Cracking the Code on Merit: A CEO’s Guide to Inclusive Hiring

Mo: [00:00:00] Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, president of International Facilitators Organization, People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources. Each week we bring you in in-depth conversations with the country's top HR executives and thought leaders.

For today's conversation, I'm excited to be joined by Thomas, a Cole Chair Emeritus of the Executive Committee of Sidley Austin, LLPA global law firm. He is also Trustee emeritus of the University of Chicago. Welcome, Tom. Thank you Mo. Glad to be here. Great to have you with us. Tom, tell us about your career journey.

Tom Cole: I can start with my, uh, my professional career journey, which started 50 years ago when I graduated from [00:01:00] law school. And unlike lots of people, uh, and lawyers today, I've been, uh, I was at the same firm for 47 years. So from, uh, 1975 through 2022, I was at Sibley Austin. Um, my practice was largely public company m and a and corporate governance.

Um, I was in firm management for 25 years and chair of the executive committee for 15 of those years. But on top of that, I would say that my, my, my career also included, um, civic engagement. So I was, uh, on the board of, uh, trustees of the University of Chicago for 23 years. I. On the board of Northwestern Memorial Healthcare, uh, and chaired that board for a number of years.

Uh, and, you know, basically got around a bit, but I, I think, oh, the other thing I did for fun was to teach a seminar in corporate governance that, uh, a couple of different law schools. Uh, but I, I think you, you [00:02:00] really, you really talk about a career path by talking about what you did before, all that. And I think two of the things that really.

Informed how I played out my career and informed how I dealt with people, uh, was working construction during summers, uh, being the, the very low man on the very tall totem pole. Uh, and I also worked for two years with emotion underserved adolescence, which taught me a lot about negotiations. Humility.

Mo: And you have a book coming out in November titled Doing Meritocracy, right?

Uh, so how do you tell if a workplace is is a meritocracy?

Tom Cole: I think, I think lots of places are merit autocracies, uh, but they, they can be flawed. So a a, a workplace that's a really good meritocracy applies a very broad definition of merit. Goes beyond simply, you know, how many hours your work or what your talent is or where you went to school, that kind of thing.

So it's a broad definition of merit, but [00:03:00] a, a a, a workplace that has a, is a meritocracy is also very inclusive. Inclusive in, in an appropriate sort of way. Uh, because if you wanna have a meritocracy, you have to have the broadest possible pool of talent to draw from and, and individuals to draw from. Um, so I, I think that's, that's key.

And then a workplace that is a meritocracy has a leadership that is committed to that notion and doesn't select team members simply because they're loyal to the leader. But they, you know, it was very, very important that they do that.

Mo: What, what is the downside of selecting folks that are loyal to the leader versus following meritocracy principles?

Tom Cole: Well, you, you, you can end up with a weak bench. I mean, I, I've wor, I work a lot with boards and with CEOs, and one of the common criticisms a board will have with the C of a CEO is that he or she has assembled [00:04:00] a weak bench. That could be, that could be evidence that they are valuing a non-med consideration that is loyalty to themselves over, over other things.

Or interestingly enough, it can be that they've sort of grown up with these people and they're excessively loyal to them. You know, so it, it, it, it, it's very important. I'm not saying be, be totally, uh, inhumane or, or too, too difficult with folks, but it, it, it's, it's very important to recognize the obligation to the organization to have the best team.

And sometimes, sometimes people assemble a weak bench because intentionally not outta loyalty, but out of fear. I, I, I worked with one CEO who had a very weak bench. And frankly, it was because he, he, and it was a he, he didn't wanna make it too easy for a board to replace him by finding an inside, inside candidate.[00:05:00]

So a weak bench is a, is a, is a real telltale.

Mo: Yeah. So looking at the bigger picture, what are the baseline elements for merit? Yeah. Well,

Tom Cole: you start with talent and effort. I mean, that's that, you know, someone who is talented and is gonna apply themselves, not, not to the point of burnout or to the point of not having a, a good family life or, or, or, or whatever else is important outside of work.

But talent and effort are key. But then this expanded definition of merit that I talk about. It basically has lots of elements that you could combine together to call, uh, character. And, you know, it, character is reflected, uh, in integrity, humility, selfless ambition. One of my favorite terms, I'll get back to that, if you like, resilience, uh, kindness, empathy and respect for others.

