The Medici Effect

The Medici Effect isn’t a typical book for the HR Professional. At first glance, it seems to be a book geared more towards the entrepreneur and those who work in research and development. However, about halfway through the book, we find an entire section dedicate to one of the core valves of the HR Professional—having a diverse workforce.

 

The Medici Effect is a book that shows how extraordinary ideas can be develop when there is an intersection of existing ideas, disciplines and cultures. The author, Frans Johansson, illustrates the “Medici Effect” with a story about Mick Pearce.

 

Mick Pearce, an architect from Zimbabwe, is challenged to design a building that uses almost no air conditioning. This building will be located in Harare, the capital of Zimbabwe—a very hot and humid climate. For most architects, this would seem like an impossible feat. Yet, it wasn’t for Mick, because he decided to turn to the insect world for help.

 

Termites must keep their mounds at a constant 87 degrees in order to grow an essential fungus. This is by no means an easy task, because the temperatures on the African plains can range from 100 degrees during the day to below 40 at night. Yet, the termites have managed to maintain the necessary 87 degrees in their mounds by directing breezes at the base of their mounds into chambers with cool, wet mud and then redirecting this cooled air to the peak. By constantly building new vents and closing old ones, they are able to regulate the temperature very precisely.

 

By connecting the ideas Pearce gained by studying termites to architectural principles, he was able to design a building that maintains a steady temperature of 73 to 77 degrees and uses less than 10 percent of the energy consumed by other buildings its size. Mick’s building exemplifies the “Medici Effect.”  Now, what has all of this got to do with us, the HR Professional? 

 

In order for the “Medici Effect” to occur, there must be an intersection of ideas, disciplines, and cultures. Thus, if we were to hire employees who were all the same, this intersection of ideas from different cultures would not occur.

 

Steve Miller, the former CEO and chairman of Royal Dutch/Shell, believes that having a diverse workforce is a key ingredient to gaining or maintaining a competitive advantage in the global market.  He says, “You begin to find that you get some really neat ideas generated from creating a culture where people of different ethnicities, cultures, backgrounds, [and] countries… come together.” He goes on to say, “Invariably you find that the best ideas come from a mosaic of players working together in a team on a project. They will come up with an answer that is different from what any one of them would have come up with individually.”  As Mr. Miller found, having a diverse workforce increases the likelihood of there being a “Medici Effect.”

 

It seems obvious that having a diverse workforce is a no-brainer when it comes to maintaining or gaining a competitive business advantage. Yet, we often find that people tend to stick to their own kind. They stick to their own ethnicities and cultures and have a tendency to hire people just like them.

 

Why are we so hesitant about working in diverse teams? For the most part, it is our nature. We have a tendency to want to be around people like us and avoid those who are different. Psychologists have a name for this tendency. They call it the “similar-attraction effect.” The “similar-attraction effect” can destroy our efforts as HR Professionals to create diverse work teams.

 

There is saying in the HR world: “We hire the people we like.” In most cases, we like them because we find some commonalities between them and us. As Frans says, “…studies show conclusively that the unstructured interview has virtually no validity as a selection tool. Such an interview does not give us enough information to understand the candidate’s qualifications.” Thus, for the most part, we really don’t hire the most qualified individual. But rather, the applicant who seems to be the most like us. So how do we overcome this tendency?

 

Professor Robert Sutton of Stanford University suggests a number of methods that can be used to overcome this tendency in his book Weird Ideas That Work. His first weird idea is to hire people who make you uncomfortable, even those whom dislike. If you are thinking of recruiting a candidate just because “I like her” of “She’s just like one of us,” this could lead to a less creative work team.

 

Sutton also suggests that we monitor signs that we are hiring too many others like ourselves. For example, check the percentage of graduates from the same school, geographic area, discipline, functional background, former employers, age, race and sexual orientation. He also feels that organizations should hire people they don’t need, at least not yet (although this may be a bit difficult given the current state of the economy). In most cases, the new-hire is almost expected to produce from day one. As a result, they know they have to quickly acclimate, and in a way become like everyone else, and aren’t given the opportunity to find the intersection between their skills and the organization’s needs.

 

Similarly, we will stifle our own creativity if we only seek out environments where people are just like us. As we learned earlier from Frans, the “Medici Effect” is an intersection of ideas from combining disciplines and cultures that seem to have nothing in common. Thus, it would only make sense that we would be less creative if we only work on teams where everyone is just like us.

 

In summary, The Medici Effect should be read by every HR Professional, because it validates the competitive advantage of having a diverse workforce. In addition, we learn about a couple of techniques to help us recruit a more diverse workforce that should be shared with anyone on our management team who is involved in the recruiting and hiring process. Lastly, after I read the book, I found myself trying to combine concepts from the HR discipline with other disciplines that would improve process within my organization. In the end, I came up with an idea that combined the principles of employee motivation and waiting on tables to improve customer service.

  

About the Author

 

Frans Johansson earned his MBA at Harvard Business School and his B.S. at Brown University. He is an author, speaker, and managing director of Medici Capital Management. His bestselling book, The Medici Effect, has been named as one of the best innovation books by several organizations and selected as one of the 10 best business books of 2004 by Amazon.com. Furthermore, it has been translated into 13 different languages.

 

Frans was raised in Sweden and is the son of an African-American and Cherokee mother and Swedish father. He currently resides in New York with his wife.