How not to recruit

Commenter Bardon graciously provides us with a business case study to analyse. Here goes.

We recruited a bloke recently to work in Dubai, and we initially were considering him for Kuwait, but the offer and acceptance was done on the Dubai role by me from Brisbane.

So this company has operations in at least two Middle East countries, but has no regional manager. Instead, things are run from Brisbane which makes about as much sense as running South American operations from Moscow. When I worked in that region, one of the first things I learned was Arabs appreciate physical proximity, and expect the regional manager to be in their country. Before I went to Kuwait I was very briefly based in Abu Dhabi, and the first thing the Kuwaitis asked was “are you based in Kuwait?”. We quickly got the message we need to be based in Kuwait if we’re working with Kuwaitis. At the very least, the regional manager should be based in the region; anyone who tries running things from the UK or elsewhere won’t be taken seriously.

He was based in Canada and coincidentally was in Doha when he initially arrived from Canada to get a briefing from our management team there.

So there is a management team in the Middle East. But they’re not the ones doing the recruiting for roles in their region. This sounds like a confused mess.

I spoke to him and told him that he needed to go and get some work…

So this chap reports to you, who is based in Brisbane. Presumably the management team in Doha is there for show.

…and that we will support him from Doha for the moment and that we will start building a Dubai team on the back of contracts.

I can only assume you told him this now because it wasn’t made clear during the recruitment process. It sounds to me as though you recruited him for an operational role in Kuwait and, once he’d signed up, decided to put him in a business development role in Dubai.

He came back to me and said that he wanted some staff now

So he’s advising you of his resource requirements for this new role you’ve suddenly sprung on him.

I said that he will have to wait and use the existing resource,

Ah yes, a regional “support” resource which he has no control over, yet he will be accountable for meeting targets. How drearily familiar.

then he said we needed to negotiate, negotiate what I asked him, he said that it was a very senior role more so than the Kuwaiti one…

So he is confused about the role, and I can’t say I blame him. Obviously you spoke to him about the role in Kuwait (or how else would he know about it), then later changed your mind. A professional company would have supplied a job description for the Kuwait role and later replaced it with one for the Dubai role, with the differences between the two roles clearly identified. Obviously this didn’t happen, hence you’ve mobilised a person halfway around the world who is confused about the role. This is not good management.

…and he felt that his package should be much higher.

Maybe he’s right, maybe he’s not, but you have changed the role he signed up to (or at the very least, left him extremely confused about the role he’s supposed to be doing). If you change someone’s role they are by definition permitted to enter into a discussion as to whether more money is warranted.

I told him to see me after lunch, contacted the relevant director and confirmed that he was on the next plane back to Canada.

This is the response of an immature child, not a professional manager. You have messed this bloke around since Day 1, changing his role and his country of assignment, and when he approaches you, quite reasonably, to ask for increased terms upon finding out the truth your immediate reaction is to fire him. This decision was not made for the benefit of the shareholders but your fragile ego.

I then told him it was over and he backflipped to say that he would do the Kuwaiti role for the leer money

Okay, seems reasonable. He pushed for money, got turned down, so weighed up that, having come all this way, he might as well give it a go. He sounds rather mature.

, no way, you are out of here.

So your employee, who has done nothing other than ask for more money having been lied to about the role and stuck in the middle of a dysfunctional mess of an organisation, agrees to do the job he was hired to and you fired him. Wow, what a tough guy you are.

He lasted about three hours.

And for this you wasted countless manhours on the recruitment process, plus paid for his mobilisation costs and whatever salary you owe him. On top of that, there’s the delay of several months spent trying to find a replacement. Probably the kindest thing I can say at this point is I hope this tale is made up.

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108 thoughts on “How not to recruit

  1. @ Matthew – “What does that mean, shaped the deal?”

    Conditioned the client to structure the deal in a certain way such that it was easier to sell or buy as the case may be.