So that's, that's the baseline then. Then depending on context, you add things [00:06:00] to the baseline. So for example. A professional services firm, something I know something about, uh, is very important for that organization. And, and it's a competitive advantage if they are, uh, collegial and collaborative because they will get to better answers.

I mean, meritocracy in a lot of ways is all about getting to the best answers and, and being, being affected. So co collaboration and collegiality you would add, uh, a commitment to meritocracy you would add, especially for. For a CEO for the weak bench point that I made. Uh, and oh, by the way, I would also add as part of the baseline, uh, life experience, life experience can be very important for, uh, informing how you think about how, how someone who's gonna be put in a leadership position, uh, uh, is gonna behave.

Because it also life experience can teach humility, as I said before about talking about, yeah, talking about working with kids.

Mo: Absolutely. [00:07:00] Absolutely. And so, uh, in talking about all this, you said, uh, this interesting, uh, term selfless ambition and, uh, you said it's one of your favorites, and I've not heard it before.

So please tell us what selfless ambition is and and how do you dissect whether somebody is selflessly ambitious versus ambitious? Selfishly, right. Wow.

Tom Cole: Ambition is often reflected in, uh, a desire for power and compensation and position and, uh, prestige. That's, that's, that's the individual per version. If you're selflessly ambition, you're basically putting the organization, uh, if, if not ahead of you, at least on a par.

And so someone who's selflessly ambition is, is important. Uh, it, it, it's as important to them for the success of the organization as it is for their own personal success. I was, as I was talking to [00:08:00] a, a, a board member of a

public company, and they were talking about the error apparent, and one of the errors apparent, uh, the, the, her drawback was they said, she is just so ambitious.

I said, well, here's what you do, coach her. About the importance of selfless ambition and it needs, it has to be sincere. Uh, but if you're as interested in the success of your own organization or of your colleagues, then you will do better. Things will, things will just fall into place for you and don't, don't, don't work just for money.

Work for the success of the group.

Mo: I think that's a beautiful message. So how can you assess prospective C-suite members for their commitment to Merrick? Uh, I'm

Tom Cole: a big believer in 360, uh, 360 degree evaluation. And here, here, getting back to selfless ambition, if you do, uh, a 360 degree evaluation, that is ask.

The, the subordinates of a leader, and I hate to use the term [00:09:00] subordinate, but the people who work with the leader to help him or her get things done, if you ask them about the leader, you'll learn whether or not that leader is selflessly ambitious. You'll also learn about whether they exhibit the, the, the kindness, empathy, and, and respect for others.

Uh, that I think is, uh, also an important element and. If you do that evaluation, the 360 degree, you'll find out whether the leader has achieved followership because a leader, a leader who doesn't have people who want to see them succeed, is not ultimately gonna succeed.

Mo: And do you have a preference for how a 360 evaluation is done in terms of, uh, whether it's a tool or whether it's in person?

Do you have a preference for how you've seen it done successfully?

Tom Cole: I, I think a lot of evaluations say where you really want candid answers. Uh, I don't, you don't write 'em down, [00:10:00] right. I, when, when I do board evaluations, which is something I did particularly toward the end of my career, I've, I've public company boards have to do self-evaluations, right about the board as a whole and also about the committees.

Occasionally they do evaluations of separate individual board members, that kind of thing. Uh, I'm not a big fan of the written, check the box. You know, on

a, on a scale of one to 10 kind of written evaluation, because you have two problems. One is you're probably not gonna get candidate answers or worse, you're gonna get really candid answers and you wrote 'em all down.

And, and there is, I'm not a litigator, but I've been around litigators enough to know that maybe you don't wanna do that. So what I've always Eva, uh, advocated is any kind of evaluation, whether individuals or. Or a board in particular. Uh, do do it orally. Have someone, uh, who is a good facilitator, someone like you Mo, who will ask good questions.[00:11:00]

Uh, get thank you, get, have, have people respond and announce at the beginning that you're gonna follow Chatham House rules. So the, when you report it out, you say, this is what was said, not who said what. And that that can, that can really lead to very good candid answers. Uh, that frankly, it, it's not to get back at people, but, uh, the candidate answers that are then delivered to those individuals back a critique.

