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Page 1: The Talent Myth

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Five years ago,several executives at Mc-Kinsey & Company,America’s larg-

est and most prestigious management-consulting firm, launched what theycalled the War for Talent. Thousands of questionnaires were sent to managersacross the country. Eighteen companieswere singled out for special attention,and the consultants spent up to threedays at each firm, interviewing everyonefrom the C.E.O. down to the human-resources staff.McKinsey wanted to doc-ument how the top-performing compa-nies in America differed from other firmsin the way they handle matters like hir-ing and promotion. But, as the consul-tants sifted through the piles of reportsand questionnaires and interview tran-scripts, they grew convinced that the dif-ference between winners and losers wasmore profound than they had realized.“We looked at one another and suddenlythe light bulb blinked on,” the three con-sultants who headed the project—EdMichaels, Helen Handfield-Jones, andBeth Axelrod—write in their new book,also called “The War for Talent.” Thevery best companies, they concluded,hadleaders who were obsessed with the talentissue. They recruited ceaselessly, findingand hiring as many top performers aspossible.They singled out and segregatedtheir stars, rewarding them dispropor-tionately, and pushing them into ever more senior positions.“Bet on the naturalathletes, the ones with the strongest in-trinsic skills,” the authors approvinglyquote one senior General Electric execu-tive as saying.“Don’t be afraid to promotestars without specifically relevant experi-ence, seemingly over their heads.”Successin the modern economy, according toMichaels, Handfield-Jones, and Axel-rod, requires “the talent mind-set”: the“deep-seated belief that having better tal-ent at all levels is how you outperformyour competitors.”

This “talent mind-set” is the new or-thodoxy of American management. It is

the intellectual justification for whysuch a high premium is placed on de-grees from first-tier business schools,and why the compensation packagesfor top executives have become so lav-ish. In the modern corporation, the sys-tem is considered only as strong as itsstars, and, in the past few years, this mes-sage has been preached by consultantsand management gurus all over theworld. None, however, have spread theword quite so ardently as McKinsey,and, of all its clients, one firm took thetalent mind-set closest to heart. It was a company where McKinsey conductedtwenty separate projects, where McKin-sey’s billings topped ten million dollars a year, where a McKinsey director regu-larly attended board meetings,and wherethe C.E.O. himself was a former Mc-Kinsey partner.The company, of course,was Enron.

The Enron scandal is now almost a year old. The reputations of JeffreySkilling and Kenneth Lay, the com-pany’s two top executives, have beendestroyed. Arthur Andersen, Enron’sauditor, has been all but driven out ofbusiness, and now investigators haveturned their attention to Enron’s invest-ment bankers. The one Enron partnerthat has escaped largely unscathed isMcKinsey, which is odd, given that itessentially created the blueprint for theEnron culture. Enron was the ultimate“talent” company.When Skilling startedthe corporate division known as EnronCapital and Trade, in 1990, he “decidedto bring in a steady stream of the verybest college and M.B.A. graduates hecould find to stock the company withtalent,” Michaels, Handfield-Jones, andAxelrod tell us. During the nineties,Enron was bringing in two hundred andfifty newly minted M.B.A.s a year. “Wehad these things called Super Satur-days,” one former Enron manager re-calls. “I’d interview some of these guyswho were fresh out of Harvard, and

DEPT. OF HUMAN RESOURCES

THE TALENT MYTH

Are smart people overrated?

BY MALCOLM GLADWELL

28 THE NEW YORKER, JULY 22, 2002

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these kids could blow me out of thewater.They knew things I’d never heardof.” Once at Enron, the top performerswere rewarded inordinately, and pro-moted without regard for seniority or ex-perience. Enron was a star system.“Theonly thing that differentiates Enronfrom our competitors is our people, ourtalent,” Lay, Enron’s former chairman

and C.E.O., told the McKinsey con-sultants when they came to the com-pany’s headquarters, in Houston. Or, asanother senior Enron executive put it toRichard Foster, a McKinsey partnerwho celebrated Enron in his 2001 book,“Creative Destruction,” “We hire verysmart people and we pay them morethan they think they are worth.”

The management of Enron, in otherwords, did exactly what the consultantsat McKinsey said that companies oughtto do in order to succeed in the mod-ern economy. It hired and rewarded thevery best and the very brightest—and it is now in bankruptcy. The reasons forits collapse are complex, needless to say.But what if Enron failed not in spite

of its talent mind-set but because ofit? What if smart people are overrated?

