Secret Ingredients to Building Your All-Star Team

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Why shouldn't I keep recruiting in house? After all, I know my needs better than anyone.
We see more and more companies rely on their own efforts, whether through job boards, or LinkedIn, or trying to build their own talent pools. They see this as the path to hiring the best talent in the market.

But in our experience only about 5 percent of the proactive approaches/applications we receive are ever right for a position--and very, very rarely are those people the best candidates.

It shouldn't come as a surprise that we only receive applications from people who are actively looking for a job. Typically those candidates aren't in the top echelons of their industry, aren't blowing away their sales figures, or aren't the absolute best at customer support.

I doubt internal recruitment teams really yield drastically different results. The only conclusion I can come to is that, at best, internal teams typically hire slightly better than average candidates.

But since the average length of employment continues to drop, aren't more people looking?
We are seeing more and more candidates who only spend two years in a job before they move on. Clearly they think that is an at least acceptable term of employment to show on their CV. But I think most of those people are serial job hunters--they're the ones who are applying, making themselves available to talent pools, etc.

The people you really want to hire--the cream of the crop--aren't looking or applying.

So how do you find great people who aren't actively looking for jobs?
Since they're not actively looking for you, you need to actively look for them.

It's relatively easy to identify people who work in certain positions or in certain companies. Almost all companies have a page dedicated to their management team, if the role is senior enough.

Plus, while many people may not be looking for a job right now, most people have at some point in their lives looked for a job. So most of them will have created a Linkedin profile, etc. It may be old, it may be somewhat out of date... but it does give us a name. For example, it's extremely rare that we find any salesperson who doesn't have a LinkedIn profile, particularly in the tech sector. And many people have created some form of online presence for themselves for their own professional purposes.

But we don't just rely on online social networks to find great people. If we know that 10 people are on the sales team of ABC Company and we can only find seven names, we'll call the company directly and try to glean that information.

Once you find people... how do you find the superstars?
You're right. It's relatively easy to get names. We often start with a long list of 90 to 100 names. The real key is to narrow down that list through iterations of screening and interviewing.

Say we're looking for a superstar salesperson. We look at organizations of similar stature with similar sales results, and we look for the people who consistently over-perform.

Because we do a lot of recruiting for start-ups, this often takes on a slightly different flavor. Those companies don't need prima donnas. They need people who don't need a big office, don't need a fancy desk, don't need a huge sales support team to help them achieve their numbers.

So we go hunting in companies who have experienced similar phases of growth. The first stage of the process, identifying target companies, is one of the most important to ensure you quickly identify the superstars.

Still, aren't the superstars often invisible? That awesome sales rep isn't busy blowing her own horn; she's busy selling.
Sometimes, sure, but not always. Many people speak at conferences, seminars etc., and most of the times these details are published.

But maybe what those people are really good at is selling themselves.
That's where due diligence comes in. Most people, particularly in sales roles, can talk a good game... so we have to see past that and find details of their deals, their targets, their achievements, etc. Often this information comes through informal references and talking to people we know who have worked with them in the past--that's a huge value from having a large network.

As with any candidate, you absolutely must make sure the person is a known quantity with a proven, verifiable track record. The more people you know, the easier it is to do your due diligence. Build a big enough network and someone you know knows someone you need to know.

Speaking of networking, how can that play a role for an entrepreneur where hiring is concerned?
When we're searching and talking to people we are constantly asking who they know, who did this, who led this deal, who was responsibly for that.

That builds a picture and a map of the client's market. Any entrepreneur can and should do the same thing. It's easy, because people love to talk about people. But you do have to beware of false claims--sometimes several different people will claim they were the lead or the linchpin of a particular deal or project.

The key is to understand the context. I think it's much easier, for example, to sell a market-leading product than it is to sell a challenger. When you're the market leader, everyone knows you, customers call you, and in some cases salespeople actually become glorified order takers.

That doesn't happen in a start-up trying to challenge or disrupt; every deal they do is hard damn work!

Give me an example of how this might work.
Pretend you're a U.S. company seeking to expand your cloud-based service into the Asia-Pacific region. You need to hire two or three salespeople who can take your business from near-standing start to producing around $1.5 to $2 million in sales per person by selling to large enterprise companies.

The first thing is to investigate the cloud computing market in APAC. As it happens that market is, relatively speaking, in it's infancy compared to in the U.S., and there aren't many companies with a cloud-based product who have built a sales team.

Sure, you could look at big companies like IBM, HP, Oracle, etc. who have cloud-based products. But those companies have a huge installed base already, so when they're rolling out new products they can often go to warm leads and existing customers. Plus, they have huge sales support functions, pre-sales technicians, extensive marketing, and are well-known brands. You don't have any of that.

