Yahoo’s CEO Problem Offers Opportunity to Improve Recruiting Process for All Parties

Last Week Dan Loeb of Third Point Capital sent a letter to the board of directors of Yahoo asserting that Yahoo CEO Scott Thompson actually did not have a degree in degree in computer science as his executive biography indicated. Yahoo replied that this was an “inadvertent error.” Mr. Loeb wrote a response to the board demanding his removal for cause by noon on Monday.

Stories are being written by Kara Swisher, Michael Arrington, and many others about the incident. Most articles discuss the integrity of Thompson or the board of directors itself. Some might ask the legitimate question of whether an executive of a technology company even needs a computer science degree. Answer: They don’t. After all, IBM CEO Lou Gerstner did an amazing job turning around in the 1990s after initially turning down the job because he didn’t consider himself a technology guy. It makes the actions of Thompson all the more puzzling.

Ultimately this begs the following question, “How in the world did a Fortune 500 company recruit and hire a CEO with inaccurate statements in his biography?” This might indicate symptoms of a more broad and disturbing problem, such as lack of proper recruiting budget investment, formal process, and execution of proper human capital processes. To view this as a Yahoo problem and move on would be missing a rare opportunity to drive positive change.The past 20 years brought massive recruiting changes: movement from paper resumes actually read and discussed by people who understood the skills and the corporate culture issues, to electronic resume scoring, reduction of budgets, and the decimation of many recruiting departments.

If Ray Kurzweil’s assertion of artificial intelligence not matching the human brain until at least 2029 proves correct, why are so many companies using unproven technologies that use artificial intelligence business rules layered on top of resume databases as a primary tool in employee selection? This has opportunity costs not only for our companies, but individuals making career changes due to macroeconomic events and communities as well.

In a world where the leadership skills of tomorrow are changing constantly, why would anyone use outdated job specifications for this resume scoring, even if it did work well? Why aren’t we investing the proper resources in recruiting conversations to perform thorough one-hour interviews with candidates that discover their passions, emerging strengths … and then revising the spec around the strongest candidate which was once a normal practice?

Why isn’t LinkedIn, and to be fair all providers of recruiting platforms, investing the money to not only verify all degrees in their system profiles, and use that weighting instead of overweighting current job title? Would this not help create trust and accuracy? It would also identify clearly bogus profiles for removal. Why aren’t they segmenting it to weight a full degree over a one-week certificate differently in their algorithms?

One’s upbringing in their family, schooling, and work experiences over their lifetime affect their abilities in a material fashion. I can remember a time when one looked at the quality of a degree on the bottom of a resume first and then read the rest. Let us use this incident to request that companies restore funding to conduct proper, dignified, personal and complete two-way conversations and interviews with candidates.

We live in time of great structural change. Many people have had unplanned career change due to macroeconomic disruption that is often no fault of their own. We should redevelop a process that can identify our best and brightest, put them in a position to succeed, and be certain they are actually who they say they are. Make no mistake these processes must be flexible as people are acquiring new skills via naturally curious lifelong learning. We should seek and reward that. Perhaps if we did, Thompson’s biography would have never contained the words computer science.

Let us use this incident as the call to action it can be. Let’s fully restore or reallocate the proper budgets for a personal, dignified, and thorough exploration of candidates’ backgrounds and conversations about what they can uniquely bring to the role. Executive teams need confidence that chosen candidates have the proper acumen to produce the required business impact.

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How about treating recruiters with respect in the form of not only pay, but stronger input into the process and granting them the time they need?

What else should we be learning from this incident? What are your ideas to restore the world-class and personal recruiting techniques to ensure such an incident is not repeated?