Nobody knows how to hire. We spend hours combing through resumes, conducting dozens of interviews, deploying psychometric tests, and checking references. And when the bright new hires fail to deliver, we blame them when, at heart, we know we goofed.

Everyone thinks they can spot talent even though all the evidence suggests it's impossible. And maybe even irrelevant.

Productivity Secret

A classic psychology paper, Pygmalion in the Classroom, describes a study in which elementary-school students were given a test to identify the most able. Their teachers were told which pupils showed outstanding promise and, lo and behold, by the end of the experiment those children started performing exceptionally well. The catch? The test was nonexistent, and the children had been chosen entirely at random. What made the difference was that their teachers now believed in them.

Twenty-five years later, an Israeli researcher wonders if the same Pygmalion effect might apply to teams. Working with trainee military platoons, some leaders were told that their men had particularly high potential. No individuals were singled out; the leaders simply believed they were working with exceptionally promising material. Raising leaders' expectations caused improved performance of approximately 20 percent. Just imagine a 20 percent productivity improvement--achieved by no other means than by believing in your people.

The Pygmalion studies--and there are hundreds-- indicate the degree to which leadership may matter more than talent. The high achievers weren't special--but their teachers and leaders believed that they were. And when you start to believe that your people are great --or talented or creative--it's amazing how quickly those qualities can surface.

Some of this may be due to priming: You start to find what you're looking for. So when a member of your team shows creativity or energy or resourcefulness, you spot it, praise it, reinforce it. So you get more. This positive feedback cycle may be a lot more powerful than anyone's ability to pick talent.