But with a little digging you learn that many of the big companies' cloud offerings have been brought in through acquisition. So you look for people who worked for those companies pre-acquisition, start reaching the people who have been there, done that... and now (hopefully!) they're bored of doing that in a big company... and they're ready for their next challenge.

Of course you'd also look at other start-ups performing well in complementary tech areas. In our case, we aim for 20 to 30 companies on our target list. You might be able to get away with less--but why limit yourself?

If you only think about hiring when it's time to hire someone then you're already a little too late.

Finding great people should be an ongoing process. For example, I already have an idea of the next five to 10 people I'll approach when we need to hire someone. I basically keep a note of any interactions I have with people who seemed interesting and employable.

Anyone can do that. Every business has customers, competitors, and partners; all you have to do is pay attention to the people doing great work. For example, companies in the open-source tech community found many of their employees simply by paying attention to early adopters and users who were very active on forums and user groups.

Keep notes on any people who seem promising. Even if they're not doing the same job, they might have the perfect attitude.) Ask your customers who impresses them. Ask your staff who impresses them. When you're ready to hire, you'll have your very own talent pool already in place.

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Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

Many entrepreneurs can't afford to hire the best and the brightest.
In my experience, the best and brightest are drawn to high-risk, high-reward opportunities, so I would argue that start-ups actually have it easier when it comes to attracting talent. Giving employees equity and allowing them to share in the upside creates a sense of ownership--and nothing is more motivating.

What else do you do to make sure you're hiring the best?
We constantly make non-obvious hires and have invented positions for people who didn't fit a traditional career trajectory but who struck us as smart and creative. We've hired former insurance agents, a person who worked on an Egyptian cruise ship, a medical doctor, people from government, etc. The key for hiring managers is to constantly think creatively about transferrable skills and experience.

Give me a specific example of an employee with a diverse background you've hired.
One of our data scientists, Emi, was a neuroscience post-doc conducting neural network research at UC Berkeley. We convinced her to join our data science team and she's applied her academic background in machine learning and graph theory to social media analysis. She's discovered amazing similarities between the neural networks in brains and social networks.

Can't unusual backgrounds sometimes create cultural fit issues?
We have always sought to be highly intentional about the culture at Hearsay Social. Long before we hired any employees we developed a set of core values: 1) customers come first, 2) company before self, and 3) execution speed.

We believe in transparency and meritocracy, which means everyone at Hearsay Social is accountable for decisions and results. We hire and reward people based on these values, which makes them self-reinforcing.

How has social media changed the way you build teams ?
Social networks have completely changed the way companies hire by expanding referral networks; referrals from existing employees have always been a great source for new hires, and social networks make it easier than ever for recruiters to source candidates and proactively ask existing employees for referrals. Visibility into mutual connections also makes it much easier to do reference checks and generally learn more about candidates upfront.

1. Be creative. Smart, hardworking people can always contribute to a team. Read between the lines of resumes and seek out nontraditional backgrounds to find hidden gems.

2. Make sure values are aligned. We focus on building strong company values and, as we expand our team, it's vital that all new hires embrace the same values.

3. Tap into your network. The people you once worked with and the people you meet at events around town could be your future star employees.

4. Look for curiosity and passion. People who drive themselves will prove their value many times over. Many of our top-performing employees have a strong passion outside of work.

5. Feed them. Our employees work incredibly hard and we want to take care of them. From catered meals to health benefits, we believe there's no better investment than investing in your employees.

• How to build your own talent pool
• Inside a completely transparent company
• Why 'going green' won't be optional in the future
• Is it better to train or hire great talent?
• The keys to maximizing your return on sponsoring events
• The ins and outs of franchising with Noodles CEO Kevin Reddy
• How Ashley Madison's founder built a business everyone loves to hate
• Julia Allison on building a great personal brand
• Eric Ripert on how to build a classic brand

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up from ghostwriting books for some of the smartest leaders he knows in business.

Robert D. Austin, Dean of the Faculty of Business at the University of New Brunswick, explains how Danish software tester Specialisterne maintains a diverse and productive workforce. He is the coauthor of Harder Than I Thought: Adventures of a Twenty-First Century Leader.

It's no secret that happy, satisfied employees are a key ingredient to a successful company. But what really motivates people? Traditional thinking follows that the more you pay someone the more loyal and satisfied they are in their job.

But, the truth behind employee motivation is a more complicated mix including praise, autonomy, and leadership opportunities. Take a look at the infographic below for more on the many factors involved in motivating employees.