At the heart of the McKinsey visionis a process that the War for Talent

advocates refer to as “differentiation andaffirmation.”Employers, they argue,needto sit down once or twice a year and holda “candid, probing, no-holds-barred de-

bate about each individual,” sorting em-ployees into A, B, and C groups.The A’smust be challenged and disproportion-ately rewarded. The B’s need to be en-couraged and affirmed. The C’s need toshape up or be shipped out. Enron fol-lowed this advice almost to the letter, set-ting up internal Performance ReviewCommittees.The members got togethertwice a year, and graded each person intheir section on ten separate criteria,usinga scale of one to five. The process wascalled “rank and yank.”Those graded at thetop of their unit received bonuses two-thirds higher than those in the next thirtyper cent; those who ranked at the bottomreceived no bonuses and no extra stock op-tions—and in some cases were pushed out.

How should that ranking be done?Unfortunately, the McKinsey consultantsspend very little time discussing the mat-ter. One possibility is simply to hire andreward the smartest people. But the linkbetween, say, I.Q.and job performance isdistinctly underwhelming. On a scalewhere 0.1 or below means virtually no cor-relation and 0.7 or above implies a strongcorrelation (your height, for example,hasa 0.7 correlation with your parents’height), the correlation between I.Q.andoccupational success is between 0.2 and0.3. “What I.Q. doesn’t pick up is effec-tiveness at common-sense sorts of things,especially working with people,”RichardWagner, a psychologist at Florida StateUniversity,says.“In terms of how we eval-uate schooling,everything is about work-ing by yourself. If you work with some-one else, it’s called cheating. Once youget out in the real world, everything youdo involves working with other people.”

Wagner and Robert Sternberg, a psy-chologist at Yale University, have devel-oped tests of this practical component,which they call “tacit knowledge.” Tacitknowledge involves things like knowinghow to manage yourself and others, andhow to navigate complicated social situ-ations. Here is a question from one oftheir tests:

You have just been promoted to head ofan important department in your organiza-tion. The previous head has been transferredto an equivalent position in a less importantdepartment. Your understanding of the reasonfor the move is that the performance of the de-partment as a whole has been mediocre. Therehave not been any glaring deficiencies, just aperception of the department as so-so ratherthan very good. Your charge is to shape up thedepartment. Results are expected quickly. Rate

THE NEW YORKER, JULY 22, 2002 29

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The current corporate dogma encourages star employees to make their own rules.

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the quality of the following strategies for suc-ceeding at your new position.

a) Always delegate to the most junior per-son who can be trusted with the task.

b) Give your superiors frequent progressreports.

c) Announce a major reorganization ofthe department that includes getting rid ofwhomever you believe to be “dead wood.”

d) Concentrate more on your people thanon the tasks to be done.

e) Make people feel completely responsi-ble for their work.

Wagner finds that how well people doon a test like this predicts how well theywill do in the workplace: good managerspick (b) and (e); bad managers tend topick (c). Yet there’s no clear connectionbetween such tacit knowledge and otherforms of knowledge and experience.Theprocess of assessing ability in the work-place is a lot messier than it appears.

An employer really wants to assessnot potential but performance.Yet that’sjust as tricky. In “The War for Talent,”the authors talk about how the RoyalAir Force used the A, B, and C rankingsystem for its pilots during the Battle of Britain. But ranking fighter pilots—for whom there are a limited and rela-tively objective set of performance crite-ria (enemy kills, for example, and theability to get their formations safelyhome)—is a lot easier than assessing howthe manager of a new unit is doing at,say,marketing or business development.And whom do you ask to rate the man-ager’s performance? Studies show thatthere is very little correlation betweenhow someone’s peers rate him and howhis boss rates him. The only rigorousway to assess performance, according tohuman-resources specialists, is to use cri-teria that are as specific as possible.Man-agers are supposed to take detailed noteson their employees throughout the year,in order to remove subjective personalreactions from the process of assess-ment. You can grade someone’s perfor-mance only if you know their perfor-mance.And, in the freewheeling cultureof Enron, this was all but impossible.People deemed “talented” were con-stantly being pushed into new jobs andgiven new challenges. Annual turnoverfrom promotions was close to twentyper cent.Lynda Clemmons, the so-called“weather babe” who started Enron’sweather derivatives business, jumped,in seven quick years, from trader to asso-ciate to manager to director and, finally,

to head of her own business unit. Howdo you evaluate someone’s performancein a system where no one is in a job long enough to allow such evaluation?

