What Market Are You In?

One of the classic marketing stories taught in business school concerns the history of the railroads. When trains dominated the transportation market, successful railroad executives thought they were in the “iron road” business. As a result of this closed-minded vision, wheeled transportation services progressively grew in importance as railroads progressively shrank. Railroads, once the only game in town, were reduced to “bit-player” status in the transportation market–all because their managers could not see beyond steel and steam. Markets are cruel and unforgiving. But if management is sufficiently broad-minded to understand them, a company can prosper. Consider office software. A few years ago, MS Word was a clunky and awkward word processing application that took a backseat to WordPerfect’s streamlined user interface. A majority of people preferred using WordPerfect. Microsoft recognized, however, that clients tended to do more than word processing–they liked to merge data from spreadsheets, memos, graphs, and letters. Microsoft improved their user interface and integrated discrete office software products into integrated software suites. Microsoft learned fast. WordPerfect did not. You probably have some version of MS Office on your computer today. Anyone remember WordPerfect? Harvard Graphics? Dbase? Just having a flashy product is not enough to keep you on top of the heap. History consistently shows that a myopic management view of the marketplace will inexorably take you from leading the parade to sweeping up after the elephants. History is about to repeat itself among many web-based employment ASPs. Partial Understanding of Client Needs If you think about it, clients want one thing: to get skilled people in the job fast and efficiently and not get sued in the process. That’s not so difficult. They just don’t know how to do it very well. If you get out of the office and walk across the street to the university library, you will find 30 to 40 years of selection research showing the best employees are found by working from a job analysis competency list, using a variety of job-related selection tools, and carefully validating each tool. But in spite of this vast body of knowledge, both ASPs and clients alike tend to look at the employment problem as a single tree in the forest–a teensy-weensy part of a huge ecological system. You can see this by examining the vast array of disjointed tools that promise to offer the ultimate hiring solution: 1) recruiting tools, 2) resume screening tools, 3) mechanized tracking and communication tools, 4) measurement tools, 5) background checking tools, 6) key-word search engines, and 7) technical test sites. Basically, none of these tools really solves the clients’ ultimate problem–getting qualified people in jobs, quickly and efficiently without getting sued. These ASPs are in the iron road business. Partial Understanding of Good/Legal Hiring Practices The Uniform Guidelines on Employee Selection Procedures have been around sine 1978, yet few employers know about these guidelines, and even fewer follow them. The interesting thing about the “Guidelines” is that they are not just a legal stumbling block–they actually describe how to hire the most qualified people. <*SPONSORMESSAGE*> Say what you will, if you are not following the practices outlined in the guidelines, there is no conceivable way you can do a good job hiring people for your organization. I am still waiting for someone to present a compelling argument that explains how he or she can confidently hire the most qualified person for the job without basing requirements on a job analysis and using selection tools that are accurate and validated. Partial Understanding of the Hiring Process There is an old saying, “If the only tool you know how to use is a hammer, every problem looks like a nail.” It is a fact of life that we are all limited both by what we know and what we don’t know. This is a two-edged sword that gets us frequently into trouble. For example:

  • If you peek behind the curtain of an assessment site you will probably find an assessor at the helm.
  • If you peek behind a test site, you will probably find an IS techie at the helm.
  • If you peek behind a job-matched application blank or a paper-management site, you will probably find a recruiter at the helm.
  • If you peek behind a personality test company, you will probably find a trainer or wannabe consultant at the helm.

From a personal perspective, I never realized how much I did not know until I went back to school as an adult and earned a Ph.D. in selection. It was a humbling experience. Even though I had an MBA, it wasn’t until I read a few thousand papers, conducted my own research, and installed hundreds of selection systems, that I actually learned something about what I was doing. ASP visionaries need to do the same. Selection is about more than fancy search engines. ASP drivers and buyers need to “go back to school” and learn about the whole selection enchilada. Tunnel Vision When we were kids, learning was fun. We would drop an old toy in a heartbeat to investigate a new one. Flexibility was the norm. Now that we are adults, flexibility does not come as easily. In truth, we shut out and eliminate contrary opinions and ideas because we might lose face, be uncomfortable, or have to admit we don’t know everything. This costs us a fortune in business! Progressive management needs to get a grip on the market and consider what happened to the railroads, WordPerfect, IBM, Apple, Wang, etc. These were all industry leaders, and for a time, the only game in town. Want to follow in their footsteps? Stay narrow and underestimate the needs of your market. Client Perspective If you are a client, you need to drive product development from the demand-side of the economic equation. Read and understand the Uniform Guidelines. You won’t like them. You will think they are confusing and a lot of work–but they are your operations manual. More to the point, they hold the keys to your professional survival. If you want to “run with the big dogs” you need to master your trade. Anything else is just wishful thinking and empty words. Do not accept partial solutions. Insist that your vendor:

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  • Help conduct and document the job analyses that are so important to legal credibility and hiring accuracy
  • Tie together job reqs and job apps with research-backed competencies
  • Provide the tools to accurately measure each job competency
  • Give you the means to communicate and manage paper flow
  • Validate each selection tool that you will use (i.e., either content or criterion)
  • Provide the necessary training to implement both the software and the tools.

Keep in mind that your vendor does not have to live with either the legal or the operational consequences of poor hiring practices. If you cannot implement the Guidelines yourself, hire a consultant (be sure to ask them how many research articles they have read). It will be the best investment you ever made. Conclusion Not since the days of the traveling carnivals have so few sold so much junk to so many. I don’t think most of these people are mean-spirited. They just don’t know what they don’t know. Did you know that people once thought it was a good idea to drink opium, radium and wormwood to maintain their well-being? Too bad they died of the cure before they became healthy. So whether you are a client, a recruiter, or an ASP, get educated, get skilled, get respect, and get demanding! It will reward you handsomely. P.S. If you are not subject to U.S. law, you can ignore the “sued” part…U.S. citizens just have an unspoken contract with our law schools to keep their graduates gainfully employed…


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