Read more stories about: Management, Motivation, Managing employees

Kathleen Davis is an associate editor at Entrepreneur.com.

Eliciting the best work from your employees is the mark of an effective leader. But, effectively communicating what exactly you expect from them can be difficult.

"Unclear expectations lead to inefficient processes and subpar performance," says Christine Lotze, a partner at Philosophy IB, a Florham Park, N.J.-based management-consulting firm that specializes in changing workplace behavior. "People get frustrated because their work isn't valued and ultimately the company suffers."

You can avoid that confusion with these four tips to communicate your expectations clearly and effectively:

1. Reinforce your expectations. As with any conversation, you should use simple and direct language when communicating your expectations. "The key to effective communication is simplicity and repetition of the message," Lotze says. Hearing your expectations once won't make them sink in -- they need to be regularly reinforced.

For example, you might track progress in monthly check-ins, or call out employees that are meeting your expectations exceptionally well. When you do, reinforce which expectation you're highlighting and what they've done to meet it. That repetition will act as a reminder and clarify the types of behaviors you're looking to see from employees.

2. Explain who, what and how. To communicate clear expectations in a constantly changing startup environment, make sure that employees always know what you are trying to achieve, how you plan to get there, and who will do what to reach that outcome. "Most failures can be linked to a gap in clarity about one of these three components," Lotze says.

By clarifying expected outcomes, roles, and processes, you give your team all the tools they need to bring your vision to life. "If you don't explain how your vision is linked to what your employees need to do, you'll get a lot of great ideas with no execution," Lotze says.

3. Notice what the work environment communicates to employees. For employees to meet your expectations, the work environment has to support the behaviors you want to see. "Every element of your culture must reinforce the expected behaviors you outline for your employees," Lotze says. If the expectations are at odds with the environment, your employees won't be able to meet them -- even if they're trying.

Effective expectations are supported by your reward system, as well as your company's structures and processes. For example, if you expect employees to take risks, then you need to celebrate those who do, and establish a work flow that allows for failure and experimentation. "You have to practice what you preach," Lotze says.

4. Take a personal interest in your employees. Your employees come to the workplace with their own wants and needs, so getting to know each person individually helps you ensure that they understand your expectations and feel motivated to meet them. "By really understanding what makes them tick, what gives them energy, and what challenges they are facing, a leader can much more effectively drive performance and change behavior," Lotze says.

Take the time to establish an emotional connection with each of the people you manage. Ask what they're struggling with, what they're working toward, and what excites them about the work they're doing. Knowing what motivates them will help you frame your expectations in a way that matches their career goals.

Read more stories about: Leadership, Motivation, Communication strategies

Nadia Goodman is a freelance writer in Brooklyn, NY. She is a former editor at YouBeauty.com, where she wrote about the psychology of health and beauty. She earned a B.A. in English from Northwestern University and an M.A. in Clinical Psychology from Columbia University. Visit her website, nadiagoodman.com.

Published: March 06, 2013 in Knowledge@Wharton

Every year, hundreds of thousands of new graduates enter the business world, eager to climb the corporate ladder. Their progress on the early rungs of that journey will often be determined by qualities like hard work, determination, knowledge and technical proficiency. But business consultants Alan S. Berson and Richard G. Stieglitz argue that those same qualities prove less helpful at higher rungs on the ladder, and may even be one's downfall if they are not balanced by a very different set of leadership qualities. They sum up the thesis of their new book, Leadership Conversations: Challenging High-Potential Managers to Become Great Leaders, like this: "As you move into upper leadership levels, your technical skills -- what you know -- become less important. What counts is whom you know and, perhaps more important, who knows and trusts you."

The importance of building strong working relationships within an organization may seem self-evident. But Berson and Stieglitz go well beyond a call to establish and maintain open lines of communication. The kind of conversations they are advocating for are not simply talk for talk's sake. Rather, they are the heart and soul of any thriving organization's culture: a strategic tool incorporating very specific techniques toward very specific ends.

Leadership Conversations is part of a growing recognition that the so-called "command and control" model of organizational leadership is fast becoming outdated in today's world. The reasons for this shift are many. Today's business environment is increasingly global, diverse, fluid and unpredictable. Technological change and the rise of social media have fundamentally altered the way companies interact with their customers. Rigidly hierarchical organizations risk losing ground to more nimble, collaborative ones.

Berson and Stieglitz echo and expand upon many of the themes touched on in last year's Talk, Inc.: How Trusted Leaders Use Conversation to Power Their Organizations, by Harvard Business School professors Boris Groysberg and Michael Slind. Both books draw on research and case studies involving leaders in a wide range of settings -- including private industry, government, the military, nonprofits and educational institutions. As Berson and Stieglitz point out, another dimension to today's changed environment is how these sectors are becoming more and more alike: executives frequently move amongst them, facilitating a free and open exchange of management and leadership practices.