The answer is that you end up doingperformance evaluations that aren’t basedon performance.Among the many glow-ing books about Enron written before itsfall was the best-seller “Leading theRevolution,” by the management con-sultant Gary Hamel, which tells thestory of Lou Pai, who launched Enron’spower-trading business.Pai’s group beganwith a disaster: it lost tens of millions ofdollars trying to sell electricity to resi-dential consumers in newly deregulatedmarkets. The problem, Hamel explains,is that the markets weren’t truly deregu-lated: “The states that were openingtheir markets to competition were stillsetting rules designed to give their tradi-tional utilities big advantages.” It doesn’tseem to have occurred to anyone thatPai ought to have looked into those rulesmore carefully before risking millionsof dollars. He was promptly given thechance to build the commercial electricity-outsourcing business, where he ran upseveral more years of heavy losses beforecashing out of Enron last year with twohundred and seventy million dollars.Be-cause Pai had “talent,” he was given newopportunities,and when he failed at thosenew opportunities he was given still moreopportunities . . . because he had “tal-ent.” “At Enron, failure—even of thetype that ends up on the front page ofthe Wall Street Journal—doesn’t neces-sarily sink a career,” Hamel writes, as ifthat were a good thing. Presumably,companies that want to encourage risk-taking must be willing to tolerate mis-takes. Yet if talent is defined as some-thing separate from an employee’s actualperformance, what use is it, exactly?

What the War for Talent amountsto is an argument for indulging

A employees, for fawning over them.“You need to do everything you can tokeep them engaged and satisfied—even

delighted,” Michaels, Handfield-Jones,and Axelrod write. “Find out what theywould most like to be doing, and shapetheir career and responsibilities in thatdirection. Solve any issues that might bepushing them out the door, such as aboss that frustrates them or travel de-mands that burden them.” No companywas better at this than Enron. In one oft-told story, Louise Kitchin, a twenty-nine-year-old gas trader in Europe, be-came convinced that the company oughtto develop an online-trading business.She told her boss, and she began work-ing in her spare time on the project, untilshe had two hundred and fifty peoplethroughout Enron helping her. After sixmonths,Skilling was finally informed.“Iwas never asked for any capital,”Skillingsaid later.“I was never asked for any peo-ple. They had already purchased theservers.They had already started rippingapart the building. They had startedlegal reviews in twenty-two countries bythe time I heard about it.” It was, Skill-ing went on approvingly, “exactly thekind of behavior that will continue todrive this company forward.”

Kitchin’s qualification for runningEnronOnline, it should be pointed out,was not that she was good at it. It wasthat she wanted to do it, and Enron wasa place where stars did whatever theywanted. “Fluid movement is absolutelynecessary in our company. And the typeof people we hire enforces that,”Skillingtold the team from McKinsey.“Not onlydoes this system help the excitementlevel for each manager, it shapes Enron’sbusiness in the direction that its manag-ers find most exciting.” Here is Skillingagain: “If lots of [employees] are flock-ing to a new business unit, that’s a goodsign that the opportunity is a good one. . . .If a business unit can’t attract people veryeasily, that’s a good sign that it’s a busi-ness Enron shouldn’t be in.” You mightexpect a C.E.O. to say that if a businessunit can’t attract customers very easilythat’s a good sign it’s a business the com-pany shouldn’t be in. A company’s busi-ness is supposed to be shaped in the direction that its managers find mostprofitable. But at Enron the needs of thecustomers and the shareholders weresecondary to the needs of its stars.

A dozen years ago, the psychologistsRobert Hogan, Robert Raskin, andDan Fazzini wrote a brilliant essay called

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“The Dark Side of Charisma.” It ar-gued that flawed managers fall intothree types. One is the High LikabilityFloater,who rises effortlessly in an orga-nization because he never takes any dif-ficult decisions or makes any enemies.Another is the Homme de Ressenti-ment,who seethes below the surface andplots against his enemies. The most in-teresting of the three is the Narcissist,whose energy and self-confidence andcharm lead him inexorably up the cor-porate ladder. Narcissists are terriblemanagers.They resist accepting sugges-tions, thinking it will make them appearweak, and they don’t believe that othershave anything useful to tell them. “Nar-cissists are biased to take more credit forsuccess than is legitimate,” Hogan andhis co-authors write, and “biased to avoidacknowledging responsibility for theirfailures and shortcomings for the samereasons that they claim more success thanis their due.” Moreover:

Narcissists typically make judgments withgreater confidence than other people . . . and,because their judgments are rendered withsuch conviction, other people tend to believethem and the narcissists become dispropor-tionately more influential in group situations.Finally, because of their self-confidence andstrong need for recognition, narcissists tendto “self-nominate”; consequently, when aleadership gap appears in a group or organi-zation, the narcissists rush to fill it.