It could be more constructive. It's more likely to result in having them alter their behavior if their behavior's been problematic.

Mo: So in your book, doing meritocracy, right, you talk about a double standard. Can you please tell us what that double standard is?

Tom Cole: Well, a double standard is basically when you're assessing the merits of an individual.

You are, you are applying a lower standard, you know, could be to a cohort, to a, to a, to a particular group. It could be, uh, [00:12:00] it could be having to do with minorities, it could have to do with women, but it's a lower standard. Uh, and you know, maybe for purposes of, uh, of just, just trying to create diversity.

But it's, that's kind of a. Um, that's not the best way to create diversity, obviously. And it, and it creates problems. There can also be a double standard applied. And again, I've seen this, uh, I, I've seen the temptation to do this, um, where you have someone who is a real producer, someone who is really just, you know, knocking it out of the park, but they had some character flaws that are a problem.

In other words, look. This person is too valuable in terms of our bottom line to make too much of a fuss over character issues. That is a real problem. Uh, and too many, too many organizations succumb to that. I mean, that's how we got hashtag me too. Uh, but there are other, there are other less dramatic examples and it is stunning how [00:13:00] hashtag me too continues to live.

When you see, uh, CEOs who are being removed or very, not precipitously, but very quickly and appropriately, quickly. Um, that's a problem. So, so having a double standard creates risk for the organization, particularly if you're gonna look the other way on character flows. But if you have a lower standard for purposes of putting up numbers, uh, uh, uh, of particular cohorts, it demeans those who are in that cohort who, uh, who made it on the, on the higher standard, on the appropriate standard.

And it can also create, it can be very demoralizing. You know, if, if people think that they didn't get that promotion, somebody else did, and, and that, that somebody else got it through the application of a, of a lower standard, that's not good either. And there there's always litigation risk as well. But, but it, for the organization, it's more about.

Um, you know, [00:14:00] not, not demeaning the individual. Oh, by the way, another problem with the double standard is you, you can, if you put somebody into a position where they're really not up to it, that's not good for them either, right? I mean, it's, and, and that, that can, that's applied across the board, or it's applied in college admissions.

It's supplied in the, uh, you know, the, the regular employment arena.

Mo: Yeah. Thank you for that. Great answer, Tom. So how do great leaders grow their good people with 'em?

Tom Cole: One of the great, uh, expressions I heard is give somebody the gift of high expectation. If you expect good things, it will help them grow to to, to meet your expectation.

Um, another is through, you know, through coaching. I mean my, the, the, the example I gave you about coaching somebody about, uh, selfless ambition, that that will help, that will help them grow, that will help them get the promotions, whatever. Um, but mentoring, uh, can be [00:15:00] critically important. Um, there are people brought into organizations not, not applying a double standard, but they may not be as familiar with the milieu.

As, as say others, I mean, I, I'll, I'll give you an example of myself. The first time I set foot, the only, the only time I set foot in a law firm other than to interview for a job when I was in law school, was to build filing cabinets for my father at a law firm in Philadelphia. I mean, this, this was, this was way beyond my life experience.

And so mentoring to help people for whom it may be a, an, uh, an unfamiliar terrain, uh, can really help them grow as well. Um, yeah, yeah. I, I, I would say that, that, that, those are some of the things. I mean, there, there are lots of ways to help people grow and, you know, some of it is, uh, through formal training.

Yeah.

Mo: And Tom, what are some of the barriers [00:16:00] good leaders will eliminate for their people?

Tom Cole: Well, I think one of the most important barriers is to, uh, uh, not succumb to credentialism, but simply because somebody went to an Ivy League, uh, school or, or whatever. Um. You know, that shouldn't, the, the, the fact that you didn't do that should not be a barrier, uh, to moving forward.

One of the, one of the things I talk about in the book, if you do a survey of Say, as I did, of the s and p, I think the s and p 50, where did the CEOs go to school? Uh, ni, only 10% of them went to an Ivy for an IB plus. Which, and, and some of them, I mean the, the, uh, the, the CEO of General Motors went to the General Motors, the Technical Institute.

