(Illustration by iStock/ThongSam)
When a company hires a manager, conventional wisdom holds that the new joiner should be added immediately to meetings and treated as a longtime member of the team. But what if this common-sense advice is wrong?
“We find that extensively involving the new hire in a wide range of the company tasks and social activities that the established managers are engaged in fails,” write the authors of a new study on how firms trying to scale unintentionally torpedo their own growth by undermining new hires. “While this approach is intended to foster strong, collaborative relationships between the new hire and the established managers, it instead backfires and leads the new hire to become perceived as an intruder.”
Instead, companies fare better, the study found, when they include the new hire for parts of the job that involve scaling but otherwise avoid integrating the person into every activity or project. This policy leads existing managers to think of the new person less as an intruder and more as a “stranger” in Georg Simmel’s classic sociological formulation—an outsider who is part of the group and whose opinion they should respect.
The authors—Jian Bai Li, assistant professor of strategy and policy at National University of Singapore Business School, and Henning Piezunka, associate professor of management at the University of Pennsylvania’s Wharton School—have collaborated ever since they were PhD students together at Stanford University and often found themselves the only two people in the office late at night, Piezunka recalls. Because they had studied family-owned companies in China over the course of several published works, the researchers knew the issues these firms had with bringing in new executives, especially successors.
Hiring attempts typically failed, Piezunka says, because the new person attempted to push through changes once at the firm but encountered opposition and was unable to make progress. Then the new hire would often leave in frustration, if they didn’t get fired.
How, then, could a firm change this dynamic?
For this study, the researchers did extensive interviews with employees at eight manufacturers in China’s Yangtze River Delta, starting with a research trip in 2013. They chose firms where the founder had remained CEO, bringing on local managers shortly after launching the company in the mid- to late 1990s. To meet the opportunity that e-commerce brought to the sector in the 2010s, all the firms hired new managers with experience in this area.
The most surprising finding from interviews and data analysis, Piezunka says, was that the general lesson of social-network research—frequency of interaction leads to a strong relationship—didn’t hold in this situation. Although companies tried to integrate new colleagues using conventional techniques, the strategy was unsuccessful. Even when one company hired a friend of the CEO as a new manager, that hire failed.
The study revealed the flawed assumption that the new member would better serve the company by participating in every important decision and project. In fact, relationships among the existing managers were built over years of working together, and new managers threatened that dynamic. Trust can’t be established and solidified quickly; it relies on time. A new member of the group doesn’t have the shared social and work history on which the others are operating, Piezunka says.
What did work, the study found, was deliberately integrating the person at a slower rate: seating them in a geographically distant office, not inviting them to contribute to every task, and leaving them out of some meetings over the first few weeks to months. “You don’t start off as if you are friends or extremely trusting,” Piezunka says.
The study overturns the accepted idea that the faster a new member of the group is integrated, the more tightly knit the group will become, says Ezra Zuckerman Sivan, a professor of entrepreneurship and strategy at MIT. He likens this concept to the “not invented here” problem that plagues the attempts of startups and tech firms to grow: Company engineers tend to fight corporate attempts to buy or bring in new innovations from outside the company.
“It’s not at all obvious that successful integration means that you treat newly acquired talent as a ‘stranger,’” Zuckerman Sivan says about the study’s counterintuitive finding. In fact, he thinks the study also yields a compelling model for bringing in other forms of outside expertise, such as consultants. Zuckerman Sivan finds this aspect interesting, “not only because of the case material Li and Piezunka marshal, but also because it amounts to leveraging the weakness of the situation—the newcomer’s outsider status—into a strength.”
Find the study: “Welcome, Stranger” by Jian Bai Li and Henning Piezunka, Strategic Management Journal, forthcoming.
Read more stories by Chana R. Schoenberger.