Tyco and WorldCom were the GreedyCorporations: they were purely inter-ested in short-term financial gain.Enronwas the Narcissistic Corporation—acompany that took more credit for suc-cess than was legitimate, that did notacknowledge responsibility for its fail-ures, that shrewdly sold the rest of us on its genius, and that substituted self-nomination for disciplined manage-ment.At one point in “Leading the Rev-olution,” Hamel tracks down a seniorEnron executive, and what he breath-lessly recounts—the braggadocio, theself-satisfaction—could be an epitaphfor the talent mind-set:

“You cannot control the atoms within anuclear fusion reaction,” said Ken Rice whenhe was head of Enron Capital and Trade Re-sources (ECT), America’s largest marketer ofnatural gas and largest buyer and seller ofelectricity. Adorned in a black T-shirt, bluejeans, and cowboy boots, Rice drew a box onan office whiteboard that pictured his busi-ness unit as a nuclear reactor. Little circles in

the box represented its “contract origina-tors,” the gunslingers charged with doingdeals and creating new businesses. Attachedto each circle was an arrow. In Rice’s diagramthe arrows were pointing in all different di-rections. “We allow people to go in whicheverdirection that they want to go.”

The distinction between the GreedyCorporation and the Narcissistic Cor-poration matters, because the way weconceive our attainments helps deter-mine how we behave. Carol Dweck, apsychologist at Columbia University,hasfound that people generally hold one oftwo fairly firm beliefs about their intelli-gence: they consider it either a fixed traitor something that is malleable and canbe developed over time. Five years ago,Dweck did a study at the University ofHong Kong, where all classes are con-ducted in English. She and her col-leagues approached a large group ofsocial-sciences students, told them theirEnglish-proficiency scores, and askedthem if they wanted to take a course toimprove their language skills.One wouldexpect all those who scored poorly tosign up for the remedial course.The Uni-versity of Hong Kong is a demandinginstitution,and it is hard to do well in thesocial sciences without strong Englishskills. Curiously, however, only the oneswho believed in malleable intelligenceexpressed interest in the class. The stu-dents who believed that their intelli-

gence was a fixed trait were so concernedabout appearing to be deficient that theypreferred to stay home. “Students whohold a fixed view of their intelligencecare so much about looking smart thatthey act dumb,”Dweck writes,“for whatcould be dumber than giving up a chanceto learn something that is essential foryour own success?”

In a similar experiment,Dweck gave aclass of preadolescent students a testfilled with challenging problems. Afterthey were finished,one group was praisedfor its effort and another group waspraised for its intelligence.Those praisedfor their intelligence were reluctant totackle difficult tasks, and their perfor-mance on subsequent tests soon began tosuffer.Then Dweck asked the children towrite a letter to students at another school,describing their experience in the study.She discovered something remarkable:forty per cent of those students who werepraised for their intelligence lied abouthow they had scored on the test, adjust-ing their grade upward.They weren’t nat-urally deceptive people, and they weren’tany less intelligent or self-confident thananyone else. They simply did what peo-ple do when they are immersed in an en-vironment that celebrates them solely fortheir innate “talent.”They begin to definethemselves by that description,and whentimes get tough and that self-image isthreatened they have difficulty with the

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consequences.They will not take the re-medial course. They will not stand up toinvestors and the public and admit thatthey were wrong.They’d sooner lie.

The broader failing of McKinsey andits acolytes at Enron is their assump-

tion that an organization’s intelligence issimply a function of the intelligence of itsemployees. They believe in stars, becausethey don’t believe in systems. In a way,that’s understandable, because our livesare so obviously enriched by individualbrilliance. Groups don’t write great nov-els, and a committee didn’t come up withthe theory of relativity. But companieswork by different rules. They don’t justcreate; they execute and compete andcoördinate the efforts of many differentpeople, and the organizations that aremost successful at that task are the oneswhere the system is the star.