  2. So, what, the other bidders are in cahoots with Branson, making sure that the deal ends up how he’d want it? Why would they do that?

    Far be it from me to question your business nous, of course.

    How do you know all this stuff anyway, what, are you following Branson’s twitter feed or something?

  3. No you are reading an email from one of the investment services that I subscribe to, that’s why I had to post the lot and not a link. I play the stock market with my super, its my little bit of leisurely risk taking thing.

    When I was a kid I always won at Monopoly, now you can too.

    I also had the record high score for Space Invaders as well.

    …………………………………………………………………………………

    Specifically I related how the invention of the game isn’t quite what you hear from the established owners, Parker Bros. You can review that issue here.

    I think understanding the real origins of the game helps you to play the game better…which is one of the reasons I wrote the October issue for you. And I don’t know anyone that doesn’t like playing the game — until they get thrashed that is, perhaps.

    So, here’s a discussion I had with my great mate XXXX the other day about all things Monopoly. It’s strictly for you as a subscriber if you’d dearly love to decidedly thrash your opponents at the game next time.

    XXXX works in the financial planning business. He was disgusted at the advice that financial planners would give him after he learnt years and years ago about the real estate cycle from me.

    All the people he spoke to in the industry (and me too for that matter) would never admit of a property cycle — indeed some would even actively talk against its existence. But they’d also happily take his money and invest it for their benefit, not his, in trailing commissions.

    And the real estate cycle would continue to turn.

    So XXXX started his own financial planning business and now runs XXXXX.

    Here’s what you need to know to help you beat your Monopoly opponents next time you play.

    First, the game’s rules, (in part):

    Rule: The Bank ‘never goes broke’. If the Bank runs out of money, the Banker may issue as much as needed by writing on any ordinary paper.

    Although understood by very few, ‘Helicopter’ Ben Bernanke understood this rule and used it to his advantage as he tried to solve the credit woes of the GFC.

    As investors, by understanding how this works, you will come to understand just why the economy MUST result in a boom/bust cycle.

    You will also understand how the current banking royal commission in Australia will not — and cannot — fundamentally alter the role that banks play within our economic system.

    Rule: There are 32 houses and 12 hotels in a game of Monopoly. However, unlike money, there is a finite supply and no substitutes are allowed.

    Even in Monopoly there is a ‘Housing Shortage’ and ‘Affordability crises’!

    If the bank runs out of houses you must wait until another player sells houses or buys a hotel before you can buy a green house as there are strictly only 32 houses!

    Rule: When you have four green houses you may trade up for a hotel.

    When you own all the properties of the same colours you have a monopoly and you are allowed to build houses and hotels on these properties.

    Trading up to a hotel will increase the supply of green houses — again increasing the length of the game. Remember, the art to winning the game is to starve your opponents of opportunities, so think strategically before doing this.

    Just like in real life, sometimes more money is made by restricting supply.

    Rule: Even though you are in jail, you may buy or sell property, buy or sell houses and hotels and collect rent.

    This rule is very interesting and replicates a real moral dilemma ie: when crooks like Allan Bond are placed ‘in jail’ yet they can continue to amass a fortune behind bars ready to collect once they get out and ‘pass GO’.

    And here’s how you stand a better chance to WIN the game:

    Buy as much property as quickly as you can. The more property you have, the more rent you collect. Buying properties early in the game dramatically increases your chances of winning.

    DON’T save your money, be aggressive early. There is no incentive in Monopoly to play conservatively and wait. You only make money AFTER you have property. NOT before.

    Secure monopolies. Don’t leave open spaces in a colour group. Buy them so that you can control the entire colour group.

    Block monopolies. It can be advantageous to purchase properties other players want, thereby blocking them from creating monopolies. Also, it will enable you to trade later or just stop that player from buying green houses.

    Buy Green Houses. As soon as you get a monopoly, start building green houses. You will increase the rent you collect as you increase the number of houses you own.