Now, I mean, so, so, uh, uh, not making credentials be a barrier, uh, is, is very important. [00:17:00] Another is, uh, frankly, uh, you, you don't want people to have a barrier to promotion because of, uh. Nepotism or because someone in a leadership position is. Paying back or, or paying too much attention to someone in their network, uh, then you're eliminating an opportunity for someone else in all likelihood.

And you're probably not doing the kid a, a, a, a, a good deed, especially if, if it would require applying a double standard 'cause they're gonna be in over their head. And so, you know that, that's bad. The, the other thing, uh, is it's not so much eliminating barriers but creating. Opportunities, uh, is I'm a big believer in pipeline programs.

I think they can be very, very important and there are a lot of good examples both in, uh, in, in law and business and accounting and whatnot. Um, I, I think one of the first pipeline programs I heard of was when [00:18:00] DuPont said, we don't have enough diversity among our chemical engineers. And so they started funding chemical engineering program.

And, you know, you, you have, you have to do it the right way. But, uh, pipeline programs can be very important.

Mo: Yeah. Uh, so Tom, when it comes to unifying workplaces, how have you seen companies incentivize their employees to perform with merit? Right.

Tom Cole: Well. Part, part of the element, one of the par elements of the definition of merit for when you're, when you want a unified organization is collaboration and, and collegiality.

So one of the things we did at our firm, every, every year, our management committee interviewed every partner, every partner for co, and it's in the context of compensation. And we gave the series of questions in advance so people could be thoughtful about it. And one of the questions. Always tell me which partners were most supportive, most helpful to you during the course of the [00:19:00] past year.

Now, when you ask that question, everybody wants to have a good answer and everybody wants to be the answer. Yeah. That can be, that can be very important. Very important. I love that question. Yeah. The the other thing that will help unify an organization, again, keying off of one of the. The elements of the definition of merit is humility.

If people are humble, uh, and learn how to learn how to disagree without being disagreeable, then you're gonna have people work together better. Right. And then lastly, I think, and this is maybe a message mostly for, uh, CEOs. Uh, when, when, when grappling with difficult questions like, like a crisis management, whatnot, you got a team and it's gotta be cross-disciplinary.

Not everybody's, not everybody's point of view will, will carry the day. And so you get people to continue to participate [00:20:00] in that effort, cross-disciplinary effort if, when you don't take, when they, when their argument doesn't carry the day. You make sure they're not demoralized by that you make sure their input was critical to the, the, the overall process.

And just because they didn't carry the day, that was, you know, they'll let the fight another day. Although hopefully it's not fighting.

Mo: Yeah. Great stuff. Great stuff. I love all the wisdom. It's, it's really, uh, just wonderful to hear your stories and examples. Let's talk about the role of the board of directors.

Uh, if a board is having issues amongst its directors, what is the ripple effect on the employees or the success of the company?

Tom Cole: Uh, I've seen boards have a, a real problem, uh, particularly in the current environment over politics. I mean, I, I did, I did a board evaluation where one of the board members said, my [00:21:00] big problem is that everybody knows I'm on this side of the aisle and the other guys are on, the other people were on the other side of the aisle.

It, it, it wasn't so much that he was bullied about it, but he was teased about it too much and that, and, but, but that, that's, that, that's very unusual. Frankly. No, I, I think when there are disagreements among the board, the ripple effect is because it's not gonna be a secret, right? When, when somebody comes in and makes a presentation to the board and they start, you know, sort yammering at each other.

In a, in a non collegial way, uh, that can, that can create a morale problem, uh, throughout the organization. It's also not exactly good modeling, right? Uh, again, my, one of my favorite aphorisms is learn to disagree without being disagreeable. Now, I, I had a partner who, who took it too far. He, he would say something and he'd say, I agree with everything you just said.

At which point [00:22:00] you would brace your neck because you knew it was what was coming and it was not agreement. But at least he, he, he was, he was elegant enough to try to, uh, you know, sort of gussy it up that

Mo: Yeah. To win you over first. Uh, so you've conducted a lot of board evaluations, Tom, what have you learned about how boards can be more effective?

Tom Cole: I, I think the elements of an effective board start with having the right people. I, again, I'm a big believer in having a diversity of perspectives because organizations and boards and senior management teams are all about decision making, and if you have different perspectives that can be brought to bear on the, on the question.