There is a wonderful example of thisin the story of the so-called Eastern PearlHarbor,of the Second World War.Dur-ing the first nine months of 1942, theUnited States Navy suffered a catastro-phe. German U-boats, operating just offthe Atlantic coast and in the Caribbean,were sinking our merchant ships almostat will.U-boat captains marvelled at theirgood fortune. “Before this sea of light,against this footlight glare of a carefreenew world were passing the silhouettes ofships recognizable in every detail andsharp as the outlines in a sales catalogue,”one U-boat commander wrote. “All wehad to do was press the button.”

What made this such a puzzle is that,on the other side of the Atlantic, theBritish had much less trouble defendingtheir ships against U-boat attacks. TheBritish, furthermore, eagerly passed onto the Americans everything they knewabout sonar and depth-charge throwersand the construction of destroyers. Andstill the Germans managed to paralyzeAmerica’s coastal zones.

You can imagine what the consultantsat McKinsey would have concluded: theywould have said that the Navy did not havea talent mind-set,that President Rooseveltneeded to recruit and promote top per-formers into key positions in the Atlanticcommand. In fact, he had already donethat. At the beginning of the war, he hadpushed out the solid and unspectacularAdmiral Harold R.Stark as Chief of NavalOperations and replaced him with the leg-

endaryErnest Joseph King.“He was a su-preme realist with the arrogance of genius,”Ladislas Farago writes in “The TenthFleet,” a history of the Navy’s U-boatbattles in the Second World War. “Hehad unbounded faith in himself, in hisvast knowledge of naval matters and inthe soundness of his ideas.Unlike Stark,who tolerated incompetence all aroundhim, King had no patience with fools.”

The Navy had plenty of talent at thetop, in other words. What it didn’t havewas the right kind of organization. AsEliot A. Cohen, a scholar of militarystrategy at Johns Hopkins, writes in hisbrilliant book “Military Misfortunes inthe Atlantic”:

To wage the antisubmarine war well, an-alysts had to bring together fragments of in-formation, direction-finding fixes, visual sight-ings, decrypts, and the “flaming datum” of aU-boat attack—for use by a commander tocoordinate the efforts of warships, aircraft,and convoy commanders. Such synthesis hadto occur in near “real time”—within hours,even minutes in some cases.

The British excelled at the task be-cause they had a centralized operationalsystem. The controllers moved the Brit-ish ships around the Atlantic like chesspieces, in order to outsmart U-boat “wolfpacks.”By contrast,Admiral King believedstrongly in a decentralized managementstructure: he held that managers shouldnever tell their subordinates “ ‘how’as wellas what to ‘do.’ ”In today’s jargon,we wouldsay he was a believer in “loose-tight”

management, of the kind celebrated bythe McKinsey consultants Thomas J.Pe-ters and Robert H. Waterman in their1982 best-seller,“In Search of Excellence.”But “loose-tight” doesn’t help you findU-boats. Throughout most of 1942, theNavy kept trying to act smart by relyingon technical know-how, and stubbornlyrefused to take operational lessons fromthe British.The Navy also lacked the or-ganizational structure necessary to applythe technical knowledge it did have to thefield.Only when the Navy set up the TenthFleet—a single unit to coördinate all anti-submarine warfare in the Atlantic—didthe situation change.In the year and a halfbefore the Tenth Fleet was formed,in Mayof 1943,the Navy sank thirty-six U-boats.In the six months afterward, it sankseventy-five.“The creation of the TenthFleet did not bring more talented indi-viduals into the field of ASW”—anti-submarine warfare—“than had previousorganizations,” Cohen writes. “WhatTenth Fleet did allow,by virtue of its or-ganization and mandate,was for these in-dividuals to become far more effective thanpreviously.”The talent myth assumes thatpeople make organizations smart. Moreoften than not, it’s the other way around.

There is ample evidence of this prin-ciple among America’s most suc-

cessful companies. Southwest Airlineshires very few M.B.A.s, pays its manag-ers modestly, and gives raises accordingto seniority, not “rank and yank.”Yet it is

32 THE NEW YORKER, JULY 22, 2002

RADIANT IVORY

After the death of my father, I locked myself in my room, bored and animal-like.The travel clock, the Johnnie Walker bottle,the parrot tulips—everything possessed his face,chaste and obscure. Snow and rain battered the air white, insane, slathery. Nothing poured out of me except sensibility, dilated.It was as if I were sub-born—preverbal,truculent, pure—with hard ivory arms reaching out into a dark and crowded space,illuminated like a perforated silver box or a little room in which glowing cigarettes came and went, like souls losing magnitude,but none with the battered hand I knew.