    Cause a housing shortage. Purchase green houses to restrict their supply and especially place them on the low-rent colour groups. Don’t trade up to hotels as this will increase the availability of houses to your opponents.

    Gang up on strong players. Do strategic deals with other players. There is nothing in the rules to stop you forming an alliance with other players to block their monopolies and prevent them from gaining an advantage. Just choose your allies wisely.

  4. “No you are reading an email from one of the investment services that I subscribe to…”

    I know, I just wanted to check if you were claiming to have written it yourself. For a minute I thought I’d caught you bullshitting. Dammit Bardon, you tricksy son-of-a-bitch!

    (It’s pretty sweet advice, though: Investing the Branson Way: first, have a massively successful company and a few hundred million dollars on hand…)

  5. Matthew, me bullshit? never.

    This extract is quite interesting to.

    The real inventor of the game was a woman by the name of Elizabeth Magie — at the start of the 20th Century. By all accounts she was a modern-minded woman in a traditional age, who sought to make her own way in the world rather than rely on a husband to provide for her. She was a poet, writer, actress and activist. She was also an inventor. Her idea was to create a board game that would capitalise on the growing middle class fashion for board games. But she had a purpose in doing so — to educate people on the ideas of a wildly popular writer and economist at the time, Henry George.

    The most famous economist you’ve never heard of

    If you’ve never heard of Henry George this is testament to how amazingly successful the cover up has been. George was an American political economist and journalist of the second half of the 19th Century. George had no formal education to speak of and had left school at the age of 14, drifting in and out of poverty until securing steady employment as a typographer for the newly created San Francisco Times. He later went on to edit his own newspapers. George was, however, an avid reader. Economics was his special interest. He studied the great classical economists such as David Ricardo and Adam Smith and was fascinated by the seeming paradox of why ‘poverty’ rises in tandem with ‘progress’. It’s a question we are still asking ourselves today.

    Critically — for our story at least — George asked why industrial economies are subject to recurring bouts (or ‘paroxysms’) of boom and bust. When George published his answers in a seminal work, Progress and Poverty in 1879 during an industrial depression, his ideas electrified the world.

    In the closing decades of the 19th Century, some estimate that Progress and Poverty outsold all other books, even the Bible. It remains to this day, even a century of obscurity later, the most widely read economics book in history.

    One of his famous passages remains:

    ‘That as land is necessary to the exertion of labour in the production of wealth, to command the land which is necessary to labour, is to command all the fruits of labour save enough to enable labour to exist.’

    George understood the relationship between the three factors of production — land, labour, and capital — and he used these tools to dissect the system.

  6. So the run on Northern Rock happened in 2007 and Branson bought the branch network in 2012.

    Just as I recalled. Five years later after all sorts of people were vulturing around the mess.

    I wish Bardon would stop farting. It smells but doesn’t clarify his points

  7. he will be, amongst other things, avenging the murder of Colonel Munro and his daughters

    Wait, what?

    1. The Last of the Mohicans is fictional, as are Munro’s two daughters.
    2. Alice doesn’t get murdered; she survives the book.
    3. Fort William Henry is in New York state. Nobody in Canada cares about what happened in the French & Indian War, that’s considered to be US history.
    4. If you think you can do business in Canada without massively kissing ass to anyone with a greater Sino-Siberian blood quanta than Elizabeth Warren, you have badly misjudged the domestic political situation.

    I work for a lot of small tech startups, and there’s a certain type of person I see again and again. Generally some kind of mid-level manager convinced they know how to run a company better than the people who actually do, they pool their money with some like-minded folks and Start Their Own Company that’s totes going to disrupt the industry because their small, fast-moving agile cutthroat company will be run right, not at all like those big stodgy multinationals they all used to work for.

    When such people’s cartoonish Glengarry Glen Ross notion of executive management collides with reality, the results are rarely positive.

  8. Bardon

    The last thing you possess is phronesis. You are riding for a spectacular fall – and you won’t even see it coming!

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