A central distinction in the book is that between leadership and management. Both represent not only a different set of skills, but an entirely different mindset. One is not necessarily superior to the other. In fact, a key challenge to an employee rising up the organizational ranks is to find the proper balance between the two.

Management is intrinsically result-oriented. Managers develop work schedules, set goals and delegate responsibility. They are there to answer questions and to assist employees in completing their tasks. Their orientation is tactical and geared to solving problems. Nonetheless, even at the lowest levels, managers are challenged to develop a new mindset, a new set of skills. As a so-called "high potential" moves up from individual contributor to first-line manager, he or she is for the first time in a position where future promotion will depend largely on team results, not individual accomplishments or expertise. The hiring and supervising of individual contributors will demand leadership qualities from the beginning manager: the ability to assess, not just technical skills but how well an employee fits with the organization's culture, and the ability to motivate and mentor employees with varying temperaments and skillsets. That shift in emphasis grows even more pronounced when the young manager is promoted to essentially become a "manager of managers."

Leadership, on the other hand, is more process-oriented. Just as important as meeting deadlines is how the group gets there. If a bottom-line goal is achieved without involving and developing the entire team, the organization will not be prepared to meet future challenges and changing circumstances. In defining a leader's primary objective, the authors return again and again to the terms connection and alignment. A team is connected and aligned when its members see they have input into decision-making and planning, and thus feel a stake in the group's objectives. A connected and aligned team is one that is constantly learning, and thus better able to adapt to unforeseen changes. While managers are more likely to be answering questions, a great leader routinely asks them. Their orientation is strategic rather than tactical, with an emphasis not so much on solving problems as on generating possibilities.

Again, a blend of the two skillsets is required as one moves up the corporate ladder. Ideally, the two will work in concert with one another: "Your leadership mindset defines the objectives; your management mindset ensures that those objectives are met." But one of the biggest dangers, the authors have found, is that upper-level leaders will default to a management mentality when the situation first and foremost demands leadership. Management -- with its task-oriented goals, deadlines and tangible measurements -- is a comfort zone that untested leaders all too easily slip back into. Worse yet, such leaders may not even recognize the difference between the two approaches.

The heart of the book is an exploration of the four basic kinds of conversation a leader should engage in. Each kind of conversation involves a distinct set of strategic objectives demanding its own skills and techniques. At the outset, the authors emphasize that holding leadership conversations should not be viewed as a mere task to be crossed off a checklist. "Rather it is something you need to do well -- consciously and unconsciously -- every minute of every day. Conversations with your bosses, peers, direct reports and other stakeholders are the lifeblood of your business relationships."

Before a relationship can pay dividends, it must be established in the first place, on a foundation of trust and reciprocity. Thus, the authors begin with an overview of the basic tenets of relationship-building, citing a couple of case studies of CEOs who seem to have devoted an inordinate amount of time on conversations with no particular end in mind. One, Sam, routinely spent hours a week on five- to ten-minute phone conversations, never asking anything of the other person, just listening. Peers questioned this practice amid so many immediate challenges faced by the firm. Yet, precisely because of these conversations, whenever the firm faced a major challenge or opportunity, Sam had someone he could call on.

Another CEO, the head of a Fortune 500 company, was known for writing as many as 20,000 notes a year to company employees he encountered on his travels. He would thank them for what he had learned and ask for additional information. As he continued this practice, the information offered him grew more and more valuable, and employees went out of their way to share with him. He had cultivated an invaluable base of knowledge on the ground.

The second type of leadership conversation is geared specifically toward cultivating leadership qualities in those who report to you. Especially amid a challenging and ever-changing world economy, developing leadership from within is more important than ever. The authors contend that demand for such leaders usually exceeds supply. Even in a soft economy, they point out, headhunters connecting companies with needed talent do a thriving business.

Growing talent from within starts at the very beginning with the initial hire of a prospective employee. Focusing narrowly on resume and technical qualifications may work out in the short term, but is no way to build for the future. Less obvious criteria revolve around whether a candidate is a good fit for the organization's culture, and whether they possess the kinds of characteristics that will allow them to move up the leadership ladder.

Early promotions are key. It is essential to "avoid the trap of assuming that the best salesperson, engineer or other individual contributor will be the best manager." When high potentials are targeted for advancement, they must be systematically mentored and coached into entering, first, the management mindset, and, later, the leadership mindset. "Each promotion requires a high potential to learn new ways of leading and to leave some old ways behind," say the authors.

