It isn’t just on Wall Street.  That’s what happened to General Motors.  That’s what happened to the old AT&T.  We’ve seen a lot of companies go down because the leadership was not focused on how to build a long terms institution. 

Question: What are the steps you would take to make sure that leader possesses emotional intelligence?

Bill George:  I would do a much greater in depth assessment of his values and his emotional intelligence.  Send him off for a psychological assessment, which we do before we hire people, so if we’re promoting someone internally shouldn’t they have it too?  I think it’s totally appropriate.  360 feedback, one of the best things ever been created.  I made a lot of promotional mistakes because I was basing them on my impression of the people and some of these people looked very good upward.  They could do a great job making presentations.  They always were on top of their game, but when they went down and talked to the people that worked for them they couldn’t stand them and I’ll tell that people always tell you, 360 evaluation is one of the most important tools at any organization.  Goldman does this religiously, Medtronic does, Novartis does.  I think it’s essential that companies do this.  I always did it as CEO.  I got an evaluation from my executive committee.  It was always considerably harsher than what the board said to me.

Question: How does a company approach 360 evaluations?

Bill George:  It starts at the top.  The CEO has got to want it.  At that same Davos meeting last year I had Jamie Diamond on a panel and he told a story about a woman that said to him in a management meeting, “Mr. Diamond we need one person on your staff who is a truth teller, tells you the truth at all times.”  And he said, “Well with all due respect, if I have only one truth teller I need to fire the other nine people.”  “I need ten truth tellers.”  “Everyone has got to tell the truth.”  He creates that kind of environment.  Tell me what I’m doing wrong?  I had people coming in my office and tell me when I was going off base, off track and they helped me stay on track.  They helped me realize what was going on.  You need people like that and if it doesn’t start with the boss it’s not going to start further down.  I think you’ve got to have that and then spread it throughout the system and the strong firms have resilient management like Johnson & Johnson, like Mackenzie, like Goldman, like General Electric have this kind of system where they do very good a job on performance evaluation and feedback on a regular basis and straight up honest conversations. 

Recorded on December 9, 2009