Hire Without Falling Victim to Stack Fallacy
This article was updated on July 25, 2018.
In "The Stack Fallacy: Why Big Companies Keep Failing," Anshu Sharma writes about why big organizations have difficulty capturing new markets, or what's called "moving up the stack" to adjacent businesses or products by building on their successful base. In computing, the "stack" refers to layers of technology (hardware and software), with servers at the bottom of the stack and applications at the top.
Sharma's view is that large corporations overvalue the layer of the stack where they operate and lack understanding of customer needs in layers above them. They more frequently have success "moving down the stack," where customer needs are known. One example he provides is how IBM did not expand into the software layer that ran their personal computer layer. He states that The Stack Fallacy™ is a result of human nature , because we overvalue what we know.
As organizations hire to meet new business needs and respond to new technologies, they should be cautious to not fall victim to stack fallacy. While there are immediate hiring needs that must be met for the current business model and products, hiring managers cannot fail to build up the appropriate support for the organization's future and longer-term needs — including businesses seeking to "innovate up the stack." There should be a pipeline of talent by type of employee.
The challenge is how to identify whether to fill open positions from the current talent pool, fill them externally or a combination.
How to Find the Right Candidate
"Good talent acquisition requires human resource professionals to be close to the hiring managers, to understand what the business is working on strategically and to translate the business needs into a job description," according to Joy Conlin, a Corporate Recruitment Consultant. The more information HR has, the more successful they can be. "I have been able to provide hiring managers with candidates with skills they didn't even know they needed because I anticipated their needs," she continued.
HR should be working on a pipeline so candidates can be presented to hiring managers quickly. Conlin establishes search parameters based on the type of position to be filled and uses talent acquisition software to search for skills and backgrounds of potential internal candidates, matching needs to candidate skills and experience and identifying people who are ready to move.
To review external candidates, she will use LinkedIn to vet potential outside hire candidates, evaluating their profiles and creating a list of candidates who might be a good fit should the need arise. This activity is ongoing. "In the current marketplace, talent goes stale quickly, with candidates on average getting placed within three months or less," she explained.
Sources of Talent: Internal or External?
For technology enterprises, certain key skills are always needed. So it's always possible that specialized skills may be required that do not exist internally and cannot be taught to existing employees quickly enough or at all. Given the fast pace of technology, hiring managers and HR leaders need to think ahead, and skills need to be anticipated and planned for during new product and service development.
For industries outside of technology, hiring managers may be able to first look internally to current employees with knowledge of the organization who can be trained and rotated to support new business demands. The advantage of that approach is that the organization has already invested training time and money in those employees, and the employees may have already proven themselves and their abilities. The challenge is that not many organizations have good rotational programs, and it may be hard to convince hiring managers that rotational candidates will benefit them, fearing they will receive valuable training and then move on.
In all industries, it can be difficult to know how to build a bench of talent for future needs or to invest time training employees for future business opportunities. But organizations should invest in their human resources now to build up the necessary support for their current and future business strategies.