Each step along the way, Berson and Stieglitz note, leadership development must be an ongoing, daily activity. It is not something that can be covered in the occasional training workshop, and should not be viewed as a function of human resources. Providing ongoing leadership feedback to high potentials is a three-step process comprising preparation, delivery and follow-up. Executives nurturing young talent must be on constant guard for signs of trouble -- for example, if a young leader tends to fix mistakes for employees rather than teach people to do the work themselves. Essential to this feedback is a celebration of successes, however small. Even a celebration can teach and develop leadership by focusing not so much on the results as on the behaviors that led to that result.

Making crucial decisions is the cornerstone of leadership. The authors first of all distinguish between management decisions and leadership decisions. A manager's decisions will tend to be based on facts, within the realm of the known and measurable. They involve a low tolerance of failure: the priority is simply to complete a given task. A leader's decisions, on the other hand, will revolve more around a vision for the organization's future, and thus around the unknowable. The process whereby a decision is arrived at can be as important as the decision itself, and there is a greater tolerance of risk.

Among a leader's decisions is the hiring of next-level managers with leadership potential. The astute leader will find that his or her criteria have undergone a fundamental shift. "As a manager, you may have hired people primarily based on their skills and experience; but as a leader, you will place more weight on their attitudes and their judgment."

In the old command-and-control model, decision-making involved a leader assembling and assessing the necessary information, and then issuing a directive to his or her subordinates. In the new model, decision-making is a more fluid, ongoing and collaborative process. By tapping into the input of as many team members as possible, the new decision-making develops leadership and cultivates a sense of ownership in the organization's objectives and their subsequent implementation. In today's world, the authors argue, important decisions must be made with the executive knowing an ever smaller part of what is necessary to make those decisions. Thus, the information held at any given time is less important than the group's capacity to quickly acquire and spread fresh knowledge in response to changing circumstances. A decision-making process that builds in a broad foundation of input and ownership will foster a learning culture within an organization in which everyone is both learning and teaching.

Berson and Stieglitz contend that developing a plan to implement key decisions involves the most crucial and delicate balancing of the management and leadership mindsets. On the one hand, the management approach "takes center stage" as getting things done becomes the priority. "As the leader," on the other hand, "you must ensure that everyone supports the plan, understands her role, and knows what is expected of her." The danger, as always, is slipping into a strictly managerial stance that measures results in a narrowly quantitative way. It is entirely possible to meet statistical benchmarks while failing to expand markets, innovate services and fully tap the team's creative potential.

As is the case with decision-making, the process can be more important than the result. A planning process that successfully engages the entire team will allow it to adjust when unexpected events occur, as they almost invariably will. Moreover, implementing a plan often proves to be an organization's most effective classroom. As the authors put it succinctly, "Actions create learning." Goals and strategies will require constant adjustment, and only a team that is fully "committed and aligned" will be equipped to do so.

Cultivating a "learning culture" within an organization also involves making peace with the prospect of failure. A team afraid of failure will at best make incremental gains within the constraints of the current status quo. Organizations that fear failure will also easily fall prey to the kind of "analysis paralysis" that waits for complete knowledge and perfect solutions. "The most valuable aspect of an action," the authors write, "can be the learning it provides, regardless of whether the short-term goal was reached."

In the face of pressing deadlines and the need to demonstrate immediate results, too many executives fail to invest the necessary time in leadership conversations. Consequently, demand for quality leaders consistently exceeds supply, and organizations are again and again forced to turn to outside managers and consultants. The results, the authors say, can include a lack of internal cohesion, high recruitment fees and increased turnover. They cite research showing that nearly half of high-potential executives fail to reach their full potential (a phenomenon euphemistically referred to as "midcareer derailment"), and the book is full of examples of rising stars who hit a wall soon after a significant promotion. In each case, the candidate acknowledged a lack of mentoring that left them unprepared for the new leadership mindset required at the next level.

The book closes with a detailed checklist of conversational skillsets high-potential managers will need as they move up the organizational ladder. This checklist is intended as a tool for interpreting a leadership assessment test the authors provide on a companion website. They encourage budding leaders to use these tools to put together a personal action plan to identify strengths and weaknesses and set themselves on the path to becoming an effective leader.

A senior executive of a large consumer goods company had spotted a bold partnership opportunity in an important developing market and wanted to pull the trigger quickly to stay ahead of competitors. In meetings on the topic with the leadership team, the CEO noted that this trusted colleague was animated, adamant, and very persuasive about the move's game-changing potential for the company. The facts behind the deal were solid.