—Henri Cole

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by far the most successful of all UnitedStates airlines, because it has created avastly more efficient organization thanits competitors have. At Southwest, thetime it takes to get a plane that has justlanded ready for takeoff—a key index of productivity—is, on average, twentyminutes, and requires a ground crew offour, and two people at the gate. (AtUnited Airlines, by contrast, turnaroundtime is closer to thirty-five minutes, andrequires a ground crew of twelve andthree agents at the gate.)

In the case of the giant retailer Wal-Mart, one of the most critical periods inits history came in 1976,when Sam Wal-ton “unretired,” pushing out his hand-picked successor,Ron Mayer.Mayer wasjust over forty. He was ambitious. Hewas charismatic.He was, in the words ofone Walton biographer,“the boy-geniusfinancial officer.” But Walton was con-vinced that Mayer was, as people atMcKinsey would say, “differentiatingand affirming” in the corporate suite, indefiance of Wal-Mart’s inclusive culture.Mayer left, and Wal-Mart survived.Afterall, Wal-Mart is an organization, not anall-star team. Walton brought in DavidGlass, late of the Army and SouthernMissouri State University, as C.E.O.;the company is now ranked No. 1 on the Fortune 500 list.

Procter & Gamble doesn’t have a starsystem,either. How could it? Would thetop M.B.A. graduates of Harvard andStanford move to Cincinnati to work ondetergent when they could make threetimes as much reinventing the world inHouston? Procter & Gamble isn’t glam-orous. Its C.E.O. is a lifer—a formerNavy officer who began his corporate ca-reer as an assistant brand manager for Joydishwashing liquid—and, if Procter &Gamble’s best played Enron’s best at Triv-ial Pursuit,no doubt the team from Hous-ton would win handily. But Procter &Gamble has dominated the consumer-products field for close to a century, be-cause it has a carefully conceived man-agerial system, and a rigorous marketingmethodology that has allowed it to winbattles for brands like Crest and Tidedecade after decade. In Procter & Gam-ble’s Navy, Admiral Stark would have

stayed. But a cross-divisional manage-ment committee would have set the TenthFleet in place before the war ever started.

Among the most damning facts aboutEnron, in the end, was something

its managers were proudest of.They hadwhat, in McKinsey terminology, is calledan “open market” for hiring. In the open-market system—McKinsey’s assault onthe very idea of a fixed organization—anyone could apply for any job that he orshe wanted,and no manager was allowedto hold anyone back. Poaching was encouraged. When an Enron executivenamed Kevin Hannon started the com-pany’s global broadband unit,he launchedwhat he called Project Quick Hire. Ahundred top performers from around thecompany were invited to the HoustonHyatt to hear Hannon give his pitch.Re-cruiting booths were set up outside themeeting room.“Hannon had his fifty topperformers for the broadband unit by theend of the week,” Michaels, Handfield-Jones, and Axelrod write, “and his peershad fifty holes to fill.” Nobody, not eventhe consultants who were paid to thinkabout the Enron culture, seemed worriedthat those fifty holes might disrupt thefunctioning of the affected departments,that stability in a firm’s existing busi-nesses might be a good thing, that theself-fulfillment of Enron’s star employ-ees might possibly be in conflict withthe best interests of the firm as a whole.

These are the sort of concerns thatmanagement consultants ought to raise.But Enron’s management consultant wasMcKinsey,and McKinsey was as much aprisoner of the talent myth as its clientswere. In 1998,Enron hired ten WhartonM.B.A.s; that same year, McKinseyhired forty. In 1999, Enron hired twelvefrom Wharton; McKinsey hired sixty-one. The consultants at McKinsey werepreaching at Enron what they believedabout themselves.“When we would hirethem, it wouldn’t just be for a week,” oneformer Enron manager recalls, of thebrilliant young men and women fromMcKinsey who wandered the hallways atthe company’s headquarters.“It would befor two to four months.They were alwaysaround.” They were there looking forpeople who had the talent to think outsidethe box. It never occurred to them that, ifeveryone had to think outside the box,maybe it was the box that needed fixing. ♦

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