You're gonna get to a better answer. So I think, I think that's really important for decision making. So have the right people and, you know, have the right skillset, have the right form of organization, of the board. You know, do we, do we have the right committees? Are we, are we organized to address our mission [00:23:00] critical risks?

That, that, that there's a whole series of cases, you know, starting with, uh, you know, tainted ice cream going all the way. And it's pretty easy to remember it. Boeing. And the airplanes, uh, they, they did not Incredible, as it sounds, there

was not a safety committee or a committee devoted to airline safety, airplane safety of the Boeing board until afterward.

Well, you know, but so being organized as well. And part of organization is thoughtful delegation, recognizing the role of the board, you know, that there is a line between board and management and it's a movable line depending on how things are going. Right, right. And, and the, and the quality of management and the, and the, the extent of, uh, confidence in the management, but, but recognize the role.

Um, and the other is, uh, having, uh, the other element of, uh, organization is having the right staff support. [00:24:00] So, for example, a, a CHRO provides critical support, uh, to the compensation committee. And it's even better if it's a sort of a modern compensation committee that talks about compensation and talent management.

Talent development. That's where the CHRO is the critical staff support. Uh, for, for in, in, in the governance process. Um, so you, you need to have that then you have to have quality information that's, that's provided in, in an appropriate way, uh, and in a timely well way. You know, if you, if you drop a 250 page board book on a, on a board two days before the meeting, lots of luck.

You know, it's just, it, you ought to, frankly, it shouldn't work out for you. Um, it's inappropriate. It's inappropriate. We'll just say that. Uh, and then quality, self-evaluation. I mean, you know, really taking this, how are we doing question, uh, seriously [00:25:00] and, and, and taking in, uh, constructive criticism and, and responding to it.

But one of my favorite stories was I, I did a board evaluation where. The board very courageously said they wanted the C-suite to evaluate them. Wanted, they wanted to hear how the C-suite reacted. You know, did the C-Suite think our board was prepared? Uh, did they ask good questions? And several members of the C-suite said the same thing about one of the individual directors, which is he's always prepared, but every question has sort of a gotcha to it.

You know? It, it, it was almost so you could see he was the smartest guy in the room. Right. And so when I reported that back to that director. I thought he was going to bite my head off. And then there was a long pause and then he finally said, that's a fair point. And then the next year when I did the valuation of that board, uh, they said, I don't know what you said to that guy, but it was totally different.[00:26:00]

nd so people, people can grow if there's a, if there's thoughtful, uh, constructive criticism delivered well, so that's, that's how you, that's how you have a effective board.

Mo: I, I love that. And it's a great example of feedback yet again, so thank you for that story. Feedback is a gift. Feedback is a gift.

Feedback is a gift. Yeah. I love that. Thank you. Yes, I got that from a director. Uh, you know, without feedback, you're shooting in the dark, right? Isn't that what they say? Right. Yeah. Right, right. Yeah. So Tom, looking ahead, how do you envision, uh, merit in the workplace evolving in the coming year?

Tom Cole: I think in the coming year it's gonna be about all the challenges, uh, to, to, uh, inclusion and diversity and, and, and I hope that.

There's evolution that, I guess the opposite is the evolution. Uh, you know, I, I, you know, I look at Costco and [00:27:00] how they reacted to a shareholder, uh, proposal courageously. And then there are other examples of, uh, of companies that, that have retrenched on inclusion and retrenched on diversity. And I. I think the examples of how that didn't go so well for them may, may help, may help, uh, different companies, different boards, senior management teams, uh, be brave.

Now, you know, there, there are, there are legal considerations, but you, you can, you can still have diversity and I think diversity is so critical, uh, to good decision making.

Mo: And last question, Tom, what is one piece of advice that has shaped your work or personal life?

Tom Cole: Well, it's, it is sort of a cliche, uh, but there is a, there's an old proverb and I can't recall where it came from, but the proverb is, if you wanna go fast, go alone.

If you wanna go [00:28:00] far, go with others. And I can tell you from personal experience, the times I've tried to go fast alone didn't work out as well as when I went with others.

Mo: Wonderful, and that's where we'll end it for this episode of People and Strategy. A huge thanks to Tom for your valuable insights.

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