The CEO also observed something troubling, however: his colleague wasn't listening. During conversations about the pros and cons of the deal and its strategic rationale, for example, the senior executive wasn't open to avenues of conversation that challenged the move or entertained other possibilities. What's more, the tenor of these conversations appeared to make some colleagues uncomfortable. The senior executive's poor listening skills were short-circuiting what should have been a healthy strategic debate.

Eventually, the CEO was able to use a combination of diplomacy, tactful private conversation, and the bureaucratic rigor of the company's strategic-planning processes to convince the executive of the need to listen more closely to his peers and engage with them more productively about the proposal. The resulting conversations determined that the original deal was sound but that a much better one was available-a partnership in the same country. The new partnership presented slightly less risk to the company than the original deal but had an upside potential exceeding it by a factor of ten.

The situation facing the CEO will be familiar to many senior executives. Listening is the front end of decision making. It's the surest, most efficient route to informing the judgments we need to make, yet many of us have heard, at one point or other in our careers, that we could be better listeners. Indeed, many executives take listening skills for granted and focus instead on learning how to articulate and present their own views more effectively.

This approach is misguided. Good listening-the active and disciplined activity of probing and challenging the information garnered from others to improve its quality and quantity-is the key to building a base of knowledge that generates fresh insights and ideas. Put more strongly, good listening, in my experience, can often mean the difference between success and failure in business ventures (and hence between a longer career and a shorter one). Listening is a valuable skill that most executives spend little time cultivating. (For more about one executive's desire to be a better listener, see " Why I'm a listener: Amgen CEO Kevin Sharer.")

The many great listeners I've encountered throughout my career as a surgeon, a corporate executive, and a business consultant have exhibited three kinds of behavior I'll highlight in this article. By recognizing-and practicing-them, you can begin improving your own listening skills and even those of your organization.

1. Show respect

One of the best listeners I have ever observed was the chief operating officer (COO) of a large medical institution. He once told me that he couldn't run an operation as complex as a hospital without seeking input from people at all levels of the staff-from the chief of surgery to the custodial crew. Part of what made him so effective, and so appealing as a manager, was that he let everyone around him know he believed each of them had something unique to contribute. The respect he showed them was reciprocated, and it helped fuel an environment where good ideas routinely came from throughout the institution.

The COO recognized something that many executives miss: our conversation partners often have the know-how to develop good solutions, and part of being a good listener is simply helping them to draw out critical information and put it in a new light. To harness the power of those ideas, senior executives must fight the urge to "help" more junior colleagues by providing immediate solutions. Leaders should also respect a colleague's potential to provide insights in areas far afield from his or her job description.

Here's an example: I recall a meeting between a group of engineers and the chief marketing officer (CMO) at a large industrial company. She was concerned about a new product introduction that had fallen flat. The engineers were puzzled as well; the company was traditionally dominated by engineers with strong product-development skills, and this group had them too. As the CMO and I discussed the technological aspects of the product with the engineers, I was struck by their passion and genuine excitement about the new device, which did appear to be unique. Although we had to stop them several times to get explanations for various technical terms, they soon conveyed the reasons for their attitude-the product seemed to be not only more efficient than comparable ones on the market but also easier to install, use, and maintain.

After a few minutes, the CMO, who had been listening intently, prompted the engineers with a respectful leading question: "But we haven't sold as many as you thought we would in the first three months, right?"

"Well, actually, we haven't sold any!" the team leader said. "We think this product is a game changer, but it hasn't been selling. And we're not sure why."

After a pause to make sure the engineer was finished, the CMO said, "Well, you guys sure seem certain that this is a great product. And you've convinced the two of us pretty well. It seems that customers should be tripping over themselves to place orders. So assuming it's not the product's quality that's off, what else are your customers telling you about the product?"

"We haven't spoken to any customers," the engineer replied.

The CMO blanched. As the conversation continued, we learned that the product had been developed under close wraps and that the engineers had assumed its virtues would speak for themselves. "But maybe not," said the team leader. "Maybe we ought to push it a little more. I guess its good traits aren't so obvious if you don't know a lot about it."

That engineer had hit the nail on the head. The device was fine. Customers were wary about switching to something untested, and they hadn't been convinced by the specs the company's sales team touted. As soon as the engineers began phoning their counterparts in the customers' organizations (an idea suggested by the engineers themselves), the company started receiving orders.

Had the CMO looked at the problem by herself, she might have suspected a shortcoming with the product. But after some good listening and targeted follow-up questions, she helped to extract a much better solution from the engineers themselves. She didn't cut the conversation short by lecturing them on good marketing techniques or belittling their approach; she listened and asked pointed questions in a respectful manner. The product ultimately ended up being a game changer for the company.

Being respectful, it's important to note, didn't mean that the CMO avoided asking tough questions-good listeners routinely ask them to uncover the information they need to help make better decisions. The goal is ensuring the free and open flow of information and ideas.

I was amused when John McLaughlin, the former deputy director of the US Central Intelligence Agency, told me that when he had to make tough decisions he often ended his conversations with colleagues by asking, "Is there anything left that you haven't told me . . . because I don't want you to leave this room and go down the hall to your buddy's office and tell him that I just didn't get it." With that question, McLaughlin communicated the expectation that his colleagues should be prepared; he demanded that everything come out on the table; and he signaled genuine respect for what his colleagues had to say.

2. Keep quiet

I have developed my own variation on the 80/20 rule as it relates to listening. My guideline is that a conversation partner should be speaking 80 percent of the time, while I speak only 20 percent of the time. Moreover, I seek to make my speaking time count by spending as much of it as possible posing questions rather than trying to have my own say.

That's easier said than done, of course-most executives are naturally inclined to speak their minds. Still, you can't really listen if you're too busy talking. Besides, we've all spent time with bad listeners who treat conversations as opportunities to broadcast their own status or ideas, or who spend more time formulating their next response than listening to their conversation partners. Indeed, bad listening habits such as these are ubiquitous (see sidebar, "A field guide to identifying bad listeners").

I should know because I've fallen into these traps myself. One experience in particular made me realize how counterproductive it is to focus on your own ideas during a conversation. It was early in my career as a consultant and I was meeting with an important client whom I was eager to impress. My client was a no-nonsense, granite block of a man from the American heartland, and he scrutinized me over the top of his reading glasses before laying out the problem: "The budget for next year just doesn't work, and we are asking our employees to make some tough changes."

All I heard was his concern about the budget. Without missing a beat, I responded to my client and his number-two man, who was seated alongside him: "There are several ways to address your cost problem." I immediately began reeling off what I thought were excellent suggestions for streamlining his business. My speech gained momentum as I barreled ahead with my ideas. The executive listened silently-and attentively, or so it seemed. Yet he didn't even move, except to cock his head from time to time. When he reached for a pen, I kept up my oration but watched with some annoyance as he wrote on a small notepad, tore off the sheet of paper, and handed it to his associate. A smile flitted almost imperceptibly across that man's face as he read the note.

I was already becoming a bit peeved that the executive had displayed no reaction to my ideas, but this little note, passed as though between two schoolboys, was too much. I stopped talking and asked what was written on the paper.

The executive nodded to his associate. "Show him."

The man leaned across the table and handed me the note. My client had written, "What the hell is this guy talking about?"

Fortunately, I was able to see the humor in the situation and to recognize that I had been a fool. My ego had gotten in the way of listening. Had I paid closer attention and probed more deeply, I would have learned that the executive's real concern was finding ways to keep his staff motivated while his company was shrinking. I had failed to listen and compounded the error by failing to keep quiet. Luckily for me, I was able to get a second meeting with him.

It's not easy to stifle your impulse to speak, but with patience and practice you can learn to control the urge and improve the quality and effectiveness of your conversations by weighing in at the right time. Some people can intuitively grasp where to draw the line between input and interruption, but the rest of us have to work at it. John McLaughlin advises managers to think consciously about when to interrupt and to be as neutral and emotionless as possible when listening, always delaying the rebuttal and withholding the interruption. Still, he acknowledges that interrupting with a question can be necessary from time to time to speed up or redirect the conversation. He advises managers not to be in a hurry, though-if a matter gets to your level, he says, it is probably worth spending some of your time on it.

As you improve your ability to stay quiet, you'll probably begin to use silence more effectively. The CEO of an industrial company, for example, used thoughtful moments of silence during a meeting with his sales team as an invitation for its junior members to speak up and talk through details of a new incentive program that the team's leader was proposing. As the junior teammates filled in these moments with new information, the ensuing rich discussion helped the group (including the team leader) to realize that the program needed significant retooling. The CEO's silence encouraged a more meritocratic-and ultimately superior-solution.

When we remain silent, we also improve the odds that we'll spot nonverbal cues we might have missed otherwise. The medical institution's COO, who was such a respectful listener, had a particular knack for this. I remember watching him in a conversation with a nurse manager, who was normally articulate but on this occasion kept doubling back and repeating herself. The COO realized from these cues that something unusual was going on. During a pause, he surprised her by asking gently, "You don't quite agree with me on this one, do you? Why is that?" She sighed in relief and explained what had actually been bugging her.

3. Challenge assumptions

Good listeners seek to understand-and challenge-the assumptions that lie below the surface of every conversation. This point was driven home to me the summer before I went to college, when I had the opportunity to hang out with my best friend at a baseball park. He had landed a job in the clubhouse of the Rochester Red Wings, then a minor-league farm team for the Baltimore Orioles. That meant I got to observe Red Wings manager Earl Weaver, who soon thereafter was promoted to Baltimore, where he enjoyed legendary success, including 15 consecutive winning seasons, four American League championships, and one World Series victory. Weaver was considered fiery and cantankerous, but also a baseball genius. To my 18-year-old eyes, he was nothing short of terrifying-the meanest and most profane man I'd ever met.

Weaver wasn't really a listener; he seemed more of a screamer in a perpetual state of rage. When a young player made an error, Weaver would take him aside and demand an explanation. "Why did you throw to second base when the runner was on his way to third?" He'd wait to hear the player's reasoning for the sole purpose of savagely tearing it apart, usually in the foulest language imaginable and at the top of his lungs.

But now and then, Weaver would be brought up short; he'd hear something in the player's explanation that made him stop and reconsider. "I've seen that guy take a big wide turn several times but then come back to the bag. I thought maybe if I got the ball to second really fast, we could catch him." Weaver knew that the move the player described was the wrong one. But as ornery as he was, he apparently could absorb new information that temporarily upended his assumptions. And, in doing so, the vociferous Weaver became a listener.

Weaver called his autobiography It's What You Learn After You Know It All That Counts. That Zen-like philosophy may clash with the Weaver people thought they knew. But the title stuck with me because it perfectly states one of the cornerstones of good listening: to get what we need from our conversations, we must be prepared to challenge long-held and cherished assumptions.

Many executives struggle as listeners because they never think to relax their assumptions and open themselves to the possibilities that can be drawn from conversations with others. As we've seen, entering conversations with respect for your discussion partner boosts the odds of productive dialogue. But many executives will have to undergo a deeper mind-set shift-toward an embrace of ambiguity and a quest to uncover "what we both need to get from this interaction so that we can come out smarter." Too many good executives, even exceptional ones who are highly respectful of their colleagues, inadvertently act as if they know it all, or at least what's most important, and subsequently remain closed to anything that undermines their beliefs.

Such tendencies are, of course, deeply rooted in human behavior. So it takes real effort for executives to become better listeners by forcing themselves to lay bare their assumptions for scrutiny and to shake up their thinking with an eye to reevaluating what they know, don't know, and-an important point-can't know.

Arne Duncan, the US Secretary of Education, is one such listener. He believes that his listening improves when he has strong, tough people around him who will challenge his thinking and question his reasoning. If he's in a meeting, he makes sure that everyone speaks, and he doesn't accept silence or complacency from anyone. Arne explained to me that as a leader, he tries to make it clear to his colleagues that they are not trying to reach a common viewpoint. The goal is common action, not common thinking, and he expects the people on his team to stand up to him whenever they disagree with his ideas.

Duncan uses a technique I find helpful in certain situations: he will deliberately alter a single fact or assumption to see how that changes his team's approach to a problem. This technique can help senior executives of all stripes step back and refresh their thinking. In a planning session, for example, you might ask, "We're assuming a 10 percent attrition rate in our customer base. What if that rate was 20 percent? How would our strategy change? What if it was 50 percent?" Once it's understood that the discussion has moved into the realm of the hypothetical, where people can challenge any underlying assumptions without risk, the creative juices really begin to flow.

This technique proved useful during discussions with executives at a company that was planning to ramp up its M&A activity. The company had a lot of cash on hand and no shortage of opportunities to spend it, but its M&A capabilities appeared to have gone rusty (it had not done any deals in quite some time). During a meeting with the M&A team and the head of business development, I asked, "Listen, I know this is going to be a little bit shocking to the system, but let's entertain the idea that your team doesn't exist. What kind of M&A function would we build for this corporation now? What would be the skills and the strategy?"

The question shook up the team a bit initially. You have to be respectful of the emotions you can trigger with this kind of speculation. Nonetheless, the experiment started a discussion that ultimately produced notable results. They included the addition of talented new team members who could provide additional skills that the group would need as it went on to complete a set of multibillion-dollar deals over the ensuing year.

Throughout my career, I've observed that good listeners tend to make better decisions, based on better-informed judgments, than ordinary or poor listeners do-and hence tend to be better leaders. By showing respect to our conversation partners, remaining quiet so they can speak, and actively opening ourselves up to facts that undermine our beliefs, we can all better cultivate this valuable skill.